to washington anytime, anywhere. >> c-span's campaign 2024 coverage is your front row seat to the presidential election. watch our coverage of the candidates on the campaign trail, with announcements, meet and greets, speeches and more. to make up your own mind. campaign 2024 on the c-span network. c-span now, our mobile app. or anytime at c-span.org. c-span, your unfiltered view of politics. >> next, a discussion on china's political economy and economic growth at a daylong conference hosted by george washington university. they also talked about u.s.-china relations, the leadership of china's president and more.

this is about 2.5 hours. >> will compute -- welcome. we have a great lineup of speakers on u.s.-china relations. first i want to thank our

supporters for making this conference possible. i want to thank a member of the board of advisors. it is great to have you here. thank you. [applause] as well as our co-chair, who could not be here today but may be watching online. thank you, frank, if you are watching online. i also want to thank another member that was supposed to be here today but i think he is watching online as well. we want to thank the other institutes, the center for asian studies as well as international

business education and research. i want to thank the organizing committee. this is our 15th annual conference, quite an achievement. it is amazing it is still going every year. for those who don't know us, iep is located here. we focus on issues such as international trade and finance, diplomatic and policy studies, climate change and economic policy. more broadly we focus on china and india and we have organized more than 175 events. you can find a lot of the events on our youtube channel. it is my pleasure to turn the

podium over to our dean, who will introduce the speakers and talk more. [applause] >> thank you and welcome everyone. thank you for coming out on a gloomy morning. our temperature is back down, it's not the summer we were in the past few days but we are excited about today and the 15th annual china conference. i want to extend my thanks to our featured speakers for their contribution to the conference and the study of what has become an urgent subject. we are committed to educating leaders for the future. i hope you walked in and saw what was on the front step. it's fair to say china is important to virtually every foreign policy, and international economic policy issue in the world today. understanding china, its economic develop and and relation with united states will

be, and already is a necessity for the issues our students will face during their careers. in our current geopolitical climate, one in which quite obviously u.s.-china tensions have increased in recent years, we still need ways to deal with our differences, with or related to trade flows, supply chains, intellectual property concerns, openness to investment or responses to climate change. i've listed a number of issues in the economic arena because that's the focus of this conference. over the last 15 years, this conference at the elliott school has featured research and policy engagement that takes a thoughtful and nonpartisan approach to the issues and helps inform the policy debate in washington and abroad. in addition to this conference, over the last 15 years we've hosted a group of chinese business executives in executive education programs and organized multiple iterations of a

business and investment supposing him -- symposium. i advise you to continue to engage with us as we move forward and continuing our second decade of this important area of research. i would also like to echo remi's thanks, in mentioning lee, who is an alumnus in our masters in economic policy. he is a dedicated member of our school's board of advisors. as was mentioned, he established an endowment for u.s.-china economic relations. thanks to his support and others , the study of china and particularly china's economic relations will be a top priority here at the elliott school and the institute for economic policy in years to come. you are here to hear from

professor harry harding, and it is my pleasure to introduce him as our keynote speaker. he will address the study of china's economy, our of all the analytics agenda. he is a university chair professor in the college of social science in taiwan, and university professor emeritus of public policy at the university of virginia, where he is also a faculty senior fellow at the miller center for public affairs. he's also a member of the board of directors for asia-pacific resilience and innovation. he previously held visiting or adjunct appointments at sanford, the university of washington, the chinese university of hong kong, the university of sydney, university of hong kong, hong kong university of science and technology, and national university. he served as the founding dean of the frank that in school of leadership and public policy at uva. before, he had faculty opponent

-- appointments at various institutions and was a senior fellow at the brookings institute. you are probably noticing i left something out. from 1995 until 2005, he was dean of the elliott school of international affairs, so one of my first predecessors. following his leadership at the elliott school, he served as director of research and analysis at the eurasia group, i political advisory and consulting firm in new york, giving him a different private sector vantage point on many of the economic issues he studied as a scholar. he has served on the boards of several educational nonprofit institutions. he is the author of numerous books, including organizing china: the problem with

bureaucracy, and was also the coeditor of china's foreign relations in the 1980's. what most of you don't know is the india-china relationship with the united states -- relationship: what the united states needs to know, was the product of the elliott society and i staffed that project and traveled with harry harding on a trip to both china and india in 2000. a nice example of the way the world comes full circle. he is presently writing a book on the history of the u.s.-china relationship from the clinton administration to the trump administration, with the working

title a broken engagement. let me stop with a very long introduction. you can see from all harry has achieved, he is the right person to share his thoughts on the study of china's political economy. following his keynote remarks, chair of the organizing committee for this conference will moderate the q&a period. thank you and let me invite professor harding to the podium to deliver his keynote remarks. [applause]

prof. harding: thank you for coming, it's great to see you. thank you for the kind introduction. over elaborate, i'm afraid, but thank you very much. i can't tell you how wonderful it is to be back at the elliott school and in this building. there is something very special about this school that impresses me every time i come, and that assistance of community and warmth that is not omnipresent, let's put it this way, and every research university in the world. something very special that my predecessors created and my successors have maintained, sustained and built further. it is truly wonderful to be back

here. i have lost the text on this now. i think i didn't touch it for too long a time. anyway, i can do some of it by memory. when alyssa invited me to give the keynote speech, i could not possibly say no. because of all the jobs i've been lucky to have, and she mentioned many of them, starting as a young assistant professor, down to the exalted title of -- what am i? university chair professor pugh did i have been blessed by the opportunity to do many things in many places. of all the jobs -- and i don't always say this outside these halls, but i say to many friends -- of all the jobs i've been

privileged to have, this was the best. it was because, first of all, something i've already mentioned, that was the collegiality of the faculty. their desire to build the elliott school into an even better school of international affairs than it was, to professionalize it, to make it more than just two more years of liberal arts education. at the same time, the dedication of the then president of the university, who i came to admire and respect, to make the elliott school the jewel in the crown of the university he was trying to raise to the highest levels. for all these reasons, this was a wonderful place to be. i accepted the invitation with the greatest of pleasure, but -- i don't want to call it panic, but let's say apprehension set in. not only would it be the keynote address a major event with no a

longer history and richer background than i had imagined when i accepted the invitation. but to make a confession, i am not an economist. let me spend a few minutes saying why i chose not to be and i hope i don't offend the economist in the room but i think you will understand what i'm going to say. when i went to college, i intended to major in economics and then go off to business school. neither of which i did. what happened to the economics part of that? i remember vividly as a freshman , a first-year student, i read my textbook, i was taking the introductory class, it was probably samuelson, but i couldn't be sure, and i got to the passage that said when the comparative advantage of organizations and countries changes, when the supply and demand curve shifts, it's

possible a factory or company will close down. the text continues, workers will find other lines of work. i remember thinking, i don't think it is that simple. i don't think is that frictionless, and indeed, this was before political economy, which had been the root of the discipline in the past, was ora prinent place. i also have a story i won't go into about how slicing a plane through a three-dimensional space i couldn't describe explained why people bought what they did, and coming from an advertising family back on, i do not think that explained it. it was more behavioral than that, and that was before the behavioral revolution in economics. i was lured away by an interdisciplinary major, similar

to the international affairs major here at the elliott school. that was the right decision for me in terms of my future career path but i did not abandon economics altogether. i continued to take courses in various branches of economics, including international economics and more advanced courses in macro and micro, as well as a very good course in business history that i think shaped me a lot as well. but i never acquired that intuitive sense of how complex economic systems work, which so many of the economists in the rooms will understand what i'm talking about. when interest rates go up, i don't think very carefully and logically, what does that mean for various other aspects of the economy. you know it intuitively, i don't. that to me is when you really become an economist and i am not that. the other thing i did that

helped further develop my limited knowledge of the field was the time i spent at the brookings institution, and for those of you watching, you may know about the friday lunches, which were an ongoing seminar in applied economics, which i developed a better understanding of some aspects, internationally and domestically. while i never gained that intuitive feel, i continued to try to develop my knowledge of the discipline and apply it to the various issues, especially china, that i was interested in. with that moment of panic from my mind, i turned to the director of what was then known as the international trade and investment policy program, for his guidance. what should i do? give me some advice. he said why don't you go back and look at what you have written about kino over the years and what do you see --

written about china over the years and what do you see? i was reluctant to do that, i thought i might end up with a draft of my intellectual obituary in advance, but nonetheless it was a really good exercise. i'm going to share with you what i found, what emerged. i had written a lot more than i remembered and much of it was unpublished. it was basically talks, proprietary papers i had written for various organizations, some published materials. there was a lot and it was hard to sort it out. the question was, given the flood of writings, published and unpublished, what should i draw upon for my speech today? i had to sort it out. my first thought was i don't i look at the ones where i was right, where i made good productions and made with analysis.

i thought, that's not honest of me, i should give a balanced accounting of my writings, the things i got right and the things i clearly got wrong. then i turned to the more scholarly approach, which was to ask which ones had been more widely cited. i found probably to the surprise of a few people, there was no correlation between what was widely cited and what i felt was my best or favorite work. for example -- one second. what i regarded as my best book, a fragile relationship, is not my most widely cited. that was a big surprise because that was one of my bigger books and it is kind of up there but not at the very top.

what i regard as my most important book, patterns of cooperation in the formulations of modern china, is not cited at all. maybe the reason is it was never published. hard to be cited if it wasn't published. what happened is a string of reviewers demanded multiple revisions of all the chapters to bring them up-to-date, which is a constantly receding target. they finally concluded that cooperation is not really a key issue in the study of chinese foreign relations. it should have been a book on patterns of conflict. the whole thing was deep-sixed and i regret that. fortunately, thanks to a colleague here, we did manage to publish a summary of the book drawing on the concluding chapter. the last time i looked,

yesterday, has received grant total of three citations. i would like to think it was a contribution to understanding this question of is a cooperative relationship with china, which we all think would be in everyone's best interest, how feasible is that? i regret that book was not ever published, but the summary has been. the book that was mentioned was 1945 to 1955, a critical decade from the world war ii alliance to the cold war distancing. this was innovative because it was a collaborative project between young chinese and young american scholars. we decided instead of having the chinese scholars write about china and the american scholars write about america, we would

reverse it so the chinese scholars wrote about the united states, and the subtext was it would be that they would be freer to say what they really thought about a country other than their own, and have the american scholars write about china. it checks in as of yesterday at about 100 citations, hardly an astounding record. about the same as an article i wrote at roughly the same time called from china with disdain, which is one of my more embarrassing works. no correlation between what i am proud of and what i regret i published. we will return to that in a moment because of what it says about my interests in the field. none of the publications i mentioned focused specifically on the chinese economy or even on u.s.-china economic relations. little of my output has.

as i said, i am not an economist. instead, in an age of specialization in universities especially, i am a resolute generalist food i have written on a wide range of topics, assuming the so-called sustained research agenda that i was wisely advised to follow when i was a young faculty member at stanford, and defiantly ignored and refused to accept. that may have its strengths and weaknesses but it is what i have done. i have written about a lot of things and done a lot of things. if you had to identify myself, i would not even say i am a political scientist, even though my position was, before i started going to professional schools and teaching. i see myself as a political historian. i like telling stories more than building models.

i like narratives more than analysis of data. what i have tried to do is tell stories that have some kind of analytical bite, where we are applying concepts to make the history clearer, that are understandable and to identify some of the reasons for the errors policymakers have made as they tried to lead their countries and manage their international relationships. my writing has been all over the place. just as my career has been all over the place in terms of where i worked and what i have done. still, looking at it, trying to draw the threads of continuity out of my work, i find there are some things that tie those papers and books together. today i want to offer you what might be regarded as an intellectual history of my own. i'm going to focus on the questions others and i were exploring at the time rather

than the answers i gave. the answers tended to be time-based and the questions tend to be more enduring. just last night at dinner, i learned for the first time since we are in the passover season, that asking questions is a key part of passover seder in every jewish family. maybe it is an appropriate time to focus on the questions we need to ask and not focus too much on the answers we may temporarily give until the situation changes. i'm going to try to relate those questions to the broader trend in the involving -- evolving field of chinese study. that approach i am taking today was also reflected in some of my writing because i was constantly doing surveys of the field, asking about how the questions changed and the answers changed, given changes in china, the united states in the world, and

as generations followed generations in the study of china, which i find a particularly interesting issue. i won't have time in my prepared remarks to raise the final question in that area, that is are we on the verge of a new generation of analysis in the study of china? my answer, if you want to ask me during the q&a, will be am quite concerned about the future of our field, whether it is economics, foreign policy or politics, for some of the obvious reasons we might want to consider. so, as i looked at those themes, one of the most enduring ones, and produced what i regard as my favorite work because it was my first book, all of the parents know about the firstborn in that it is a particularly special child.

you love them all but the firstborn has a special place in your heart. my first book was called organizing china. it was about the debates in the chinese communist party about how to govern their country. the title, organizing title, was not the title i originally gave it. the first title was giving -- getting organized, after the si by mao -- essay by mao called get organized. his views about the mass line, about political control, about rectification and indoctrination, collective leadership, was i think what inspired me to take up this issue. this was a time in the 1970's when graduate students around the country were mining the

cultural revolution documents as biased and incomplete as they were, to write first cuts of issue area history. everything from public health to agriculture to industrial workforce, as well as something on foreign policy, although that was not the focus. i thought what was missing was the organizational issue in chinese politics, which was the title of the dissertation on which this book was based. as i said, my original title was organizing china. publishers always have the last word in so that title was rejected by stanford university press because they were worried that back in the day, books sold mostly in brick-and-mortar stores, it would be put on the shelf -- i am not making this up -- with self-help books. [laughter]

getting organized would be next to managing your time, raising a successful child. everybody would say i want to get organized, all my god, this is about china. so it was named differently. the book was about the ways in which this was a major issue in chinese politics. far more than organizational issues are in the united states. it was aimed at the u.s. domestic interests, asking the question of are we as well organized as we should be, which has become increasingly important over the years not particularly important in the early 1980's when it was published. also in that book, i identified another enduring theme, and that is to think dialectically rather than in a non-dualistic manner.

basically the chinese were managing a whole set of contradictions in their organizational life. the contradiction between basically having control over the low will -- lower levels of society and politics, and the need to allow a relatively free flow of information up to higher levels of decision-making. that's a classic problem in every organization. they were grappling with some of the classic mythologies of organization, especially government bureaucracies. the questions of rigidity, ordinary citizens and bureaucrats. corruption in a system where the state has great control over the economy. i saw the managing of these contradictions as being a theme that should be applied not only

to the study of chinese organizations but also the study of china more generally. interestingly, this book, organizing china, seems to have been better received in china than in the u.s.. it was seen by some scholars as overly complicated because i had so many different approaches and patterns in managing these huge bureaucracies but i've been told by diplomats from china and i hope they were not simply being polite, that they had read it, that it was assigned in some of the courses they took. they read it when they were doing their studies. they felt this was an understudied topic that could not be discussed particularly frankly in china and it would be interesting at least to see a foreign scholar tried to grapple with it. what they thought of my analysis was never made clear to me. what they said was you picked an

important topic we had not been able to think or talk much about when we were even before i published organizing china, i publish an article in asian survey, the journal that was published, i think, it was at the university of california at berkeley. it introduced another one of my enduring interest. that was the way and which, foreigners and especially americans are trying to understand china, whether as journalists, policymakers or scholars. and then convey that understanding to our relevant audiences that they are trying to reach. the article that chronicled and critiqued, what i saw was a trend that now i recall as one of disillusionment. it was a study of and critique

of the visitors who went into china, as china began to open after the cultural revolution. for those of you who have studied the great works and the history of the chinese revolution and the chinese communist party, may recognize chalmers johnson, his wife, was a accomplished specialist on japan and in international affairs on her own right. she wrote a book called, to china with love which was basically what some scholars later called, the leaders -- the years of revolutionary tourism. when basically those that admired the model and ideal, this was -- this began in the late 1960's and the student resolution in her clean and other areas -- student revolution in berkeley and other areas.

in fact, if you go and see their hyperbolic -- china! inside the people's republic, based on the early years of revolutionary tourism. it was largely dictated by me. please do not read that. please do not. that's a negative example. i did better work later on when i work -- when i did the work on the cambridge history of china. so they went to china, for -- for love expecting to find the utopian paradise, and that many young americans hope to see. they came away deeply disillusioned, disappointed,

again, a standard pattern in american observations of china. i remember writing, an article where i concluded that if we were going to avoid the cycle of illusion meant and disillusionment we better identify what happens and why we get illusions in the first place. and i still say that. basically what i did was a critique of this, from china with disdain argument. it touched the boundaries, maybe crossed the boundaries of apology or the maoist model and maoist china. i cannot deny it is there, it is one of my more cited articles. i hope it used as a negative example as it should be, but anyway. that came even before organizing china and it what has established my interest in trying to understand how people, especially americans perceive

and misperceive china. we will be returning to that throughout the live remarks today. so -- apple products are sensitive to touch you need to be more careful with that than i have been here. the next thing that we work beginning to ask, the next set of questions of course, what was going to happen when mao died. this was now in the early 1970's, mount died in 1976, so there was extensive literature trying to forecast the future of china in the post-mao era. in an another embarrassing book or article, paper, i tried to take that on. and basically i argued that there would be a high degree of consensus and continuity as china entered the post-mao era. i was persuaded by what i

believed was the power of the political education and proper -- propaganda in china. for a company that still exists across the river, mathematica, which was a forecasting and analytics form -- forum. when you do forecasts always include probabilities. you can never be proven wrong unless you say, with 100% chance or 0% chance. i said there was a low probability for just the opposite. the most likely probability i said was likely continuing the status quo under new leadership. a giant in the field of both comparative politics and the

study of china, in his usual way , i got to know him fairly well, and respected him a great deal, saying he has presented such an eloquent case for continuity i do not know, why i am totally unpersuaded. and of course, he was right and i was wrong. and once you realize that there would be substantial change, the question becomes, but how hard is ago and in which direction. again i was unnecessarily cautious for the reason i have mentioned. basically, i began to argue that there might be some kind of synthesis of the maoist and i do not want to call it rational or irrational legal or standard approach to organizational management and to economic

policy. i talk instead about the idea that there might be something that i call revolutionary pragmatism. i tended in those years to overstate the possibility for continuity in china and to not understand the great pressure for change that was coming from society and within the party itself. even though i had by pure chance the opportunity to experience personally the huge demonstrations toward beijing and in shanghai in 1976, that welcomed the fall of the gang of four, therefore the end of the maoist era. in shanghai it was absolute ecstasy on the street and somehow i tuned that out and i did not the how -- what a force it was for fundamental change. i was searching for far more

continuity than i imagined. i am no longer scrolling particularly well. so the question is, what would it be. there was going to be more change, than i hadn't dissipated but it was also -- had anticipated but it was also going to involve the steps forward and backward that we have seen since then. at the time, i thought that there was a sense that china would follow, perhaps the path of the soviet union as it fundamentally market ties and privatize this economy, and through what were then called the big bang, very sudden and comprehensive change. i was never sure that that was going to happen, because i thought that would be an overly complex approach. although i didn't pioneer the idea that china would try to

cross the river by feeling for the stones of the bottom of the riverbed. i did have a sense that it would be more complicated, more complicated than that. i also was strongly influenced by a young scholar, a young field will -- again female scholar in mongolia. at the time in mongolia they were debating the degree of economic and political forum. they asked me the question why are the two foreigners who did the greatest damage to my country people with the same initials, js. i said what you mean, js? joseph stalin and jeffrey sachs. the idea that you can go all out toward privatization and marketization was simply a mistake which the mongols had never made. the big bang didn't seem particularly likely to me. i can't say i knew what would

happen but it was clear that it would be a more dialectical approach. there would be what one school or has called rolling out the plan, a group -- a gradual process rather than something spectacular. it would be a dialectical approach that would combine what they would want to be the best of the market the best of the remaining government regulation of the economy and so forth. there was of course the huge interruption of the crisis of 1989 and then the question is how far back it would go. again, there was dramatic forecasts in the united state that were obviously based on what was being said at the time. but i took my cue from a friend, wanted the people who worked with me on the edited volume of u.s. china relations who -- he said that pain was persuaded by

those who said those who go backward especially in the countryside will not be able to outnumber those who have employed there. and you will be in big trouble. you have no choice except to sustain township and enterprises and free markets. you have no choice. and as we know, he was persuaded by that. and despite the fact that backward more in the political sphere, there were also those that thought at the time that china necessarily would follow the approach of taiwan and gradually first pluralize and then democratized political. we can get to another tw elliott coley, who wrote at the time that this simply was not going to happen because of the resistance from the leninist system, the fear of what would result and therefore it would be very limited political reform by that definition.

again, i was a little more optimistic i talked about the halting process of pluralism. i emphasize the progress and boost was far more right than i was. i'm sharing with you some of the things that i got wrong when trying to answer the millions of questions that we were all trying to raise. ok. so those were some of the themes that i dealt with in those years. and then, as we got into jumping forward quite a bit, into the 2010s, i began to focus more on the u.s. china relationship and as i said one of my favorite books and one that has been very widely cited, basically a fragile relationship, a fragile u.s. china relations between

1972. never put an end point on your study even though there has to be one because it will limit sales. i write grant that -- i regret that because it sounds like it comes up to the present but it doesn't. i try to identify what was the most likely outcome from the u.s. china relationship was going to be. i cannot say that i got all of it right. but it is going back to the moment in my introductory micro-macro class where i saw that the implication was that when there was economic changes and competition domestic or foreign there would be a slow process by which workers would be laid off, factories would close down but they would easily be able to find other lines of work. that is not what has happened in the u.s. china relationship. in sand, there was a growing anger and frustration that the impact of the u.s. china

economic relationship, one called a codependency relationship, not interdependent but codependent. it's exactly that negative connotation that that term applies. basically the two sides use the relationship to cover up serious imbalances in their economies. dick cheney chinese has saved two months relative to the gdp for obvious reasons. the lack of a social safety net, a cautious society has suffered much from economic distress in the past. they consume less than most other countries at their stage of development, and they export too much, again, relative to the norm. in two little, and that these imbalances are what caused the

trade deficit. it was not just, in fact not mainly the unfair trade practices and the lack of reciprocity that people complained about. but basically the idea that if the mexican valid -- showed me that i tried to explain to my class every year that there is a accounting identity between trade imbalances and domestic imbalances, but cannot explain it without writing it out word for word. because i understand it but i don't get it. if you understand that ancient. the question was, with whom would the united states run is large trade deficit? there you can argue that trade regulations and practices made a difference. give -- given the balances in

both countries, this would have consequences in the united states that we all know about and prove very damaging to our relationship politically. one of the most important works that i've written most recently was published in the elliott school journal, it was under the title, has u.s. china policy field? was engagement broken, because it was unable to manage the growing differences between the two countries not just on economics that on a variety of other issues make human rights of obviously and china's positioning of itself in the asia-pacific region and economically and from a security point of view. i came to the costliest -- cautious conclusion that there was debate about this but the most prevalent when a view was that it failed. or at least had very disappointed results.

there there was a quite serious debate at that time. there was those in the united states, especially in china also that, well they may have disappointed both sides but as the chinese put it there is no alternative to engagement. now as they say there is no alternative to cooperation. ladies and gentlemen, yes there is an alternative and we have asked very instead and it was basically the break in the u.s. china relationship under president trump and the most surprising phenomenon especially to the chinese that it has not been reversed under joe biden. they had come to the confident lucian that looking at the track of american starting with ronald reagan who talked today about restoring -- two the u.s. china relationship with regards to taiwan. and what they hope would have been donald trump had happened with bill clinton. that presidents would complain,

talk tough and threaten china but then something would happen. something in most aces i'm a china engineered which was the demonstration of china's use of force arrogant kind of like the taiwan strait. that would say they need to have a good relationship with us so, you better back away from your unreasonable demands. they were confident this would happen with biden. they hoped that after nancy pelosi's visit to the island it would have the same effects but it has not. if our policy has been broken so has theirs. we will talk later today and in the absence about the implications for the u.s. china relationship going forward. that article, that i wrote was quite controversial because it was a significant group of people in the united states, they are often called huggers,

we use a different phrase called keepers of the flame. trying to keep the flame alive. that there's no alternative to engagement policy and sooner or later we will have to realize that. that might be true in the real -- in the long run. that -- we will see i have my reservations about that but it is certainly not been -- has not happened immediately. in terms of the u.s. china relationship how do we manage the decoupling, how much further is it going to go? it's already gone much farther than some into his abated area -- how do we evaluate this quite successful model that the chinese chose, by trial and error, and with the sense that we need to do it experimentally, cautiously, and not in an

all-encompassing one shot bang way. how can we evaluate that, but it's been called the chinese economic miracle. no country has lifted as many hundreds of millions of people out of poverty as the chinese have, it's an economic article. in the article i mentioned in taiwan, is available here as well, i be argued that it not an economic your call. miracles are things that cannot be explained by arts larry -- our eggs banding on how the word -- world without expanding on how the world works. there is nothing about what chinese did at the time -- with the chinese did at the time. they got the message that they need to do the other things that

the other asian tigers had accomplished as they begin to make a move toward, in their case, labor-intensive roles. or in china, a greater role for private ownership and must control by the party and the government. there is nothing miraculously -- miraculous about it. what was miraculous was a political miracle not an economic one, basically the chinese leadership was willing to make the break from the past that i falsely predicted would be very unlikely if not impossible that they were able to make that decision among themselves and then basically persuade the rest of the senior leadership and the rest of the party to follow along this was a case of what scholars and leadership call transformational leadership, not just making big change but transforming what was considered to be acceptable or

desirable policy on the part of key sectors of the population. so i keep using that concept because my of writing and thinking has been the new problems that china has experienced in domestic, economic life. you are familiar, and all i have to do is take them off. no particular order, a stubbornly high savings rate and a stubbornly low rate of consumption. archly again because of an asian population -- aging population and the lack of a robust safety net. -- interesting complicated and deserve further study but the fact is that the chinese population which in my day we were worried about it makes loading under basically mouse policy of the more chinese the better, imploding not as a

result of the one child policy, but as a variety of sociological factors and economic factors like the high cost of housing, that are leaving families to decide, kids, why bother. we are trained on if one or any have the best opportunity. this is one of those serious challenges, and mock perverse -- and demographers would say, to reverse a birth rate, after a war or adverse events, it is only the way to do it. and if they were able to it would be a socioeconomic miracle it has not happened before and nothing that they tried to do so far such as basically encouraging counseling for couples, and addressing a lack

of fertility, but it doesn't explain the totality of the policy so far that haven't had measurable effect it could be early to tell. you have the demographic decline , the low savings rate and the indebtedness for local governments and, 75 companies. you have the increasingly day iron -- the increasingly dire consequences of climate change. they are echoed in some ways but not entirely the same, they are abnormally different from what china has based in the past, how well will they do. there is also the question and -- how china will interact with the rest of the world. it's a familiar list, and i don't have the answer to all of your questions try to be successful in a so-called dual circulation policy which is a way of saying among other things

that we want to become more self-sufficient in key technologies and materials for obvious reasons we are afraid that the rest of the world is trying to squeeze us and so we have to become targets to the greatest degree possible, how successful will they be, in terms of what they do trade how successful will they be in letting the renminbi behave like world currency and being able to settle accounts of their own currency rather than using the u.s. dollar how successful will those efforts be. and to the last thread that i have begun to work on has its origins from back when i was at brookings when i authored an article on greater china, the idea that there would be a regional if not global concepts of interactions between china societies, with china, hong kong and overseas communities

elsewhere. shirley and i live both in hong kong and taiwan now and maintain homes in both, to put it mildly we are disturbed by what we are seeing in both places. what is going to happen with regards to china's policies with regards to those two territories, one it has recovered and one it has insist -- one it insists it will recovered during the great leaders lifetime. what will be the outcome of that contribution -- contradiction what the leader wants and what beijing insist they must have. in short, that's been my intellectual journey, you might find something interesting, and i found both the good and the bad and may be insightful certainly be embarrassing, but i appreciate the chance to share with you what my intellectual

journey has been so far, i think it reflects the broader journey of those of us that china and have been undertaking a journey that will of course continue. we will have your questions and do panel later this afternoon more specifically on the u.s.-china's -- relationship, thank you. [applause]

>> thank you pursuit -- thank you for such an insightful presentation. if i may say something about the journey, when i arrived, after you hired me and gave me a job, you introduced me to the world of u.s. china relations. at the time i think i told you when you invited me to my first event indeed the on u.s. china relations i made the disclaimer that, i am an economist and i don't study china. >> i thought you said you don't study u.s. china, but what you said is very profound. the declining portion of area study and key disciplines like economic and political science is real, we can explore that leader if you want. >> what you said back to me was,

not yet. [laughter] i have to say that was right. after the last 18 years i have been running china more and more not a china specialist but i've been studying -- studying china more and more i have not been a tennis list but ivan's being. -- a chinese specialist, but i have been studying. a few years ago and made the observation that a lot of the issues surrounding u.s. china relations, trade, technology, taiwan and also president trump. is it fair to say that trade policy has taken a backseat among the various issues,

national security, taiwan or maybe trade has become an in human -- becomes an instrument on both sides. is that a fair statement to say, that trade is a instrument? >> i encourage everyone to think dialectically. we do not need to make these choices toward these two things which are a mutually constituent of priceless -- process. maybe we can answer that but it's not easy to do so. the chinese like to talk about the way in which trade has been weaponized. trade is the instrument for waging these, this competition are confrontation in other areas it is absolutely correct, what i think is equally interesting is the way in which that arena that

we maybe call trade or economic relationships is becoming more and more diverse, so there's more and more aspects. in the early years, it was largely all the way back to the 1950's, a complete embargo on trade with china. i remember that time very well, basically before normalization and the favored granting status to china. it was as i recall postage stamps and publications. people could subscribe to what was then the detained review and they could -- d kane review and then they could publish in china but little else. the wonderful comparison, the china person at the -- under the

administration came up with was before the opening of the relationship in 1971, of course it's what's been known as ping-pong diplomacy ever sent. he said until that team visited china more americans had set foot on the moon that had been to the people's republic of china and the qualifier of the two governments, some people one famous scholar actually had a yacht going up the young set river -- young c river, of course he was arrested and deported. there are a few bits not been, i'm not sure about the other directions but it's the comparison that's how distant it was. basically trade was virtually no

personal connections were greatly attenuated if not destroyed and while we started with a tariff on imports especially. and appliances and so forth. it extended across the board, the chinese reciprocated to a degree. it's got to the point where export restrictions are as important as import restrictions. and we have growing attempts to regulate investments, direct investments and portfolios. it is going across a wider and wider range of economic relationships, and so this is the way in which it is now called this wonderful euphemism, economic stagecraft. using these instruments and technology sharing instruments, in university as we know there is this concept of deemed

exports which basically means studying something if you learn something in a university is actually, in a standard tech area, that is regarded as a deemed export. it is a wide-ranging now economic warfare that is quite unprecedented even in the u.s. china relationship of the past. let me open the floor to the audience. >> i thought, i recognize him. >> i teach a course on the chinese economy here at the elliott school. it's wonderful to hear your review of yourself and all the humility, i am struck by the humility and having nearly incorrectly the continuity --

incorrectly predicted the continuity. there is a significant breaking continuity and yet, there is signs that policies are, whether it's industrial policies or concerns, and the contradiction of china having to react to the outside events. what he think about your prediction about continuity are continuity going forward, particularly the degree to which domestic policies are driving our international relations with china? >> when i first got to know him he ran rock creek research, and it was an attempt to make sense of chinese economic data to really try to on -- ironing out and make it more believable and accurate, and put it in a form that people could regularly use.

as i mentioned the people in washington who have learned more and more about economics from, they have taught me about the chinese economy and i have not forgotten it area it's great to see you here. i should've mentioned the continuity because as a separate theme i touched on, as you said but i think that's one of the areas that is problematic for observers because, again, it has to be looked at as a complex answer not a simple one. perhaps the best example of false continuity are the familiar claims that xi jinping is another matter. of course -- is another mall. -- another mao. he wants to develop xi jinping of thought and use that as the basis for political education, all of these are continuity. and there are huge differences as well which arise is both

interesting and often very poorly done, perhaps the biggest , the original and what seems to be discontinuous, as the saying goes, it history doesn't repeat itself but it rhymes. it echoes the passing on his farm -- it echoes the past in modest form. basically, as a xi jinping exercises greater control over the party and democracy and chinese society, he did not do at all what mao did. what in my book i called unreliable -- rely on the unreliable. will i on the people who are most alienated and therefore the

most angry to criticize the party and get it to shape up, the best example, the cultural resolution -- cultural revolution that were dissatisfied with the education system mao acknowledge that they were unreliable but they experienced -- they felt that the experience of revolution would bring them around. xi jinping was not like that if you want a comparison, he is far more xi jinping than he is mao. there is a student at middlebury college who is writing on xi jinping's attempt to gain control over the party, and it -- send out the work teams to enforce not only the compliance with the central working groups, but also to get them to ordinate

better with one sector, one fiefdom to another. there is continuity and change, getting the mix right and understanding how to define those continuities is a challenging task. but thank you for the question. much of what xi jinping is doing in economic policy is far more mao. -- a screen over the open window to prevent flies from flying in. i think that president xi is somewhat departed from xi jinping as well. and returning to some of those on top pick -- autochtic views that mao had. ? question.

-- >> one more question. >> i have two questions, are you really sure that american business interests are in line with your disengagement because the treaty to does not show disengagement, in fact it shows the trade imbalance has reached a new peak and business it is seen as eager as ever to get back into the china market so that it may grow. one could interpret this somewhat differently which is the interest in china is in tandem with the degree to which the chinese economy is expected to grow. the problem is, they're not -- there may not be growth.

i wanted your thoughts on that, and the second is, going back to similarities between the chinese approach to modernization and to east asian one. i wonder if you would acknowledge that there is a significant distinction in globalization, because when east asian tigers took off they moved entire industries to korea or japan. china did something much different. it asserted itself in the global value chain. it brought them a nationals -- it brought the multinationals into china, that is why it's very difficult to extract, and disengage. that is a very different

strategy dam i think is characteristic of the earlier stabilization of the countries. >> i think i'm better at asking questions thanksgiving answers, the answers are necessarily very complicated. let's talk about the completing -- about decoupling and the business in general. i will at least continue describing my occupational and intellectual journey, alicia mentioned that for two years i was working as -- ian bremmer whose known walmart personally -- who is known personally. received a contract from the chinese economic trade research organization to do a study for

businesses in china moving forward 15 years ago, i was asked to direct that study group, to make a long story short, but we saw were significant risks that we felt should inspire businesses especially japanese businesses but all businesses to basically think as to whether they were becoming too dependent on china whether for markets or sources of supply, whether they were resources or components or finished goods. we basically advocated not complete decoupling but a partial decoupling or at least diversification. the japanese picked up on this, the phrase that would be used is that china one strategy, that you would not want to be overly dependent on china in any of those dimensions, the way that i

like to put it now, we put the word dependent back in the word interdependent. interdependent means both sides are dependent on the other. and that dependency can provide a risk just as the codependents that steve roach talked about also involve certain risks because of the unhealthy nature of that relationship. at the time the issue was, and your comparative question, basically if it's china plus one, what with the other one be? and the debate at the time was between two types of extremes, one was vietnam and one was india. vietnam was seen as a smaller version of china in many ways area much smaller in the economy but the same kind of structure, similarities and culture, and certainly the vietnamese economy

has taken off extremely well. in my first visit to vietnam and going to the airport and downtown, seeing these small shop light manufacturing operations in full force into the middle of the night. i remember thinking china's and trouble. they are going to cherry pick the simple things that the chinese have been doing at a lower cost and probably comparable quality. it was a democratic angling democracy. and the sense was that it was the hindu way of growth. and others were cynically saying it would be like brazil the country of the future and always would be hilliard but -- would

be. . but the similarities and differences between china models and the others is a good one, the mantra has many uses as even pliant, and are the supply chains to important and robust? you pointed out correctly that nothing has changed the trade imbalance but since that ballast -- that imbalance is so, as i understand it related to domestic imbalances that are resistant to change. even in china i think to roach's surprise. trade imbalances will continue to invest imbalance. the only question is with him. given the size of the chinese economy and production capacity, especially in key areas and businesses that are talking

about a different range of industries in which china has acquired a oligarchy or all of doc cindy -- monopoly position. there are the only producer in some examples, and some medical technologies. in recent conversations with medical authorities and hospitals, we have found that there is no alternative at this point. i'm surprised how far it has been -- it has gone. it's from the top-down and bottom-up. i'm more interested in my election will journey as you know, and i'm interested in the bottom up and how american individuals are turning away from china. how some americans will get the shortened college program in beijing, that is intended to be the rogue scholar of program --

of china program. and we know some are turning it down because they're worried about having it on the resume when they tried to drag -- try to get jobs in sensitive areas in the united states. or they simply do not want to go it used to be because of the pollution. but the idea that this is an area that would be difficult to gain unfettered access to the internet, to google or various social media posts, there will be a scholar program for example that you cannot invite non-schwartzman's college at least in the day that you visit to see you. you can only go up there. both sides are restricting from the top down and the bottom of. we are seeing partial decoupling by the american community. some now concerned about risk

and some being required as maggie has reminded us, a what with his asian of trade policies. you are all aware of the requirements now the basically mutual funds begin to reduce their, the share of their holdings. this is a good question and i can answer, as you can see you can see what you want to see. if you would see decoupling, you can see decoupling. it is a story that we need to investigate and i'm not sure as of now of my answer would be. >> we need to move our discussions, and we need to move on with the rest of our agenda.

thank you, all let's give harry a big round of applause create -- applause. [applause] >> you're welcome. >> it's now my pleasure to invite bruce dixon, from george washington university to start the next palin -- the next panel. we bother break right away and then we will start after the next panel. [indistinct chatter]

[indistinct chatter] >> just go ahead? i'm getting at the signal to launch into it. let's get back on track. on going to start in. i will start by saying, here he is a tough act to follow. so it's mine dubiously on -- it's my dubious honor to do that. he began by talking about the many misjudgments during his career. i want to mention one more that he left out. when he first got to brookings he had the opportunity to hire a

research assistant, and he hired me. he got better at picking after that. for me, it was a great need to into my new program that led to the book that he referred to during his remarks. i will try and live up to both the standard that harry set for us and has something new to state here today. i would like to focus on the retreat from reform that we see in china in recent years and top of a little bit about politics and the economy, but other speakers on this panel are going to talk about those details so i'm not point to say much about them. we will get more on the impact on society and when it may mean for the u.s. and our relationship with china. one of the key attributes of reform here is the

decentralization of decision-making. local officials were encouraged and sons of i -- incentivized, often as a springboard for their own careers to move up in the system. and that shift in decision-making from the center to localities was part of the explanation he -- why the economy grew so rapidly during those years. the similar parallel trend was liberalization, having a state that would be less involved in the economy, and the party less involved in everyday life, there's a shift away from the state sector to private firms and ngos both of those trends have been dramatically reversed over the past 10 or so years.

and along with that mercil comes the retreat of many other actions we do and define as being key to reform area -- era. briefly, on elite politics, we have seen what would have been a gradually normal seasonal transition of power has been upended. term limits and age limits have not been completely eliminated, but clearly weekend -- weakend. there is one faction at the top, and the notion of meritocracy to get the top has been weekend. and particular, the notion or

the popular top-down decision-making, begins at the very top and it typically begins with xi jinping. the impacts of these different trends in elite politics is that there is the potential for more instability among the elites as people see opportunities for advancement especially people who are not hard reporters as people perceive -- there is certainly uncertainty between -- about she successor -- xi jinping's successor. he is close to 70 now and obviously cannot go on forever but there is no one in place to choose a new successor.

books on economic and political reforms were much more limited. the in particular, less feedback on what's happening in society or your decisions being -- your decisions being made fun of a and your poor decisions being made. the more accurate is in someone's house making. the economic policy has increasing party overreach into the sector where one key reach does not -- that has signal likely -- that has symbolically shifted in a couple of ways, once in the private sector. the high-tech firm that began

two years ago, that ample of that, the greater emphasis on party building with other firms. which we do not have opportunities and doing this research it's hard to know what is new and what they are doing in their firms. they used to be there largely to help the firm's in their business practices, what they are doing now, they have the highest parking and they are there for them to addressing? we won't know into it where opportunities -- until we have more opportunities. another small but notable trend from the country, many have given up and try to get their loved ones out of the country. and of concern among many foreign companies for china going forward in many ways the

parties goal is economic relevance in terms of keeping itself in power, they will try to pursue goals with more concern about the expense of promoting rapid growth. a bit more detail about his and act on society after removing politics from everyday life for most people it's returning with a vengeance under xi jinping, for many people the party is becoming less relevant in their daily lives and it's what is involved in workplaces and it's what's in your face and it's become more of her turn to ideology and china with xi jinping's thought on just about

every topic you can imagine and an increasing number of universities and other locales throughout the country studying the thought on a wide variety of topics there is a greater emphasis on ideology in the schools and in the media. there are greater restraints on ngos in the country, including those that were previously tolerated, those that who have been involved more and lead to sensitive work like in the environment and social welfare. these are now under greater scrutiny and constraints, there is also an emphasis on building organizations within ngos. and unlike the parties practice of recruiting engineers or leaders in the civil society, the heads of ngos have not been

targeted for recruitment by this party, not seen as the kinds of people that the party wants in his organization. another well-known future, this is the increased surveillance throughout the country -- feature, this is increased surveillance throughout the country, to him on a dirt where people are they are with and what they say and do. there was also the desire to monitor and control society, but it was the analog, and we didn't have the same abilities. facial recognition software has easier ways of monitoring people in real time in ways that were simply not imaginable in the past. there was a great increase in this during the covid pandemic. whether it will decline subsequently, or whether this constant surveillance, using a

qr code to get into a building, in a classroom or on buses are everywhere else, howhow much thd if it will come back at times when the party feels a need to tighten control remains to be seen the impact of this, with greater party and state controls over most aspects of life. it has caused some resentment that got used to the fact that the party and state were not as prevalent in their life as it is now. for people who have grown up only knowing, especially the younger generation grew up only knowing more relative freedoms in the country, less constant surveillance by the party, this comes as a surprise. older generations that room of the past, not so much come of younger people this is a

dramatic change from what they have come to know. there is greater emphasis of using former -- formal party channels. mall -- mao like chaos, mobilizing the masses, have them do his bidding. xi wants to control the masses and make sure what they do goes through formally approved institutions that the party can control. limit the information that flows up to the top there is also less tolerance for the informal institutions, informal practices that had come into play during the reform period. officials would often cooperate with ngos in providing social welfare. in providing legal advice for

migrant workers, aspects of. poverty relief and disaster relief. . informally, they were not always registered local officials saw the benefit of having them do those things. now there is less tolerance for that. one of the consequences for this? the resentment for the greater surveillance especially during the covid period. will that be a permanent decline in the popular support for the party? one thing that often surprises the foreign observers is a high level sustained support for the party from china's on population. -- own population. we have anecdotal evidence of support declined through social media, but it is largely anecdotal. it is not this survey we had in the past, and it is unlikely we will see it anytime soon.

one key indication of the fact that there may be a shift of opinion among especially young people is that fewer people are applying to join the party now than they used to. sense 2015 there has been a decline in the number of people wanted to the party. there has been a decline in number the party exception to the party. why that is the case, we do not know. because the difficulty of doing the type of field research, in the past. all of these things are unforced errors. these are not things that happened by mistake. they did not stumbled and to these -- into these changes. they did so intentionally. something the ccp is pulling back, regarding the private sector and high-tech internet companies like alibaba, tencent,

especially after the recent national people's conference. the prime minister was giving lots of reassuring redneck that the party still some -- rhetoric, that the party supports the private sector. matches the chinese private sector but the international community. china is open for business and regular business. whether this is rhetoric or a shift in attitude or practice remains to be seen. some of the applications for the u.s. i will take off quickly in the best interest of time. one is the ongoing blame game in both countries about the other country's intent. during a period of covid there were mutual conspiracy theories of the origins of the disease. in china there was suspicion that a may have begun in the

united states and transported to china. very much unlike the sars epidemic where there was a desire to find out how it started and what to do about it. this plays well in china, the popular nationalism that is so much a part of the recent social media commentary. the notion that the u.s. is out to get china in some ways does seem to play well to the population. a dangerous tactic to employ. the rhetoric to the u.s. containing china is a long-standing means the party promotes. in the past it is way seemed kind of silly. it is hard to imagine how much faster the economy could have grown. how much greater influence a could had in the international arena if the u.s. -- it was doing a very lousy job of

containing it. it seems increasingly true now, there is an effort to limit technology changes, other types of trade. one issue of publicans and democrats agree on nowadays -- republicans and democrats agree on no days is to limit everything that comes from china. there is a story from the washington post on efforts to limit the ability of farm land sold to chinese individuals and companies. the ban on technology transfers especially jeppesen chipmaking technology will be a further hindrance to the ability of chinese leaders to achieve the national goals. they have always had the capacity of duplicating foreign technology, often improving upon it, not good at creating new

technology from scratch. now it will be forced to, the made in 2025 program that seems to be a key part. it is forced to do so by limits on imparting -- importing technology from abroad. this may be a short-term setback. closed by noting that people that bet against china usually end up being wrong. so there are challenges the party faces in china, but it has always been able to somehow adapt enough to deal with them to survive. and the fate seems to be that they will do so for the foreseeable future. thank you very much. [applause] >> we will now turn to our speakers who are joining is virtually.

just one moment. we will first turn the podium over to make meyer, meg, the floor is yours. >> can you hear me ok? can everyone hear me? >> yes. >> thank you for having me. i cannot tell if you can hear me or not. i will assume you can. thank you for having me. i am sorry i cannot be there with you all in person. i enjoyed listening to his address and his assistant whose work i have learned from for decades now. thank you for having me. my focus will be on the role of the party state in china's economy. what it means for china's economy and what it means for u.s. relations in the end, i

have four points to cover briefly. one is how should we think about the political economic transition underway in china for some period of time? it has been amplified under xi jinping. that is something my co-authors margaret pearson at the university of maryland and kelly at hong kong university of science and technology. call party state capitalism. it echoes bruce's remarks about the logic of the parties intervention in the economy and what that underlying logic is about. the second is talk about this new era of regulation in china. third i want talk about ideology and then i will talk about prospects. i me start by talking about party state capitalism. there was this idea for many years, that i think roos nicely captured right now as well as -- bruce nicely captured right now. what the party one from the

economy was economic growth and dynamics is to bolster the party's political power. as long as the economy is growing, it was very important that the ccp qb grip on -- keep a grip on social stability and political civility. the key to political stability and longevity is economic growth. will be seen now is a reversal of that idea or the reconfiguration of those priorities. what happens in the economy, the chinese economy mystically as well as it -- domestically as well as the interactions with the world. the priority is on clinical power. rather than economic growth itself. we call it party state capitalism because we think it is different from state capitalism. we were talking about the eurasia group at little earlier. this idea, he has written about state capitalism. that term is used to describe

most of economic intervention and states divers as brazil, india, norway, saudi arabia. some of them are democracies and some are not. it tends to take on a more nefarious connotation when it applies to other authoritarian regimes like china. but people have focused on the state capitalism is the role of the state to support national champions or sovereign wealth funds, and globalized sectors. we argue that the logic of party state capitalism and we will tell you how that manifest in a minute, is not necessarily global competition bu political control. political power for the chinese comments party. we see that -- chinese communist party received that manifested in a few ways. i quite agree we do not want -- know what the impact is.

we do not know why they happen, we do not know what the role, even having golden shares and controlling minority stakeholders from the party itself early is on the -- it is too early to tell and we just do not know. we would make mistakes if we made immediate inference, are going for example that all firms are extension's of the party. i do not think that is true at all. that is when the trends. the second is what we call secret is asian -- securetization. that minified -- manifests in several ways, seeing economics as part of national security. a suite of laws that started in 2013 with the cybersecurity lot national intelligence laws. national security laws and -- that gave the state and the party a wide legal purview to intervene in the activities of firms.

commandeer assets, can tell -- compel individuals to operate with a party state -- -- an interest of national security. for example in the 2015 national security law, financial stability and financial sector stability was identified as a key element of national security. i was right on the heels of the stock market crisis in 2015 had a transformative effect of how the ccp was viewing private markets. and the riskiness inherent in the behavior of firms in china. this week of laws made it very difficult, especially for host countries on the outside that have had chinese investments and trade partners with china, do not be firms -- not see firms as extensions of the chinese state. because the law gives them the right to commandeer and intervene in the activities of those firms.

we have also seen industrial policy in china, i would point people to -- among others on this. what is interesting, the chinese state has been involved in the chinese economy in terms of ownership, state ownership, also subsidies and picking winners and trying to foster the develop and of competitive firms for all types of ownerships. has not really done industrial policy on this scale, ever. the signature campaign, made in china 2025 that launched officially in 2015. is not spoken in those terms of aiding china. -- made in china. those that require excessive guidance, matching state capital with social capital or private capital and the chinese financial sector to final aspects investments towards fund -- firms in frontier sectors.

ai, quantum computing, new energy vehicles, a wide variety of tech sectors emerging. what is interesting and quite novel on this new set of technologies is that this kind of investments going to non-state owned firms. private sector firms. that is because the policy have realized the next generation of innovative technology will not come from the behemoths they owned -- state owned industries. they will come from dorm rooms and startups in shenzhen. because they have been systematically excluded from the chinese financials is in for a long period of time, it was necessary to have the policy instruments. like government guidance funds in order to get capital. to send signals to venture capital and private equity and the wide variety of private capital in china.

where the state ones and see resources -- wanted to see the resources allocated. we are doing that united states as well. it is quite interesting. is private sector firms as well state sector firms part of china's very security oriented forward-looking industrial all these. we call this party state capitalism because the logic is about the circle of the party state itself. that is the response to both china's external environment. made in china 2025 on my reading is a direct response to the revelations that the u.s. was in fact choosing is access to high-tech value chains and the dominance in the value chains to spy on huawei. the fear that the u.s. and others might weapon guys -- weaponized the supply chain against china to supplant -- constrain the growth for modernization.

irony, the response, that securitized party control over the economy produce that outcome. fear in trading partners in host countries to restrain china from growing a wide variety of sectors. it is a bit of a self-sufficient -- selfless availing -- self-fulfilling prophecy as well as a security dilemma. it is also a response to china's and ccp's domestic concern about the economy. that brings me to the second point, the new era of regulation and how we should think of ideology in the role of the party. in china's political economy. i agree with bruce, the crack on tech it started in 2020 with a suspension of financial ipo. the reading you often get, is that check mark gave a very

incendiary speech and was punished. is part of common prosperity part of the drive to a limited the power base, or prevent the immersion of a power base by powerful osborne oars in china -- oscar newark -- businessmen in china. have followed a financial crisis and in equity markets. it also identified capital exports and capital flight from china. my for effective tell people, this period between 2008-2017 everyone's writing books if china is buying the world and what china is doing in africa and america buying up assets in europe. the errors in omissions was the balance of payments was living

-- if not more than the foreign investment in those years. it indicates a deep level of distrust between the private sector and some elements of the public sector. insecurity, their view of the future in china. it was noticed by the party state. what is happening in the context of the anti-corruption campaign and -- many actors in china come both part of the state officials and numbers of the private sector were abusing certain policies of china. including open capital markets and liberalized financial markets in order to accrue wealth for themselves. they expect treated -- expatriate it and committed a wide variety of fraud. we think of this new era of regulation has not an apotheosis of a long-held plan by xi

jinping, but a response that comes from a genuine fear. actions within the chinese economy were making the ccp insecure and were making the economy increasingly unstable and unwieldy. when i think about the financial ipo for example with the company that was being regulated as a tech company and was really a bank. when the size of those assets under management and the exposure of chinese households to the behavior and decisions of that firm. that was not being regulated by financial authorities. the fear on the part of the party state coming off the heels of a financial crisis and widespread protest with the peer to peer lending platforms. and other financial innovations in vehicles that expose chinese households to all kinds of actions to people in the chinese financial sector there were not behaving very well. it is a genuine sense of fear.

the new era of regulation and the most recent we have seen with the reorganization of how science and technology will be governed in china and the reorganization of the financial sector. that can be characterized by one word. centralization. it is a response the idea that the revelatory system was not working in china. i think we should recognize, they are in part, right above that. it was not working. in terms of ideology, it became fashionable to call xi jinping a committed communist. red china had returned and he is a new mao. we see the emphasis on xi jinping, hearing how every meeting has a start with some reading of the 20th party congress documents were some study of xi jinping. certainly that has happened, but is important we remember that before xi jinping became such a communist he said things quite

capitalist. market should allocate resources in china. he was bolstering the private equity market in 2015, trying to get capital to the private sector. i think the right conclusion is he became spooked by the instability that markets bring. they have done a very familiar thing in chinese politics. returned to the command control model of the party state of the solution of instability of markets. rather than some manifestation of the ideological presence. the way i think about is, when he says the expansion of capital has been disorderly. we have to function on the term disorder rather than capital. he will say over and over again private capital has a place, private business has a place. the disorderly extension of that capital has been most important. you look at critical sectors like finance, banking, and

educational touring you can see how it is riddled with fraud, instability, and in fact it is quite justified read literary response to -- regulatory response. he remains pragmatic, although getting into xi jinping's head is the kind of field we cannot do now or ever. let me close briefly by talking about the prospects for the chinese economy. high echo almost everything bruce said both in terms of not counting them out but also recognizing there are significant problems. the primary problem, and at least this is how the chinese are thinking about it right now is the backlash from the west. it is a response of. some actions china has taken. also a response to american domestic politics. shifting ideas about what america's will will be in the world. is the obvious with the

investment mechanisms, the use of export controls and a very straightforward specifications of those projects. saying we cannot tell the difference between a private chinese firm and the chinese state anymore for the purpose of american national security. therefore these barriers must be erected. what we have now is a situation where china is hearing, we will not let you grow no matter what. it has some very high-profile chinese academic singing last couple of weeks that chinese policymakers think there is no hope for improving relationships with the united states. therefore the logical extension of that, there is no point in trying to address -- adopt market reforms because they will never let us grow. what kind of policymaking that might lead to in china, i think is really uncertain and quite scary. the idea is they cannot trust

the external environment, the domestic actors, it seems to me there are very few limits to what the party state might do in terms of how it governs the economy to the ability to some of the -- to rehabilitate some of the experimental, and independent dynamics that allow china's economic growth to happen. not necessarily a miracle. quite easy to explain in terms of letting people follow the market logic. there are limits to that from the policymaker's mindset we are in an scary world. they know within need to do in terms of reform, in the property sector, within the financial markets, there needs to be clear transparent disclosure, there needs to be fiscal reforms, property tax, in fact they piloted some of those things. again, generated from market instability, and backlash of

urban households and others in the party state is not willing to tolerate that. they are stuck in the same reform cycle, in my view. on the other hand, we can count vatican is -- back and it is listing -- interesting to listen to professor hardy talk about this. we can think they have no way to get out of this, they don't have the appetite or the ability for the reforms they need to generate the next generation of investment and innovation. i think it is too early to cannot such a thing as possible. i will and on the note, -- end on the note, this is not the first crackdown on on -- investment in china. they are trying to rehabilitate the chinese economy after the war and making certain compromises with them, then turning against them in the late 50's and early 1960's.

i think all this has a lasting impact on the nine set of that -- mindset of them in china. these to be waves of accommodation and reprisal. when there is a wave of accommodation they capitalized on it as fast as they can was short time horizons. the more punitive the waves of reprisal get like the last several years, the more that mindset is embraced by chinese businessmen to the detriment of the economy. there is not much new here, but the changing external environment but the deepening of the psychology of trust between the business class in the state will have lasting consequences for the next generation of market oriented performers are willing to do and what is meant willing to risk in china -- what is men are willing to risk in china. >> it is our pleasure to welcome

you to the school virtually the floor is yours. >> thank you so much. such an honor to be here. i am also sorry i cannot be there in person. i hope you are all well. i enjoyed, the presentation so far, i really like professor harding's keynote speech. if they called it about the history and that is what i'm going to do. i have a few slides, can you enable me to share my slides? >> hello. ok, great, thanks. [laughter] i want to talk about, what we are seeing in china.

we know that earlier this year, just last month, champagne has very successfully attained a third term. this will make xi jinping the longest reigning head of state in the history of the people's republic. even mao zedong was the head of state for only 10 years. 1949-1959. he will likely be the head of state release 50 years or maybe 20 or 25 years. i want to focus on this question. what this means. what having a long ruling leader means for china and also for the world. as the professor mentioned, history does not repeat itself, but it always rhymes. we need to think about what will happen to china, in terms of what has happened in china, my remarks are based on my book,

that is focusing on imperial china. looking at the politics in the last 2000 years. let me start with a fun fact about the chinese borders in the last 2000 years. what you are seeing, is including all the emperors in chinese history. from the first emperor to the last in early 20th century. i collected graphic data about all the emperors. 400 emperors in chinese history. i collected the biographic information of all them. high-speed -- paid special attention to how they died. turns out that half of the chinese emperors died peacefully. they died of age, disease, when they were on the throne. the other half, died on peacefully -- un-peacefully.

they were killed by foreign adversaries or rebels. a quarter of all emperors in chinese history where assessing by elites. people that wronged them. what you see in this graph is the probability of being deposed by elites in the last 2000 years. you can see in the first half of imperial china, this increased dramatically. in the late dynasty, for example, almost half of the emperors were deposed by the elites -- elites. this and then dramatically declined in the second half. to almost when no emperors were deposed by the elites. we do see a dramatic change of fortune for chinese rulers in the last 2000 years. i took a look at what happened to the government. i paid attention to physical

policies, and the physical power of the chinese government in the last 2000 years. very briefly to summarize what you are seeing in the two graphs. in terms of both policies, but also terms of per capita taxation we see and increase in the strength of the imperial government and the first half of imperial china. that reached its peak in the year 1000. and the second half of imperial china we see a decline of the strength of the chinese government. if you put the two graphs together, remember what i showed here and what is show here. we do see a very puzzling pattern. that is, in the last 2000 years of chinese history, when you have a strong ruler, in the second half of the imperial china. you have a strong ruler not deposed by the least -- elites

come you will be government. and the first half of imperial china it is the opposite, if you have a weak will you are deposed all the time by elites but you end up having very strong government. that is what i try to explain in this book, my argument is that chinese rulers, in the past, but also today, are facing a dilemma. a sovereign's dilemma. when they try to stay in power for a very long time they need to frighten the elite. if they -- fragment the elite, if they have a coherent elite, they will make action against them. by fragmenting the elite, this will undermine the strength of the government. a fragmented elite, they will not be able to take the kind of action make policies to strengthen the government. this is what i call the sovereign's dilemma. you can stay in power for very

very long or you can have a very strong government. you can achieve both goals at the same time. the type of elites that is required to achieve both goals is very different. that is the core argument i try to make the my book -- in my book. i want to summarize what i saw on the last 2000 years of chinese history. i use a very special source of data in my book. every person, the elite, when they died, and historical china, the family asked their friend to write a lengthy eulogy. they will carve it on the tombstone. the tombstone survives for a long period of time. for researchers like me, to collect information on what type of people we are seeing in their families, for example. paying attention to the network, who you marry your daughter to who you marry her sons to.

using the data collected illustrate a few slides to get a sense of what i am talking about when we talk about elite. this is what the work of the elite look like during the dynasty. the emperors were in danger all the time. this was because i very closely -- close knit network among the elite. on the left is the marriage left work -- network among the central officials. the people occluded are the people who held ministerial levels or above positions. in the dynasty. everyone was married to everybody else. sons and daughters are married and every family is embedded in this closely marriage network in the late dynasty. happen, as you can see, most of the central government officials

were in this close-knit network. where we put this network on a map you can also see the central elites were all meeting in the capitol area at the time. with their network they were able to connect the local elite to the every corner of the empire. that is what the elites look like in the dynasty. it makes sense that the emperors were in danger of the elites, they were so coherent and connected with each other. they were able to trust each other and take a plan of action against there was at the time. in the next century, the structure of the elites changed, i talked about the -- why a, save time i will show you what it look like in the next century. you can see the same people, i am put the people that had vice

minister level or above coming to see the network is fragmented. you have people that are connected with each other, then you start to see holes in this network. a lot of people that are not connected with other parts of the elite. you see a very fragmented elite. that kind of explain what happened to china's rulers at the time. the ruler started to enjoy safety and longevity. partly because of the fragmentation of the elite. this is also part of the strategy of chinese rulers, to stay in power they have to fragment the elite. . that is what happened in this. of -- this period of chinese history. lessons we learned from chinese history is, for the monarchs to stay in power you need to fragment the elite. you need to have a break of the

networks. you cannot have them become connected so closely with each other than the monarchs can stay in power, can maximize their own personal power. as a consequence of this the elites will not be able to make coherent policies. they will not be of the take the action trust each other to strengthen the government. that is what we saw on the second half of imperial china. to shed some light on what we are seeing today, on the one hand we see this argument made. that china is returning to a personalistic rule. xi jinping has monopolized power in the 20th power -- 20 power -- party congress. as shown here, we are also seeing the decline of networks. including the chinese elite. as xi consulted power, when

strategies he is using is break the network in the chinese elites. that has significant implications for how we understand china in the next five to 10 years. if he continues to this, try to consolidate his power by fragmenting the elites, we are going to see many many problems in the bureaucracy. the chinese your cut, the chinese -- bureaucrat, the officials, will not be able to coordinate encore policy issues. we have seen -- on core policy issues. we have seen some of this. it happened so abrupt, they announced the end of zero covid overnight. december, january, of last year and this year, and also receive

that there are some signs that maybe the defense ministry was not even coordinating with the foreign ministry. they were expecting secretary of state blinken, but -- we do not see any coronation among the bureaucratic organizations anymore. probably because, as i argue, the strategy used by xi jinping to fragment bureaucracy to stay in power. that is all have to say. i will stop here i look forward to your comments. [applause] >> thank you so much for those marks. bruce will invite you to come back for the discussion portion. we will have questions in a room on the microphone so you will be able to hear those.

bruce, let me invite you and stephen to sit in the level two seats. [indiscernible] >> thank you very much. are like take prerogative as the moderator to ask an opening question. we will open up to other people in the room as well. the one takeaway we have heard about the transition of the plague autonomy model is the high level of risk. professor dixon talked about declining party enrollment. professor britt meyer talk about

errors in omissions, the large outflows, very risky high scale state driven industrial policy. we have heard also, festival -- professor wong talk about the fragmented elite leading to inefficiencies from a bureaucratic perspective. the opening question is how sustainable is this current model? earlier professor harding talking about the importance of scenario building. there is a a lot of uncertainty here. how sustainable might it be moving forward? bruce: i will wait for somebody else to go first. >> i will jump in briefly. thank you, stephen for the question.

we have to think of a dynamically. the problem right now, it is my view that u.s. constraints on china's technology acquisition is so broad right now the policymakers in the ccp has concluded there is no hope for making concessions. there have been no concessions ask or by the u.s. government. there is no sense that if china were to take xyz action they would have more access to global markets and global supply chains. in that context since i'm getting from china, goes like a do or die moment, now the incentives are very much they had to succeed in developing their own abilities to do certain things without reliance on the global innovation ecosystem. that has traditionally been anchored in the united states and europe in some ways. very much with the reliance on china for manufacturing and the realization of actually making the technology happen. more recently innovating a lot

of the technology. i have read about the battery sector, where now u.s. firms have to licensed technology from chinese firms in order to manufacture batteries for electric vehicles in the united states as part of the inflation reduction act. we do have those capabilities although we invented them a long time ago. china is only one that knows how to manufacture them. that is a fascinating turn of events. now, why would we try to make concessions or be part of the global innovation ecosystem? they will never let us dissipate as long as we have the system that we have. as soon as the competition seems existential. even the biden administration has framed in terms of democracy versus authority is him. saying it is who governs china rather than how china behaves as the funding of the problem. within that it seems difficult

for me to imagine a snare into which china has an easy time changing course. in my view, change course risks are profound. the risk is alienating the business class is profound, the rest of the world is profound, what would be required is a change in the policymaking mindset inside of china. i quite agree with the observations. based on his quite brilliant historical resource -- research and in the contemporary period there is no voice to say we do it a different way. the recent meeting with business leaders seems to be a kind of a little bit of a -- but it is a band-aid on a big wound. there risks, the structural thing thing to do shift the economy, and stop the security dilemma dynamics within the united states or the trust dynamics in china.

it would take much more civic and change. i think china is in a moment, that what god here will not get it to the next step. the process to reconfigure that, does not seem evident to me. that said, we are always surprised when they end up changing course and there is something different. if something happened the next two years where they dramatically changed course, i do not want to say i think it is impossible. it would take some thing different than what is happening right now. i do not think xi jinping having a change of mindset, to back off and reverse the loss. it would -- reverse the laws. it would take dramatic action. >> to add onto that, this trend of greater role for the party and for the state in economic and social life is not a new developing. it goes back to the global financial crisis of 2008. chinese leaders asked why should

we take advice from people that almost crashed the global economy? our approach is better. that sounds pretty well in china. they can show the dysfunctionality of american democracies and the challenges other democracies face. they did not see the same pressure to change the basic model or the main way of doing things. within china there has long been assassination for the single model of a very controlled policy with a single party ruling -- really dominating things. it does not scale up to the country the size of china. they have the desire to somehow learn from that sprint. there is also always ambivalence about relying on the private sector for growth. it is hard to control a very large private sector full of small to medium enterprises. they would much prefer a system like south korea. with large, integrated,

conglomerates. there has been ambivalence all along, that is reinforced now with the focus on the monopoly practices in high-tech and other sectors. that partly is a revelatory response -- regulatory response. jack ma could have been seen to be to populated -- popular and they want to constrain the role he has. what we have seen in recent years is the greater role for the party has gone back 15 years. >> very quickly to say in terms of elite politics, i would argue it would be very sustainable for the next five to 10 years as long as xi jinping remains in power. even those that are losers in the elite struggle. he was supposed to be the next

president, but is now sidelined. it is in his best interest to shut up and do whatever xi asked him to do. that is a feature of the singapore to regime. even though there are factions and struggles within the single party, for everyone it is in the best interest to be loyal to the party. you can enjoy all the pension, all the privileges he is having by investing in the party. the problem i think will happen when succession happens. that is when xi jinping has to step down. in 10 years or 15 years, that is when a policy will become risky, we are likely to see a systemic scenario, where there will be chaos. everyone will be competing for the top position. steven: i will open it up for questions from the room. we are tight on time. we will take one or two and then

go to the panelists after. over here and overhear. >> hello. i am a grand student here. a researcher at the center. my question for the doctor, with reports of censorship and restrictions on the academic database there are concerns about the verifiability and the axis of data from china. -- access of data from china. especially for officials looking for data on career advancement and academic interest in china. when you think the trends signify? do they signify data transparency being a bigger hole -- hurdle in the future in china? will i have impacts on political careers as well? >> we will also take the question overhear. >> hello, from the group

dialogue at gw. a question related to the earlier one. you mentioned the possibility of doing research in china is going to become substantially less. that our understanding of it is happening in china will be, probably attenuated going forward. that could make pulsing -- affect policymaking in the united states as well. how does one cope with that? the second question, china controls various railroads, refining, apis as well, could those be a bargaining chip that the chinese could use to make the u.s. give concessions with regard to technology affecting semiconductors? 40% of apis to come from china. >> we will move around to each panelists. >> i will take the first question.

even before cover the atmosphere for doing field research in china was very limited. it was getting worse and worse. being able to interview local officials had no incentive to accept interviews with local -- foreign scholars. for academics, if there is a social or professional, would also be questioned afterwards. there is a freeze on the kind of yield research that we had -- field research we had before. the use of public opinion surveys ended 2015-2016. our ability to understand trends in china, but more relations between state and society really suffers as a consequent. now with the country opening again, after covid there are

some opportunities. some braised -- brave souls that are going there the summer to do field research. we did not know what the result will be. how much access they will get. access to archives. be able to talk to people. it is a concern for people like me. less of a concern, because i have tenure. for people who are starting out their career's in grad school and need to earn tenure by doing high-quality research that gets published as a major major issue. to your other question how does it impact policymaking in the u.s.? this will be a very cynical view because i've been in washington too long. probably not too much. i do not think policymakers pay much attention to academic research on china. [applause] [laughter]

30's to be a revolving door between -- there used to be a revolving door between government officials in academia. that does not happen anymore. the revolving doors between think tanks in washington and the government. very few professors now going to government service. the way that was very common among my advisors. in that sense, what scholars know about china or think we know about china, does not really filter up to policymakers the way we wish it would. >> we will shift to professor wong, who i think after going a few minutes. >> thank you so much. i want to say, about the future. some of my students are starting to go back to china this year. as bruce mentioned, i think there is -- among the academics. the people are able to go

back are chinese nationals with a chinese passport. i have student that went back during the pandemic but they are all chinese nationals. i think it will be challenging for people to have a chinese passport. the senior people that have contacts in china are more likely to get interviews than the junior people. i do want to leave with an optimistic note. it is possible to study china without going to china. many many younger scholars are stating china in the u.s.. for example, chinese diaspora, chinese companies are in the u.s.. if you want to study chinese companies you can stay in the u.s. and talk to the u.s. branch of tiktok and get the insights on how chinese countries are dealing with the sanctions. is hard to study china, but it does not mean it is impossible to study china.

>> thank you for both of these questions we all have a lot to stay -- essay about what the study. i plan to go there this summer, i am hopeful, i do not think is right or the world of independent interviews where i can go around and talk to regulators have a problem that is over. on the other hand it out -- i do not want to be too pessimistic. we need to see how this year goes where we go back to china and see how works. it is a difficult time. the thing that is the nuance of it. i can look at the balance of payments and errors of omissions. if it were not being for me talking, many people quietly saying this is how i get my money out of macau, i would not have known to makes is a big deal those figures. i am worried we are at risk of redefining this idea that china works a particular way. the party is everywhere, and denver appreciating the way people -- under appreciating the

way people pursue their own interests. that is particularly dangerous with how washington sees china right now. on the data question about the financial data and disclosure, it is or michael. at this point, wall street has been kind of the only friend to china. in the business community broadly that says we love this place. wall street firms do not have the access to the financial data and bond data of chinese firms. what they do with this i do not know. it was pointed out to me the other day, that the new national data bureau, allow this is happening in the name of data security on the china side. countries all over the world are worried about data security. it is interesting that the new data bureau is under the ndrc. we think of as an economic management rather than a security tool. rather than parts of the party state that is interested in security. there is cybersecurity action

that is is not under. we should pay attention to the ways it happens, my view is that a lot of was happening, the financial regulators no longer trust the companies to report accurate data. they should not. it is much harder to get accurate data on chinese companies. the ways in which we have taken some data for granted because it is available, without doing the real fieldwork to figure out exactly how those contracts are structured and how the companies are structured. it is painstaking. to figure out the holding of a company's, takes a few months of corporate filing research. i kind of welcome the reconfiguration, briefly to say we have to do a lot of work to figure out if the data we are using is the right data in the first place. the fact that we do not have access to the off-the-shelf data sets is kind of bad. it is invitation to do more creative data collection.

it is possible because china is all of the world now. it is easier to do that research outside of china's border. it is supposed to be hard work for scholars. hard work to collect the data and get the stories right on how the interactions happen how the company's work in particular. it is on us to do the hard work and creative ways than we have done in the past. i share bruce's anxiety about the younger generations. especially as someone who does not yet have tenure. it is on the rest of us now to make sure that those interactions continue to happen. we are just about out of time. i like the closing charge, let's do the work. thank you very much, thank you bruce and stephen. we are running behind.

we will take a five minute break , there are beverages available outside, restrooms are across the hall. we will start the next panel in five minutes exactly. [overlapping speech] >> here is what is coming up tonight on c-span. next, david mccormick the 2022 pennsylvania senate candidate discusses his vision for a better future. then, the head of the u.s. space force talks about space force gordy's and national security strategy.

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building 100,000 miles of new infrastructure to reach those o need it most. >> charter communications supports c-span as a plic service, along with these other television providers. giving you a front r seat to democracy. >> up next on the author interview program, "after words" . former bridgewater associates ceo and 20 22 u.s. senate republican candidate david mccormick outlines his vision for a better future for america. he is interviewed by program senior fellow jon bateman. "after words" is a weekly interview program with relevant host interviewing at top nonfiction authors about their latest work. jon: