Adam and Cameron celebrate the podcast's two-year anniversary by answering listener questions on China. Topics discussed include China's potential economic offensive actions, the impact of China's currency floating, the future of China's economic growth, and the challenges ahead for the country.
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Quick takeaways
China's economic offensive against the US involves managing its exchange rate and reshuffling assets, rather than selling off US debt.
Supporting US business interests in Taiwan requires a credible coalition of deterrence and a visible commitment from the Taiwanese government.
Deep dives
China's Potential Economic Offensive
China's potential economic offensive against the US is explored in this podcast episode. The concern over China's sell-off of US debt and the impact on the US economy is discussed. However, it is noted that China's strategy of managing its exchange rate and reshuffling its portfolio of assets has not resulted in an aggressive economic offensive. The effectiveness of economic weapons and the potential impact on both China and the US are also examined.
Securing Business Interests in Taiwan
The question of how to support US business interests in Taiwan without increasing the country's vulnerability is raised. It is acknowledged that business interests alone cannot guarantee Taiwan's safety in the face of mainland China's potential aggressiveness. The need for a credible coalition of deterrence and visible commitment from the Taiwanese government is emphasized. The strategy of deterrence without provocation is discussed, focusing on the need to defend Taiwan while minimizing the potential for escalation.
Chinese Regime: Fascism or Communism?
The comparison between the Chinese regime and fascism is debated in this episode. The argument is made that China's focus on nationalism, private property, and state-owned enterprises resembles fascism rather than communism. However, it is countered that such a comparison overlooks China's historical context, its identity tied to opposing the Axis powers in World War II, and the unique nature of its regime. The complexity of classifying the Chinese regime and the need to consider China's own logic and history is highlighted.
Implications of China's Exchange Rate Liberalization
The potential effects of China allowing its currency to float freely are explored. It is noted that China's currency has been managed and pegged against the dollar since the late 1990s. The impact of liberalization would depend on the current economic context. Past experiences suggest that liberalization could lead to a revaluation of the Chinese currency and increase in imports. However, recent market dynamics indicate that the currency could depreciate due to interest rate differentials. The implications for China's trade relations and the global economy are discussed.