Hosted by Merrell Tuck-Primdahl and Fred Drews
First aired on: September 6, 2019
In this podcast, the second in a two-part series from the global leadership forum the Brookings-Blum Roundtable, Fred Dews and Merrell Tuck-Primdahl of Brookings bring in Homi Kharas, Director of Global Economy and Development at Brookings; Minxin Pei of Claremont McKenna College; Weijian Shan, Chairman and CEO of Pacific Alliance Group, and Michael Froman, Chair of the Board for the Center for Inclusive Growth, Mastercard, to discuss the US-China relationship, arguably the most important bilateral relationship in the world at the moment.
Kharas begins by bringing China's rise into perspective. Not only has the country been lifting so many people out of poverty (700 million by current counts), but it has also created the world's largest middle class. This is a middle class that, despite common comments about how "different" China is, looks a lot like the middle class in the rest of the world: people want things like "education and health for their children, economic opportunity, the ability to enjoy a good life and not to be scared of falling into poverty."
Kharas also mentions the great heterogeneity of China, a point which is often overlooked in the media: while Shanghai and Beijing are truly global cities, inland China is still far behind.
Pei discusses the US-China trade war and its impacts, and also notes the alarming potential for escalation in terms of an arms race. He also describes the strategic rivalry between the US and China. As regards international development, he doesn't see quite as dreary a picture as in their militaristic rivalry, since the US and China are primarily competing in Southeast Asia but less so elsewhere. He thinks there's much more room for collaboration in other parts of the world.
Pei notes a contrast in the popular conception of China's Belt and Road Initiative (BRI) and what policy wonks see on the ground. The spoiler: the BRI really isn't the master-scheme it might seem to be, and China risks ending up with a lot of bad debt.
Shan then describes a little of his own experience in a changing China. His memoir can be found here. (The foreword is written by former Federal Reserve Chair Janet Yellen, which says something. I've put it on my to-read list.)
Shan attributes China's breakneck growth more to the opening up to the market economy than to some "China-specific" magic formula. He notes that China still has a ways to go in opening up and liberalizing: the role of the government in industry is still oversized and inefficient, a role that limits his own scope for action as a private equity investor.
The guests then engage in a lively and insightful discussion about how China has benefited from the global rules-based order in its own development, whether China's stepping up to the task of helping generate an environment in which such a framework can continue to exist, and whether part of the backlash against globalization in the US in particular can be seen in some sense as a feeling of "unfairness" that China benefited so much from the way the US and Europe set up global institutions after WWII.
Weijin Shan's book Out of the Gobi describes his experiences growing up in a transforming China.