Ep 57 - Jude Blanchette on how China views “The Rupture” in global politics

[MUSIC] >> Hi, everybody, and welcome to the latest Tribune China podcast, the proud member of the Synicked Podcast Network. I'm your host, Trim Co. Founder, Andrew Polk, and I'm joined today once again by Tribune's head of markets research, Ginny McMahon, Diny, how you doing, man? >> Doing good night. Good to see you. >> Yeah, great to have you on as always. Diny and I today are going to get into a little bit of a 15th five-year plan preview, but from a specific macroeconomic angle for those listeners who don't know. Next week is a big week in the Chinese policy calendar. There's the annual government meetings. They will drop the government work report for the year that outlines the headline policy, economic and governance policy goals for the year, but they will also drop the 15th five-year plan, which of course outlines the major policy and governance and social goals for the next five years. We are going to be all over that at Tribune, so you'll definitely want to be listening to the upcoming podcasts as we get into all that stuff and what it means for China's economy and geopolitics, companies, investors, etc. But today we're going to talk specifically about a change we've been seeing or Diny in particular has picked up on when it comes to Beijing's willingness to support welfare spending or to offer welfare spending. Of course, within eye towards supporting consumption in the economy, but also just kind of creating this bigger social safety net for Chinese citizens. And the policy chatter we've been saying has kind of started to evolve a bit in a way that we think it's going to be sort of officially stated in this 15th five-year plan next week. So we're trying to get a little bit ahead of it. Well, I guess we'll see if we're correct in about a week, but we're pretty certain based on the policy chatter that this is the way things are moving. So we're going to get into all that today with Diny. And then listeners should stick around after my conversation with Diny. I have an interview with Jube Blanchett, who is the director of the RAN China Research Center. He's a long time China political analyst, one of the best out there. We talk about sort of what he calls or Mark Carnegie first called it, but others have referred to as well as the rupture. The big tectonic shifts in geopolitics that we're seeing these days and park driven by actions from the US and park driven by actions from China. And we get into the rupture and we talk about sort of how Chinese leaders are thinking about it. What their role in the rupture has been and how they may react to it going forward. So stick around for that fascinating conversation after Diny and I wrap up. But getting, of course, before we get into any of that, we have to start with the customary five check. How's your vibe, M. Yeah, I'm like, I think knowing that this is my last winter in Chicago is making it all a harder deal with it. So yeah, senioritis, it's like senioritis, right? What's that? That's when you're a senior in high school, you start mailing it in because you don't want to do the work because you're so close to the finish line. It's something like that. No, we had a beautiful warm. I mean, it happens every year in Chicago. You kind of have these false springs. So we had a wake beautifully warm with the last week. And now it's back to sort of like optic conditions. And I'm just sitting here going, "Why? Why? Why? Just why?" So as much as I love this city, I am really looking forward to upping stops and moving to North Carolina in a few months. Yeah, but what's there's maybe not no thing is about to head out to the Dermare, right? Yeah, yeah. New North Carolina. Yep. The Balmy Climes. That's cool, man. Excited. I don't want to dox you or anything, but I guess people. That's great, man. Well, I'm excited to have you one hour closer. On the same time, someone's me here soon. My vibe is just like podcasting. I was just telling Demi before that I recorded the interview with Jude yesterday. I've been prepping for next week's pod and then right after this recording, another pod with another group. And so I didn't know my career would lean so heavily towards podcasting at this stage. But that's where we are. And I'm enjoying it. And so I hope the listeners are enjoying it as well. We'll make sure to flag those other pods so you can check them out. And also, you know, we've got a lot of cool programming coming up. We're going to be bringing more and more outside guests on. So it's going to be a lot of fun. I think listeners will get a lot out of it. So we're going to get into this stuff today as well. But have to course also do the very quick housekeeping quick reminder. First that we're not just a podcast here, tripping China as a strategic advisory firm that helps businesses and investors navigate the China policy landscape that of course includes domestic policy in China across a range of issues as well as policy towards China out of Western capital like DC London Brussels and others. So if you need help on any of that stuff, please reach out to us at hq at tripping China.com. We love to have a conversation about how we can support your business or your fund. Otherwise, if you're interested in receiving more tripping content, check out our website again tripping China.com where we have a bunch of different options, both free and paid for subscription services around Chinese policy intelligence. Basically, we track Chinese policy along the items that matter for investors and in the markets for companies that are involved, you know, with the tech sector, we have finance, we've got general sort of China watchers slash cross cutting business issues. So go check out the site. You'll definitely get the China policy until you need and finally do us a favor, tell your friends and colleagues about trivia and also like and leave us a rating on the pod so that, you know, we get the listenership rates up and we can continue to grow that, get the word up. All right, we are going to get into this welfare piece now at the end. So you've talked a lot before about why China hasn't pivoted sort of to a consumption of the economy as everyone says China needs it. Rebalance the economy towards consumption. That's been the thing for a decade plus and you have, you know, argued, I think, rightly that the reason that Beijing's not really wanting to do that even though everyone says they should. They didn't really saw the Western economy say they should. Is Beijing's unwillingness to fund an expansion of welfare, the welfare state from debt by borrowing money on the central government balance sheet, but you wrote something on that for us this week, kind of previewed at the top, suggesting things might be starting to change the relationship between the government's views on debt welfare might be starting to break down based on some policy chatter that we've seen and not just chatter but official writings from Tee Thalsey advisors and from party outlets. So we think this could have really significant implications like I said specifically in the 15th five year plan and policy around both developing welfare state as well as supporting consumption. So we want to get into all of that but to set the stage, why don't you start by giving us a refresher on why Beijing so far has been so reluctant to ramp up welfare statement. Okay, well, regular listeners have been more than familiar with this writing at this point, but what about communities that China really wanted to boost consumption. It needs some sort of large scale wealth redistribution and to deliver it on the scale of redistribution that's necessary so that it could have a meaningful impact on consumption in a relatively short period of time. For that to happen, Beijing really needs to do a via government spending. There's a bunch of tools I could use. I could use helicopter money or spending more on healthcare. I could introduce an earned income tax credit like in the US, which is effectively a reverse income tax. They could put more money into pensions, but a bunch of ways that you can kind of put more money into people's pocket so they can start spending. But let's just lump all those things together as higher spending on welfare, right? Because as long as ordinary people are constrained by the need to save for medical bills or to save for an underfunded retirement or for, you know, side child care or education costs or whatever, as long as they're constrained by those sorts of demands on their income, they're going to save far more than it then is ideal. And so if you want to release that savings, you kind of need some mechanism to reduce those costs to put money into people's pockets. And in theory, Beijing has always kind of said that it is absolutely unbored with spending more. Officials, Xi Jinping included say repeatedly that they want to spend more on welfare life programs. But in the same breath, they also say that they want to do it within the scope of the economy to be able to pay for it. And what that really means is that they don't want to fund it with debt because they see welfare as effectively a bottomless pit. Once you start spending on welfare, you can never stop. Right, after you've made a certain commitment to spend more on pensions or spend more on healthcare, you kind of locked in and you ended up in a situation in which Chinese officials, researchers referred to as Latin Americanization. But they look at the experience of Argentina and Brazil last century where they tried to build western style welfare systems off on the back of a developing economy and they ended up with a situation where they had more debt than they could ever really manage or pay down. And so that's where we are. Beijing has been left trying to, because it's unwilling to fund welfare. It's just have a broadly defined that because they're not willing to fund welfare from debt. They're kind of being left trying to boost consumption with supply side measures that are designed to unleash latent demand, which hasn't been hugely effective because the real problem here is that people just aren't willing to spend more at current levels of income. And Beijing hasn't been able to reduce their propensity to save because they're not willing to put more money into people's pockets. And so that's kind of where we're at and why we haven't seen a meaningful, like we've seen incremental increases in welfare, like don't get me wrong. But we haven't seen the sort of expansion that could have a meaningful impact on consumption. Well, thanks for laying that out. It's good to sort of lay out that foundation, which you've been, of course, have been sort of talking about for a while. So some listeners will be. I've been flogging this wall as far as I just. No, I think convincingly so. And it converted me. I think that is a pretty reasonable take. And one that's sort of not necessarily a conventional one that's not well recognized. But now you're starting to say, "Okay, well, maybe there is any wrinkle at the very least here." I mean, you've previously, you just made the case of this aversion of welfare spending through debt is pretty hard baked into the system. But what are you seeing now to suggest something might be changing? So there's this expression that's made it to weigh into. I was going to say sort of government documents, but really Xi Jinping has been using it for the last couple of years. And what it is, is he's been talking about the need to invest in people or investing human capital. Told you, you read it. And it's important to note that this idea, this phrase, she's been using it for a while now. So the first time he used it was at a big party conference focused on the financial system back in 2023. And then in 2024, he wrote a essay in which he dealt with the idea, used the expression again, then the. this idea of investing in people made its way into the government's work report last year in March, then it turned up in the decision documents for the five-year plan in October. And then it also got a shout out in the Central Economic Work Conference read out in December, right? So the idea has been around for a little while. The reason we're particularly interested in it now is because since the Central Economic Work Conference, they really do seem to have been a material pickup in the volume of just stuff being written about this concept in official publications, live children and the people's daily. Now, the really interesting thing about sort of the longevity of this idea, because I mean what she started talking about it three years ago, is that what it means has really evolved a fair bit since its birth started being used. So when she first started using it, it kind of geled very much with how we've kind of articulated our idea of what Beijing is trying to do for your economy. The idea was that, look, it was based on Beijing's concerns about how to manage an economy with a shrinking and rapid reagent population. So the idea was like, okay, the population shrinking, it's getting rapidly older. So how do we deliver common prosperity and rising prosperity, given those constraints? And the idea was like, well, look, we can't continue on our merry way, where so much of growth was driven by investment, being housing, infrastructure, or whatever. Those days had gone. The returns on investment arenas, as high as they used to be. The way of the future, to be able to generate rising wealth and rising prosperity in an environment where the workforce is shrinking in the age of, there's any of the population of reviries is increasing. The only way to deliver prosperity under those conditions is with higher productivity, through innovation, greater efficiency, and whatnot. And so the way to deliver greater productivity is yes, yes, investment in traditional style investment in robots and AI and technology, still very, very important. But increasingly important, and perhaps even more important at this point, is investing in people. And then an idea of investing in people was mostly about upskilling, giving the Chinese population the skills to be able to operate and in more advanced economy, increasing education levels, increasing the resources dedicated to research. It was about creating a more productive and efficient workforce. Now also tapped on to that as a whole lot of ideas about providing greater support for fertility policies in China, raise China's rate of childbirth. But that's kind of where the idea was coming from. That was a problem here that China needs to deal relative because of its population, its demographic profile, and upskilling and investing in people could kind of weigh the future. Now the reason we're interested in it, all of a sudden, is partly because clearly there's more and more interest in it. The state media, the party media is clearly identifying this as an increasingly important thing for the five-year plan. But what it has come to me has changed a lot from three years ago, from what I just outlined then. And all that stuff is still there. Right? The idea that we need to create a more skilled and more highly educated workforce, still there. As is the stuff about trying to increase the number of births and expand family size. But also wrapped up is we need to spend more on healthcare. We need to spend more on elder care. We need to do more about equalizing public services for migrant workers. And so in some ways the idea has kind of changed from just being a solution or a tool for dealing with demographic decline. And it's increasingly couched in Marxist terms that China is now at a stage of development where it's not just enough for the authorities to overseen accumulation of capital. We're now at a level where it's important for ordinary people to start enjoying the fruits of China's economic development not just as economic actors, but also as individuals so they can properly enjoy their lives. And so the idea here is that to kind of increase not just the economic capacity of China's workforce, but to also kind of share the wealth in a way that allows people to more fully enjoy or celebrate their lives. I mean, it's not the sort of thing that you usually see wrapped up in sort of analysis of of mewecanolic policies. But that's kind of where this is is going. And so very clearly you kind of see this inunciation that this is about allocating more fiscal resources, not just to education and upskilling and investment in the labour force, but it's also about providing resources to things that we have traditionally considered as wealthy. It's not all sort of child care, neonatal policies, it's definitely part of that, but also the healthcare, elder care, and sort of just ensuring more equalization of access to public services for market workers. So just to to make sure I'm sort of hearing this right, it sounds like you're sort of saying that effectively Beijing and Chinese authorities are trying to sort of disguise an expansion of the welfare state as being an investment in people. I don't know if disguise is the right word, but at least message it that way. Do I have that right first and secondly, they take that approach? Yeah, I think you're right. And this comes back to the debt problem. It's kind of what I was saying before about, you know, how Beijing said officials often say yes, we'd like to spend more on welfare, but we want to do it within our means. I mean, going back to what I was saying before about Xi Jinping talking about this idea of investing in people back in 2023, it was like yes, we want to spend more on childcare. Yes, we want to spend more on upskilling our workforce, but it needs to be within our capacity to support it. But increasingly, you're not seeing that caveat so much, or at all really in discussions of this. Hong Wenzhiol, who is the deputy executive director of the CTA, which is kind of like the party's main body on economic and financial issues. He just a few weeks ago wrote something on this and he often when he's talking about the need to expand welfare makes that caveat that I just mentioned. Yes, we want to spend more on welfare. No, we're not going to do it unless it's within our means. He was talking about investing in people and the caveat wasn't there. And you're not seeing it in a lot of the discussion of it. And as I said, I think this comes back to debt. Beijing traditionally hasn't been willing to fund welfare from debt, but it's always been more than happy to fund investment with debt. And that's because investment generates a return. By definition, if you're making an investment, the expectation is that it will eventually generate sufficient returns to be able to pay off the debt, whereas welfare is just a recurring expense. And so I think what we're seeing here is an effort to refrain the narrative. Sure, maybe this is linguistic gymnastics, but I think they're in a position that I can't kind of overturn or go back on this fairly deep rooted aversion to funding welfare from debt. But we have seen in the past that when they change the narrative, the money does appear for certain issues. Now, we saw this a couple of years ago when Xi Jinping declared that China's low birth rate was a national security issue. And so by doing that, all of a sudden, child care, maternity care, other neonatal policies, they were no longer welfare programs. And once that happened, the money kind of materialized for those sorts of pro family, pro child sort of funding programs because all of a sudden, there wasn't welfare anymore. It was a national security concern. So I think that's what we're seeing here. Beijing isn't trying to dismantle its traditional position on welfare because it's spent too long building that up and it's kind of hard bacon the system. And so rather than arguing the merits of spending more on welfare, we've got this new argument that China needs to invest in the future. That's going to be the economic prosperity in the future. And also at this stage of development, it's just important for the Chinese people. And so just kind of refraining it as an investment, as opposed to kind of a welfare expense, I think that's what they're doing here. And it's kind of laying down the foundations for making government fiscal resources available for spending on things like healthcare, pensions, child care, elder care, etc. That's all great. I'm going to take us a little bit off our roadmap here, maybe through a little bit of a curve. But as you're saying that, so first of all, I guess that my question here is, do you think I'm going to try to put my thoughts together? I've got a lot here. Do you think that this is something that sort of Xi Jinping or senior leaders are reframing as something to message domestically about how they're approaching this? Or is this something some advisor to Xi Jinping who wanted to support consumption and welfare came up with to justify it politically within the system? So, jumped out of me when you said, how do we own the policies or are pro-natal policies? We're kind of flagged as a national security issue. There's no better way to get funding for something in any government ecosystem than to say, well, this is national security. That's how famously the ill-called convinced Xi Jinping that debt was an issue is to say our debt crisis is a national security challenge. So, the question is, do you think this is something Xi kind of came to in his own and they're messaging this now like top down? Or was this a clever advisor who came to Xi Jinping and said, listen, this isn't welfare, this is an investment. And here's how it's an investment. So, with the caveat that we don't really know, we don't always know how decisions get made in the system. Just interesting, your overall got sense on that because I've actually been part of conversations in DC. Similarly, that we're to try to build constituencies for bills on capital bill that will invest in people. The narrative is often what we need to invest in our people as a down payment on the future that we will get back and higher skills upgrading better, more productive workers, which actually as macro-government is something I do believe in, but that is even in the US used as a narrative to fight back against just saying, well, this is just putting money in people's pockets. This is an expansion of the welfare state. So, that was a lot. But what do you think the context is internally on that for China? Yeah, my sense is that I think Xi Jinping has full buying, you know, this and there's a few reasons for it. One, the whole national security thing I get, it's a really easy way to reframe an issue. It's like, well, this is a national security issue. Can't you see it? This is national security implications. You carve out something, you rebrand it. I mean, it's obvious the implications are but for this, as I said, I mean, like it requires some real gymnastics here to kind of get your head around how, yeah, it really does feel like the scope of what they're trying to reframe as being investment is really quite significant within the scope of sort of the Chinese political economy. Night view, Western democracy, everything's an investment. A politician turns up to open a school. We are investing in our children's future. It turns up to open a hospital. We are investing in the wellbeing of our people. And so there's definitely an element of that in sort of what's happening here in China with this sort of formulation of investing in people. But the idea here is that they're hearing it. It's not just a rhetorical tool. They're hearing it very much with the idea of investment and things isn't generating the returns it used to. Therefore, we need to invest in people to generate the prosperity of the future. And to a certain extent, it's quite what I was explaining before where this kind of idea started with. Investing in people to the extent that you're kind of upskilling and investing in education in order to be able to generate a more productive workforce. I mean, that kind of makes sense. But the next step that it seems to have taken over the past year where it's like we need to invest in health care and in elder care. The returns on those things that those things as an investment aren't immediately obvious. And at the same time, you've kind of got this article's been written about this idea that are coming specifically from a Marxist perspective, which I mean, maybe I'll never kind of look for it in the past. But in the past, when there's kind of been a new government, economic or financial policy, it usually doesn't get steeped in Marxist terms. And yet there's a lot out there written about investing in people from a Marxist perspective that at this stage of China's economic and social development, it's now time for us to kind of engage in a better development of people as individuals rather than just as economic beings. And as I said, I just haven't really seen that before. And so that's my kind of my sense that this is something that has been buying from the top because it feels very different than just a convenient way for an advisor to kind of reframe a particular issue that is the hip hobby horse. Just the sheer scale of reframing what investment is and what this means for the economy seems to be happening on a much larger scale. Yeah, that's a great point. I tend to agree with you, just sort of it's a vibrating, right? It's kind of all we have, but just the various ways that has been expressed so far in the outlets within which it's been expressed. And the fact that Xi Jinping is one of the torchbearers for this at least at this stage seemingly would seem to say it's more fundamental. Of course, that doesn't mean that it wasn't policy advisors over time, right? You know, kind of seeding the idea, I get what you're saying. This isn't a signature, a pet priority that someone's going to sneak through under the radar. It has it's media than that. But I do, I do just kind of wonder if there was someone who consistently pounded this drum enough that it started to sort of change the calculus in terms of how senior leaders were thinking, although that said, I also will say, I've said before, I've just gotten this sense, again, just reading all this stuff and I can't point to one individual thing, but that senior Chinese leaders were sort of trying to convince themselves to do the right thing on this front, meaning like they've been slowly inching towards more welfare spending, slowly inching towards more central government funded infrastructure investment, both in software structure and hard infrastructure. Kind of there's an inversion to using the central government balance sheet to aggressively in that way, but they know ultimately like the local governments can't do it and they've got this massive demographic problem. So like the answer is obvious, there has to be more government spending on it. And so I wonder if that was maybe part of the process. So, well, of course, Dan all said, we're not 100% sure that this is, they didn't, like this is our early read on something that we think is going to happen. Again, we think, well, the proof will be in the pudding. The first chance for the proof to be in pudding will be next week. If something along these lines is at least nodded to, if not explicitly sort of outlined in the 15th, 5-year plan, but given that we're not 100% sure this is happening, like what would push you towards more certainty that, okay, we're now moving like more conservatively in this direction. Yeah, I think the first thing is I'm going to be reading the 5-year plan document with this in the back of my mind to kind of see if the more ball moves forward because as I said, this idea is popped up in a number of documents so far, but it just hasn't been made on the bones. I mean, it wasn't the government work report last year. It was in the, you know, the decision documents for the 5-year plan. It was in the, you know, central economic work conference readout. So it keeps popping up. So the question is then, okay, given that there seems to be momentum building, how would that manifest itself in the actual, the final 5-year plan document? So that's kind of what I'll be watching for. And then beyond that, we really kind of need to see not an increase in spending on welfare here and there, but like new programs, you know, perhaps the central government funds some programs to ensure that migrant workers get better access to public services in the cities that lead for maybe there are new programs to support elderly communities. I'm not sure exactly what this would look down, but it really comes down to where they start spending more money. I don't think we're going to get explicit programs in the next week, but at the very least, hopefully, we'll get a much more succinct direction of travel. Well, that kind of pulls us back to the question, where is this money going to come from, right? So next week we're not just going to get the 5-year plan with, you know, big, big ideas on governance priorities, but we'll also get the government work report, which will detail, I guess it's not both the government work report and the budget report can now, I forget which details are in which one exactly at the moment, but either way, we're going to get details on the budget for 20, 26 as well. And so, you know, last year, the central government budget deficit was 4% of GDP. That was the highest. It's been in 30 years. In fact, the first time it's cracked, 3% of GDP in 30 years outside of, I think, once during COVID. So, I mean, where is this money going to come from? Are they going to raise the budget deficit this year, you think? And commit some legit fiscal spending to these priorities? You know, I really don't have a good answer for this one because 4% budget deficit is already high. I mean, it's hard to imagine them ramping it up two years in a row. Now, I'll call it when you're noticed that Xi Jinping talked about extracting greater fiscal resources out of state owned enterprises, which is something he said during in December at the Central Economic Work Conference. Maybe that's where it will come from. Right. So, that would allow the budget deficit to stay at 4% while effectively redistributing wealth from the state sector to households. Maybe. But there's been talk for years about taking more profits from state owned firms and redistributing to the state. It's been happening incrementally, but it has been like pulling teeth. So, I'm not sure the degree to which they can expand that, how quickly it will happen, what sort of pushback might occur. But I mean, that is the perhaps one source of potential income that the government has without having to resort to raising taxes or without needing to borrow. So, I mean, I don't have a good sense. Even though this whole thing seems to me to be an effort to reframe spending on welfare so that they can borrow to do it at the same time, I just don't see there necessarily being an appetite for higher government debt levels regardless of what that money is being used for. So, I mean, this is really the open question of the moment. If they go down this path, where does the money come from and I don't have a good answer yet? The money. That will always get to the answer. I mean, it would be remarkable, absolutely like a game changer. If they finally, you know, they've been talking about this for decades, like finally, really, in a concerted way, re-channeled money from or funneled money from S.O.E.'s into direct financing for for investments in people. I mean, that's the old Michael Pettis-Hobby horse, right? That the households have been subsidizing the state sector for decades and decades, and only way to sort of adjust the structure of the economy is for that process to go into a reverse. And so we'll keep an eye on that. I'm not super optimistic or I'm skeptical that that would happen, I don't know, optimistic, is the right word in terms of whether or not that happens, but it would be monumental. It would be the beginning of that whole process going into a reverse and increasingly signal the state is willing to subsidize households, but that'd be a big, big change. Yeah, there it would. All right, man. Well, thanks for running us through all that. We'll have more answers to this. We obviously won't have the answer, but we'll get a ton of information next week when the 2026 government work report comes out. And the 15th February plan also drops, and we will be all over that in our next couple of pods. If not our next three or four pods, dissecting various aspects of that. So stay tuned with us. We're going to have some a lot of really media pods in the next few weeks. And in the meantime, please stick around for my conversation with Jude Blanchett, director of the Ranch Out of Research Center on how China views the rupture in geopolitics. It's a really good conversation, but Diny, thanks a bunch for joining me today. This was great. You know where it's meant that there was always. Thanks everybody for listening. Stick around for my conversation with you. Thanks y'all. [Music] I'm joined now by a very special guest that we have on the pod. I kind of previewed this a few weeks ago that we were going to make some changes in the structure of the pod. And that is to bring on more and more external guests. And so our first external guest of 2026 is somebody I'm really excited to have on. It really needs no introduction, but for those of you who may not know him, he is the director of the Rand China Research Center and the expert in Chinese politics, but really all things China. And that's Jude Blanchett. Jude, great to have you on, man. How you doing? Great to be here. Although the idea of anyone being expert in all things China. Oil markets. Talk to me about China. Oil markets. Yeah, he can test the limits of that in about five seconds here. I mean, yeah, yeah, you set the standard. We'll put it that way for for those of you. My allied in Steve is my sweet father. Well, I'm super excited to have you on for listeners who don't know. Jude and I worked together in pre-pandemic life, which was sort of a different life altogether at the conference board in Beijing. And so that was back what 2016, 2015, 2015. Yeah, so a very decade. Yeah, 2015 is when I joined conference board. So and now we're both here in DC and the swamp. And so really appreciate you coming on. I wanted to talk to you today, starting out a little bit more high level because I know, you know, you're often are working and thinking sort of a strategic level when you're doing work. Both in support of various government outcomes, but also for the private sector. And we were talking the other day and you were talking about kind of this idea of the rupture, these geopolitical ruckians that are happening all around us. And that term specifically was used by Mark Carney at Davas, you know, a speech that was got a lot of attention, some of a controversial, some of it highly praised, but you know, his general point was we're not a transition period. This is not a temporary thing. This is something completely different. It's a rupture. And so, you know, we've seen a lot of volatility, of course, in terms of geopolitics at the beginning of the year of Venezuela, Greenland, now threats to Iran, Supreme Court, terrafruling, all this stuff. And with those kind of things happen immediately. And the sort of bigger idea of the rupture in the background, you often get this analysis from people that I kind of view as somewhat lazy, which is China's going to benefit from all this amid all this chaos, all this change. China is going to act as a stabilizing force. And countries are going to increasingly sort of hedge their bets if not fully turn away from the US and either align with or have some kind of relationship with China to bounce out the relationship with the US. So I kind of want to get into sort of all of that and specifically how China might be thinking about this. But to start, I wanted to ask you, when you talk about quote unquote the rupture, what do you mean by that? I mean, Karin may have meant one thing, but how do you think about it? Probably similar to you. I'm less steeped in IR literature on this and it's more driven by lower elevations, observations and interactions with governments, with companies. And I think Karin's speech hit on something that everyone has been feeling for a while. And it was the first really prominent national leader to make it so explicit. But since 2016, Brexit Trump, we've been talking about sort of end of an era. Some of those assumptions felt a bit premature in 2017. But I think since certainly Trump's first administration, then building with Russia's full scale invasion of Ukraine, we can talk about this later, but I think this brewing China shock 2.0 AI first starting with chat GPT, or at least for popular awareness, starting with chat GPT a few years ago. Now just over the course of a few years, we're in just an entirely different universe of thinking about the disruptive possibilities of the technology. We're recording this the week that that sort of sci-fi report from what is it, Citrini. I've never heard of them, but sort of said equity markets a light on Monday, Tuesday, with just some sort of sci-fi speculation about disruptive potential of AI. We also have Trump's Greenland threats, which I think, although they didn't materialize in the end, but I think coupled with Russia's invasion of Ukraine, Chinese saber-addling on Taiwan, you do have this theory feeling that while the post-World War II period was by no means fully peaceful that we are in with the coupling of these sort of technological global governance China territory aggression, we can no longer use the same basic assumptions or structural assumptions about what underlays global politics, economic security, to describe the world we're in. You know, Karni's speech in one part was cathartic for many people who got a sugar high from hearing a western US pro-US leader saying essentially screw these guys, they're being bullies, we can no longer look to them for the type of support that we've counted on. That sugar high, I think, evaporated within a couple weeks of Karni's speech, you're left thinking, well, what is the alternative to that? But I think the second part of it, which does make sense to me, is, you know, in a very sort of Antonio Grimchee sort of way, we're seeing the death of one order, we know a new order is coming into being, but we don't entirely know what the rules of it are. And I think part of it is that new order is being formed right now through iteration, interactivity. Trump is going to leave office, we'd imagine in a few years, but obviously the, you know, the global trading regime will just look different from what it did. And so I think it's the accumulation of both the structural and contingent events that have happened over the last decade coupled with the idea that we know that order is deteriorating, collapsing, but we just don't know what the new order looks like yet. That is really, I think, what to me is captured in the idea of a rupture. Yeah, and there's obviously a lot of uncertainty, which I think is one of the, that uncertainty, of not knowing what replaces the old order, I think is what sort of causes a lot of anxiety, both in individuals and in nation states. But so I want to ask you, Xi Jinping bringing China into this piece of it, of course, always says the phrase that we're seeing changes unseen in a century. And I mean correct me if I'm wrong, but I think he generally means kind of the demise of the West and the rise of the East. Maybe it's not that simple, but that's kind of how I tend to read it. I think it's undeniable. We actually are seeing, you know, through the rupture changes aren't seen in a century, but I'm not sure that that's what it's actually what Xi Jinping is describing. Do you see what you're describing as something different than that, something bigger than that, or how do you align those two ideas? Yeah, just first an observation on what I think is a underappreciated advantage of the Chinese system. And this could be political culture as much of anything, but I think the party has always been more attuned to shifts in economics, politics, geopolitics, domestically and internationally. And I think this is born out of an acute sensitivity driven by an unceasing view that the precipice is never that far away. And so anticipating shifts understanding emergent trends, getting ahead of them is from a foundational perspective imperative for regime security. I also think they know that it is important for accumulating power. And so Xi Jinping has shown this scale multiple times early on. It was clear, like to be fair, like Hootian town, other leaders, but I think Xi Jinping was really attuned to shifts in technological order driven by new emerging technologies, which China, it was imperative that they did. And it was also strategically important that they harness these technologies because they were not legacy technologies where there had been an established Western dominant order around them. This was sort of an opportunity for China to pass on the curve. And also that these technologies, I think the Chinese saw certainly earlier than we did that these were going to have just a real penetrating ability to shape domestic and international order. Changes unseen in a century, I think falls in that where that came out first at a formal top level after bubbling up through Think Tank discourse, to the really emerging 2016. I guess where I slightly differ on an interpretation of it, is I think it is a bundle of concepts and has evolved over time. So I think initially it was a very teleological frame that was capturing some of what was happening in geopolitics in the mid-20 teens. So redistribution of global power towards China, but away from the West erosion of sort of Western institutional dominance rise of these non-Western centers of economic and political power, you know, multi-pollarity and technological revolution. So I think it was that bundle where I think it has evolved a bit is you do hear more on the official discourse of them talking about the profound changes being both opportunities and risks. So it is both moments where China can grasp history and move forward boldly, but it is also I think as you see in the discourse about these sort of growing challenges. I don't have the language of the top of my head, but it is something like you see this more of sort of strategic opportunities and risks coexist, you know, challenges and uncertainty could become greater. So I think within that construct of great changes, the Chinese know, there's some opportunities here, but this also comes with risk to the party and this is, I'm curious your thoughts on this as well. I think people underpeach eat how in many ways, small sea conservative Beijing is. If the status quo is providing benefits, it will often just latch onto that, even if a shift from the status quo potentially offers new opportunity space, the unknowns about a shift off the status quo. Well, I think often keep Beijing in its fixed position. Once changes do occur, you know, sort of exogenous changes like we're seeing now, I think China immediately goes into the balanced assessment of risk and reward, but I think in general, as you noted in the framing your question, China looks at shifts in order and shifts of the status quo in some ways initially, weirdly, because I think it is a risk-obsessed organization, which in many ways is what is given in such durability over a century plus. Yeah, I think that's right. I think there are certain Chinese aspects of that. I think that's also largely a feature of government to sort of default to the status quo to be largely risk-averse. So, I mean, I take your point that it's like fundamentally inherent to sort of the Chinese Communist Party and its approach to governance, but I do wonder if part of that is just part of leading a large country that you tend to be more reactive and weary of getting out in front of big change. Completely makes sense. We would not say that that Mao's regime in the high point of the culture evolution was a fundamentally cautious actor. And again, that was the China that was funding guerrilla movements across Africa. So, yes, I do take your point, but I also think there is not just a bureaucratic explanation for this. I think there is a political cultural explanation that predates Xi Jinping and has this as an institution which is so focused on survival and regime durability that it is not highly risk-taking. In a way, you can make the saying argument that the United States should be just as cautious given that it is a large bureaucratic entity as well, but I would say you see how leaders matter here and Trump is moving this big bureaucratic institution to do some pretty remarkable things. Yeah, well, he obviously is a unique figure in and of himself. I actually wanted to circle back to how you opened your comments on the changes that I've seen in the century, which is your observation, which I agree with that sort of the party in particular, or the party generally in Xi Jinping, in particular, has this sort of capability to take the temperature of evolutions in sort of technology, geopolitics, governments. I mean, this is a little bit more of a tactical question, but how do you, I agree, how do you square that with this idea that we often think of about Xi Jinping not getting good information? This is a bit of a dog like that. Do you think he gets good information? Or is it possible for them to be bad at receiving information or like policy feedback, but also be good at scanning their horizons? Because kind of what you said makes me think, well, they must be good at sort of projecting out their own vulnerabilities. Does that make sense? Yeah, I think there's a caricature analysis of this, which is that Xi Jinping is up in the castle keep totally isolated from reality with everyone scared to deliver bad news to the boss. Obviously, that is not the world we're operating in. And policy coming out of Beijing does not reflect an isolated madman who has no grasp on reality. That being said, I think it is undeniable that Xi Jinping has created a ruling coalition around him, which is rolling in the same direction and is not staffed with sort of team of rivals where unlike Trump, who I think likes a bit of a squabble and to see and in some ways, Trump is unique where I think even in contradiction to previous US presidents and maybe even other Western leaders, Trump may be more plugged in to what's happening outside of the White House because he will spend an hour watching cable news at night in the morning and get on an unsecured cell phone and talk to Mr. Pillow. I think a range of other people in the private sector and contacts. And I think that actually makes him somewhat unique. I think we can be sure that Xi Jinping is not in touch with sort of man on the street sentiment or at least is not reflected in policymaking. Trying to distill court correct, I think you still do see Beijing make tactical decisions, which indicate to me that information albeit circumstride, gate kept aligned with Beijing's top level priorities is still flowing up. It's a leninist regime. They've got technically multiple information channels that are moving up verticals from the local level up through. So I think the realities were likely to see a mixed picture here where political incentives and ideology concerns over career advancement shape. What information is moving up and down the silos. I think Xi Jinping has a imperfect but broadly realistic picture of where China is. Again, I'll throw the question back to you. Can we think of policy areas where you could say something like, well, they've been talking. Yeah. Their areas where China clearly should make pivots and where they're talking about making a pivot and they haven't consumption being one of them. I don't think that is explained by a bad information environment. There are things like when they initiated the three red line policy, seems like an inopportune time to try to initiate a course correction in the real estate market and the depths of COVID. So maybe there are moments where we can see that the policy making decision making system was maladroid. But I don't see Xi Jinping as being a leader severely disconnected from reality in the way that some of the kind of bad information bad choices out framing seems to indicate. But again, you're close to a lot of the economic policy domains. No, I think you're 100% right. I mean, typically when people ask me the question about, you know, is Xi Jinping surrounded by Yesman? Is he getting good information? You know, people often make very simple comparisons, right? They are often comparing him to Vladimir Putin. So what I always say is Xi Jinping is not Vladimir Putin. Like Vladimir Putin is isolated. He is only surrounded by Yesman. He's making decisions sort of based on his own intuition, often very you know, cloistered. That is not Xi Jinping. And maybe like eventually the system like Xi Jinping becomes more Putin-esque, right? As he is in power longer and longer and longer. So it's always a risk. But that's just not how we see the Chinese system working. One, based on how information flows, but two, exactly as you said, based on course corrections that they've made. And so you're 100% right. I think a lot of times we look at policy decisions that are made and say, we think that was a stupid policy decision. They must have made it because they don't have the right information. But actually maybe they just have different outcomes that they're pursuing. Then we would be pursuing or that we think they're pursuing. For example, on the consumption piece, you know, Dini and I, Michael, Dini and I talked a lot about how we don't really think they want a bounce towards consumption. Or if they do, it's at the end of a very long process. So, you know, if you think they want to bounce towards consumption, you see them not doing it. And of course, you think, well, they must not understand what's going on. But maybe actually their goals are different. And so I think you're right. There's like a bunch of things that you lump together. And often, people just kind of say, well, maybe they just don't know what's happening on the ground. It's also a difficult thesis to falsify because we just don't know what information flows really look like. Especially the most sort of sensitive matters that we care about. So it's hard to know what information he should be getting that is in the pipeline. So I think it just is a benchmark though. Are we seeing Xi Jinping act in erratic, irrational ways that seem to be completely divorced from the obvious realities on the ground in China? I don't see that. Now, I admit, there are areas like on Taiwan policy where we now have a defense-stated Central Military Commission Xi Jinping basically only in there with the central inspection, you know, propaganda. Now, there's still senior commanders at the theater commands, but that's one of those areas where you just don't know for good or for ill what the decision-making and information flows are. So when I say this, I don't mean to say that, and I don't think you are either, that this is a perfectly well-oiled decision-making machine. Dictatorships, 10-day bearer, and especially over time towards poor, and poor decision-making. We're going to come up on another party Congress. I'd afford to discuss this, but my guess is he's staying on, yet again, the personnel in the system will further orient towards Xi Jinping's vision that minimizes the space in theory for heterodox views on how China should move forward, build some path dependence, like that is not a great, you know, equation for decision-making. So as I said earlier, I think the risk, you know, becomes greater, the longer he's empowered, right? And I think that's both evident in China and historically evident, and you know, I appreciate you pointing out like, yeah, we're not saying just because the system can self-correct that everything's perfect. That dichotomy, you know, is obviously a trap we run into often in China analysis in Washington in particular. Like if you're not saying Xi Jinping is getting terrible information, you're saying he's getting perfect information. Well, no, there's gray area in the middle and there's middle ground between those two things. But to bring it back to the rupture piece that we start with, you know, speaking of what information Xi Jinping's getting and how he's thinking about the world, I mean, how do you think he and the Chinese leadership are making sense of what's happening in the world? Is this rupture sort of something that they envisioned in any way as we alluded to at the talk, changes in the century, or they just as confused about what's happening as everyone? Yes. I mean, try to disaggregate it. So I, without a doubt, think that the leadership and Xi Jinping himself think in many ways where we are now is exactly what we have been preparing for and anticipating for more than a decade. I think Xi Jinping in some ways looks prescient anticipating and preparing for a world of just much more contested geo economic and geopolitical space. I think everything in the past several years validates the Chinese in their own logic validates the Chinese approach of self-reliance, self-sufficiency of just building technological and economic resilience so that they could fight with a better toolkit, the next geopolitical struggle, which they did in a few rounds last year with the United States. We're trying to use leverage. It's export control dominance here. I think there is some deeper critique of capitalism, which I think Xi Jinping is still wafting the flames of that comes from a genealogy of Marxism and Leninism, which looks at inherent contradictions, building in capitalism, which inevitably lead to its weakening and self-destruction, which they see occurring here. I think they, again, like Lenin see imperialism as an inherent part of capitalist expansion. And so that's how they make some sense of the Greenland push the Latin American push. I think they see this as confirming that the era of Western preeminence and hegemony is collapsing. So in that sense, I think they'd say yes, this is at a macro strategic level, theoretical construct level, we have been anticipating this. Now that being said, these people also put their pants on one leg at a time and every morning, the leadership in Beijing has to look out at a landscape geopolitically, which I'm sure is vexing to them, starting in Latin America, where I think you saw that Chinese react to the Maduro raid in keeping with what we've been saying so far in this discussion, relatively cool. There were some downsides to this in terms of losing a sort of friendly beachhead in Latin America. But in the other hand, so 4% of Chinese energy imports come from Venezuela and most of that was going to the teapots and they basically wanted teapot consolidation anyway. So like life gives you lemons, you make lemonade. But still for them, the big question out of Latin America was less like oh no, we just lost Venezuela. It was more, does the United States double down on a hemisphere strategy? And that comes at a zero sum tension with their Indo-Pacific aspirations. And I think they're still assessing that. Then I think they're looking at Greenland. I think they know that this was not really driven by Trump's fears of Chinese influence in the Arctic. But I think they see this as a imperialist push to double territory and resources. But having talked to many Chinese about this since those threats were made in earnest last month, they see this as a positive fracturing or deterioration of transatlantic ties on China. I was at the Munich Security Conference. What are we going to have to go and you just say that there was not much talk of transatlantic coordination on China policy as the US and Europe were still experiencing the wounds of the Greenland threats amongst other things. I think the Chinese look at the war in Ukraine and feel that they are in a fairly settled position there that they have taken some hits in their relationship with Europe. But by and large, they have been able to stand by their strategic partner Russia. And if anything, increase in important ways, the support they're giving for Russia in satellite surveillance capability, drones, drone parts. And they haven't really taken much of an additional hit for that. I think they look at the Middle East and strikes in Iran, which I think they're watching with uncertainty. Iran is a bigger supplier of oil to China than his Venezuela, but still I think most of that is going into the tea pot refineries. And so is replaceable. I think China is showing the limitations of strategic partnership with China where they're there. There's really only so far as they're going to go for you. Russia, I think they went further than we should ever expect them to go for Iran and Venezuela. But just to summarize, there's a lot of moving parts. And at the center of this and everything we just talked about is a neocurial, unpredictable leadership in the United States that I think China sees benefits flowing from Trump's omnidirectional energy to put it politely in the global arena. Again, they're always looking for bank shots. But I do think this also raises the China's is absolute beneficiary of the US led order in the post-World War II period. And that's why anytime I hear the Chinese say that the United States was trying to contain China, we have done the most hand-fisted job possible of that. It's not to say that US views on China were wholly benevolent. I think that's a falsehood as well. But China has significant significant stakes in the existing status quo international order. Where their their sweet spot was a lulled United States propping up in international order that gave China a massive runway of technological, economic, military, and that's changing in unpredictable ways. And I think for Beijing, they're sort of they're cool assessing where this is going. Again, we're separating US-China relationship for the time being. But I think it's again, as as usually the case, it's a net assessment China is doing on all these. Your last point, there's a great point. And I actually wanted to bring that in. I mean, how much is China a mode of actor like in the rupture, right? Like these tectonic ships in your view? We all seem to look at it and say, well, it's the United States driving this in the mercurial president of the United States driving this. But I mean, China is playing in in some way to set the context for this restructuring, right? Oh, for sure. Yes, yes. And this is one where I think Beijing is quietly aware that it is a dominant motivator of the rupture, but is publicly being silent. And they would love to place all this on Trump and the United States. I mean, first point is I don't think we will really appreciate the role China has played in driving the current moment in geopolitics for a decade. I think this is one of these where we're just way too close to it. You know, in the same way that it'll take us, I think 15 years to really know the effects of COVID, politically, sociologically, on the world of the United States. I just think China is such an outsized player here across a number of domains that it's just hard to separate this. First, I think it's hard to separate Trump and Trump's initial election, the wave he rode without understanding the role that China played in that. Of course, remembering that 2016, the year of running for election is the year that the China shock work came out, which has been complicated and I'm not trying to get into that, but the point is of a assessment and an narrative of China as this massive, massive trade and manufacturing juggernaut, which disrupts political and economic realities in trading partners, especially the United States. We're experiencing that with Europe right now. This very much to me is retellent of Karl Palani in the great transformation, talks about the double movement of sort of unalloyed capitalist neoliberal progression, which then feeds a backlash. And I think in 2016, starting in 2016 in Europe and the United States, but here in the United States, you saw it go in a sort of emergent, a Trumpist right and a Bernie Sandinista left orientation that both were reacting to grievances around what economic engagement with China had done to the United States. Again, I think there's a complicated reality that avoids the sort of shoulder shrug or the full-on China shock narrative because I think it was complicated. But nonetheless, I think that was an important role. Take something like Greenland. I think it is only in the world we are in now with a logic of strategic competition really deeply embedded. That Trump could actually claim that one of the reasons he wanted to in X Greenland was because of a China threat. I don't think they would have thought to use that in early 2017, but we were deep, we were decade deep into a really deeply held political logic of strategic competition that's driven by China. I think some of the belief that the existing international order doesn't work is because it has been difficult to assimilate China. I praise this paper all the time, but I'll do once more, you know, Mark Wu's paper, the China Inc Challenge to the WTO, which I still think is a wonderful summary of how difficult existing Western post-World War II multilateral institutions, how poor the job they can do of bringing in, in China's case, a hybrid state capitalist economic system. So I think China really plays a important role here. I suspect some of this, again, was saying, I think we need to wait 15 years. Some of this we might be exaggerating the actual role that China is plating, but for me, I think Beijing right now dramatically underestimates how powerful a propellant it is for a rupture, which in many ways will erode an existing international order, which it is done very well off. Totally, and I expect you bring up the Trump administration using the China threat as some of the justification for the government threats. I forgot they had even done that, to be honest with you. It didn't even clock that aspect of it, just because it seemed like Trump won a green line. So I didn't really think about the justification all that much, but of course, you know, you can just throw it. Which, by the way, was the exact right way to play that? Cool. Well, then I want you to sort of let me know the vibes of the Munich Security Conference. You were there a week and a half ago, obviously, they're in Europe and Munich, and the Europeans are stuck in the middle of all this, but what were the vibes they are both in terms of the US aspect of things, but also the China aspect of things? Maybe similar to the rupture conversation, the surface level was all about Trump, but I think deeper down, the real strategic dilemmas were in many ways or equally to equal to the United States were about China. So this was the second year in a row that I've gone and as with last year, it was the US who sucked a lot of the oxygen out of the room. Last year was Vice President JD Vance's speech, his meeting with the AFD right before Munich and again a week before Germany was having elections. This year it was all anticipation of who would the US send, what was Rubio's speech going to be? Secretary of State Rubio's speech going to be obviously the wounds of the Greenland threats had not healed, and I don't think Will Heal hence the rupture point. I think some large amount of the distrust and friction between the United States and Europe I think will take a generation to repair. So that stuff I think has been captured well in the media. I think what I felt more deeply is just a veer away from China for a second. One, 2026 I think just will be a really impactful year because it will settle some trajectories. I don't know, you think I don't think we'll get to the end of this year with it looking very much like it does now. Things will have to break one way or the other. I think domestically here in the United States, we're recording it's just after the Supreme Court ruling on IEPA last night was Trump's state of union. We're going to have the midterms later this year. It strikes me that Trump is now a bit wounded. I think his reaction to being wounded is to lash out. So I suspect this is going to be an energized year here in the United States. I think in Europe this will really be a rubber meets the road or not on strategic autonomy in Europe. Remilitarization efforts. I think we'll see how Europe is going to land on China. Chancellor Mayrits is in Beijing today. Obviously you've had Macron was there recently, Starrmer. So I think this is going to be an important year to see how Europe navigates this new challenge of theirs of both having their first and second largest trading partners and the two superpowers at odds with each other. And for Europe having them in some ways, both superpowers at odds with Europe. China for structural reasons about both support for Russia and the war, but also we can talk about this the sort of China shock 2.0. And in the United States, Europe is dealing with a whole host of issues that the Trump administration is throwing their way from trying to wrap up the war in Ukraine to I think continued persistent threats of tariffs and of course in of course Greenland. I'm China. I just came away again feeling the weight of strategic dilemma that Europe is facing over how they're going to move forward with their relations with Beijing. There is no Europe view on this and there is no Europe exposure, but given that the meeting was in Germany, you can feel the unworkability and the unsustainability of the status quo here, wherein you are definitely seeing European companies and industries decimated by competition with China and that building deep political resentment that is in some ways feeding you know, political parties like the AFD or and certainly feeding populism. I don't get the sense. I didn't get much clarity on how Europe is going to navigate this and I think the reality will be not that well because it is a sui generous position to be in now that Europeans have not had to deal with of losing in some ways meaningful support from their primary security and economic patron of the United States. Having a deep trade and economic partner in Beijing, which is in its own way moving towards degrees of belecocity and weaponizing interdependence and I think China's export controls on rares last year were a significant significant shock to Europeans that I heard in all my private meetings in Munich of just how deep of a shock that was, but dealing with that is costly, painful and it's not clear to me that the political will has fully been mobilized to wean yourself, for example, wean yourself off support, you know, on dependencies of China on rares for example. I mean that's a decade-long project of extraordinary investment and I just don't see the will there. And that's an amazing observation because I've gotten the same sense, maybe not quite as visceral error or explicitly as you did just how deeply the Europeans were impacted by the rares X4 controls and they were collateral damage of that entire thing. It wasn't even aimed at them and yet they seemed to have felt it more deeply even in the US in a way. So yeah, because this is a lose, lose, lose, lose situation for them. Right. On the one hand, the China can squeeze and push the carotid artery. On the other hand, Europe's in the back of the line, not in the back of the line, they're behind the United States, let's say, in the corporate queue to get licenses approved. So even in a best case scenario where China really opens up the tap, we can't unsee the threat of China's choking off again. So everyone is going to be doing what they can to stockpile where they can. The United States is going to have more ability to be passing lists over the table of specific licenses they want approved. Right. I think the United States is going to be in a better position to to lock in supply from China while we're still buying from them. If you look at this, the critical minerals initiative that the White House is pushing, they held the the initial meeting under the auspices of the State Department a few weeks ago. That looks good. The problem with there is that was still I think for many Europeans, is still a very unilateral US driven initiative where it didn't feel like a sort of everybody's equal world in this together. So I think Europe's just doubly squeezed on on this. So in this, we've seen this before. The Europeans were in European companies in particular, of course, were super worried during Trump's first presidency, right? When the first trade war was error, the first part of the trade war was happening. And that negotiation made the Europeans really nervous because they thought it was going to really give preferential trade access and treatment to US companies at the expense of the Europeans. Now that didn't end up happening, but this is like that times 10, I think. And just want to get you on one other one before we have to wrap up, which is speaking of trade. Muse of the day, you mentioned it. This scotus ruling on the IEPA tariffs, Trump's IEPA tariffs. I guess I'll just ask about that. It also brought me down. So two partly, what do you think China is thinking about the tariff negotiation now that Trump's been undercut in the Supreme Court to some extent? Do you think they think that gives them more leverage where they in that journey generally? And then what are you thinking about US China over these next kind of 10 months with Trump's upcoming trip in April? You said at the end of this year, it looks much different than where we are now. Is that true for US China as well? So kind of a two part. And so anyways, I think this is a, again, another net assessment for China that you could easily spin this. There's being an unalloyed positive for Beijing, but I think it comes with some downsides, the Supreme Court ruling. First on the upside, I think this clears away the remaining IEPA tariffs which China was going to try to negotiate away anyway. So this removes that. I think this also puts Trump on a bit of a back foot going in to the Beijing meeting. His signature economic policy has been struck down by the Supreme Court. Of course, he's come back right away and said 122-232-301 and we're coming back with the kitchen sink. But the reality is this is the approach he had been using given its flexibility, the fact that you can layer it on and take it off quickly as a negotiating tactic. So signature economic policy, they're going to look at his low approval ratings. And I think they're going to see this as him coming in a bit more battered and wounded than he otherwise could have been. On the other hand, I have talked to a few Chinese over the last few days in Beijing who have said, one of the concerns is what IEPA did at a minimum was meant if Trump needed to blow off steam, it was going to ramp up a tariff, you know, a tariff rate which China felt like, look, we've gone to 120%. We can fight that war. I think where there's some worry is if Trump doesn't have his tool de jour when he's frustrated and invent his valve, where does he go? I don't have a good answer to that, but I think there are some who are a bit worried about that. The second is if Trump now moves into a much more codified tariff policy that he goes to Congress for at least has is on more solid legal footing. And by the way, I'm not sure the 122 tariffs are in super solid footing because I don't think we're in a balance of payments crisis. I also don't know who has standing to bring a lawsuit on this, but point being is I think obviously 122, certainly 301, 232, an expansion of those will be time consuming, will stress USTR, will stress commerce BIS, which is already overstressed. But if he can push those through, I think the Chinese know that those tariff regime is just going to be much more sticky and structural and harder for them to spin off. So I think the Chinese are sort of looking at it in that net assessment way. I started more durable bipartisan approach to tariff policy, cuts both ways. On the one hand, they get the IUP tariffs off, but in other hand, it means their idea that they can just sort of wait out Trump and then reset on trade is unlikely. I like with Biden, I think if you've got a robust 301, 232 tariff regime in place on China, going into the next administration, whoever it is, even if it's a more probably someone who's closer to trade on trade than I am, I think politically it's going to be challenging for them to roll back all those tariffs on China. I forget what the second question is, or is that just like where you see us 10 months from now on US China in that context? I'm weary of anyone who's going to do any confident predicting this. Come on, Jude, that's what we do here. Nine months ago, I thought an idea of an April of a Trump going to Beijing was unlikely, but I was reading too much into where we were in the summer with the export control war that the two sides were in. And I think I underestimated how much Trump wants the deal. So I'm having to reset my priors a bit. Let me speak a little bit more confidently, which isn't the Chinese side because with Trump, who knows? I think the Chinese view this as a dance that it's not about April, it's about 2026. And using the stepping stones of three meetings for sure, maybe for if there's going to be another summit between Xi and Trump, that that's how China is going to play this. So it depressurizes April. You don't have to get everything done, you want to get done. My sense is Beijing is spending as much time planning on the symbolism of a Trump visit as they are. And Trump seemed to support this. And if you saw his comments last week where he was saying Xi Jinping, you know, he gave me the platinum treatment last time. He's got to top it this time. So I think for the Chinese, it's like, how big is the parade? Bring him to a part of the wall that no one since Qin Shou-Hong has been to. I think that deliverables on this round seem to me pretty easy to hit. Trump has been clear, I think, on what he sees. And part of this, it's soybeans, it's energy. It might be at least an announcement on some inbound Chinese investments in the United States, which would be meaningful in so far as that would have been politically unthinkable a year and a half ago. But I think we don't need to think of this summit as essentially being the set piece for US China relations. I think it is really the for the Chinese, the real kind of opening move. And if they can string together productive meetings across the year and essentially buy a year of stability, that's the lowest threshold for success. I think if they can buy that year's stability and get a rollback of some of the export controls, if they can get Trump to make some new statement on Taiwan, whether that's just riffing on the importance of peaceful unification or saying we oppose independence, that's a win for the Chinese. What I think that leads us though is a US China relationship that is still profoundly competitive. I think things like the export controls, that sort of fully weaponized interdependence is going to be a defining feature of this. I think for the Chinese, the export controls are too effective of a tool to imagine that they're not going to keep that loaded gun on the table. The other thing too is, you know, the Chinese are fully utilizing this against the Japanese right now. But for the forbearance of the Trump administration, that in and of itself could be a much bigger deal than it is and frankly should be. And then the final thing is, this relationship is so multifaceted and it's such close proximity that there's no good reason to think we can fully avoid some unpredictable exogenous shock to the relationship, whether that's a proverbial collision. There's just so many ways in which some, again, COVID was an exogenous shock that completely upset the US China relationship. I don't think it will be a repeat of that, but I think it does indicate that take away Trump himself. And I think the US China relationship looks deeply and structurally competitive. And so Trump alone is not going to overcome all those dynamics, even if he can brute force his way through a series of summits and deliverables. Maybe temporarily can kind of tactically provide some, I don't know, stability is the right word for sure, but yeah, no, that totally makes sense. Well, listen, we have covered a ton of ground. You've been very generous with your time. I know you've got to get going and we should wrap up. So, this has been great. Really appreciate you coming on. And thanks for the time. Yeah, brother, anytime. And thanks for listening. Everybody, we'll see you next time.