Transcript: Suisheng Zhao Dialogue with Huiyao Wang

August 03 , 2025

Professor at the University of Denver and founding editor of the Journal of Contemporary China explores the “prolonged crisis” in China–U.S. Relations from Trump 1.0 to 2.0.

▲ Video | Wang Huiyao in Dialogue with Suisheng Zhao 

 

On July 18, Suisheng Zhao, a Professor and Director of the Center for China-US Cooperation at the Josef Korbel School of Global and Public Affairs, University of Denver, visited the Centre for China and Globalisation (CCG) to deliver a keynote address and participate in a discussion with Henry Huiyao Wang, Founder and President of CCG.

Following that, Zhao, also the founding editor of the Journal of Contemporary China, answered questions from a live audience.

This transcript is based on the video recording and has not been reviewed by any of the speakers.

Mabel Lu Miao, Co-founder and Secretary General, Centre for China and Globalisation (CCG)

Distinguished guests, Professor Zhao, friends of CCG,

Good  afternoon! Welcome to the Centre for China and Globalisation. I’m the  Secretary General of CCG. Welcome to our CCG Global Dialogue.

Actually,  CCG Global Dialogue is a very prestigious global dialogue. We conducted  a lot of dialogues with the distinguished guests, including Pascal Lamy, Joseph Nye, Graham Allison, a lot of those distinguished scholars and political figures.

Today,  we are honoured to have with us Professor Suisheng Zhao, Professor and  Director of the Centre for China-U.S. Cooperation at the Josef Korbel  School of International Studies, University of Denver. Our discussion  today is themed “From Trump 1.0 to 2.0: Transitions and Analysis of  China-U.S. Relations.” I believe this is a subject of great interest to  many, as China-U.S. relations are the most consequential bilateral  relationship in the world today, shaping global strategic, security, and  economic landscapes. Later, we will have the honour of hearing  Professor Zhao’s keynote speech, followed by a dialogue with Dr. Henry  Huiyao Wang, Founder and President of CCG. As I mentioned earlier, this  Global Dialogue series is where renowned scholars, policymakers, and  thought leaders engage in exchanges with Dr. Wang. Past discussions are  available on YouTube and various domestic platforms, so we encourage everyone to subscribe to our channels and get updated.

I  am truly honoured to introduce Professor Suisheng Zhao. In addition to  his roles at the University of Denver, Professor Zhao is also a Research  Associate at Harvard University’s Fairbank Centre for Chinese Studies, a  member of the National Committee on China-U.S. Relations, and the  editor of the renowned English-language Journal of Contemporary China,a  leading international publication on China studies. I believe Professor  Zhao will elaborate further, but I am honoured to mention that I, too,  have been a contributor to this influential journal, which has shaped  many global opinions on China.

Professor Zhao’s  distinguished career also includes serving as a Campbell National Fellow  at Stanford University’s Hoover Institution, Associate Professor of  Political Science and International Studies at Washington College,  Assistant and later Associate Professor of Government and East Asian  Politics at Colby College, and member of the Board of Governors of the  U.S. Committee of the Council for Security Cooperation in the  Asia-Pacific (CSCAP).

Professor Zhao holds a Ph.D. and M.A. in  Political Science from the University of California, an M.A. in  Sociology from the University of Missouri-Kansas City, and a Bachelor’s  and Master’s in Economics from Peking University.

Beyond founding Journal of Contemporary China, Professor Zhao has authored over ten English-language books, including: Power by Design: Constitution-Making in Nationalist China, A Nation-State by Construction: Dynamics of Modern Chinese Nationalism,Power Competition in East Asia: From the Old Chinese World Order to Post-Cold War Regional Multipolarity, and his latest work, The Dragon Roars Back: Transformational Leaders and Dynamics of Chinese Foreign Policy, which was named a 2024 Best Book of the Year by Foreign Affairs.

He has also published over 100 English academic and policy papers in leading journals such as The Washington QuarterlyThe Wilson QuarterlyPolitical Science QuarterlyThe China Quarterly, and the Journal of Contemporary China.

Today,  Professor Zhao will present on: “From Trump 1.0 to 2.0: Transitions and  Analysis of China-U.S. Relations.” Following his remarks, Dr. Henry  Huiyao Wang Huiyao Wang, Founder and President of CCG, former Counsellor  of China’s State Council, and a distinguished professor, will engage  him in an in-depth dialogue. Without further ado, let’s welcome  Professor Suisheng Zhao to the stage.

Suisheng  Zhao, Professor and Director of the Center for China-US Cooperation,  Josef Korbel School of International Studies, University of Denver

[Speaking in Chinese]

Thank you, Dr. Miao, for the kind introduction, and thank you, Huiyao, for inviting me back to CCG. Two years ago, I spoke here  about China-U.S. relations, and in these two years, the relationship  has undergone significant changes. Since Trump took office—especially in  his second term—many have made predictions. One of the most notable was  a bet  made by two prominent scholars at the World Economic Forum in Davos  this January. The first figure in this bet was Graham Allison, a good  friend of Huiyao, who argued that by this time next year—around the  one-year mark of Trump’s second term—we would “be surprised on the  upside” in the China-U.S. relations.

His reasoning was  simple: Trump and the Chinese leader have a strong rapport, Trump  respects the Chinese leader, and they share similar personalities as  strongmen, which makes negotiations between them smoother. Therefore,  China-U.S. relations were expected to improve. However, on the same  panel, Ian Bremmer, founder of the Eurasia Group, strongly disagreed. He  predicted that by this time next year, relations would not only fail to  improve but would “be in materially worse condition.” He argued that  China-U.S. rivalry is so deeply entrenched and emphasised that China  would not accommodate Trump or Trump’s policies, making any improvement  in relations unlikely.

Half a year has passed since that bet, and  Trump has now been in his second term for about six months. Looking at  the developments so far, who do you think is winning the bet? There’s a  few hundred dollars at stake. In my view, neither prediction has come to  fruition. We haven’t seen a “surprising improvement” in China-U.S.  relations, and I doubt we will in the next six months. At the same time,  relations haven’t become “materially worse” either, and I don’t foresee  that happening in the remainder of the year. So, what has China-U.S.  relations been like under Trump’s second term? I would argue it has  largely followed the trajectory set during his first term. And what is  that trajectory? I call it a “prolonged crisis.”

Before Trump’s  first term, China-U.S. relations followed a cyclical pattern—periods of  crisis, followed by stabilisation, improvement, and then another crisis,  another improvement. These cycles were typically driven by two factors:  sudden incidents and U.S. domestic political cycles. However, the  cyclical dynamic of China-U.S. relations came to a definitive end during  Trump’s first term. Since then, the relationship has experienced a  cliff-style plunge. Many in the U.S., especially, have framed post-Trump  1.0 China-U.S. relations as a “new Cold War.” I don’t like this term.  So, instead, I’ve coined the phrase “prolonged crisis” to describe a  long-term crisis that is not triggered by sudden events or U.S. domestic  political cycles, but rather stems from accumulated contradictions  between China and the U.S. over the long run.

The lowest point of  this prolonged crisis actually occurred after Trump’s first term began  in 2017. The first trade war kicked off in 2018, and over the next five  years, until 2023, China-U.S. relations reached their nadir within this  prolonged crisis. What was the most significant indicator of this low  point? The near-total suspension of all high-level exchanges between the  two nations. Before this period, more than a hundred communication  mechanisms were functioning at various levels. In 2017, when President  Xi visited Trump at his Mar-a-Lago estate, there were attempts to  establish or re-establish four dialogue mechanisms. While these  frameworks were technically set up, they proved largely ineffective.  Meanwhile, nearly all other channels of communication were nearly  completely severed.

During these five years, virtually no U.S.  cabinet-level officials visited China. Although China’s foreign minister  could attend UN General Assembly meetings in New York, not once during  this entire period was China’s foreign minister invited to Washington.

During  this period, high-level exchanges between the two nations were largely  reduced to rhetorical confrontations conducted through media channels.  With official diplomatic communications suspended, people-to-people  exchanges also experienced significant deterioration. From my  perspective as an individual and a university professor, the Trump  administration implemented two particularly damaging policies that  profoundly impacted my work in education. First, the complete  termination of the Fulbright Program, which had enabled many Chinese  scholars to conduct research in American institutions while also  facilitating American scholars’ work in China. Second, the  discontinuation of the Peace Corps’ operations, which had provided young  Americans with opportunities to teach English in China’s remote  communities and learn about China. This programme has also been  dismantled.

From 2020 to 2023, the number of American students  studying in China plummeted dramatically. At its peak, following the  2008 and 2009 Olympics, there were as many as 15,000 American students  in China. By 2023, that number had dropped to a low of 350, and by the  following year, it had only slightly recovered to just over a thousand.  Moreover, these students are now concentrated in only two institutions:  Schwarzman College at Tsinghua University and Yenching Academy at Peking  University. During my visits to numerous other Chinese universities,  I’ve noticed many international students, but very few Americans.

This  sharp decline in Americans coming to China has been mirrored by a  significant reduction in Chinese people going to the United States.  During Trump’s first term and continuing into the Biden administration,  the number of Chinese students in the U.S. peaked at 370,000. By 2024,  that figure had dropped by one-third, to around 250,000–260,000. I  anticipate further declines this year due to restrictive U.S. visa  policies and Trump’s anti-immigration stance.

As official and  people-to-people exchanges dwindled, the media in both countries  portrayed the other in an extremely hostile and often demonising light.  Having lived in the U.S. for 40 years since 1985, I’ve always seen  overwhelmingly negative coverage of China in American media. Any mention  of the People’s Republic of China, the PRC, or even the sight of the  Chinese flag on television is almost invariably accompanied by  narratives of technology theft, job theft, and espionage. Additionally,  the portrayal often suggests that China is unsafe, with reports of  American young people, faculty members, or scholars being detained or  disappearing in China.

Conversely, Chinese media portrayals of the  U.S. are equally bleak. When I visit Beijing or return to China, like I  recently participated in a seminar in Shanghai, attendees felt I must  be living in a very dire and chaotic situation since I live in the  United States. They said, “You should come back to China quickly. How  can you still live there?” I thought to myself, “I’ve lived in the U.S.  for 40 years and I’m doing fine.” They went on to describe the U.S. as a  place plagued by shootings, anti-Asian sentiment, and civil unrest. One  even asked me, “Can you still buy things in stores? The shelves are  empty!” I was stunned, as I had never heard of such issues.

This  kind of mutual vilification, the departure of most foreign journalists  from Beijing, and the drastic reduction of correspondents from Chinese  state media in Washington—such as People’s Daily, Xinhua News Agency,  and China Central Television—from hundreds to just a handful, has led to  overwhelmingly negative reporting on both sides.

This  negative portrayal not only deepens hostility between the two countries  but also leads to irrational responses to each other’s actions. I recall  that in 2023, many American scholars were concerned that the two great  powers could no longer engage in dialogue and were on the brink of war.  In fact, some even suggested that China and the U.S. were “sleepwalking” toward escalation and confrontation.

When  Biden took office after Trump’s first term, he was deeply concerned  about the potential for inadvertent escalation. He called for  responsible management of competition and the establishment of  guardrails, with one of the most crucial measures being the restoration  of high-level exchanges. However, resuming these exchanges proved  difficult. When Biden’s Secretary of State and National Security Advisor  suggested meeting with Yang Jiechi and Wang Yi, the meeting could not  take place in Washington or Beijing. Where was it held? It was held in a  cold, neutral location—Alaska.

That place in March was bitterly  cold and dark, but the media remarked that the atmosphere inside felt  even frostier than the weather outside, thanks to the chilly standoff in  verbal exchanges. However, leaders on both sides—especially during the  Biden administration—still hoped to restore communication.

Thus,  at the 2022 Bali summit, it was decided that U.S. Secretary of State  Antony Blinken would visit Beijing in late January or early February the  following year. However, three days before the trip, the balloon  incident occurred, postponing the visit. Fortunately, the  well-established dialogue channel between Wang Yi and Sullivan remained  open, and it was this that facilitated a swift resumption of  communication and allowed the visit to be rescheduled to June.

In  June, the U.S. Secretary of State came, followed by four U.S. cabinet  secretaries visiting China within three months—the Secretary of  Commerce, the Secretary of the Treasury, and the Climate Envoy. Then, in  November 2023, the San Francisco summit took place, aimed at “stopping  the decline and stabilising” relations. I believe this goal was  achieved, but the stabilisation occurred to a very small degree. In  other words, the prolonged crisis that began during Trump’s first term,  or what many Americans call the “new Cold War,” was neither terminated  nor reversed.

Why is this prolonged crisis or so-called “new  Cold War” so difficult to reverse? Many, especially some scholars in  the U.S. who pin their hopes on dialogue, believe that China and the  U.S. still can’t find common ground because they lack sufficient  understanding of each other’s policy red lines, leading to  misunderstandings and misjudgments. I disagree with this view. Last  year, I wrote an article titled “Talk the Talk and Walk the Walk,”  arguing that neither side truly believes the other’s commitments. Why?  Because mutual trust is nearly impossible to establish, whatever one  side says, the other doesn’t believe. And why can’t trust be built?  Because since Trump’s first term, China-U.S. relations have entered a  new historical phase: great-power competition.

From  the U.S. perspective, its policy focus before this was counterterrorism.  But after Trump’s first term, great-power competition became the  priority. Although this was formally articulated in the 2017 National Security Strategy,  I believe its roots trace back to the 2008–2009 financial crisis.  During that crisis, the U.S. economy suffered a severe downturn, while  China’s economy remained robust. In 2010, China even managed to maintain  a double-digit GDP growth, its last such milestone.

So, I  feel that many people in China—and I don’t say this as criticism—but at  the time, many Chinese scholars became somewhat overconfident, believing  that America had completely collapsed, was in irreversible decline,  while China enjoyed overall stability and sustained economic growth. As  we just discussed, notions like “the East is rising while the West is  declining” seemed to have fully materialised.

In the past, China  looked up to America; now it sees it at eye level. Not just eye level—I  think to some extent, it’s even looking down on America. There was a  perception that America now needed China, especially during the subprime  mortgage crisis. Many Chinese scholars, including some from Renmin  University, argued that America’s need for China was greater than  China’s need for America. One scholar from Tsinghua University even  claimed that China had comprehensively surpassed the U.S., not just in  GDP but also in technology, declaring America permanently weakened.

During  this period, China’s attitude toward the U.S. underwent a significant  shift. In the past, many issues could be resolved through mutual  compromise or negotiation. But now, many in China felt that America must  respect China’s “core interests”—interests that are non-negotiable and  non-compromisable. Previously, such “core interests” referred to a very  narrow set of issues. But now, they seemed to expand to cover almost  everything, all deemed non-negotiable and non-compromisable. This shift  alarmed many Americans.

In my 40 years living in the U.S., I’ve  developed a strong sense that this country has a deep-seated crisis  mentality—it constantly fears being overtaken, fears its way of life  being destroyed, and always looks for scapegoats to mobilise resources.  Japan once played that role; now China has become the perfect scapegoat.  Thus, a so-called “Sputnik moment” emerged. America began reassessing  China, a process that actually started before Trump’s first term, around  2014–2015, during Obama’s second term. During this reassessment,  America realised it had discovered a true competitor.

Thus, in Trump’s first National Security Strategy,  counterterrorism was notably downgraded from being America’s primary  strategic focus to a secondary objective, or even no longer mentioned.  Instead, the report emphasised “great power competition.” His National Defence Strategy  went even further, explicitly identifying China and Russia as America’s  principal strategic competitors in the U.S.’s great power competition.  This reorientation has continued under Biden.

During my  visit last year to the U.S. Air Force War College, I was struck by how  dramatically their curriculum had changed. Among the 400 colonels in  attendance, the focus had shifted entirely. Where once their coursework  centred on the Middle East and Islamism, these topics have now become  marginal. Instead, the curriculum is dominated by studies of China and  Russia. The China component alone consists of eight five-hour modules  covering Chinese society, economy, culture, politics, and military  affairs. I lectured for five hours in one such module, and was impressed  by the seriousness with which these officers now approach the study of  China.

So, great-power competition has become the central  focus of U.S. foreign strategy and the primary framework guiding its  China policy. As a result, the entire discourse surrounding China in the  U.S. changed. As I just discussed with Huiyao, works like Michael  Pillsbury’s The Hundred-Year Marathon argue that China has a hundred-year strategy to replace and defeat the United States.

And books like The Long Game  and others reflect this shift. In the past, the question was “Who lost  China?”—but now it’s “Who will lose to China?” There’s this mindset that  during my term, I absolutely cannot allow China to surpass the United  States. Great-power competition has become almost a bipartisan consensus  across the American political spectrum. A new “Washington Consensus”  has emerged—one focused on competing with and defeating China.

Since  the start of this great-power competition, ideology has been  politicised and weaponised. Although ideological differences between  China and the United States have always existed, for quite some time,  both sides chose to downplay them in pursuit of shared strategic,  geopolitical, political, or economic interests.

However, beginning  with Trump 1.0, ideology became highly politicised. Vice President  Pence’s first major speech outlining the U.S. approach to China was  entirely couched in Cold War language, casting China as America’s  ideological rival. Then, Secretary of State Mike Pompeo’s Nixon Library  speech was effectively a Cold War manifesto, drawing a sharp distinction  between the Chinese people and the Communist Party, and openly calling  for regime change—blatant Cold War thinking.

Biden has continued  this trend, framing great-power competition between China and the U.S.  as a contest between democracy and autocracy. Ideology has been fully  weaponised, with all sorts of issues used as tools in this great-power  competition. This, in my view, characterises the evolution that began  under Trump’s first term and has continued into the Biden era.

Our  topic is “From Trump 1.0 to 2.0.” I believe Trump 2.0 represents a  significant evolution. The reason why Allison is now so optimistic in  his analysis is precisely because of these substantial changes. However,  this does not mean that the prolonged crisis or the fundamental nature  of China-U.S. great power competition will change. That has not changed  at all. What has changed is the main focus of the competition.

During  Trump 1.0, the emphasis was on geopolitics and American leadership.  Biden continued that approach, highlighting ideological conflict and  even making a major issue out of Taiwan. But what is the focus of  competition in Trump 2.0? It’s trade and economic issues—maximising  America’s trade and economic interests. As for geopolitics, geostrategy,  ideology, and even the Taiwan issue, he rarely mentions them. If you  look at all of Trump’s speeches since returning to office for his second  term, you’ll find very little discussion of the South China Sea or  Taiwan. In fact, he almost completely avoids the Taiwan issue—his  subordinates might talk about it, but he himself steers clear. As for  ideology, it’s even less of a focus; he doesn’t address ideological  issues at all.

Not long ago, I was discussing with a colleague who  studies international relations theory, and he raised a very  interesting point. He said that the current leaders of the three major  powers—Trump, the Chinese leader, and the Russian leader—all share a  common ideological opposition to traditional liberalism and even to  traditional democratic ideas. In other words, their ideologies are  remarkably similar.

For Trump, who is his ideological enemy? It’s  not countries with different political systems, but what he calls the  “enemy within”—his domestic adversaries. Who are these internal enemies?  Undocumented immigrants, LGBTQ communities, and even the Democratic  Party—he treats his political opponents as ideological adversaries and  enemies. This is unprecedented in American politics. In the past, the  two parties competed fiercely, but it was always under the premise that  both sides were patriotic; they just had different ideas about how to  achieve patriotic goals. Now, Trump treats Democrats as his outright  ideological enemies.

So, in this context, Trump does not  view China as an adversary—neither in terms of ideology nor geopolitics.  There’s an article with a title I really like: “Trump Is A Trade Hawk, Not A China Hawk.”  That’s right—he’s a hawk on trade, not on China. I later tried to  validate this point, and indeed, there’s ample evidence. Not only did he  launch trade and tariff wars across the board against all countries,  rather than singling out China, but if you compare his first and second  terms, none of his original China hawks returned to key roles in his  cabinet or among his senior advisers. Mike Pompeo and Matt Pottinger  were not brought back; nearly all of his first-term hardline China  officials, including his famously tough U.S. Trade Representative, were  left out.

Someone I know quite well, David Stilwell—who  lived near me, served as Assistant Secretary of State for the Bureau of  East Asian and Pacific Affairs, and was an Air Force Brigadier  General—was certain he would return. Before Trump came back to office,  he confidently told me, “Look, during his first term, I worked  tirelessly for him. These China policies, the strategies to contain  China—those were all my ideas.” He was sure that once Trump returned, he  would be brought back as well. But after Trump’s return, he didn’t get  any role at all; he remained an Air Force Foreign Area Officer.

Many  Chinese are familiar with Miles Yu. At the time, he was also  confident—he believed that his boss, Pompeo, would return to office and  that he would go with him. But in the end, nothing happened; there was  absolutely no opportunity for him. Matt Pottinger, who published  numerous articles to curry favour and signal his loyalty before Trump’s  return, was also left out.

So in this sense, I really agree with that article’s title: Trump is a trade hawk, not a China hawk.

There’s  another important shift in Trump’s second term regarding great power  competition. He now sees that while great powers compete, strongmen can  jointly govern the world. Major powers can join hands to carve up the  world, turning it into respective spheres of influence—America in the  Western Hemisphere, Russia in Eurasia, and China in the Asia-Pacific. In  a sense, this represents a rethinking and redefining of America’s  hegemonic position. In the past, the U.S. never acknowledged a  multipolar world. Yet, as soon as Secretary of State Marco Rubio took  office, he said that America has already entered a multipolar world.

The  Under Secretary of Defence for Policy, Elbridge Colby, with whom I’ve  had some contact, is known in Washington as a representative of the  neo-isolationist school, even though he is quite hawkish on China. He  believes that the U.S. should not overextend itself or provide support  to European countries. When it comes to Indo-Pacific security, he argues  that U.S. allies in the region should take primary responsibility for  their own defence. Just a couple of weeks ago, his remarks  drew significant attention when he told the UK, Why is your aircraft  carrier in the Pacific? That’s not your concern. Europe is a mess—take  care of your own problems first. This viewpoint closely aligns with  Trump’s concept of strongmen jointly managing the world.

In  this context, Trump is not a China hawk. In fact, he has always shown  admiration for the Chinese leader. If you look at all of Trump’s  statements about China’s leader, there has never been a single negative  remark. He has always hoped to reach some kind of grand bargain or  transactional deal with China. So when the China-U.S. trade war began  and he imposed 147% tariffs, it was really an opening bid, hoping for  negotiation and a deal. But China refused to play along.

In the  end, Trump completely reversed his stance, and throughout this process,  he was eager to meet with the Chinese leader. He would post on his own  social media platform, Truth Social, in the middle of the night, unable  to sleep over making a deal with the Chinese leader. Eventually, he  wrote in all caps, the Chinese leader is “VERY TOUGH, AND EXTREMELY HARD  TO MAKE A DEAL WITH.” But he also acknowledged that this was only  right, that they defend their interests, and I defend America’s  interests. Ultimately, this competition is over national interests.

This  is a new development for China-U.S. relations. Given this, what are the  prospects for the bilateral relationship? Is it possible for the  relationship to reverse this prolonged crisis? In my view, that remains  unlikely, for four main reasons.

First, U.S.-China relations are  now driven completely by personal will, especially on the American side.  Trump’s own approach is highly arbitrary, focused on immediate concerns  with no long-term strategy, while China engages with the U.S. from the  perspective of stability and a broader strategic framework. This makes  it difficult for the two sides to find common ground.

Second, when  it comes to trade and economic issues, Trump’s demands remain extremely  high. Although so-called selective decoupling and other economic  measures are meant to prioritise trade and the economy, reaching any  agreement with China is still very difficult.

Third, although  Trump is able to control the situation for now, the broader U.S.  domestic environment remains extremely unfavourable. While he hasn’t  brought back the first-term hawks, the overall atmosphere in Congress  and across the political landscape is still deeply hostile toward China.  For now, Trump maintains his position as a strongman and keeps the  Republican Party in line, which retains control over Congress. However,  if his policies encounter difficulties—if the effects of the tariff war,  which have yet to be fully realised, begin to harm the economy in, say,  six months, triggering a recession and he faces setbacks in the midterm  elections—these China hawks and hardliners could quickly gain influence  over him.

In addition, this idea of joint governance of great  powers—what many now trace back to the 18th- and 19th-century Concert of  Europe—has fundamentally changed from its original form. Today, the  power dynamics among major countries are not balanced, but are shifting  rapidly and unpredictably. Trump once thought he could strike deals with  Putin, but this has become increasingly difficult and may ultimately  end in disappointment; U.S.-Russia relations will also change in the  future. The same goes for his hoped-for deals with China—I think these  may not materialise either. Under such circumstances, the concept of  joint governance is hard to realise. This is why I believe that the  “prolonged crisis” or so-called “new Cold War” will be difficult to  change in the short term.

Therefore, with regard to Allison’s  prediction, I think it’s still too early to see any clear outcome.  Looking at the current trajectory of U.S.-China relations, what matters  most is the wisdom and foresight of leaders. However, in my view, Trump  lacks this kind of foresight. China’s leadership benefits from a  relatively stable system, so I’m less concerned on that front. What  worries me is irrational decision-making in the U.S. regarding China.

After  Trump, and even now, I see two major irrational tendencies in America  that concern me deeply. First, there is a serious underestimation of the  resilience of China’s economy and political system. Many in the U.S.  now believe that China’s economy is finished, that it has already  peaked; Trump himself claims that China’s economy is failing and that  his pressure is actually helping China. There is a widespread view that  China is on the verge of collapse, which simply does not reflect  reality. Likewise, the resilience of China’s political system is  underestimated.

Second, there is an overestimation of the “China  threat.” Not long ago, I attended a conference at Brown University that  focused specifically on this issue—the inflation of the China threat.  The overestimation of China’s influence on American society is  especially alarming in the United States.

Both the underestimation  and overestimation of China have led to a common policy result:  overreaction to China’s policy moves. Examples of such overreactions  toward China abound, and they can have extremely serious consequences. I  will briefly touch upon some of them.

First, overreaction can  lead to avoidable conflict. The U.S. has made many strategic mistakes by  overestimating the threat from an adversary and underestimating its  resilience. History offers many such examples. One is in the 1950s,  when, because of the “domino theory,” the U.S. became mired in the  Vietnam War. Another is the Iraq War, where the U.S. once again  overestimated the threat.

Second, these overreactions have created  major obstacles to academic exchange between China and the U.S. Right  now, in American academia, such exchanges have become nearly impossible.  For example, in states like Texas and Florida, laws have been passed  prohibiting public university faculty from participating in academic  exchanges in China. Not long ago, I visited Florida, where a professor  told me that when he tried to join a National Committee on U.S.-China  Relations delegation visiting Japan, Korea, and China, his university  warned him: If you go to China, you will be fired. This has had a  devastating effect on academic exchange.

Third, the economic impact is also significant—it’s a lose-lose scenario, where both sides suffer.

Fourth, such overreactions have fuelled anti-American sentiment in China, which is highly detrimental to the U.S.

So  these are the outcomes I am deeply concerned about. I’ve spoken at  length, so let me summarise: I don’t see the current situation as a new  Cold War, but rather as a prolonged crisis. It is not a new Cold War  because the U.S. and China have not formed two distinct geopolitical and  ideological blocs. Moreover, neither country is likely to defeat the  other. The U.S. underestimates China’s resilience, and many in China  also underestimate America’s resilience. Neither will be defeated. The  only viable path forward for both countries is peaceful coexistence.  I’ll stop here. Thank you all.

Henry Huiyao Wang, Founder and President, CCG

Thank  you very much. Just now, Professor Suisheng gave a very comprehensive  and focused analysis, as well as a summary and outlook on the evolution  from Trump 1.0 to 2.0 over an eight-year period. I think his analysis  was spot-on. Having lived in the U.S. for decades, Professor Suisheng is  deeply involved in academia while also staying attuned to developments  in China. He has contributed greatly to building bridges and  strengthening ties between the two countries. His remarks were truly  excellent.

Now, for the next part of our event, we’ll be switching  to English, because, as always, CCG Global Dialogue is conducted in  English.

[Speaking in English]

So, from this point,  I’d like to begin our discussion with Professor Zhao on the topic “From  Trump 1.0 to 2.0: Transitions and Analysis of China-U.S. Relations.”  We’re hosting this CCG Global Dialogue today at the CCG CBD office. I’d  also like to briefly introduce Professor Suisheng Zhao to our  English-speaking audience. Professor Zhao is Director of the Centre for  China-U.S. Cooperation at the Josef Korbel School of Global and Public  Affairs, University of Denver. Another of his notable achievements is  founding and serving as editor of the Journal of Contemporary China,  which is recognised as one of the world’s top journals in China  studies. He founded that journal many years ago and has long been a  leading figure in the field of China studies. The journal has become  highly influential for research and discussion not only on China, but  also on U.S.-China relations and global issues.

Suisheng,  I find it interesting that you mentioned Graham (Allison). We’ve  invited Graham to CCG many times, and this February at the Munich  Security Conference, he made the same prediction that by February 2026,  China-U.S. relations would improve—a bet he also made publicly with the  chief editor of Foreign Affairs, Daniel, among  others, for a $1,000 lunch wager. I have a slightly different view,  because I think we’re still waiting for a truly high-level summit  between China and the U.S. During the last phone call between President  Trump and President Xi, both agreed that a series of visits would take  place. Who knows—after those visits, we might see some improvement in  the relationship. But I agree with you that, in the long run, the  competitive dynamic will persist.

For today’s dialogue, I’d  like to focus particularly on Trump 2.0. I have several questions, and  then we can also invite questions from colleagues and our audience. The  first question I would like to ask you is this: With three and a half  years remaining in President Trump’s term, what do you see are the  biggest areas for cooperation between China and the U.S.? As you  mentioned, since neither side can defeat the other, we might as well try  our best to find areas where we can work together. What are the most  promising areas where we can work together? That would be my first  question. I’d like to hear your thoughts on that, and then I may add  some comments as well.

Suisheng Zhao

Thank  you again for the invitation and for the conversation. Before I answer  this question, let me also pick up when you talked about the leaders’  meeting possibility. In fact, I think if there’s a summit between the  Chinese leader and President Trump by the end of the year, there could  be some significant change or improvement in the relationship.

So,  in that context, I would urge the China side to make as much effort as  China could to facilitate this meeting. Trump himself, I think, is very  eager to meet the Chinese leader. The New York Times article said  he is “obsessed” to have a phone call with the Chinese leader. Even he  himself said several times he had already made phone calls but did not  happen. That showed he was so eager.

If there is a meeting,  I think a lot of issues in person could elaborate much better. And he  has a big personal eagerness to show his respect by the global leaders.  So, in that case, if a meeting could happen, in that case, Allison could  have a point. The opportunities by end of year, I think the two  opportunities, their possibility for meeting. One was the September 3  Chinese military parade or celebration of the Anti-Fascist Anniversary. I  don’t know if he was invited.

Henry Huiyao Wang

My  personal observation is that China is certainly open to welcoming world  leaders for the September 3 80th Anniversary of the Anti-Fascist  Victory Parade. We’ll have to see. Putin has confirmed to come, and we  have other leaders to come. But if President Trump can make it, that  would be even greater. It would create the possibility for a  “Yalta-style” gathering, with the big heads of Europe, China, and  America sitting together in Beijing for a summit on peace.

Suisheng Zhao

That  would be a big win for China. In that case, I don’t know if Trump will  want to give Beijing such a big win. Also, U.S. domestic politics may  not favour his visit.

So, in that case, I think another  opportunity would be the APEC, an informal leaders’ meeting in November  in South Korea. I think that would be a very realistic opportunity.  Also, China should use that opportunity not only in South Korea, but  invite him to come to China for a state visit.

Henry Huiyao Wang

Yes,  but have one more option as well. If the September 3 event in Beijing  doesn’t work out, there’s also the UN summit in mid-September, marking  the 80th anniversary of the founding of the United Nations and the end  of the Second World War. The UN could invite Chinese leaders for another  summit to commemorate these milestones.

More importantly, I think  China could help the U.S. and Europe in bringing an end to the ongoing  war between Russia and Ukraine. At the Munich Security Conference, I  recall that the U.S. Defence Secretary proposed sending peacekeeping  forces to the “frozen” borders in the conflict zone, and that it had to  be European and non-European troops. China, as the largest contributor  of peacekeeping troops among the UN Security Council members, could have  an important role. This could be an opportunity for China, along with  India, Brazil, and other BRICS countries, to get involved in breaking  the deadlock in the Russia-Ukraine war, especially since President Trump  has become increasingly frustrated after six months of negotiations  with Putin that have gone nowhere.

As Foreign Minister Wang Yi  said, the BRICS countries could be the best mediators and peacemakers in  this situation. So I think it’s possible that China, the U.S., the EU,  BRICS, Russia, and Ukraine could all come together, under the UN  framework, to work toward a peaceful resolution. This could be an  important area for China and the U.S. to cooperate.

Suisheng Zhao

That would be a great opportunity. The issue here is that the Chinese President has not been at the UN often.

Henry Huiyao Wang

President  Xi was there several times. He made a pledge to reach carbon peak  before 2030 and achieve carbon neutrality before 2060. That was  President Xi’s commitment made at the UN.

Suisheng Zhao

It’s  not what the Chinese leader is invited for the UN assembly. The Chinese  leaders is always invited for those meetings. It’s whether he is  willing and able to attend. So the ball is on the China side if he is  going to go to the UN.

Henry Huiyao Wang

No,  as you just said, it works vice versa. If Trump attends APEC in  November and invites Chinese leaders to visit the U.S., the same thing  could happen. The Chinese leader could go to the U.S., attend the UN  summit, and the U.S. invites the Chinese leader for an official visit.  So, both sides need to work on this.

Suisheng Zhao

Exactly, the China side should approach proactively the U.S., if you can invite the Chinese President.

Henry Huiyao Wang

I’m  sure there are a lot of talks on those high-level visits because that  was the target set during the last phone call between the two  leaders—that they are going to have bilateral visits. President Trump  invited President Xi to visit, and President Xi invited Trump to visit  China. So, who comes first? There are two convenient occasions in  September and one in November, so it could happen toward the end of the  year…

Suisheng Zhao

If  that happens, Allison, as we said, who made a prediction, could win  that $1,000. Then the question you asked was about what issues China can  work on with the U.S.

Henry Huiyao Wang

So,  number one would be a peace deal. Rather than focusing solely on a  trade deal, I think Trump places great importance on a peace deal. If  China can work with the EU and the U.S. on Russia to help achieve peace,  that would be really something…

Suisheng Zhao

The  problem on the Ukraine warfront on the Russian side, from America’s  perspective, [is that] China has never taken a neutral position.  Although China has not directly, militarily supported Russia, it has  provided dual-use technologies and equipment, and to a great extent,  morally supported. That’s the problem. That’s the issue. If China could  clarify that position…

Henry Huiyao Wang

Actually,  I had the president of MERICS, a German think tank, visit us just last  week, and he mentioned that many German and European companies are also  supplying dual-use goods to Russia through other channels. The  definition of “dual-use” itself can be quite broad—rice eaten by  soldiers could be considered dual-use. The thing is, the war is getting  nowhere, and Trump is frustrated, even threatening to get involved  again. So I think now is probably the best time that we work together.

Suisheng Zhao

If  China somehow reduces its support to Russia and works more with the  U.S. and the EU on this front, I think Trump would be grateful.

Henry Huiyao Wang

I  also heard Trump say in Davos, in a video message, that he really  welcomes China’s involvement in the Ukraine-Russia conflict and hopes  China can help solve this. So the invitation is there. I think that  perhaps, during the potential summit, this could be a good…

Suisheng Zhao

So  China could take a ball on this. You said you were in Davos. In fact,  he said in his social media he is willing to work with Chinese leaders;  if China could help the U.S., the issue would be resolved. So he has  high expectations.

Henry Huiyao Wang

He  has expectations because the U.S. is providing weapons and Europe is  providing weapons to Ukraine. China does not provide any weapons to  Russia. As the Chinese Foreign Minister said, if China had provided  weapons, the war would have ended a long time ago. So, it’s not about  who is supporting whom, but rather about how we can solve this. Having a  new “Yalta” to solve the war could mean a great deal.

Suisheng Zhao

You  talked of a new “Yalta”, this type of concept. I think that’s a concept  Trump could accept because he thought the big powers could have a  collision rather than competition, collision meaning that China, Russia  and the U.S. could work together to resolve those conflicts, including  Ukraine and the Middle East. For the U.S., I think that’s time they  really want to move their strategic priority to Asia Pacific. But the  Middle East, they cannot get out of the Middle East other than the  Israel-Hamas war, Iran-Israel, and all these kinds of conflicts.

Henry Huiyao Wang

Another  question I’d like to ask is this: Peacemaking seems to be the biggest  common denominator between China and the U.S.—not just on Ukraine and  Russia, but also in the Middle East, as you mentioned. The second point  is that I agree with you about Trump being less ideological. Actually,  Graham Allison has documented that since his election, Trump has  publicly praised Chinese leaders 40 or 50 times and said many good  things about China. He rarely made any bad comments about China.

If  Trump is less ideological—no longer holding “democracy versus  autocracy” summits, and not interested in geopolitical encirclement of  China (for example, even suggesting a U.S. withdrawal from certain  alliances)—that marks a significant change. However, he is now building  up a trade war alliance: he has struck new deals with Vietnam,  specifically aimed at countering China, and has made similar agreements  with Japan, all focused on building a tariff coalition against China.

So,  if he’s less ideological, if he’s no longer holding democracy  summits—“democracy versus autocracy”—if he’s not interested in the  geopolitical encirclement of China (for example, he’s talking about  getting out of the AUKUS), but he does make a new move now. He’s  building up a trade war alliance, right? He’s had a new deal with  Vietnam, but he was aiming at China. He’s had another deal with Japan,  probably also with China in mind. So he could be building up a tariff  encirclement…

Suisheng Zhao

I don’t know that part with Japan. Now he is fighting with Japan. Japan will not compromise…

Henry Huiyao Wang

I  understand. But, for example, the deal he made with Vietnam specifies  that if goods are made in Vietnam, the tariff is 20%, but if they are  just transshipped, the tariff is 40%. Clearly, that policy is aimed at  some country.

Suisheng Zhao

I  think that’s reasonable because China shifts all those offshore to  Vietnam. That will be a problem for Vietnam and also for the United  States.

Henry Huiyao Wang

Anyway,  what I’m saying is that his less geopolitical and less security-focused  than his predecessor Biden, but he or his staff are a bit more focused  on economic issues.

But to the point—if Trump’s focus is primarily  economic, I don’t think China is particularly concerned. China has  become much more competitive and resilient, and is prepared for economic  cooperation. For example, while Trump is raising tariffs on everyone,  China is reducing tariffs to zero for 53 countries. The contrast is  clear.

What I mean is that in the long term, as you said, there  won’t be a “hot war” because of mutual military deterrence. There’s  really no option for a “hot war” even over Taiwan. That leaves peaceful  competition in the economic arena as the only viable path forward. Would  that be a thing that…

Suisheng Zhao

I  don’t think that will happen at this time. He is launching a tariff war  not only against China but all over the world. So, he’s competing with  everyone. Everyone has to buy in his deal, make deal bilaterally with  the United States. So, in that context, his competition in the economic  tariff front with China would be in a different environment. On the one  hand, the U.S. does not have the ability to build an alliance. Not only a  geopolitical alliance, but also even trade alliance, I think it’s very  difficult for the U.S. to establish against China, because he offends  all other countries, including those countries around China’s  peripheries. On the other hand, he is very tough on every country,  including China. So, he would want to make sure in his mind, China would  not take advantage of the United States. China would have a fair  playground with the United States. That’s his mind. In that case, I  don’t think a lot of his terms China could accept. It’s a very tough  deal.

Henry Huiyao Wang

Yes,  I think you’re right. I think Trump is less security-wise or  military-wise, and is now shifting more toward economic competition. His  tariff wars really focus on the economy, which I think is probably  stimulated by China. Because China, in contrast to Biden building up  security alliances like AUKUS, the QUAD, and Camp David agreements, is  doing RCEP, BRI, CPTPP and China-Africa, China-Middle East, China-Latin  America, China-Africa, you know, all those economic alliances.

So,  Trump is starting to learn from China and building up economic  alliances through the trade war. But again, the U.S. accounts for only  about 13% of global trade. China is now the largest trading nation in  the world.

Suisheng Zhao

That’s  a big concern now in the U.S. among a lot of economists and scholars:  America is isolating itself. The world moves forward, and international  globalisation without the United States and regional integration without  the United States. In that context, Trump is destroying the American  economy, American global status, and isolating the U.S. itself. That  would create opportunities for China.

Also, you mentioned that  even from those trade war, tech war, Trump’s objective is to isolate  China, but eventually will buy back against the United States. One  example people talk about is that the U.S. tries to reduce production  chain, value chain dependence on China. But if he reduced all those  interdependencies, he would not have any leverage on China. If the U.S.  does not buy anything from China, how can he put pressures on China? And  in the meantime, China has also used the opportunity to develop its own  technology, innovative products. So that hurt America. That’s a lot of  people’s concern in America.

Henry Huiyao Wang

So,  what I think now is that, since we have mutual assured destruction  (MAD) and strategic deterrence on both sides, a hot war is no longer an  option. But economic competition is really geared up. What Trump did and  what China is defending show that China is prepared.

I think the  next phase of competition will be in areas like the green transition and  AI. We had Jason Huang in Beijing these two days, and he’s saying China  has 50% of the world’s AI talent—very big. Also, if we consider  history, when the UK led globalisation, it was steam power; when the  U.S. led, it was electricity, computers, and the digital economy. Now,  as China plays a larger role in globalisation, it’s about green energy  and AI. So, we have a different phase of competition and public  dominance.

But what I’m asking is this: Can the U.S. and China, including the EU, peacefully [coexist] rather than going to war?

Suisheng Zhao

Should  be peacefully. Of course, as you said, hot war is not possible because  nuclear powers cannot fight; that would destroy the world. So, the  competition now is primarily, especially at Trump 2.0, on the economic  front.

And Trump’s policy is basically learned from China. In  fact, learning from state capitalism. Even Joe Biden already started  state capitalism using the state subsidies and built industrial policy  to protect the domestic market against globalisation. In fact, China  benefits tremendously from globalisation in this process developed. In  the meantime, China also had its own industrial policy and state  capitalism. The U.S. criticised China for a long time. Now, the U.S. is  learning from China.

I don’t know how good the U.S. could be  learning from China, but could that be successful? China succeeded by  using state capitalism and industrial policy. In the 21st century, in  the AI age, the new technology age, could this industrial policy and  protectionism really help the American economy? I’m not quite sure. That  could isolate the United States and eventually delay the progress, even  in technological innovation, in the competition, AI and many other  fronts. It is really something very uncertain for the U.S..

Henry Huiyao Wang

I  agree that the U.S. is stimulated by the Chinese practice now. It is  probably putting more state capitalism into practice. But China is  actually quite unique. I mean, the system China has in the last 47 years  since opening up is supported by three pillars: the private sector 60%,  another 20% SOE that does all the dirty jobs, and then another 20%  multinational employees, where 40 million people generate one third of  China’s export in business. This kind of trilateral hybrid economy is  second to none in the world. So, China must have done something right.  Of course, embracing globalisation is another thing. It lifted 800  million people out of poverty.

But now I’d like to press the other  thing we talked about, because mutual assured destruction is preventing  the hot war, but then the issue of Taiwan is a hot spot. How do you see  the prospects for peaceful cooperation between China and the U.S. in  the Pacific, and is there a way to address the Taiwan issue peacefully  as well? What are your thoughts on this issue?

Suisheng Zhao

The  Taiwan issue is the most dangerous issue. When I give talks in the  U.S., the question from audience ask mostly is Taiwan. Everybody is  concerned about if China will use force to cross the Taiwan Strait and  what America can do for that.

My sense here is that it’s very  dangerous for sure, but could be less dangerous. Here, it became  dangerous because the status quo has been changed in the last decade or  so. The U.S. Taiwan policy is a so-called “One China Policy,” which  talks about there is only one China. But neither side of the Taiwan  Strait could unilaterally change the status quo, could use force to  change the status quo.

The U.S. supports peaceful resolution, not  peaceful unification. So, that’s very two different terms. If you both  sides agree unification, be it, but be peaceful. We support resolution,  not unification—that’s American policy. And in this process, the U.S.  has been very clear that neither side should change the status quo. For  many years, China has emphasised the so-called “peaceful unification”  and played a long game to achieve peaceful unification with so-called  “strategic patience.” That’s how the U.S. has seen China’s policy.

And  here is a three-party game. Taiwan, for many years, also agrees that  there’s one China, but the so-called pro-independence force has been  developed since the 1990s, and Taiwan’s status quo has been changed  primarily by the Taiwan pro-independence forces. But the U.S. has never  criticised Taiwan’s pro-independence forces for the change in the status  quo. And the U.S. itself has also changed its status quo policy because  when Taiwan became, in the American mind, a democracy with elections, a  lot of American politicians became very sympathetic to Taiwan [because  they are like-minded]; and we should support like-minded people. So,  more and more American politicians try to show their sympathy to Taiwan.  That is reflected in the U.S. policy to Taiwan. They increased official  exchanges, increased arms sales to Taiwan. So that is a change in the  status quo.

I mentioned that for many years, the U.S. had a  strategic ambiguity policy toward Taiwan, meaning that we will involve,  but we will not tell what we will involve, how we will involve. That’s a  double deterrence. On the one hand, they try to deter China, saying,  don’t do anything, and also deterring Taiwan: don’t be proactive. So  double deterrence. That’s their policy.

But this policy was  changed by Joe Biden. He said in public to the media four times that the  U.S. treats Taiwan as a NATO ally. In other words, if there is a  military conflict across the Taiwan Strait, the U.S. would get involved.  Four times. Also, he not only increased arms sales to Taiwan, but also  he included arms aid to Taiwan according to the Foreign Military  Financing program, which is the law they used to help Ukraine. So that  crossed China’s red line. But the U.S., in the meantime, blamed China  for changing the status quo because they said China became less patient.  The Chinese leader said we cannot let the Taiwan issue pass on from  generation to generation, and China increased military exercises and  also activities across the Taiwan Strait, including blockade, all those  kinds of exercises. So America blames China for this.

The last  point here is that Trump has now changed. Trump 2.0, I think, is  different. Trump is very different from traditional American  politicians. He did not have any attachment to Taiwan. He treats Taiwan  as a pawn. He could trade Taiwan as just a product for anything he wants  to get. So he could sacrifice Taiwan for whatever he can get from  China. He also thought Taiwan took advantage of American generosity,  like chips, all those things took out of U.S. production. So, he had a  lot of problems with Taiwan.

Henry Huiyao Wang

I  think, as you just mentioned, the U.S. attachment to Taiwan is largely  because they think Taiwan is a so-called democracy. But now, the  narrative of democracy versus autocracy isn’t as effective as it was  during the Biden era, when he strongly promoted democracy. If you look  at recent UN Security Council votes, Russia and the U.S. sometimes vote  together, while China and the EU vote together. I was, in February, at  the AI Summit in Paris, where China, the EU, Germany, France, and India  voted for the AI declaration, while the UK and the U.S. vetoed it. So,  there are no longer “China versus the West” or “the rest versus the  West” that kind of scenarios; things have become more blurred.

Also,  in Taiwan, as a matter of fact, support for TPP, for independence,  seems to be waning. In the last election in January, 60% of voters voted  for parties with a more pro-peaceful unification stance. They’re the  majority in the parliament. As you said, if Trump is less ideological,  and he thinks Taiwan has stolen U.S. chips technology and didn’t pay the  insurance fee, then probably, we have a good opportunity for the  Chinese mainland to accelerate the peaceful unification process.

For  example, Fujian is government announced since last year, any Taiwanese  coming to Fujian will receive free schooling, medical care, employment,  social security, treat you as a local. I hope that the policy can be  expanded to the whole of China. There are 2 million Taiwanese working in  the mainland, half a million husbands and wives who are married across  the Strait. Before the DPP took power, six million mainland tourists  visited Taiwan annually, sending money to Taiwan’s tourism revenue.

If  the Chinese mainland wants to buy Taiwan out, I think 1.4 billion  people can buy 23 million people out. Why do they want to get  independence when China has even said there’s no need for Taiwan to pay  taxes on the mainland at all? So, if Trump’s new attitude prevails,  there may be an opportunity to peacefully buy Taiwan out of this. Of  course, we will not tolerate any move toward independence or separation,  but I think time is on the mainland’s side. And then, unification will  eventually come.

Ultimately, people may ask themselves: if the  mainland offers financial benefits and integration, why choose the  hardship and risks associated with independence? Peaceful unification  could become an attractive option for many. Who would refuse if they’re  offered financial support? Why choose independence, which could mean  hardship and the risk of war? If I’m getting along with the Great  Federation of China, I don’t pay taxes.

Suisheng Zhao

But do you think China has that much money to buy off?

Henry Huiyao Wang

What  I mean by China to buy is that, let’s have 5 million Taiwanese working  on the mainland. There are 2 million already. Get 5 million.

Suisheng Zhao

Do we have that jobs for them?

Henry Huiyao Wang

Yes,  we have. And let’s have 10 million mainlanders flood Taiwan, you know,  spending money on restaurants, hotels, buying Taiwanese products. Taiwan  already enjoys a large trade surplus with the mainland. So if that  continues in 10 years’ time, if there’s no foreign interference, I  believe peaceful unification is going to happen.

Suisheng Zhao

China has used this type of…using the economy to push for politics. Never was successful.

Henry Huiyao Wang

For  example, Taiwan is currently refusing to allow mainland tourists to  visit. Lai Ching-te is even stricter now, treating China as a “foreign  force.” There is a lot of white terror happening now in Taiwan.

Suisheng Zhao

But  Lai Ching-te is very popular in Taiwan. I was in Taipei last year  January election. I was an observer in an American delegation to observe  Taiwan. At that time, Taiwan had a lot of confidence in Taiwan. After  the election result came out, the U.S. government sent some former  officials. Joe Biden’s government made sure Taiwan will not be  provocative. And Taiwan collaborated with the U.S. well at that time.

Henry Huiyao Wang

But the thing is now, you know, if 60% didn’t vote for DPP…

Suisheng Zhao

That’s the parliament, the Legislative Yuan.

Henry Huiyao Wang

…which means the majority of Taiwanese voters don’t want independence. Basically, they voted…

Suisheng Zhao

We can now look at it this month, July 26, they have a recall…

Henry Huiyao Wang

Whatever. My advice is that we use this economic incentive. Let’s make the carrot sweeter.

Suisheng Zhao

That’s  a very good point, very interesting point. But I just don’t know if  that would work eventually. You put all that money, China gives a lot of  preferential policy treatments to Taiwan investments many years…

Henry Huiyao Wang

If the Fujianese government has already policy to welcome all the Taiwanese to come to work in Fujian, if the 31 provinces…

Suisheng Zhao

But  for me, I think it’s a big, strategic geopolitical environment. While  for many years I went to Taiwan, 60% or more people thought there is  conflict, America will come to our rescue. It’s now changed.

Henry Huiyao Wang

Absolutely.  Even for the Ukraine war, the U.S. said we’re not gonna send any  soldiers. We’re not going to give aid. You know, who is going to fight  for Taiwan if something happens?

Suisheng Zhao

Since Trump came to the U.S. office, 60% of Taiwanese people would not trust America, would not think America to…

Henry Huiyao Wang

So  if that happens, if America reduce the interference there, then they  will really recognise the Greater China. Then that, of course, allows a  lot of activities to happen on both sides.

Suisheng Zhao

There’s  another polling number there, a majority of Taiwanese people still  don’t want to be united with the United States [sic]. But 30% already  thought we had no choice. China becomes stronger. The U.S. will not come  to our rescue.

Henry Huiyao Wang

I  believe that, ultimately, it’s possible. Look at neighbouring ASEAN  countries—they have different ethnicities and economic systems, and the  European Union has so many different countries, yet they all work  together. Mainland and Taiwan are all from the same culture, language,  heritage, relatives. Why can’t they get together? So, I think that day  will come if we really…

Suisheng Zhao

That’s what I believe, too—eventually. But how long the eventual…

Henry Huiyao Wang

No, I think as China gets stronger, as the hot war is not possible..

Suisheng Zhao

I  went to Taiwan for the first time in 1990 as a mainland of China  background scholar in the U.S. When I got to Taiwan that time, I  thought, wow, Taiwan was so economically advanced, much, much more  advanced than China. At that time, they had just begun to build the  Jieyun, the light rail system.

Henry Huiyao Wang

Now it’s falling behind.

Suisheng Zhao

Exactly.  That’s the point there. So, at that time in 1990, China was still far  behind Taiwan. Now, Taiwan’s economy is just like one province of China.  And I still remember I talked to Michel Oksenberg before he passed away  in 2020 [sic]. He is a very strong believer in the unification, but for  many years, he thought economically, these two sides have to be  integrated, and the Chinese economy should be much stronger than Taiwan.  Then his second thought was the political system. If these two sides  could narrow that gap…

Henry Huiyao Wang

I  really think the world is becoming more tolerant of different systems.  For example, within the BRICS bloc, you have India, the world’s largest  democracy, alongside Russia, China, and Middle Eastern kingdoms with  royal families. The BRICS bloc is working well despite differences in  governance systems. The world is no longer divided into “democracy  versus autocracy”; it allows various governance models to flourish at  the same time and compete peacefully.

Whether China’s model is  good or not, let’s compete peacefully. Whether Taiwan’s model is good or  not, let’s compete peacefully. That way works for the next mega trend. I  think eventually, we would be recognising each other legitimately. Like  Zeng Xiaoping said, it doesn’t matter whether the cat is white or  black.

Suisheng Zhao

This could happen under Trump.

Henry Huiyao Wang

Yes, that’s right.

Suisheng Zhao

It’s possible. So, as you said, take advantage of the three and a half years.

Henry Huiyao Wang

Good.  We’ll open the floor for one or two questions if anyone has any.  Zichen, do you have a question to ask? There’s a microphone here. Zichen  is CCG’s editor for Pekingnology.

Zichen Wang, Research Fellow & Director of International Communications, CCG

Good  to see you, Professor Zhao. I was wondering, I spent the last year in  the U.S., and I was told by some Americans who believe that President  Donald Trump could be the only and perhaps the last remaining hope for  China to have a very different leader. Because, as you have suggested,  for example, he has the power to make a lot of different policy choices  regardless of what the national security and foreign policy  establishment believes. And against the popular will, he can make  foreign policy decisions like the one in Russia, which stands in  contrast with what the U.S. traditionally believes. He is apparently not  an ideologue. He’s not interested in colour revolutions or regime  change abroad. And he is known to be very transactional. It’s really  unimaginable that the United States will have a similar leader in the  next maybe 4 years, 10 years or 20 years. So, from that perspective,  President Trump, as tough as the challenge he presents to China in  diplomacy, might really be a rare beast that China has to deal with. So,  from that perspective, some say Beijing should jump at the opportunity  to really deal with him, but I guess, at a level of risk-taking that’s  typically not usual in Beijing, I was wondering if you would agree with  that.

Suisheng Zhao

I  agree to a great extent because 川建国. They really translate that into  English: building China, not building the U.S. Trump is building China.

Zichen Wang

And if you believe that to some extent, what would be your advice to Beijing?

Suisheng Zhao

I  don’t think I could give advice to Beijing. I can only tell you what’s  going on there. In the U.S. now, the liberal media, those critical of  Trump, is flooded with articles talking about whatever Trump has done is  good for China. And Stephen Young, those former ambassadors, those  former diplomats, who know China so well, all published articles that,  whatever Trump policy came out, said this is good for China. This is  good for China. Almost everything is good for China. This is a very  strong discourse in the U.S. now talking about Trump. He is not only a  hawk. I mean, even Allison, his first article during the Davos  conference, talks about “Is Trump a China Hawk?”  And not only him, a lot of mainstream scholars, commentators all wrote  that Trump is good for China. So, how could China deal with that? Could  China take advantage of that? That’s China’s business.

Henry Huiyao Wang

Maybe  I’ll just add to Professor Zhao’s comments. I think Trump has ushered  in a new era. When he started the trade war with China during his first  term, nobody would expect he would be the kind of president who would so  disrupt bilateral and multilateral relations, quitting the WHO and the  Paris Agreement and all those things. The impact is still being felt  today. And in his second term, this trend has only intensified.

So,  I think, the U.S. is shifting from a more political and geopolitical  focus to a greater focus on geoeconomics and trade, gradually diluting  the ideological divide. Then, it boils down to “Let’s compete, make  America great again, make China great again, make the world great  again.” So, let’s compete peacefully. It may not be a bad thing to usher  in a new era of economic competition. So, wait and see.

Let’s have a second question. We will take two, maybe.

Yang Huang, Senior Economist, the World Bank

Thank  you very much, Professor Zhao. And thank you for the fascinating talk  and the fascinating conversation between you and Henry.

I’m  an economist by training. I want to ask a question about the driving  force behind this bilateral relationship. You talked about we are  experiencing a long cycle of this bilateral relationship between China  and the U.S. I heard earlier from Justin Lin, as an economist, who said  that when the size of China’s GDP doubles the size of the U.S. GDP,  then this bilateral relationship will stabilise and then they can  cooperate. I wonder, what’s your view on that? What are the key  ingredients or driving forces behind this bilateral relationship? Do you  think this economic force is the only one, or are there other forces?

Suisheng Zhao

Indeed,  if China could double its GDP, over tech, the U.S. economy, the  relationship will be changed fundamentally. But if China could do that  any time soon, I don’t know if that would happen. Even if that happens,  China’s per caped GDP is still far behind the U.S. I travel in China.  Although a lot of people in the U.S. say China threat, China is already a  developed country, you go to many places in China, toilets are very  different from America, far away. If that happens, that could change.  But when that would happen, I don’t know.

In the U.S. now, the  prevailing view is that China not only peaked, China will slow down  dramatically in the long run. China’s demographic situation [will be]  even worse, that by 2050—there are a lot of predictions—the Chinese  population would be equal [to that of] American population, at 700  million people. If China declines by a hundred million people and the  U.S. increases very dramatically, not only by immigration but also by  natural birth, it will be in a much better position than China. So, if  that’s the case, I don’t think the situation talked about by Justin Lin  will happen anytime soon.

Henry Huiyao Wang

That’s why CCG is also promoting for China to welcome global talent coming to China, right?

Suisheng Zhao

Exactly.  That’s a good opportunity now because of Trump’s immigration policy.  It’s the best time now. Three years from now, we will change.

Henry Huiyao Wang

Okay, we have a final question. The gentleman with the glasses.

Louis Liu, Founder & CEO, DAP Technologies

Thank  you very much for the final question opportunities. I’m Louis Liu from  DAP Technologies. We do international trade and provide supply chain  solutions for aviation.

As we know, the export control from U.S.  to the control the CFM engines for the aircraft C919. On the other hand,  China exports controls rare earth to the U.S. What do you think is  about this trade war? Do you see it coming to a warmer or a cooler  situation in the future? Another question is, we talked about the Taiwan  issue. As we know, most of the high-level chips are produced by TSMC in  Taiwan. If the Taiwan issue becomes too terrible, how can we keep the  supply chain solution for high-end chips to make sure the world economy  can be safe? Thank you.

Suisheng Zhao

On  the specific trade deal, on the engines you talk about, those parts  versus rare earth, I think China and the U.S. have already reached some  kind of agreement on this. China has already relaxed rare earth exports  to the United States, issued more licenses. The U.S. has also already  reopened the exports of those parts to China. I think those deals are  really good. I think it will continue. If the current negotiation  sustains and can move forward, those issues could be resolved.

On  the second question about the chips. They have invested in the U.S. and  have already built in Arizona and some other places to try to prevent  that situation. But I don’t think how successful that could be. For  Trump, it’s better if you just move all production to the United States,  but I don’t think that will happen. The U.S. does not have that many  skilled labourers. And also, the labour cost is so high. So that was  still a problem for China, the U.S., and the Taiwan side.

Note: The above text is the output of transcribing from an audio recording. It is posted as a reference for the discussion.

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