Boardroom Governance with Evan Epstein Ker Gibbs: On Geopolitics and US-China Relations.
0:00 -- Intro.
1:26-- About the podcast sponsor: The American College of Governance Counsel.
2:13 -- Start of interview.
3:47 -- Ker's "origin story."
7:41 -- His history with the American Chamber of Commerce in Shanghai (AmCham).
9:42 -- About his book “Selling to China. Stories of Success, Failure and Constant Change.” (2023). "We felt that it was important to remind people why we're doing this in the first place, you know, what's good about our relationship with China. We wanted bring the commercial issues back into the conversation."
13:31 -- On the current idea of “uncoupling” or “de-risking” the US economy from China.
"I think it is good to talk about 'de-risking' rather than 'decoupling'." "I don't think a complete decoupling is realistic and it's certainly not in the interest of either side. But I think the de-risking term is helpful, in the sense that it aims at communicating the intent. {The intent] here is not to punish China or isolate China or decouple from China, but it is to protect our interests, whether they're military interests or strategic economic interests."
16:46 -- On whether the US policies and sanctions towards China are effective.
"The narrative is that the export controls and sanctions and de-risking coming out of Washington DC is simply pushing China to be more self-sufficient." "This has to be seen as a temporary measure, that gives us time to resolve the actual conflicts that exist."
21:21 -- On the US responding with its own industrial policy to catch up with China (e.g. in batteries and EVs).
"We've got to be careful not to slip into outright protectionism and allow this to change who we are as a country and how we've been successful as an economy." "[I]f we get into a situation where we are indeed trying to limit China's economic rise, and literally keep China economically contained, that is a dangerous path, and it's a bad narrative, because it inevitably leads to conflict."
"I'm basically conservative when it comes to economic issues and fiscal policy, but I have actually been saying for quite a long time that the US needs to get over its aversion to industrial policy and put some planning in place."
30:38 -- On China’s private sector.
"[B]eijing actually kept a remarkably light hand [in the development of the internet industry]. I give the Beijing policymakers full credit there for knowing that they needed to stay out of the way and let that happen." "Now we've seen the pendulum swing back the other way."
"Jack Ma was going around visiting countries and he would almost be treated like a head of state. I think Jack Ma must have, because his company is publicly listed in New York, he might have confused himself with a Western CEO. He's not. China is China and the West is the West, especially in the tech sector. So yeah, he's been disciplined as have some other tech leaders."
36:21 -- On the fate of TikTok in the US.
40:38 -- On the recent APEC meeting in SF, and his take on Presidents Biden and Xi Jinping meetings.
"I put it in the category of huge success that the meeting happened, that Xi Jinping actually showed up." "It's critical that Xi and Biden meet face-to-face because of the Chinese political system, it is so concentrated at the top."
46:09 -- On the risks of a military conflict between the U.S. and China over Taiwan.
"We should not underestimate [China's] willingness to take the island and take it by force. I think at some point you have to just take them at their word. If you listen to the domestic media and domestic speeches that Xi and others make in China, it's quite clear that they're highly motivated to take the island and willing to." "[But] I don't think it's imminent, mostly because of the difficulty of taking the island and of the probability of success on the Chinese side."
"I think the probability of an accidental conflict [is] high. And until the agreement of the last week or so, the ability to de-escalate and de-conflict, low." "In other words, without that military-to-military hotline, there would be no way for it to de-escalate."
50:35 -- How should boards think about de-risking its China exposure.
"They should be thinking about what are the hard assets that they have, both in mainland China and in Taiwan? What I'm hearing boards do is that some of them are converting their businesses to more asset light. So, in other words, converting a wholly owned subsidiary to maybe selling off some of the shares to make that into a minority investment or a full asset light model might be literally selling factories and hard assets and then maybe licensing them back or something like that to where they wouldn't have to literally write them off the way many companies had to do in Russia when that took place, and you saw large companies writing off literally billions of dollars of assets off their balance sheets because they could no longer have access to them."
"Again, I don't think that we are on the brink here, but it would be wise to have plans in place in the case of, especially in accidental conflict."
52:27 -- Books that have greatly influenced his life:
- Free to Choose by Milton Friedman (1980)
- All books by James Clavell. [*we cover here his thoughts on Hong Kong]
- No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II by Doris Kearns Goodwin (1994) ("great companion book to The Rise and Fall of the Third Reich by William L. Shirer (1960)
57:24 -- His mentors:
- Robert "Bob" Theleen (a local San Franciscan, former VC and Chairman of AmCham Shanghai)
- Bob Chang (his boss at the Boston Consulting Group in SF)
- RT Peng (another boss he worked with in Taiwan)
58:36 -- Quotes that he thinks of often or lives her life by: "Don't ever let what you can't do stop you from what you can do." by John Wooden.
1:00:20 -- An unusual habit or absurd thing that he loves: his daughter.
1:01:21 -- The living person he most admires: Arnold Schwarzenegger.
Kerr Gibbs is an EIR at the University of San Francisco. Prior, Ker served as the President of the American Chamber of Commerce in Shanghai and worked in various roles giving him broad exposure to US-China relations and business issues facing American companies operating in Asia.
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This podcast is sponsored by the American College of Governance Counsel.
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You can follow Evan on social media at:
Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
Substack: https://evanepstein.substack.com/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License