STREAMING-JOHN-BATCHELOR-SHOW-10-21-2026

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I'm going to take a break.
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I'm John Batchelor. I welcome Gordon Chang, my colleague and co-host,
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and we welcome Greg Scarlato, president and CEO of the
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Committee for Human Rights in North Korea. We look at
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rumors out of North Korea right now and puzzle why,
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why now, where are we going? The rumor is that
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the dictator is dead. And what next? That is the rumor.
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It's cheap trash talk, however significant as a data point.
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I go immediately to Gordon to remember more than 15
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years back when Xi Jinping first was tapped as the
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inheritor of Hu Jintao's People's Republic of China and arrived
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in Beijing. There were many incidents that suggested assassination attempts, violence,
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civil war, death of Xi. Very early, 15, 16 years ago,
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it came to what we have today, a dictatorship under
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one man in perpetuity. Gordon, do you recall those moments
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when she was acting desperate? It doesn't matter if I die,
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it's worth the risk. Whatever he was talking about, we
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were never sure. Do you recall that? And what did
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it add up to at the time? What did we
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learn from it?
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Well, good morning, John and Greg.
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We learned that there have been a series of rumors
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and they continue to this day about Xi Jinping, about
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assassination plots, about strokes, about all sorts of things. And
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Chinese regime has always been opaque, but Xi Jinping has
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made it even more so.
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And so in that type of environment, you have.
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Rumors and people use rumors for all sorts of things,
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not only for entertainment, but also to destabilize the regime.
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And that has been a hallmark of Xi Jinping's rule.
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Greg, a very good day to you. The rumor is
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published as a headline at UPI. Rumors of Kim Jong-un's demise.
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Are we ready for what comes next? What do you
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make of the rumors of the death of the dictator?
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Good day to you.
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A very good day to you as well, John and Gordon. Eventually,
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this is going to be true. Nobody's eternal. But we
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have been through this exercise before during COVID and some
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very respectable representatives of the North Korean defector community, both
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of them members of the South Korean parliament at the time,
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Taeyong Ho, former DCM in London, former North Korean DCM
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in London, and Chi Song Ho, who appeared at the
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State of the Union address in 2018. Both of them
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bought into this and it did damage their reputation. So
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sometimes this type of exercise is meant to damage the
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reputation of prominent figures within the North Korean escapee movement,
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the North Korean human rights movement, the North Korean expert community.
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Sometimes these are just journalists that just want to get
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a number of hits and just go all the way
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on this type of rumor. I believe that if you're
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referring to the UPI story authored by Colonel Maxwell, David Maxwell,
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what he was drawing attention to was not the rumors,
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but the fact that we need to be prepared for
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the time we actually see this type of crisis unfolding.
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I have no doubt that the North Koreans are prepared
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for succession. This is a humongous bureaucracy. They have already
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accomplished two hereditary transmissions of power in July 1994 and
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December 2011. They will be ready for the next one,
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no doubt about it. The best reference for this is
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a report available on our website, hrnk.org. It's a report
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by Robert Collins on the Organization and Guidance Department, the OGD.
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There is one chapter dedicated to succession, to how the
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actual succession process would unfold.
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Gordon, you have a question.
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So, Greg, how would the succession process unfold according to
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the organization and guidance department?
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You would have the OGD in the boardroom with several
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names on the table. A couple of names would be
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the names of women from within the inner core of
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the Kim family regime. Of course, the ones who come
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to mind are Kim Yo-jong, the leader's sister, and the daughter,
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Kim Joo-ae, who is very young, 13 years old, at
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least according to Dennis Rodman. Based on what he says,
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he held her in his arms. while she was a
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baby 13 years ago. Anyway, she would possibly be a
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candidate as well. So somebody in the room is going
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to say, no, no, no, this is not going to work.
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The Democratic People's Republic has never had a woman as
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a leader. Somebody else is going to say, no, wait
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a minute, look, Amrit Kim Yo Jong, the leader's sister,
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was highly dedicated. Remember, he was getting off the train
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on his way to Vietnam, smoking, she was holding his ashtray.
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She was first vice director of the propaganda and agitation
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department of the organization and guidance department. The first vice director,
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the bubujang, is a very important position. If this were
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a ship, this would be the XO. So they would say, no,
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she's qualified. Imagine what would happen to the guy who said,
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a woman leader is never going to work in North
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Korea if a woman actually becomes leader of North Korea,
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and the woman would have to be 10 times tougher
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than her male predecessors in order to establish herself. If
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the OGD decides that no members of the Kim family
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are eligible for leadership, then who knows? Perhaps the director
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of the OGD or some other member of the top
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ranks of the DPRK regime might be the chosen one,
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but I doubt that would be the case. It would
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have to be another hereditary transmission of power to a
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member of the Kim family regime. We do have to
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remember that this is a humongous bureaucracy. They're in the
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business of maintaining democracy. their power, and their privilege. And
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the Kim family regime is at the forefront of this,
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but there are truly several building blocks, four building blocks
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of this regime. The inner core of the Kim family,
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the military, the party, and the security agencies, with the
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party being at the very center of the Kim family regime.
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There's a symbiosis between party and supreme leadership. I have
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absolutely no doubt that the succession plan is in place.
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Greg, we just have a minute. I'm checking on the
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arsenal and also the bank account. Are the weapons still
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flowing to Russia's hands to attack Ukraine? Are the missiles
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still being offered to Russia for a fee? 30 seconds.
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North Korean weapons and munitions are still flowing to Russia.
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North Korean soldiers are still engaged in aggression against Ukraine.
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And according to President Zelensky, up to 50,000 North Korean
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troops may be eventually deployed to the front lines, which
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makes sense. There are 100,000 in the 11th Armed Corps
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that has provided troops for this endeavor.
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Greg Scarlato, Gordon Chang, podcast of our conversation about the
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rumor of the demise of the dictator, always available at Apple,
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at Amazon, at Spotify, at Spreaker, and other distinguished venues.
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I'm John Batchelor. And there we've got a rumor in
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the field. The reason I asked about the arsenal is
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this talk of a meeting in China between the three strongmen, Putin, Xi,
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and Trump, and where Kim Jong-un would fit into that trio.
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Does he get recognition, perhaps not to be at the table,
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but to be considered? That's why I asked about the arsenal,
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if he's still a vital part of the axis of resistance.
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He definitely is a very important part of the axis
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of resistance, and he's getting increasingly significant recognition from the
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Russians in a variety of symbolic ways. He's also making
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a lot of money out of these exports to Russia,
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at least $ 30 billion. And he's a very important piece
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of the puzzle. Putin will not be willing to give
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up the North Korean bargaining chip. He will not just
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throw Kim Jong-un under the bus. So North Korea will
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continue to have increasing importance along this axis of upheaval
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or axis of resistance.
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Gordon, how do you measure the significance of this three-way
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meeting in China? Is it just talk for the day?
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Are we seeing a reorganizing of the adversary and the friendlies,
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a reorganizing of the planet, actually.
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Yeah, I mean, this is Trump wanting to work with
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Xi Jinping and Vladimir Putin. It's a betrayal of American values.
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It will hurt the United States in the short and
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long term. My only hope is that after two years,
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we will get somebody who has a more moral and
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strategic American foreign policy. But this is going to be
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very bad for the United States. It's going to be
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very bad for the world.
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Greg, is East Asia ready for this? Manila, Tokyo, are
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they talking now about rumors of surrender?
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They would be very worried about this. And not only
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the East Asians, but also the Eastern Europeans, as an example.
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This brings back memories of Yalta. which resulted in the
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division of Europe. So now East Asians are very concerned
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about this. Of course, the U.S. security umbrella is necessary,
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absolutely necessary. And it's a world where offensive realism, realism
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or offensive realism, the projection of power from an IR
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theory perspective has become very important. The other Elements of
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the international system, for example, the institutionalist elements relying on
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international institutions have subsided, no.
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Doubt about it.
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Liberal elements, that's what human rights organizations and humanitarian organizations do,
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change from within. Those have subsided as well. Constructivist elements
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sharing common values, those elements have subsided as well. So
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definitely important. everyone in East Asia will be very worried,
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in particular, our Japanese friends.
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The only good thing here is that whatever Trump does,
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and however bad it looks, you got to remember that
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what Kissinger said, famously, he said that any American foreign
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policy that offends the values of the American people is unsustainable.
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And I think what you'll find is Trump can say
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what he wants, I don't think he's going to be
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as bad as it now appears, but whatever he does,
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it runs through an American foreign policy establishment and an
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American public that will resist.
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Greg, we'll be back to you about those camps.
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Wonderful.
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Really appreciate it.
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What day do you think you're going to start debate
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on this again?
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It's going to take us a few months to get started.
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We're working on the research right now, so it 27 then.
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27.
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I would say early 27, yes.
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Wonderful. Thank you. Thank you, Greg.
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Thanks, Greg.
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Thank you.
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And we are now looking.
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For Sarah Cook.
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Is Sarah here? Let me see. Yes, there she is. Hello, Sarah.
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Thank you. Good day to you. We've been.
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Swimming in the schools of rumor. Rumor in North Korea,
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remembering rumors in Beijing. Rumor, rumor, rumor.
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That's what happens when they, you know, you don't have
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a real free press and people actually being able to
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talk about what's happening.
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Sarah's here. Yes, everything's in order. We're going to begin. Gordon,
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where do you want to start? I mean, you know,
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we have the waterfront. Okay.
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Sarah would like to talk about how China has taken
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over the medical transplant establishment around the world.
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Well, it's really in China, mostly. But you're right. There's
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definitely compromise in terms of co-opting people outside China. That's true, Gordon.
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And they're moving in that direction. And so, you know,
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we've talked about medical transplants and the gruesome and grisly
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nature of that. But this is more about China's laying
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the infrastructure for this.
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Well, specifically the Chinese Communist Party. So, John, yesterday we
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published a report that I wrote that a group in Australia,
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the international group, Coalition to End Transplant Abuse in China published,
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but I was the author. It's actually the first in
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a series of investigative reports we're going to be doing
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over the next six to eight months. And this first
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one is just about how much the Chinese Communist Party
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controls the medical profession and the transplant sector inside China.
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And you just really see that dominance, the tightening under
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Xi Jinping. And like Gordon said, I think what you
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see then is these doctors who are party members then
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collaborating with international hospitals, international associations. And so there's that
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kind of leaking dimension. But really, I think it's that
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they like to portray that, oh, we've reformed. We're not
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using prisoner organs. We have these so-called third party entities
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like the Red Cross Society of China. And what this
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report does is show that that doesn't really hold up
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to any kind of scrutiny. In fact, it's complete circularity,
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and it's all under the dominance of the party.
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We'll begin immediately, Sarah. Thank you.
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All right.
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Five. Make sure I've got everything lined up here.
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Four. Three.
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Two.
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No, not yet. Everything running?
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Yep.
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And thank you, Sarah. I'm John Batchelor. Gordon Chang at
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Gordon G. Chang. Organ transplant. Organ harvesting. These are topics
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I remember coming up very early on in my conversations
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with Gordon. And it had to do with abuse in China.
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Chiefly abuse towards people who were considered splittists or dissenters.
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Various organizations. However, these many years later, I learned from
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Sarah Cook, founder of China Rights Analytics and Advising, LLC,
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and she's author of the underreported China newsletter, that the
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harvesting of organs of prisoners and dissenters more than a
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decade ago has turned into a global business. I read
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the headlines from Sarah's most recent publication. Red flags, indicators
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of ongoing transplant abuse in China. The first paragraph tells
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a story that is gothic. The first report addresses how
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much control the Chinese Communist Party exercises over China's medical
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profession and transplant sector and what that means for genuine reform, transparency, accountability,
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and ongoing human rights violations. Sarah, good day to you.
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This momentarily could turn into... something grotesque, something like Dracula.
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At the scale of it right now, is it growing quickly?
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Is it a major source of revenue for the Chinese
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Communist Party? Good day to you.
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Hi, good day. So we're just still, we're in the
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process of this investigation. I think what you do see
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is that the organ transplant sector in China is robust,
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just based on official figures, which we believe are, of course, underestimates,
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just like underreported, just like much other statistics in China.
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China is the second largest organ transplant sector in the
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world after the United States. In fact, there's reason to
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believe it might even be larger. And yet, if you
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actually look at the numbers of supposed voluntary donors, because
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since 2015, one of the differences from the early 2000s,
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when there was no voluntary system in China, then it
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had to be from prisoners. And we believe prisoners of
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conscience as well. Starting in 2015, the Chinese government announced, well,
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now we're not using prisoner organs anymore. We're going to
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have a voluntary donation system. And they set up all
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these bodies and entities that are supposed to oversee that.
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And of course, they're constantly reporting this propaganda of these numbers.
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And there is reason to believe that there is some
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voluntary donation happening in China. But I think the question is, A,
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how voluntary is voluntary, right, in terms of all the
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different mechanisms of repression and corruption in China? And two,
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whether the reforms are indeed what they say. And so
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this is actually the first in the series of investigative
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reports we're doing. And the first question is, are these
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entities that they say are independent, that they say do oversight,
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that they say are third party verifiers, indeed that? For
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those of us who know China, you know, I think
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we understand how the Chinese Communist Party works. But what
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we really tried to do here was dig deep and
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see what happens. And what we found was that it's
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completely circular. Every single entity that you look at, and
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I can give you some of the specific examples that
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they claim are third party, are in fact dominated by
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Chinese Communist Party members, or under the thumb of a
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party secretary at a particular hospital, who of course is
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the top person in charge of the hospital, above any doctors,
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above the so-called hospital president. So I think that's what
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we were looking at here, because I think that's really
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the foundational condition to the question of whether abuses are
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even continuing. Because if you actually had real verification accountability,
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it would be possible to detect abuses. Unfortunately, that's not
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the situation in China, and it would be completely possible
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to be concealing ongoing abuses and violations.
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Gordon, you have a question for Sarah.
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Sarah, as societies mature, organ donations become more acceptable. But
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in China right now, there's an overlay of culture. And
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it's my impression, and correct me if I'm wrong, but
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it's my impression that the Chinese have a culture which
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resists organ donations. So it would seem unlikely that all
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of a sudden you have a sudden increase in voluntary donations.
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Your comments.
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So I think there's two dimensions. One, there is a
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huge propaganda push to try to get people to donate.
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And there does seem to be more registrations. That being said,
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it's very hard to know how many are genuine, partly
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because there was actually research done even back in 2019,
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where the first years when the Chinese government was reporting
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on how many numbers of new donors they were getting.
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And a researcher named Matthew Robertson and some co-authors published
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a study that actually found those numbers perfectly fit a
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mathematical equation. So it's pretty much, it's almost certain that
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those numbers were falsified. Now, since then, those numbers have
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continued to grow. I actually, as part of this research,
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checked And the Chinese government's gotten a little bit more sophisticated.
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So it doesn't fit the equation that they found or
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any other equation that we were able to identify. But
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it still would seem that, you know, there's very serious questions.
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And in fact, when you look at the numbers being
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reported for those years to the international community, they haven't
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been amended. So these numbers that an academic study found
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to be false are still the same numbers. And so
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that does raise questions of how much voluntary organ donation
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there is. There's also when they started the voluntary system,
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Huang Jiefu, who's really kind of the head top guy,
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a former liver surgeon who actually is a party member,
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high up in the party, had been in charge of
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top leaders health for several years. He came and said
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to the international, he actually said to Chinese language media
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when they started the, quote, voluntary donation system that, well,
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prisoners are also citizens. So a prisoner could donate their organs.
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And he implied that these organ donations by donations by
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citizen prisoners would just be folded into the system that
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they're creating. So that's one of the big questions is
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that they may be, quote, laundering support. prisoner organs into
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what is in fact, they're calling a voluntary system. And
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one of the things we looked at here is Huang Jiefu,
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that doctor, he's head of a national organ donation committee
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that operates under the state council. And we counted the
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latest list they had, had 33 members. More than half
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of them are Chinese Communist Party members, including almost all
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the senior leadership. It also includes several members of the
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military on an organ donation oversight body. So I think
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that's kind of part of what we're trying to show
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here is that they make claims. They say it's reformed.
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But when you actually look at the nitty gritty, there's
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a lot of questions. And that's really important for any
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American or other international medical institutions that want to be
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collaborating with them and are.
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Sarah, we have a minute. Is there indication of international trade?
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People call up and pay money for an organ in Europe.
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They've been more careful about that. We haven't found as
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much of that. What there is, is just a couple
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of months ago, they started a new International Society of
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Organ Medicine. And it was formed by Huang Jiefu, this
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fellow I talked about, a bunch of Chinese surgeons and
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Americans and Europeans. including the man who leads the Transplantation Society,
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a global organ medicine entity. And so that's really the question.
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Why are they collaborating now, creating new entities with a
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system that is still so opaque and unaccountable and potentially
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engaging in ongoing abuses?
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Is Know Your Donor, is that a serious thing? Can
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people ask who this is that I'm getting an organ from?
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Oh, no, no. It's all opaque. The entire system of allocation,
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we tried to get access to it. You can't find
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it out. And you can't, it's even hard to find
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overall statistics that are not personalized like you get in
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the US or the UK. It's very, very opaque.
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Sarah Cook is founder of China Rights Analytics. She's author
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of the underreported China newsletter. Gordon Chang at Gordon G. Chang.
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I'm John Batchelor. I mean, wow, Sarah, just wow. Man,
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does that suggest major league abuse?
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Yeah, we're kind of working through all of the different
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bits of evidence over the next few months. And it's just,
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I mean, I was familiar with this issue, but when
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I was at Freedom House, I didn't dive into it
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to this extent. And it's just more complicated now because
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I think what is probably some kind of weird hybrid
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system where they have some minimal number of voluntary donors
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who but they're supplementing it with Uyghurs and Falun Gong
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practitioners and others.
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The correct term is mass murder.
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Yeah.
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Wow.
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Of course. I'd forgotten about it, Gordon. Not forgotten it.
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It had been the abuse of the Falun Gong. I'd
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forgotten entirely about it for a moment.
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Well, and I think part of it is that because
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you have the international community that's just swallowed hook, line,
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and sinker. They announced with this guy, Huang Jiefu made
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in 2015, just announcing we're not using prisoner organs anymore.
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But there's no additional oversight or transparency or anything like
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that showing that that's actually the case.
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We'll speak again soon, Sarah. Keep us informed.
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Yeah, good to talk to you again, John. Take care.
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Thank you. Here I am, Gordon. I momentarily moved the prompt.
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Oh, okay.
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This board is hot-wired. You can't move the prompt anywhere.
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I was trying to go to Dean. I crossed over
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my face, and I went out of the room. All right, Dean.
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Excuse me, Dean, for being close.
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No problem.
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But this is a really– you've heard of hair-trigger weapons.
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This is a hair-trigger prompt.
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More dangerous in some way.
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Oh, man. I don't touch it anymore, but I had
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to to get– well– A good day to you, Dean.
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Thank you for joining us. Thank you, thank you, thank you.
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Thank you for having me.
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Lordy.
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There's a few issues since we last talked, Dean. You
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have heard that.
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Oh, there's always new issues.
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The big one I take in the morning, Gordon and
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I are becoming producers of opera. The opera is this.
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Three men on a stage. Lights, orchestra... Enter the dictator
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from Russia. Enter the dictator from China. Enter the surrender
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dictator from Washington. They sit down in the middle of
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the stage and just sit there staring at each other
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for a three-hour opera. Okay, that's all that happens. They
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stare at each other. I'd go to that. We get
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to imagine what they're thinking, but they don't actually talk.
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Then they get up, having decided the fate of the world,
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and leave the stage.
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Right.
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Gordon, do you like it? Simple, straightforward. I think they'll
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regard it as a radical new opera.
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I don't like this one bit. The United States should
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be talking to its friends and its partners at a
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time where the world is on the edge of catastrophe.
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We should not be engaging in this type of diplomacy
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that makes it appear that the United States is sided
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with Russia and China. Not that it has in reality,
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but that's the way that it appears. And appearances are
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really important. So we've seen this type of diplomacy before. John,
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you mentioned Yalta. Yalta was a disaster for Eastern Europe.
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We can't do this again. And as I said before,
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whatever Trump does, and I don't think he's going to
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be as bad as it appears, but whatever Trump does,
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it offends the values of the American people. And it's
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not going to be sustainable, not in our system.
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Dean, I'm going to call this the bad Yalta possibility, okay?
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And we'll start there. And then we have the economy
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to range over, Gordon, certainly, the 4.5 report. We have
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the EU negotiating, said to be negotiating with tough talk
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with China for the first time, said to be. I
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don't have it. And then we have the Remember the tariffs.
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It's hard to remember that far back. What was that,
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about a year? The tariffs.
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April 1st.
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Yeah, I know.
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Liberation Day.
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Liberation Day. The showdown with China. We're going to talk tough.
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Going to get something for our money.
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Oh, Lordy.
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All happened. So, Dean, in order of battle, we'll start
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with the bad Yalta. So... No, let me set it up.
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Oh, sorry.
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Hold on. Five. This is us casually chatting on live
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stream for everybody. But we're going to record for what
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I need later on today for the radio show and
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the podcast. So the joy of live streaming is that
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you can let people come behind stage and sort of
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park there watching you get ready to go on the runway.
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Here we go. Five, four, three, two. I'm John Batchelor.
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Gordon Chang at Gordon G. Chang, my colleague and co-host.
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The headline in Reuters is impossible to ignore. Putin at
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talks with Witkoff suggests he and Trump could meet in China.
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Gordon and I welcome Dean Chung, senior fellow at the
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Potomac Institute for Policy Studies. Once upon a time, Dean,
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three allies met in a destroyed city and a destroyed
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peninsula called Yalta and Crimea. Once upon a time. The
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result of that was the United Nations. Today, the United
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Nations is exhausted, but that was the vision of utopia
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once upon a time. Now, the proposal by the dictator
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of Russia the new Stalin, is to meet in China
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with the new Mao, Xi Jinping, and attending is the
481
00:32:04.970 --> 00:32:08.150
President of the United States. I regard it as a
482
00:32:08.210 --> 00:32:12.650
bad yalta, but all conversations between dictators cannot be good,
483
00:32:12.670 --> 00:32:16.539
so I repeat myself. How do you measure this rumor?
484
00:32:16.680 --> 00:32:21.250
How is it heard in China especially, is this good
485
00:32:21.309 --> 00:32:24.250
for them given the troubles that they're in right now
486
00:32:24.289 --> 00:32:25.809
with their economy? Good day to you.
487
00:32:26.970 --> 00:32:28.769
Good day. And thank you for the opportunity to be
488
00:32:28.809 --> 00:32:33.470
here today. I think several things.
489
00:32:33.670 --> 00:32:36.430
One, when I hear the term summit, I start getting
490
00:32:36.490 --> 00:32:41.839
hives because very rarely are summits worth all of the
491
00:32:41.900 --> 00:32:45.039
hype just to begin with. But in this particular case,
492
00:32:45.319 --> 00:32:46.640
I think we need to dig down a little bit.
493
00:32:47.220 --> 00:32:52.660
This is a Putin proposal. And I think for Beijing,
494
00:32:53.859 --> 00:32:58.759
what they see is someone desperately wanting to be relevant.
495
00:33:00.980 --> 00:33:03.589
I don't think anyone in Beijing looks at Russia and says,
496
00:33:03.710 --> 00:33:08.309
you are my equal. Certainly not economically, arguably not politically.
497
00:33:09.109 --> 00:33:11.730
China through the Belt and Road Initiative has built up
498
00:33:11.890 --> 00:33:14.250
ties to far more countries. I think this is the
499
00:33:14.289 --> 00:33:17.890
Russians saying, hey, we want a seat at the table.
500
00:33:18.490 --> 00:33:24.549
We're willing to have this meeting in China. And very dangerously, we,
501
00:33:24.670 --> 00:33:29.329
Russia and China, invite you, America, to come to the table.
502
00:33:29.430 --> 00:33:33.839
I mean, who issues the invite and who is the
503
00:33:33.960 --> 00:33:39.220
invitee is politically enormously important. So this is, I think,
504
00:33:39.299 --> 00:33:42.839
Putin puffing himself up. This is the Chinese, I think,
505
00:33:42.920 --> 00:33:46.279
recognize that. But greater fools we, if we're the ones
506
00:33:46.680 --> 00:33:49.299
who decide to walk into a summit where it's the
507
00:33:49.339 --> 00:33:52.440
top three leaders, two of whom are going to be
508
00:33:52.480 --> 00:33:54.440
voting on what to do with the third, in a sense.
509
00:33:55.069 --> 00:33:56.940
Gordon, you have a comment and question for Dean.
510
00:33:58.569 --> 00:34:04.289
Dean, clearly Russia is the junior partner in the Russia-China partnership.
511
00:34:05.049 --> 00:34:07.309
But I always think that Russia is more important than
512
00:34:07.369 --> 00:34:09.909
people think. And the reason is that Vladimir Putin is
513
00:34:09.949 --> 00:34:12.050
willing to do what Xi Jinping would like to do,
514
00:34:12.670 --> 00:34:16.230
but feels that he shouldn't do and is more happy
515
00:34:16.269 --> 00:34:19.230
to have someone do. and that is to go out
516
00:34:19.250 --> 00:34:23.289
and invade, cause chaos, disruption in the international system.
517
00:34:23.869 --> 00:34:24.769
And so I sort of.
518
00:34:24.789 --> 00:34:31.349
See the Chinese view Putin as, yes, a junior, but
519
00:34:31.510 --> 00:34:34.579
also as something that is important for them.
520
00:34:36.260 --> 00:34:37.099
Your comment on that?
521
00:34:38.420 --> 00:34:39.360
Absolutely agree.
522
00:34:39.539 --> 00:34:42.420
Just because you're a junior partner doesn't mean you're irrelevant
523
00:34:42.480 --> 00:34:45.300
or unimportant. And I think what we are seeing in
524
00:34:45.340 --> 00:34:49.019
the Black Sea recently is a fascinating example of de
525
00:34:49.099 --> 00:34:54.639
facto political coordination. So the Russians attacked a freighter in
526
00:34:54.980 --> 00:34:59.000
Bulgaria's exclusive economic zone, which is the water extending out
527
00:34:59.059 --> 00:35:03.489
to 200 nautical miles from essentially your shoreline. And the
528
00:35:03.510 --> 00:35:07.250
Bulgarian prime minister has protested. But think about what this means, right?
529
00:35:08.050 --> 00:35:12.789
The EEZ, according to the West, is international waters that
530
00:35:12.829 --> 00:35:20.190
the owning nation has first dibs on the resources, fish, energy, minerals, etc.
531
00:35:20.590 --> 00:35:23.710
But it's international waters for all other intents and purposes.
532
00:35:23.750 --> 00:35:27.989
That's a very, very important definition because that's the justification
533
00:35:28.119 --> 00:35:31.940
we apply to the South China Sea. We say this
534
00:35:32.019 --> 00:35:36.539
is international waters that anyone, including our warships, can sail through.
535
00:35:37.920 --> 00:35:43.000
By attacking a freighter in Bulgaria's EEZ and getting the
536
00:35:43.219 --> 00:35:47.199
Bulgarians to protest, The Russians and Chinese together have now
537
00:35:47.280 --> 00:35:50.760
created this fascinating conundrum where do we stand by the
538
00:35:50.820 --> 00:35:53.570
principle these are international waters? And if the rest of
539
00:35:53.630 --> 00:35:58.409
NATO supports the Bulgarians, then the Chinese are, I would submit,
540
00:35:58.710 --> 00:36:02.150
ready on a dime to say, we totally agree. This
541
00:36:02.230 --> 00:36:04.829
is our position the whole time. This is actually Chinese
542
00:36:05.010 --> 00:36:10.050
national waters. And just as Russia shouldn't have sunk somebody
543
00:36:10.090 --> 00:36:14.119
else's freighter in Bulgaria's EEZ, You have no right to
544
00:36:14.219 --> 00:36:18.230
pass through our EEZ in the South China Sea. Or,
545
00:36:18.710 --> 00:36:21.969
we don't support the Bulgarian position. And then the Chinese say,
546
00:36:22.269 --> 00:36:25.690
look at how America abandons its allies. Heads I win,
547
00:36:26.130 --> 00:36:29.730
tails you lose. You kind of admire this. This is
548
00:36:29.769 --> 00:36:32.840
like a good scam. I mean, this is like watching
549
00:36:32.889 --> 00:36:35.000
Redford and Newman doing the sting.
550
00:36:36.539 --> 00:36:43.139
Dean, there are rumors of Xi's health. And More than that,
551
00:36:43.219 --> 00:36:46.909
the reporting was routine at the BRICS meeting and then
552
00:36:46.969 --> 00:36:51.909
again in Washington of Xi taking long breaks and minimizing
553
00:36:51.989 --> 00:36:56.710
his exhaustion climbing steps. Lots of stuff that reported in
554
00:36:56.750 --> 00:36:58.969
the Wall Street Journal and Financial Times. So it's not
555
00:36:59.010 --> 00:37:04.250
the whispering of partisan media. These are big financial reporters
556
00:37:04.309 --> 00:37:06.389
and they made decisions to put that in. They could
557
00:37:06.409 --> 00:37:09.230
have left it out. What does it come to with
558
00:37:09.269 --> 00:37:13.500
this summit idea? Does it mean that she is more
559
00:37:13.559 --> 00:37:17.340
likely or less likely to host the other two?
560
00:37:19.300 --> 00:37:23.059
Well, keeping in mind that there's several major multinational summits
561
00:37:23.099 --> 00:37:29.309
coming up, APEC and the like, depending on how one
562
00:37:29.369 --> 00:37:32.530
wants to entertain this, you could have a sidebar, for example,
563
00:37:32.570 --> 00:37:37.739
a three-way meeting through the G20 summit. But I think
564
00:37:37.800 --> 00:37:43.190
that while these rumors are interesting, I look at this
565
00:37:43.489 --> 00:37:49.630
and I wonder, how did President Biden behave? Always recognizing
566
00:37:49.650 --> 00:37:51.250
a man was said to be sharp as a tack
567
00:37:51.869 --> 00:37:54.769
when he had his meetings with Xi Jinping. Did he
568
00:37:54.889 --> 00:37:58.800
need extended time off, et cetera? And if so, did
569
00:37:58.840 --> 00:38:02.179
the Chinese see that as an insult and therefore are
570
00:38:02.239 --> 00:38:04.780
now basically saying, you know what? You wasted our time
571
00:38:04.840 --> 00:38:08.340
in these summits. We're going to waste yours. We're going
572
00:38:08.360 --> 00:38:13.269
to demand time down, time alone. And, When you speculate,
573
00:38:14.190 --> 00:38:17.489
we will basically, in China at least, be able to say,
574
00:38:17.809 --> 00:38:21.349
look at how unequal. They waste our time and we're
575
00:38:21.389 --> 00:38:22.610
supposed to swallow this.
576
00:38:23.389 --> 00:38:24.730
But if our.
577
00:38:24.650 --> 00:38:29.239
Leader needs some time off, it's somehow the so-called free
578
00:38:29.320 --> 00:38:33.059
press is going to speculate about disease. Again, I think
579
00:38:33.099 --> 00:38:37.659
that it's maybe Xi Jinping was ill. Maybe Xi Jinping
580
00:38:38.039 --> 00:38:42.590
was tired. Maybe Xi Jinping is getting other people to
581
00:38:43.210 --> 00:38:45.699
do as China wants and accept it.
582
00:38:48.110 --> 00:38:48.989
Go ahead and have a question.
583
00:38:50.989 --> 00:38:55.130
So, Dean, what do you think China's goals are when
584
00:38:56.030 --> 00:39:00.619
APEC summit occurs in Shenzhen, in other words, in China
585
00:39:00.719 --> 00:39:04.920
next month? What do you think China's objectives are?
586
00:39:06.429 --> 00:39:08.690
As always, I think the Chinese objectives are going to
587
00:39:08.730 --> 00:39:11.940
be to present the image of a strong, vibrant economy,
588
00:39:12.579 --> 00:39:18.420
an economy that is a strong player in the global context,
589
00:39:18.500 --> 00:39:22.110
meaning you smaller countries. What was it Yang Jiechi said
590
00:39:22.119 --> 00:39:26.090
about 15 years ago now? No, 25 years ago now.
591
00:39:26.409 --> 00:39:29.329
There are big countries and there are small countries, and
592
00:39:29.369 --> 00:39:31.920
we all know. which is which I think that's the
593
00:39:31.960 --> 00:39:36.780
goal here as always and in that respect to also
594
00:39:36.840 --> 00:39:41.099
send the message to the other Asian nations the US
595
00:39:41.480 --> 00:39:44.809
is still in decline if there are any hiccups if
596
00:39:45.130 --> 00:39:47.949
there are any hiccups in China's economy they are temporary
597
00:39:48.769 --> 00:39:52.550
but We are the long-term bet. And look at Senzen.
598
00:39:52.590 --> 00:39:54.719
Look at how vibrant we are. Look at how we
599
00:39:54.780 --> 00:39:55.340
are developing.
600
00:39:55.380 --> 00:39:57.920
Look at all of– and I expect them to announce
601
00:39:58.559 --> 00:40:03.000
and unveil various new technologies, whether it's some new version
602
00:40:03.039 --> 00:40:08.030
of DeepSeek or quantum or robots or along– to make
603
00:40:08.090 --> 00:40:08.530
this point.
604
00:40:10.889 --> 00:40:15.000
Dean Cheng. We're going, at the Potomac Institute, we're going
605
00:40:15.079 --> 00:40:17.960
from the global to the very specific in East Asia,
606
00:40:18.239 --> 00:40:21.800
an incident in the South China Sea. China can have
607
00:40:21.920 --> 00:40:26.429
great ambitions, but when it comes to the confrontation with
608
00:40:26.449 --> 00:40:31.570
the U.S. Navy, it's extremely cautious, extremely cautious. Gordon Chang
609
00:40:31.630 --> 00:40:32.219
at Gordon G.
610
00:40:32.260 --> 00:40:32.639
Chang.
611
00:40:33.099 --> 00:40:38.869
I'm John Batchelor. I'm John Batchelor with my good colleague
612
00:40:38.889 --> 00:40:42.190
Gordon Chang, and we're joined by our very happy colleague,
613
00:40:42.230 --> 00:40:45.389
Dean Chang, because we're observing the fate of the world
614
00:40:45.510 --> 00:40:48.679
in a conversation that's great fun, but we leave the
615
00:40:48.800 --> 00:40:53.139
bad yalta proposed by Vladimir Putin in China to the
616
00:40:53.219 --> 00:40:58.139
facts of the South China Sea. An incident again, this
617
00:40:58.219 --> 00:41:03.010
is rinse and repeat. China sends naval forces to monitor U.S.
618
00:41:03.070 --> 00:41:07.840
warships near disputed shoal. China reports U.S. warships and disputed
619
00:41:07.900 --> 00:41:09.539
South China Sea. Reports to whom?
620
00:41:10.559 --> 00:41:10.679
U.S.
621
00:41:10.760 --> 00:41:14.599
Navy carries out occasional freedom of navigation operations. Taiwan reports
622
00:41:14.679 --> 00:41:18.969
new standoff around Pradas Islands. Here we go again, Dean.
623
00:41:19.590 --> 00:41:21.949
We've been through this for years now. It's the South
624
00:41:21.989 --> 00:41:26.070
China Sea, a building of the wall of sand, sending
625
00:41:26.130 --> 00:41:30.170
in Coast Guard vessels, intimidating the Filipinos who try to
626
00:41:30.230 --> 00:41:34.980
resupply their bases. All of this and occasionally the U.S.
627
00:41:35.039 --> 00:41:39.639
Navy shows up. Where is it going? Is it just
628
00:41:39.699 --> 00:41:44.289
an endless demonstration of futility or is there an object here?
629
00:41:45.710 --> 00:41:48.269
Well, I think it depends on whose futility you think
630
00:41:48.670 --> 00:41:53.710
is being highlighted here. And as you opened this segment,
631
00:41:53.750 --> 00:41:57.530
you said rinse and repeat. I think that's absolutely essential.
632
00:41:57.610 --> 00:42:02.090
The Chinese are training. They are training their military to
633
00:42:02.230 --> 00:42:04.710
operate in this area, but they are training all the observers.
634
00:42:05.449 --> 00:42:06.650
One, we're here.
635
00:42:06.889 --> 00:42:09.489
We, the Chinese, are here. We will always be here.
636
00:42:10.099 --> 00:42:11.820
You are not going to get rid of us. They
637
00:42:11.840 --> 00:42:17.539
are training, unfortunately, our respective militaries to expect significant forces
638
00:42:17.599 --> 00:42:21.929
to always be operating around us so that, God forbid,
639
00:42:22.110 --> 00:42:26.789
come the day the Chinese leadership says go, Their forces,
640
00:42:26.849 --> 00:42:29.550
their ships, their aircraft, their drones will already be in
641
00:42:29.610 --> 00:42:33.710
place to take that battle of the first salvo. And
642
00:42:34.170 --> 00:42:38.070
that is the most dangerous part, is for us to
643
00:42:38.510 --> 00:42:41.170
not become complacent, but in a sense to stop seeing
644
00:42:41.849 --> 00:42:43.429
the ships and aircraft and drones.
645
00:42:44.510 --> 00:42:45.489
Gordon, I have a question.
646
00:42:46.789 --> 00:42:47.190
Gene.
647
00:42:48.309 --> 00:42:53.110
The Chinese Navy is large, larger than ours. Question is,
648
00:42:54.170 --> 00:42:57.380
is the Chinese leadership prepared to go to war? Do
649
00:42:57.389 --> 00:43:00.119
they have confidence in their military that they can go
650
00:43:00.199 --> 00:43:03.380
up against the United States and its allies in the region?
651
00:43:04.619 --> 00:43:07.659
What is the mentality apart from the hardware?
652
00:43:08.800 --> 00:43:12.030
I think the PLA understands very well several things. They
653
00:43:12.050 --> 00:43:16.329
haven't fought a war since 1979. That means a military
654
00:43:16.369 --> 00:43:20.289
that doesn't have combat experience. But when you think about
655
00:43:20.449 --> 00:43:24.969
when was the last time anyone else in East Asia
656
00:43:25.130 --> 00:43:28.989
fought a war at this point, the only military that
657
00:43:29.010 --> 00:43:33.420
has recent combat experience is the North Koreans. Um, which
658
00:43:33.559 --> 00:43:36.539
who of course are most likely to share their information
659
00:43:36.559 --> 00:43:39.159
and their experience with people like the Chinese. The other
660
00:43:39.179 --> 00:43:41.820
thing to keep in mind is nobody in East Asia,
661
00:43:42.159 --> 00:43:46.269
including the U S has fought a high intensity naval war.
662
00:43:46.289 --> 00:43:52.550
Um, since, what, 1945?
663
00:43:52.550 --> 00:43:57.840
So if all of us are equally inexperienced in nuclear
664
00:43:57.900 --> 00:44:02.059
submarines killing each other, monitoring is one thing, actually attack
665
00:44:02.099 --> 00:44:08.380
is another, or carrier strikes against warships, then quantity becomes
666
00:44:09.110 --> 00:44:11.949
a factor again. You know, Stalin's famous quantity has equality
667
00:44:11.969 --> 00:44:15.389
all its own. Because at that point, everyone's going to
668
00:44:15.429 --> 00:44:19.269
make terrible mistakes. Everyone is going to do miscalculations. Who
669
00:44:19.329 --> 00:44:22.880
has the most resources to recover from the mistakes? And
670
00:44:22.889 --> 00:44:26.880
then finally, we are burning through a lot of munitions
671
00:44:27.320 --> 00:44:30.099
in places like the Middle East, and the Chinese are not.
672
00:44:30.559 --> 00:44:33.179
And while the Chinese systems may not have operated as
673
00:44:33.260 --> 00:44:36.360
well in places like Iran and Venezuela, the thing to
674
00:44:36.400 --> 00:44:37.940
keep in mind is at the end of the day,
675
00:44:37.980 --> 00:44:39.760
the Chinese are going to have a lot of reloads,
676
00:44:40.570 --> 00:44:43.150
whereas the question for us is how long will it
677
00:44:43.170 --> 00:44:45.610
be before our ships and aircraft go Winchester?
678
00:44:47.110 --> 00:44:52.849
She has made Taiwan's recovery, a major piece of his success,
679
00:44:54.230 --> 00:44:57.349
always there. He mentions it, he mentions it, so do
680
00:44:57.409 --> 00:45:03.030
his lieutenants. Is it real, Dean, or is it what
681
00:45:03.050 --> 00:45:06.780
you do when you get the head of the Chinese
682
00:45:06.820 --> 00:45:10.239
Communist Party every year, almost like a statement of faith,
683
00:45:11.380 --> 00:45:13.440
a Nicene Creed for the communists?
684
00:45:15.360 --> 00:45:16.159
I think it's both.
685
00:45:16.690 --> 00:45:18.769
I think that on the one hand for Xi Jinping,
686
00:45:18.829 --> 00:45:23.619
absolutely interesting to compare it to the Nicene Creed, a
687
00:45:23.679 --> 00:45:28.440
recapitulation of the Articles of Faith. But at the same time,
688
00:45:28.599 --> 00:45:30.480
I think that you need to go beyond the Chinese
689
00:45:30.500 --> 00:45:34.659
Communist Party. I think that there is a broad support
690
00:45:35.079 --> 00:45:38.300
in China, not just the People's Republic of China, the
691
00:45:38.320 --> 00:45:42.380
Chinese Communist Party, for reunifying with Taiwan because the Taiwan
692
00:45:42.420 --> 00:45:45.469
issue predates the CCP and the founding of the PRC.
693
00:45:46.079 --> 00:45:48.239
It is about the century of humiliation. It is about
694
00:45:48.280 --> 00:45:52.940
the first Sino-Japanese War, 1894 and 95. It is about
695
00:45:52.980 --> 00:45:56.480
the century of humiliation. So all of that, it is
696
00:45:56.559 --> 00:46:00.800
the single outstanding factor which CCP has then harped on
697
00:46:00.860 --> 00:46:06.860
and propagandized further into saying, we need to recover Taiwan
698
00:46:07.380 --> 00:46:11.539
because this is the last blatant example of us being
699
00:46:11.760 --> 00:46:15.449
exploited by the West. It's the same argument That unfortunately
700
00:46:15.510 --> 00:46:19.750
led to the forced reacquisition of Hong Kong. And we
701
00:46:19.809 --> 00:46:26.250
see what has happened to Hong Kong since. For many Chinese, yes,
702
00:46:26.269 --> 00:46:28.050
unfortunately it would have to Hong Kong, but Hong Kong
703
00:46:28.070 --> 00:46:32.659
was ours until the British took it. Hong Kong was
704
00:46:32.780 --> 00:46:35.519
ours and is ours again. Taiwan was ours and will
705
00:46:35.539 --> 00:46:36.139
be ours again.
706
00:46:37.219 --> 00:46:38.099
Gordon, you have a question.
707
00:46:39.199 --> 00:46:42.320
So, Dean, I agree that there is broad support in
708
00:46:42.400 --> 00:46:48.139
general in among the people of the People's Republic for reunification,
709
00:46:48.199 --> 00:46:49.840
as they call it, with Taiwan.
710
00:46:50.539 --> 00:46:52.530
But is there support for a war?
711
00:46:53.090 --> 00:46:55.650
Because, you know, you do hear, and this is not
712
00:46:55.710 --> 00:47:00.130
just people, the common folk, it's also officials, that phrase,
713
00:47:00.889 --> 00:47:03.670
Chinese do not kill Chinese. And if you think the
714
00:47:03.710 --> 00:47:06.110
people in Taiwan are Chinese, now the people in Taiwan
715
00:47:06.150 --> 00:47:08.090
don't think they are. But if you think the people
716
00:47:08.170 --> 00:47:12.719
in Taiwan are Chinese, then is there support for mass
717
00:47:12.760 --> 00:47:16.099
casualties to reunify?
718
00:47:17.500 --> 00:47:20.480
I think that you will hear from some elements in
719
00:47:20.639 --> 00:47:24.500
the South Korean population, particularly academia, that there really isn't
720
00:47:24.550 --> 00:47:27.090
a threat from North Korea because Koreans won't kill Koreans.
721
00:47:27.949 --> 00:47:30.349
And in parts of the Muslim world, you hear every
722
00:47:30.389 --> 00:47:35.579
so often, Muslims don't kill Muslims. Um, whether that applies
723
00:47:35.639 --> 00:47:39.010
to Shia versus Sunni is an interesting question right there,
724
00:47:39.050 --> 00:47:40.639
but I think you can just stay in the Sunni
725
00:47:40.659 --> 00:47:42.050
world and find examples of that.
726
00:47:42.510 --> 00:47:43.210
So I think it's a.
727
00:47:43.449 --> 00:47:46.869
Lovely propaganda piece to say, of course, one, the Taiwanese
728
00:47:46.909 --> 00:47:50.570
people have nothing to worry about because Chinese won't kill Chinese.
729
00:47:51.130 --> 00:47:53.449
And second of all, you, the West have nothing to
730
00:47:53.489 --> 00:47:57.219
worry about little old China. That large military is purely
731
00:47:57.239 --> 00:48:00.150
for self-defense because Chinese people, not only do they not
732
00:48:00.170 --> 00:48:03.909
kill Chinese, China has never been aggressive towards anyone else.
733
00:48:04.349 --> 00:48:05.250
Pay no attention to the.
734
00:48:05.230 --> 00:48:09.449
Vietnamese or anyone else who complains. That's hogwash.
735
00:48:10.150 --> 00:48:16.820
And Chinese have killed Chinese across five millennia. So, you know,
736
00:48:16.960 --> 00:48:19.139
I think of that as, you know, the people who
737
00:48:19.199 --> 00:48:23.579
swallow this once again demonstrate the power of propaganda. and
738
00:48:23.599 --> 00:48:26.780
the ability to influence them into believing, you know, who
739
00:48:26.800 --> 00:48:29.059
are you going to believe? Your lying eyes were my message.
740
00:48:30.519 --> 00:48:33.099
Checking on the anchor of the defense of the West
741
00:48:33.460 --> 00:48:38.800
in East Asia, Japan, Takeichi Sinai, a spectacular entry to
742
00:48:38.840 --> 00:48:42.449
the world stage. Tough talk. Is it continuing, Dean? We
743
00:48:42.489 --> 00:48:45.090
have a couple of minutes. Is Japan backing up its
744
00:48:45.170 --> 00:48:45.670
tough talk?
745
00:48:46.449 --> 00:48:48.389
It seems to be backing up its tough talk. They
746
00:48:48.449 --> 00:48:53.280
are buying interesting new weapons, developing new technologies, and above all,
747
00:48:53.800 --> 00:48:56.699
They are expanding their sense of defense. You are seeing
748
00:48:56.739 --> 00:49:00.869
the Japanese Self-Defense Force expanding into, for example, the space context.
749
00:49:01.449 --> 00:49:04.349
And I believe they have renamed it from the Japanese
750
00:49:04.530 --> 00:49:08.090
Air Self-Defense Force to the Aerospace Self-Defense Force because they
751
00:49:08.150 --> 00:49:12.610
understand this is one of the major battlefields of the
752
00:49:12.650 --> 00:49:15.150
future and that Japan needs to be in it and
753
00:49:15.190 --> 00:49:15.809
needs to win it.
754
00:49:16.949 --> 00:49:22.360
And so you don't find empty rhetoric. here. It's consistent
755
00:49:22.380 --> 00:49:24.780
with what I've learned and read about, but I wanted
756
00:49:24.800 --> 00:49:29.980
to see if it holds up. They're not tiring in
757
00:49:30.039 --> 00:49:30.739
their pursuit.
758
00:49:31.659 --> 00:49:32.179
Not yet.
759
00:49:32.679 --> 00:49:35.150
And are there things that they, that I wish they
760
00:49:35.170 --> 00:49:35.929
would do? Absolutely.
761
00:49:35.989 --> 00:49:38.969
I wish the Japanese would build lots and lots of munitions.
762
00:49:39.269 --> 00:49:41.670
I would love for the Japanese, you know, they are
763
00:49:41.969 --> 00:49:45.719
already in talks with us to build new ships for us.
764
00:49:45.800 --> 00:49:50.179
That is wonderful for, for, you know, mutual coordination and support.
765
00:49:50.679 --> 00:49:53.519
I would love to see them expand their munitions purchases
766
00:49:53.579 --> 00:49:57.420
so that every ship, every arsenal is just chock full.
767
00:49:58.219 --> 00:50:01.250
These things take time, but the Japanese are, you know,
768
00:50:01.809 --> 00:50:05.969
like the South Koreans, our Asian allies have done a
769
00:50:06.010 --> 00:50:08.269
better job of spending on defense than.
770
00:50:08.300 --> 00:50:09.889
Unfortunately, our European allies have.
771
00:50:10.739 --> 00:50:14.500
Dean Chang at the Potomac Institute, Gordon Chang at Gordon G. Chang,
772
00:50:14.539 --> 00:50:19.280
a podcast of our conversation about China and the potential
773
00:50:19.460 --> 00:50:23.000
of a summit in China and also the risks in
774
00:50:23.059 --> 00:50:28.630
East Asia, always a confrontation, an armed confrontation, That podcast
775
00:50:28.650 --> 00:50:31.909
is always available at Amazon, at Apple, at Spotify, at Spreaker,
776
00:50:31.929 --> 00:50:38.429
and other distinguished revenue sources. I'm John Batchelor. Thank you, Dean.
777
00:50:39.409 --> 00:50:41.460
Absolutely. Thank you for having me.
778
00:50:41.469 --> 00:50:41.949
Thanks, Dean.
779
00:50:42.929 --> 00:50:46.690
One detail that we didn't get to, the 4.5% print
780
00:50:46.909 --> 00:50:53.849
on their most recent economic report, it was billed in
781
00:50:53.989 --> 00:50:56.150
Europe as recovery. Is it recovery?
782
00:50:57.780 --> 00:51:02.070
I think that the Chinese are trying desperately to make
783
00:51:02.110 --> 00:51:04.510
the numbers look good and they're going to keep pushing
784
00:51:04.570 --> 00:51:07.050
this through next year because Xi Jinping is of course
785
00:51:07.070 --> 00:51:10.269
going to get a fourth term and it needs to
786
00:51:10.309 --> 00:51:13.469
look like, yes, and I'm running a really tight ship
787
00:51:13.510 --> 00:51:17.750
and we're doing well and the economy is just going gangbusters. Uh,
788
00:51:18.480 --> 00:51:20.599
and you know, I don't remember who came up with
789
00:51:20.619 --> 00:51:24.409
the term dead cat bounce. Uh, I think that you
790
00:51:24.449 --> 00:51:26.469
pump enough money in and you can generate something of
791
00:51:26.510 --> 00:51:30.150
a dead cat bounce. But I think that they have
792
00:51:31.110 --> 00:51:34.409
structural issues, and that's reflected in the numbers that they
793
00:51:34.449 --> 00:51:39.889
themselves talk about in terms of projected growth longer term.
794
00:51:40.750 --> 00:51:44.409
You can try to goose that up here and there,
795
00:51:44.530 --> 00:51:48.780
but without real reform, I think that you've just got problems.
796
00:51:49.170 --> 00:51:50.750
And it's only going to get worse as their labor
797
00:51:50.789 --> 00:51:53.789
costs start to rise because you're watching the demographic cliff.
798
00:51:54.889 --> 00:51:58.969
If they haven't already gone over the cliff, their toes
799
00:51:59.030 --> 00:51:59.559
are at it.
800
00:52:00.380 --> 00:52:03.079
So they haven't solved the municipal banks. They haven't solved
801
00:52:03.099 --> 00:52:07.659
the real estate. They haven't solved the youth unemployment. And
802
00:52:07.679 --> 00:52:11.300
they keep chasing the shiny object of the high-end technology.
803
00:52:12.360 --> 00:52:15.260
That was what they did two years ago. Are they continuing?
804
00:52:16.699 --> 00:52:17.539
Broadly, yes.
805
00:52:19.050 --> 00:52:22.449
I do caution about the municipal debts and things like that.
806
00:52:23.889 --> 00:52:27.550
What does that really mean in a non-market economy? What
807
00:52:27.590 --> 00:52:32.539
does it mean that the towns and provinces are in debt?
808
00:52:33.380 --> 00:52:36.619
Who is going to call that debt? And what would
809
00:52:36.639 --> 00:52:40.559
that even look like? I'm not saying it's not a problem.
810
00:52:40.619 --> 00:52:44.119
I'm just saying I don't think we've seen something like
811
00:52:44.219 --> 00:52:48.500
this before. Because whether it was Japanese corporate debt in
812
00:52:48.519 --> 00:52:52.320
the 80s and 90s or American debt, at the end
813
00:52:52.340 --> 00:52:55.800
of the day, there is an outside non-governmental entity that's saying,
814
00:52:56.099 --> 00:52:58.519
I actually want to get paid. And maybe I'll settle
815
00:52:58.559 --> 00:53:00.760
for 50 cents on the dollar, 10 cents on the dollar.
816
00:53:01.380 --> 00:53:03.409
But I expect to get paid. What happens when the
817
00:53:03.489 --> 00:53:07.809
money is owed mostly to the government itself?
818
00:53:10.849 --> 00:53:15.110
Well, what happens is in an– A system where you
819
00:53:15.150 --> 00:53:18.269
have strong currency walls. You can continue this for quite
820
00:53:18.289 --> 00:53:23.199
some time. And then it all falls apart. And they're
821
00:53:23.239 --> 00:53:26.679
not at that point yet. But the problem is that
822
00:53:27.360 --> 00:53:30.400
when a country owes money to itself, it's very difficult
823
00:53:30.619 --> 00:53:37.050
to resolve financial crises before they become real catastrophes. So
824
00:53:37.300 --> 00:53:39.690
they can continue for a long time. But when it goes,
825
00:53:39.989 --> 00:53:41.210
it goes with a bang.
826
00:53:43.099 --> 00:53:47.119
And I think that, like most pyramid schemes, the whole
827
00:53:47.179 --> 00:53:50.460
hope here is that you're not around when that bang happens.
828
00:53:52.099 --> 00:53:56.119
Or that they outlast the United States when that bang happens.
829
00:53:56.340 --> 00:53:59.119
Yes, it's always good to hear a little larceny, Dean.
830
00:53:59.199 --> 00:53:59.639
Thank you.
831
00:54:02.630 --> 00:54:03.510
Thanks again for having me.
832
00:54:03.570 --> 00:54:05.909
Thank you. Gordon, a very good morning to you. It's
833
00:54:05.969 --> 00:54:09.530
Wednesday morning. I see you next on Monday if all
834
00:54:10.090 --> 00:54:10.630
goes well.
835
00:54:11.480 --> 00:54:12.800
If the world still exists then.
836
00:54:13.099 --> 00:54:16.000
And good hunting until then. Thank you and thanks, Lydia.
837
00:54:17.079 --> 00:54:21.199
And the Roman Orchestra is ready to perform. Here we go,
838
00:54:21.280 --> 00:54:21.960
boys and girls.
839
00:54:22.820 --> 00:54:51.400
Piano plays softly Thank you.