Editor’s notes: With China-U.S. trade talks underway at the White House on January 30-31,2019, William Jones, Washington Bureau Chief for the Executive Intelligence Review, and Non-resident Senior Fellow of Chongyang Institute for Financial Studies at Renmin University of China, was interviewed by LaRouchePAC Website, discussing the urgent need for a commitment to “win-win” relations between the United States and China, and the necessity of debunking the myths that Americans are being told about China and its commitment to science and technological progress. The following is an excerpt of the interview.
MATTHEW OGDEN: Good afternoon. My name is Matthew Ogden.You're joining us here on larouchepac.com. It's January 31st, and this is our regular weekly broadcast here. As you can see, I am joined by Mr. Bill Jones, who is the Washington bureau chief for Executive Intelligence Review. We're pre-recording this broadcast this week, because we're in the midst of what could be some very serious political developments with the trade talks that are now ongoing. We have a very high-level delegation from China, which is currently in Washington, DC. These trade talks are being conducted at the very highest level. This is led by the Vice Premier of China, and then on the US side already, there have been meetings that have been conducted by US Trade Representative Lighthizer, and also joined by Treasury Secretary Mnuchin, Commerce Secretary Wilbur Ross, and White House economic advisor Kudlow; so this is on the Cabinet level. But today, the most significant talks will take place between President Trump and the Vice Premier himself. Obviously, this is coming in the context of increased attacks coming from inside Trump's own administration. You have charges that were filed yesterday by the Department of Justice against Huawei, the tech firm, and its CFO. You also had the top intelligence chiefs before Congress, who were going viciously on the attack against China, and also contradicting President Trump on most everything else in terms of the current strategic situation.
But as you can see, there is an all-out war which is happening inside the Trump administration itself, but Trump himself continues to stand by his commitment that a good relationship between the United States and China would be a good thing, not a bad thing. And he does have a personal relationship with President Xi Jinping himself. Now, I asked Bill to join us here today, because he has made several trips to China, including several times with Mrs. Helga Zepp-LaRouche, where they have had very high-level meetings. But Bill just came back from his most recent trip to China in the middle of December. So, I just wanted to ask him to give us a little bit of the context of what's going on around these trade talks, and maybe what we can expect.
WILLIAM JONES: Well, in this case I think I'm somewhat optimistic for one reason in particular. The President has decided to meet with Chinese Vice Premier Liu He and to meet with the delegation. I think he wants an agreement, and I think he made that clear to the people he's talking to, that something of a positive nature has to come out of these talks to move it along the road and to get us away from the strategy of tension which has been building up. Now obviously, it's not going completely in that direction, given what you said about the attacks on Huawei, the attempt to extradite the daughter of the chairman of Huawei; just extraordinary stuff that wouldn't have been done except for the fact that there's such an anti-China push by the neo-cons, by parts of the Democratic Party, to really create tensions with China. The President is pushing back, so I think what we'll see coming out of these two days of talks -- and we'll see that later in the afternoon -- is that there will at least be a hiatus in some of this. They will make a decision that we will move further along the road away from tension and away from trade war. But that doesn't end everything, because the maximum list of what the United States is requiring of China, many of the things are absolutely unacceptable. Basically, if all of the demands were met, China would dismantle most of what we call its industrial policy, which has allowed them to bring 800 million people out of poverty.
Obviously, they are not going to do that; but they are coming with a list of concessions. There's probably going to be more trade with China, which is a good thing because this trade war -- or trade conflict; they don't like to call it a trade war, but it's something like that -- is hurting America and it's hurting China. Both sides are suffering as a result of this. If we could get over that by certain increased trade, I think that would be a positive sign. Secondly, the Chinese have actually put into motion, and put on the fast track a new investment law that they hope to have ready by March when they have their National People's Congress this year, which would be more amenable to foreign companies moving into China and investing; and knocking down some of the barriers or the bureaucratic hassle that sometimes they get when they're trying to set up businesses there. This is all in order to try and create a view from the United States that China is trying to work together on these things. So, I think we'll see some positive motion here, but in the long term there's going to be tension in the relationship.
OGDEN: As we saw from the campaign, and then especially during the first year of Trump's Presidency, this big trip that he made -- the state visit+ that he made to China, where he met with Xi Jinping, they toured the Forbidden City together -- this personal relationship which he forged, he has used to very good effect with the negotiations over North Korea. We know that Trump has now announced that he's going to be meeting with Kim Jong-Un again. But at the same time, as you said, from this neo-con faction from inside his own administration, and then also the pressure from the Democrats and otherwise, everything is being done to try and drive a wedge between this potentially very good relationship between the US and China under Trump. Trump has made clear that he's willing to kick over the geopolitical chessboard and this policy which was dominant in the Obama administration of trying to contain China, trying to even start military conflicts in the South China Sea and these kinds of confrontations. What's the threat that this gets out of hand again and escalates outside of even what Trump himself might intend?
JONES: It's a great possibility, especially because much of this is directed against President Trump himself in an attempt to get him out of the Presidency. This is a case of this old adage that "the President proposes, and the bureaucracy disposes." We've seen this many times; there was a recent book by Sy Hersh about the Reagan administration. Reagan also wanted a good relationship with Russia; he took up Lyndon LaRouche's ideas about the Strategic Defense Initiative, which was in fact a peace proposal of sharing technologies with Russia in order to create missile defense. What happened to that? Well, the bureaucracy didn't like that, so they put all kinds of obstacles in the way. And of course you read the history books, and you say Reagan did it because he wanted to end the Evil Empire; which is nonsense. So, you have that kind of a situation, and it's very serious.
But I think the importance of the relationship is of such a nature, that if you would create a trade conflict with China, and if it would be a conflict that would be seen as an existential threat to them, and much of the attempt to dismantle their industrial policy would be an existential threat to their economic existence. It will lead to a military conflict, and nobody really wants that. So, it's a dangerous situation. The President is playing a key role, because he is insistent, I believe, on having a good relationship both with China and with Russia, and the whole bureaucracy is militating against that.
I would like to say something about this China conflict, because in the context of what has been going on, there is this myth that has been created. The myth is that "the West" tried to help China rise, and China took advantage of that and now they're becoming a number one power and we are declining; and therefore, they are the cause of that. There's a book written by Michael Pillsbury, who is a defense analyst with some China experience,
who is perpetrating this idea that there has been a 100-year marathon by the Chinese to become the major power, the hegemonic power in the world. But if you look back, we were celebrating last year 40 years of the Reform and Opening Up; that is, China left behind all disastrous policies that they had, they were left on their own. They couldn't go to the West, they couldn't go to the East, so they tried a policy of autarky, of trying to do everything themselves. And it led to some pretty crazy things. When Deng Xiaoping instituted this Reform and Opening Up, that changed everything. And at that point, China entered the system as a low-wage producer; much like countries like Mexico and others had done that.
The US, of course, dismantled a lot of its industrial production to buy cheaply from these low-wage countries. That was the situation China was in, but they had a different direction to where they wanted to go. They had the intent of leapfrogging technological levels so that they would come out of the category of low-wage producer into a higher-value producer. They could do this because you had the Communist Party, you had an industrial policy, you had a clear emphasis on using science and technology as your wedge for making these leaps. As we have seen with the Chinese Chang'e 4 landing on the far side of the moon, they've done pretty well with that. So, their policy has been pretty successful, but they really had to fight in order to get to that point. The US now has let its economy over the last few decades go to Hell in a hand basket. This wasn't because of China; this wasn't because of trade; it was because we had disbanded, abandoned the notion of industrial policy which had made America great. Look back at Franklin Roosevelt. What happened to all these programs of Franklin Roosevelt? Year after year, Kennedy tried to keep some together, because he had a lot of Franklin Roosevelt's advisors with him. But all of these programs that were then ...
OGDEN: Including Franklin Roosevelt's wife, Eleanor.
JONES: Yes, exactly! So, he was trying to follow in those footsteps, but since then, the deregulation, the dismantling, the adoption of this absolute free trade policy, have led to the fact that we no longer have the industrial potential that we had in 1969 when we put a man on the Moon. The crisis with China has -- suddenly a lamp has been lit. We knew this; Lyndon LaRouche has spent his career in explaining the nature of this crisis and the solution. And nobody was listening; or at least, not enough people were listening. So, the policy went in the direction of Alan Greenspan and deregulation and dismantling our capabilities to the point where we now see that we are becoming a less significant technological power. So, now we're blaming China; China's the scapegoat. That wasn't the problem, and trade with China and regulating trade with China or having a balance of trade with China will not resolve the situation. It will be going back to the things that we used to do successfully to rebuild our own economy. Unfortunately, President Trump has focused on this trade thing as a key issue, instead of focusing on the other things he talked about; the Glass-Steagall, the trying to get an infrastructure program. That's the direction we should go if we want to make America great again in the sense of making it into an industrial power again. We could do that together with China, because they have learned from us, and we could take a few lessons from them, too; including this thing that the free market without controls, without regulation, without industrial policy leads to disaster.
OGDEN: I'm glad you brought that up, because I think it's necessary to debunk the myths about China. We're inundated with it completely, and the myth that this is the world hegemon and this is the threat; as Helga LaRouche has identified it, this is the Thucydides Trap, this is exactly where you get the world wars from, is the idea that we have to race against this other competing power that's trying to rise to take away our dominant status. But Xi Jinping has been very clear; he gave this very significant speech three years ago at the United Nations, where he laid out what are the principles of "win-win" cooperation. Respect for sovereignty, non-interference, but also harmonious development, and the idea that you can have nations working together for their mutual benefit; as opposed to competing against each other in a sort of a dog-eat-dog kind of Hobbesian world.
So, this idea of a New Paradigm of relations among the great powers especially, is what Franklin Roosevelt was envisioning; that's clearly what Trump was amenable to. The attacks that we heard from the intelligence chiefs and the media about China working to use -- they identified the Belt and Road Initiative by name, saying that this is the tool of soft power that China is using to take over the world. Meanwhile, development is occurring in Africa, which hasn't happened in the entire post-colonial period; whole countries are being lifted up with modern technology. As you said, China itself is lifting 800 million people out of poverty. This is the kind of program that the United States should be working hand-in-hand with; not accusing them of trying to strive for world domination.
JONES: Absolutely! The thing is that people here just don't understand anything about Chinese culture. The idea that Xi Jinping has initiated really dovetailed with what Helga Zepp-LaRouche has been talking about all the way from the 1970s, when we started working along the issues of the New World Economic Order. Remember, we tried to get the countries of the world together around a just and equal economic order in which the developing countries could begin to industrialize, reviving the Roosevelt policy. People in the West were absolutely opposed to this; there was all kinds of pressure put on our friends in the Third World who were pushing this policy. But we continued with it, and there have been conferences time and again that the Schiller Institute has held on this notion that we have to get a New Paradigm. Mrs. LaRouche's motto is this New Paradigm; she made it into kind of an iconic slogan at this point.
Then suddenly, we see these developments in China which to some extent caught us by surprise in terms of the intensity. During the period when we were working together to create solutions after the dissolution of the Soviet Union, of bringing these countries in Central Asia into the mainstream of commerce by building a railroad all the way to China. We found out at that point that the Chinese from their side also were interested in doing this.
So, that led to really the first, I would call it the first Belt and Road conference, although it wasn't called the Belt and Road at that time, in 1996; when the Chinese Ministry of Science and Technology, which was in charge of that, sponsored a conference in Beijing where Mrs. LaRouche was a VIP and addressed the conference on this notion. Then, of course, with the change of leadership, President Xi came in, and he put that at the top of the agenda. At that point, of course, everything really started to fall into place, and our attempt to build this New Paradigm had the support of one of the most important nations in the world. It is, and you mentioned President Xi's speech; this notion of the harmony of interests that we always talk about in terms of the American System and Hamilton and Carey, is also very important in China as a cultural element.
The Confucian notion of harmony. Confucius is probably a more important philosopher for the Chinese people than any of our Western philosophers like Leibniz and others are for the Western people. Some people don't even know who these people are. But in China, this is a reality. So, the attempt to bring countries together to try and find win-win solutions is really kind of a part of the mentality; and President Xi and his policy with the Belt and Road has really incorporated that as an element of foreign policy in China, to the benefit of most of the countries that they've been able to work with on this.
The United States initially had a positive response, even within the Trump administration to this, and they were looking at it and saying "How can we benefit from this?" And there were discussions of trying to create a liaison within the Trump administration to the Belt and Road to try and see how it could work. But then the neo-cons went on the warpath on this thing and said we cannot allow China to make the advances they're making in some of the high-technology fields. So, that came into play, and this whole idea that the hegemonic group, the Anglo-American crowd -- and I stress the Anglo in that -- because those are the ones who are really the authors of the policy, and the Americans sometimes just follow dumbly.
The bad guys on this side of the pond kind of follow blindly these British directions, so we've had a problem that they have really succeeded in creating -- I would say it's almost a McCarthyite atmosphere with regard to China. We've had hundreds of thousands of Chinese students who have been to US universities, who have gone back and become scientists and engineers and have helped to build up China. Many of them who stayed here and tried build up here in the United States to the extent that they could. And now this is all becoming a matter of possible espionage, so that universities now are required to investigate students who may be under pressure from the government, or who may be working together with the government to get so-called trade secrets or engineering secrets. It's really like the McCarthy era, and people are getting very scared about that.
The most egregious incident was at Duke University just a few days ago, where there were a couple of Chinese foreign exchange students in the cafeteria speaking Chinese out loud; and the teachers complained. Why aren't they talking English? They came here to learn English. So, the dean of that school put out a memorandum to the Chinese students that says "Remember, you should always speak English when you're in public domain." She got fired; this was just too egregious even for Duke University, but that's the atmosphere you have. Then, you have the attacks on Huawei. Look, some people have this idea, and it was expressed by a number of Americans -- can't remember exactly who it was -- but it's endemic. Oh, it was Larry Kudlow. "High technology is really our baby. This is what makes America great." So, you can't really get involved in that, you can't have anybody who's gone beyond what we've done; which is ridiculous. Trying to restrict, in a form we used to call technological apartheid; that is, you restrict people from getting technology because then you can control them -- is idiotic and won't work anyhow, because ideas are universal.
Science is universal. If you don't let them know what's going on in your camp, they'll probably figure it out themselves. The problem is that when they do that, and they feel that they have been restricted or that they have been oppressed by us for not being able to do that, then that creates the tension that you really don't want. President Clinton said at one time, which I think was a very important statement; people were asking "What are US-China relations going to be 50 years down the road?" He says, "What those relations will be depends upon what we do today." So, if we start to muddy the waters already now, to declare China as an enemy, or to declare China and Russia as these guys did at the hearings the other day, as the enemy, probably down the road they will become the enemy. Because if they see the United States -- and I think this is a problem with China -- and my experience in China most recently is that what used to be a positive feeling towards the Trump administration in the beginning, is now becoming a little bit more, skepticism is rising. That's a bad sign, because there are no fundamental contradictions of interest between China and the United States.
The United States can develop if we decide -- hopefully we will do that -- to move in the direction of building our railroads and our highways, rebuilding our infrastructure; putting some effort into science and technology. We can do that; this is not going to contradict anything that China is doing. In fact, at that point we can probably work together better, because China is a more important economic power that can contribute to what we're doing. There was an article the other day from the China Center for Contemporary International Relations, which said now that China has gone to the far side of the Moon, maybe now we can cooperate with the United States and do something more interesting. That's really the direction we have to go, because it is a win-win situation.
OGDEN: Meanwhile, it's been 50 years exactly to the year since the manned Moon landing -- 1969. And where are we, versus what has China accomplished just in the last 10-15 years of a space program? Now with the Chang'e 4 landing, they've landed on the far side of the Moon; something that's never been done before. The landing itself was technologically amazing with this autonomous guidance system and everything that happened there. And then this communications satellite that was at the LaGrange point that was communicating back, relaying the signal from the lander to the communications satellite to Earth.
These are all unprecedented accomplishments, but then what is the science which is happening on the far side of the Moon? The measurements of exploring this completely unexplored territory; but also being able to look into deep space at this part of the electromagnetic spectrum that we haven't been able to see, because there's this radio-silent kind of atmosphere on the far side of the Moon. These are amazing technological accomplishments; it's laying the basis for a continued commitment, what China is doing with the continued Chang'e program, which includes sample-return missions, even maybe possibly the exploration of mining Helium-3 for use as fusion fuel. If we had great power cooperation around those kinds of commitments, that would be to the benefit of the entire human race; that's the common aims of mankind. But meanwhile, we have this Wolf amendment in place, which bans any kind of cooperation between the US and China on space exploration along the lines of this narrative of the danger of espionage and so forth.
Then, the narrative that commitment to high technological scientific development is a threat to our national security; when we've abandoned what we had accomplished 50 years ago, and we have not continued along that path. So, I think it should be more of a wake-up call than this kind of conflict.
JONES: Absolutely! And the Chinese have been very clear that they want to cooperate on this. Even with the Chang'e 4, there were talks between NASA and the CNSA (Chinese National Space Administration) with regard to this; and NASA put in a request also, can you tell us something about the details of the dust when it rises when the Chang'e 4 lands. What are the parameters of that? They did that, and they wanted to do that. They also said, look we've got this communications system; if other countries want to come and try and do something on the far side, they can use our communications system. They want to do that. The US used to be like that, too. During the height of the Cold War, we were working together with Russia on space, which created a very good climate of comedy and cooperation that continues to this day. To this day we are now kind of, the intelligence chiefs are trying to get us at loggerheads with Russia; we're still working together on putting people up in the Space Station and that will continue. The NASA administrator specifically wants that to continue. But it's a real fight going on now, because Americans have really lost the sense of what made us great as a nation. What made us great as a nation where on the one hand, our ability to allow people to have the capabilities of education and the like to actually contribute their own intellectual qualities to advancing the nation; to the commitment to the nation. And to the commitment to humanity. There was also the idea that the United States is a force for good in the world; we are a force that really should be industrializing Africa; we are a force that should be helping Latin America come back to where it was at least in the 1970s when it was a functioning economy. We've helped to destroy it by our trade policy; the so-called terms of trade turned around the advances that were being made in the 1970s, coming out of the Kennedy program, the Alliance for Progress. All of these things were turned around because of our shift towards total free market economy, and imposing on these countries that also had an industrial policy, the same kind of restrictions we're trying to impose on China; getting rid of your industrial policy, let the "market" do your work. The "market" was Wall Street, that was London, that was George Soros.
OGDEN: It was the Chicago School, these coups that were run, literally overthrowing governments.
JONES: Absolutely; that was insane. The other thing is, the United States should be -- in our history, and I try to emphasize this to my Chinese friends -- for the 200 years of history of the United States, our policy to China has been beneficial. We have wanted them to do good; we have wanted them to become an industrial power. Now, all of a sudden, because of the neo-cons, because of the Anglo-American idea that has become engraved into our political elites; the notion that we have to be number one, we have to be the hegemon. As Obama said, we have to set the rules. There are 170-something countries in the world; they should have a say on these rules, because they have to obey these rules. They have to follow it, and they have to be in the interest of their countries as well. This is what China is simply insisting. They don't want to control the world; they don't want to run things; they don't want to try and deal with a lot of these problems, even the ones that the United States has had to deal with in terms of these military operations in the Middle East and elsewhere. But, they do want to have a say in formulating the rules that become a win-win situation not only for China and the United States, but for the rest of the countries of the world which they have historical ties to as a former developing country or a developing country becoming a developed country. That includes also the economic rules that are running the economy, that have not been very successful for most of the countries of the world over the last 40 years.
OGDEN: Meanwhile, there's a very interesting history in China of scholarship of the American System. Alexander Hamilton, Henry Carey, Abraham Lincoln absolutely; also Friedrich List. I'm sure you know much more than I do, but Sun Yat Sen's studies of the American System and how he used that to build what has now become the modern Chinese nation. So, this is our ideas, this is the American System, this is Hamiltonian economics at work. We can see the successes that come out when countries are dedicated to those policies versus what happens when you allow Chicago School free market ideology to replace what we built as the American System originally.
JONES: This is important, because this is something that also President Trump, how much he understands this, I'm not sure in terms of depth. But the intentionality of what he was doing, and also his statements during the campaign with regard to Henry Clay and Alexander Hamilton. When he went into the Oval Office, he put two portraits up. One unfortunately was Andrew Jackson; but the other one was Alexander Hamilton. Much of what he's trying to do in terms of the need for tariffs, the need for protection, has that Hamiltonian thrust to it. He doesn't understand that in terms of the trade so much, but it is there; it does exist as a potential. The question is, that the potential has to be realized, has to be implemented. Part of the role that we have had in terms of this administration is trying to strengthen that element in the Trump administration and President Trump personally in order to try and get him to move in the only direction in which he can succeed with his program. The unfortunate focus on trade and this attempt by the neo-cons to make China into the scapegoat, is going to cause great problems for that program itself.
OGDEN: There were discussions, I remember, of ways that under a Glass-Steagall type of national banking system, if we were to go back to that, ways that the Chinese could actually use the Treasury debt that they hold, to convert that into credit which could be used to capitalize a national bank here in the United States to build infrastructure. The details of that were yet to be worked out, but the fact that there even was discussion on the US side, but also there were people on the Chinese side who, I remember, were discussing that -- at least in general terms. Is that something that still is on the agenda?
JONES: The Chinese of course are very interested in that; the problem is on the US side. Some people are more attuned to this; Ed Rendell I think even mentioned it in terms of the Democrats and trying to get them to be transformed from a lynch mob into a reasonable factor in US policy in terms of the infrastructure program. The Chinese would be interested in that; the Chinese are already doing a lot, but the problem is on the US side. The idea of an infrastructure bank would be useful, because it would allow the Chinese to invest without actually owning something. Of course, if you're going to build a high-speed rail between New York and Washington, it's going to be very difficult to have the Chinese run this thing. But even now, look, it's just gotten so bad. Look at the Washington DC Metro, if you've ever travelled on this thing, have you ever gotten anyplace on time travelling on it? Especially over the last few years? It's an older system, it works, but it's old and it hasn't been renewed. The Chinese are prepared to sell trains to Metro to improve the system in a very short period of time. The US Senate now comes out with legislation -- we cannot have Chinese cars because they could have these little electronic devices and they would hear what the Senators or whoever it was were saying; which is ridiculous. They've done that in Boston; they've set a deal. They're buying them. As the Chinese have said, "We're not saying we're going to build your software; all we're doing is trying to sell these cars," which would be beneficial. Boston has cut a deal with them; in California, they're doing it. A lot of direct investment could come to the United States if we had a better relationship with China. Direct investment that wouldn't be of a sensitive nature that would create problems or the appearance of problems. They would be prepared to do it, and certainly they would be prepared to do it to take the amount of funds that they put into Treasury bills and put them into infrastructure funds. This has been an open and public discussion in China, but of course, they cannot call the shots on that; so that has to be done here in the United States. But there has to be this idea that Chinese investment is welcome. And as we see with Huawei and the attacks on Ms. Meng up in Canada, China investment is not being welcomed at all in the United States. We've got to change that around, because they can help us a lot in this program, simply because of the advances that they have made that will become of benefit to us; which will allow us to advance, and that's what you have to get.