Trade War or Hot War?
It's not the totality of the story because it really picks up data not just by the systems or the instruments in the plane. They actually are fed with all the data from the AWACS for example, from other drones, from the stations on the ground, satellite information etc. So eventually the Pakistani planes actually could synthesize all these data collected by different platforms and put them into this overarching platform and then because they have capabilities to see further than the other side and then their missiles can strike at a greater distance than the other side.
So the result is a home run and that demonstrates the capabilities of the Chinese military hardware and the software and it also means that China is well positioned to handle any military threat threatening China sovereignty and territorial integrity. And China is also fully prepared to assist countries like Pakistan which are close friends, brothers and sisters without reservation to provide them with the best weapons and best system possible so that they can defend their own legitimate rights and sovereignty and territorial integrity. I would say the aerial battle between India and Pakistan because of the size number of planes involved and also the lopsided result one to six or whatever is a turning point in modern war history. It means that there is another way to fight a war and China being so much committed to maintaining peace and stability will become a more powerful and impactful player for promoting peace rather than you know being eager to resort to war.
War in Chinese philosophy is always the last resort rather than the first resort. And I hope between India and Pakistan they will come to the realization that war should never be attempted unless it is the last resort. And between China and India we all should have the rationality and the wisdom not to use war as a first choice.
<Haiphong>
Well, it's interesting you say this Dr. Gao because the United States Donald Trump's administration Pete Hegseth the Secretary of Defense have referenced war with China in the framework of deterrence. I hear it all the time from Secretary of Defense Pete Hegseth. He says we must deter war with China, insinuating that China would be the aggressor party here. And we see now that there are military drills, joint drills with the Philippines and the United States. There's been a lot of anger on the Chinese side about stationing anti-ship missiles in the Philippines to fight a potential war with China over Taiwan. What are your reactions to this given this really big gap I think in understanding?
You're saying China is a player and a party that wants to seek peace. The United States is saying the exact opposite and then taking all these maneuvers and actions to pursue war.
Well, if we look at the world history since the end of the cold war, more or less in 1991, the track record for China is that China has not been involved in one single war. So, China's record is zero war for China. Whereas for the United States, the United States has been involved in one war after another, one battle after another in multiple places in the world. So we are talking about Afghanistan, Iraq, Syria, many other places for example Eastern Europe for example. so I think the track record is carved in stone.
Anyone with decency and a little bit of sense of history can read about how many wars the United States has been involved in, how many war which is zero China has been involved in. And that in itself is a very eloquent indication of whether China uses war as a top priority of its diplomacy or whether the United States uses war to solve whatever problems it define for itself. That's number one.
Number two is that I think China's philosophy throughout the ages always teach us that war should be very very much considered as a last resort. It doesn't mean that you are not strong. I think for countries which are strong and powerful you still need to be very very careful and prudent in considering using war. And the Chinese philosophy always dictates to us that war should be always the last resort.
You need to exhaust all the other things, diplomacy, mediation, negotiation, all kinds of intermediation, good offices by third parties, etc. before war should be resorted. Now we are also living in the nuclear age. Is that right? If you compare China's philosophy with the American philosophy, you should be startled. China's philosophy is China will never be the first country to use nuclear weapons against any country. That's number one.
Number two is that China will never use nuclear weapon against non-nuclear weapon country or non-nuclear weapon regions. And China will only use nuclear weapon in retaliation against nuclear attack on China or I would say against a very serious violation of China's sovereignty and territorial integrity. But whereas other countries never give up the right of first use of nuclear weapons, they consider using nuclear weapon as part of their right?
So I think we need to compare China versus the United States in terms of their philosophy regarding war in terms of their right or giving up the right of first use of nuclear weapons in different circumstances and then I would say China is always very much concerned about whether we have enough friends in the world whereas the United States seems to be very much concerned whether they have enough enemies in the world.
So I think China goes out to different parts of the world try to do trade, help you to build up bridges, railways, highways, dams of all kinds and try to cultivate friendship, promote win-win situation. Whereas for example, the United States given its huge wealth and economic and financial power at its disposal is not building any meaningful connectivity projects anywhere in the world. It's amazing. Whereas I think all these wars involved have destroyed not only hard infrastructure of all kinds but hundreds and thousands of lives in the world. That's the contrast. I hope the United States will really think more about peace rather than using war as a mean to solve its problems.
<Haiphong>
Given what you just said, then how do you see or how do you view the these specific manifestations of what I think is the antithesis of your hope and you hope to see peace, but the United States is just participating in Bikaton, huge military exercises with the Philippines is stationing these missiles preparing for war. I think Pete Haget says something like preparing for the war of the future with China and in order to have peace one must prepare for war. So what do you make of this approach? Because you know as we're speaking now the US is also testing ICBMs that are nuclear ready saying they want to deter war with Russia and China. And as you mentioned China is a nuclear power, the United States is a nuclear power and there is a huge gap in both of their approaches. So what is your assessment of this threat of war between the US and China given that there seems to be a hugely divergent path that these two countries are taking?
Well, my own conviction is the inevitability of peace between China and the United States. I reached this conclusion after a very careful analysis of the situation involving China and the United States and especially after the publication of a book written by a very renowned professor at Harvard entitled destined for war which proposed the Thucydides Trap theory. Now I'm convinced that to see this trap theory as applied to China and the United States is a fallacy because the author well-renowned whom I highly respect did excellent scholastic work analyzing cases of war in human history and came up with this theory of the emerging power challenging the established power mostly resulting in war.
Now, I think the renowned author forgets to inform mankind that all the cases of war he analyzed were conventional wars. Whereas, China and the United States are both very important nuclear weapon countries. Therefore, if you want to apply the conclusions you arrived at very scholastically, very excellently, analyzing conventional wars to two nuclear powers, you cannot really get the reality reflected. It becomes a fallacy. If for example, people walk away with a belief that China and the United States are destined for war. Therefore, I came up with my own conclusion. War is not an option between China and the United States. And war should not be an option at all for China and the United States. Why? Because any war between China and the United States may soon escalate from conventional war to nuclear war. And in a nuclear confrontation, there will be no winner.
Both China and the United States will be wiped out. And in between there will be Armageddon for mankind. So what is the goal of the United States if it wants to engage in a war with China? Do they really believe or indulge in the fantasy that they can wipe out China with 1.4 billion people whereas the United States will remain more or less unscathed. No, that's not going to be the scenario. If war breaks out between China and the United States, the two largest economies in the world of today, both armed to the teeth with conventional weapons as well as nuclear weapons, there will be no winner. All of us, the 8 billion people in the world will be the losers. So I want to shake up those decision makers in Washington and in the Pentagon and the deep state. Don't ever indulge in the fantasy of launching a war against China. Engage China in peace and become, as I'm convinced, in the inevitability of peace between China and the United States.
We have lots of problems between the two countries. China has a civilization of more than 5,000 years. The United States has barely 250 years after its independence. For example, the two countries are very very different. My philosophy is always your god for you and my god for me. Never try to impose your god on me and I will never try to impose my god on you. That will be the mega trend I hope between China and the United States and meantime we can have the luxury to resolve all the problems in peace in negotiation in good offices of all kinds and to make sure that the American people and the Chinese people are both winners. If both China and the United States win from our engagement, mankind wins. If both China and the United States lose, especially in the context of a war, mankind suffers the Holocaust.
<Haiphong>
With what you're saying, I wanted to just ask you then, why then do you believe and maybe from the perspective of China and the Chinese people even that the United States is pursuing this as you said, indulging in war while I share this hope with you Dr. Gao that I hope that the United States does not indulge. But given the actions of the Pentagon, you mentioned the deep state and the foreign policy circles in the US. Seems like the indulging is happening. There is the buildup in the South China Sea. There is constant talk even quietly. We don't hear it so much in the mainstream media because the Trump administration has so many hands in so many different pots. But every day in the western mainstream media, you can find talk about Taiwan building up toward that conflict there, the Indo-Pacific command is always trying to estimate when that war is going to happen. So Dr. Gao, why then if this is going to lead to an Armageddon situation for humanity, why would the US pursue this?
Well, I would say my suspicion is that Washington is suffering from two nightmares. The first nightmare is that they consider China as a pacing threat. Whenever they look beyond their shoulder, they see China coming up. So they worry that China eventually will surpass the United States. Now it depends on how you define it. Is that right? While the United States economy is the largest by official exchange rate, China is the largest by purchasing power parity. The latest number indicates that China is already about 130% that of the United States using purchasing power parity as the benchmark. Now um I believe in what Elon Musk says. He says by the middle of this century the size of the Chinese economy will be double if not three times as large as the US economy.
Even today if you look at a whole range of things for example production of iron and steel, generation of power production of automobile of all kinds and so many other things the Chinese production is not only larger than the United States but sometimes it is more than 50% of the global production and that is the reality so Washington should not pretend that it's not happening. And sooner or later either by purchasing power parity measurement which is already happening or by official exchange rate measurement which I believe probably by 2030 no later than 2035 China will be larger than the United States and by the middle of this century in Chinese term 2049 then in other economics analysis for example by 2050 the Chinese economy may be twice as big as the US economy. That's inevitable. That's the mega trend of our time. No one should deprive themselves of their sanity and the tranquility thinking about China becoming larger. China throughout its ages was the if not one of the largest economies in human history.
And China's downfall started more or less in 1840 when the British imposed this opium war on China and it created a chain reaction leading to the weakening of China, the decline of China. But since 1949, especially since 1978, China rose up and then China committed itself to reform and opening to the outside world and engaged in such massive amount of industrialization, urbanization and modernization of all kinds and that is the basis for China's complete transformation. If anyone in the world believes that China does not have a legitimate right to develop itself to become not only one of the largest and the most developed countries in the world but probably the leading country in the world in terms of technological innovation and of what we recently call new qualitative productivity again focused on innovation and creativity. then probably that person, lady or gentleman probably is not knowing what the world he or she is faced about.
So that's the first nightmare I would say. America wake up you know don't indulging yourself in that nightmare. China is a major power for you to be engaged in for mutual benefit. Don't worry your heads off to see China continue gaining strength. Now the second nightmare is even worse.
I think Washington worries that if China becomes bigger and bigger, China will push the United States away from the center of the global stage and then impose its values, its political system, its ideology onto the United States or even marginalize the United States. Now that's where the United States need to detoxicate itself and where China need to really convince the United States that China does not seek hegemony. I think the Chinese leader should do something that Denja did in 1974 at the extraordinary session of the United Nations General Assembly whereby Denia declared that China will never seek hegemony and he even rallied the delegates in the hall of the general assembly that if the Chinese government ever seeks hegemony, you all these countries in the world should unite with the people in China to overthrow that Chinese government if it wants to seek a hegemony.
I think it is time for China to reaffirm that position. Regardless of whether China was weaker in the past, strong now, even stronger in the future, China will never seek a hegemony. Meaning China will deal with all countries. Roughly we have about 200 countries in the world of today as equal. And we want to promote what we call win-win situation for all the countries in the world. And we want to be the standard bearer of free trade. We want to do the right thing. And we want to help all the countries in the world to gain economic development. China's economic development is not maximizing benefit for myself at your disadvantage. for example, it's always creating mutual benefit and we really believe in free trade.
Free trade will emancipate all countries involved participating in free trade. And if we look at this round of the so-called global reciprocal tariff war launched by the United States, it's a major attempt to throw a wedge into free trade or even destroy free trade. Whereas China rises up to the occasion holding the free trade banner very firmly in his hand and try to be the real champion of free trade. So this is what China is all about. China is not a force of evil. China is a force of good. China wants to promote peace, stability and development not only for itself but for mankind as a whole.
<Haiphong>
Well, let's now get to this trade war tariff exchange as you refer to it. There's been escalation. So as the audience may know for weeks and weeks now we've been dealing with tariffs and recently there was in Switzerland the US and China came to a kind of what the media western media is calling a truce a pause so to speak in at least the massive tariffs that the United States attempted to impose on China over 145%.
Now though, the US Commerce Department and I'll read the report from Reuters issued guidance stating that the use of Huawei's powerful Ascend chips would be restricted quote unquote anywhere in the world and that any company that uses these chips would be a violation of US export controls. Could you talk about this rolling it seems like escalation economically in this part of the United States's attempt to contain maybe those nightmares you were talking about. it appears that even though the United States seems to have needed to walk back on tariffs, there still is this overall strategy economically that includes what we during the Biden administration called the chip war. So talk about this recent escalation and your impressions and thoughts about where it fits into this overall trade war.
Well, if we look at the world of today, the greatest predictability is the unpredictability of the Trump administration and the greatest certainty is the uncertainty of the Trump administration. Now whether this is a good thing or a bad thing, it depends on your perspective. I think it's a disaster because I think the United States the strongest military power in the world, the largest economy if we use official exchange rate as the benchmark country with so many military bases in more than 100 countries in the world, become such a source of unreliability and unpredictability and uncertainty. This will really shake up the world because lots of the businesses do not know where and how they want to make their medium-term and long-term investment. That's the first point.
Now, the second point is that this global reciprocal tariff war is the wrong war for the United States to fight. It's not constructive. It's not going to help the declared goal of moving manufacturing jobs back to the United States. Maybe President Trump has another goal which he did not tell the world. We do not know what exactly he's up to. But to launch such massive amount of tariff war against not just China but almost all the other countries in the world. I understand even an island uninhabited by human with which only had penguins on it is also being targeted as a area with a huge tariffs.
I simply do not understand what's the real motivation. I think the United States is holding a gun at every country's head. You need to listen to my dictate. You need to do whatever I tell you to do. Now, President Trump seemed to be very proud that about 70 country now it's probably more than 70 countries wanted to talk to the United States to enter into a negotiation and come up with a arrangement and I will not say the exact term he used it's a little bit awkward but then holding a gun at other country's head, demanding Canada to become the 51st state of the United States, demanding Greenland become part of the United States. All these things are very much out of line of what the United States should behave in the world as a very large and important country in the world.
Now faced with this massive maximum tariff launched by the United States against China, China rises up to the occasion. China wants to retaliate and the United States says no you you should not retaliate know whatever I strike you with a tariffs you just take it and eat it no that's not how China will react other countries may have their own consideration and calculus for example to decide how they will react to such maximum pressure manhandling by Washington of their countries but for China if you manhandle China. If you put maximum pressure on China, China rises back. If you slap China in the face, in the cheek, China will slap you back. If you hold a gun at China's head, China will hold a gun at your head. If you say I will impose maximum tariff on Chinese export to the United States, China will do the same against your export.
So if we really sift through all these confusing things, I think probably President Trump and his team started on some presumptions. One is that by imposing maximum tariff on China, China will crumble. China will crawl on the ground and say no no no no, don't impose so much tariff. You will really make economic difficulty for me. Many companies may close down, lots of people will be losing their jobs for example.
No, that's not how China behaves. China stands up firm and say you want to launch the tariff war, I will fight with you to the very end. And then another indulgence of Washington may be well I can use tariff to block or to embargo some if not all the Chinese exports to the United States while the US export to China will have a free walk in the China market. No that's fantasy. If you want to block all the Chinese export to the United States there will be no more export of the US product to the China market. So you are talking about locking yourself out of the China market which is the largest market in the world today and will become more and more important in the coming years and coming decades.
And the decision makers in Washington should really think about what will be the consequences because in the US market lots of the things in the market are produced in China. You're not only talking about the smartphones, the garments, the clothes, the toys, many things, many industrial things and more importantly for the defense industry, the rare earth and the scattered earth being refined into the materials which can be used on very advanced weaponry. So eventually I think the United States will be judged that they launch this massive trade war against the rest of the world without really having thought very carefully about it and what is the purpose?
If the United States wants to get some pocket money for example, they can make some pocket money otherwise but by levying huge amount of tariffs and then even worse without telling the American people that eventually all these tariffs announced will be paid by the American consumers. It's kind of a tax on the American people. I don't think white house has that decency yet to muster their courage and tell the American people yes wait for the bad time because you need to pay for the tariffs it's not China it's not France it's not Britain it's not EU as a whole you the American people the American consumers need to pay for the tariffs do you know what will be the outcome you know Washington has been threatening Walmart eat up all the tariffs don't pass it on to the consumers.
That's not market practice. If you collect tariffs by the government and the traders like Walmart need to pass on the cost to the end users, eventually it's spread around by all the American people need to pay the tariffs. eventually it will cause inflation and I think it will make life for people in the middle class bracket or even lower income bracket even more difficult for the Americans. So I think from the Chinese perspective this trade war will cause a lot of difficulty and hardships for the Chinese exporters but I think we will stabilize the situation because there is something more than economic losses and gains analysis because China really views this in a very philosophical way.
The American this time is trying to destroy free trade. China wants to protect free trade. So we need to stand firm in protecting free trade. Free trade is good. Don't mess around with free trade. And by rising up to defend free trade, China does this not just for its own benefit. China is doing this for all countries benefit as well as for the fundamental interest of the American people. The American people don't want to suffer this shock of paying extraordinary amount of tariffs being collected by the US government. And for example, if the trade war does not tone down or get scaled down, my concern is that the inventory in the United States will run out and the shelves in the department stores whatever will become empty and the American people will suffer the consequences. And then you can see that China also imposes huge amount of tariff or against the US export to China. And lots of things that China import from the United States including oil, gas, soybean, other agricultural products can be sourced from other countries, Brazil, Argentina, Australia, Canada, you name it.
So the United States export to China are not the only product that China cannot source from other markets. So you're talking about a huge amount of economic losses to the American producers and exporters. What's the fun of that? I'm completely baffled by the logic and the philosophy and the rationality of this global tariff war especially against China. So I think what happened in Geneva couple of weekends ago was the right thing. It means there are still people with sound mind and rationality in Washington especially the secretary of treasury and the trade representative. They wanted to sit down with the Chinese counterparts to talk about this in a rational way so that we will tone down the rhetoric and try to do the most pragmatic thing try to solve the problem and eventually China US trade should continue for mutual benefit. I think China was fully prepared to deal with the extreme situation that is winding down China US trade two-way trade to zero.
If that happens, it's a disaster for China, but also it's a disaster for the United States. And in the short and medium term, the US people will suffer more bad consequences because they will be deprived of all the products produced in China which they can readily pick up in their stores and I think Washington should really come back to its senses. Tariff war does not solve the problem.
Now you mentioned the technological war. I'm amazed how the United States will go to such an extreme to say well even if we want to close up the US market for Huawei product which in itself is against the market practice it's against the free trade to start with it's kind of a weaponizing trade.
But then I want to prohibit mankind as a whole from using Huawei product. Who gives you that right does God give you that right to prohibit all the other countries about 200 countries in the world from using Huawei product. What is your relation with all these 200 countries? Do you govern these countries? Do you rule these countries? Are these countries your colonies for example? Are these people about 8 billion people in the world? Are they your subjects for example? Can you order them around? Who gives you that right?
You talk about democracy. Democracy means you need to treat your people on an equal basis with democracy and then you need to deal with all the other countries on equal terms. This is the world of today. It is not the US empire that you rule all the other parts of the world as if it's your subjugated conquered lands. That does not reflect well for the
thinking in Washington. It indicates that Washington probably is being plagued by some demons. You view the world in a very twisted way. It is not a reality test. You need to see the world as it is composed of about 200 separate independent nations with their own sovereignty and territorial integrity. Each has its own power to make decisions for itself. How can you say the United States orders all the countries not to use Huawei products?
No one in the world has empowered you in that way and that will only backfire because it means you are vulnerable. It means you are actually internally very weak. It means that you are very much afraid of technological innovations. It means you really believe you are not going to win this competition. Competition is good. Competition on equal terms on fair terms should be encouraged because that means mankind is still moving forward making progress. No one has a monopoly on technological innovation. No one can monopolize creativity of humankind.
<Haiphong>
Maybe talk about some ways it has already backfired because I see it in the western mainstream media everywhere now, in reaction to the trade war, in reaction to the chip war that has seemingly escalated in lie of now this pause in the trade war and one of the big narratives that is now being pushed almost to my surprise is that yeah it's not going to be China that suffers the most it is actually the United States that will be left behind And how has it backfired particularly in this area of technology which China has of course grown leaps and bounds over the past several decades?
Well, I would say let's focus on chips. Um before the chips war, China spend about $400 billion US every year to import chips from the United States, Japan, Republic of Korea, and China's Taiwan province. You name it. China had no problem with spending so much money on importing chips. As a matter of fact, China actually spent more on importing chips than importing crude oil from the rest of the world. China did not worry about the chips. China itself was one of the largest producer chips mostly on the lower end side. That's for sure.
But China also export chips. China was before the chips war one of the biggest exporters of chips. Um but that changed completely because under Trump and under President Biden and now under President Trump again they focus on semiconductor chips. They want to weaponize chips. They want to deny China's access to chips especially on the more advanced side. Now what will be the end result? Do you think China will crumble? Do you think China will say, "Oh my god, you know, I give up. I no longer develop chips on my own."
No. It forces China to become self reliant and self-independent. That forces the 1.4 billion Chinese people very much united, very much focused on achieving development for example and promoting peace to develop their own way of developing semiconductor chips of all kinds. Now that means in my best judgment in a matter of years China will have no need to import chips of any kind. That means the rest of the world especially the United States and Japan for example ROK and China's Taiwan province will lose a total of more than $400 billion order from China.
Now the second point is even more meaningful as has happened to all the other products in China. Once China achieves complete self-reliance and independence, China will continue to export to the rest of the world. So I would say by the time when China achieves complete independence and self-reliance in production R&D of conductor chips, China will be the most important exporter of chips of all kinds to the rest of the world. That means chip prices will come down significantly. That's a blessing for mankind as a whole.
Even though it may spell disaster for the semiconductor companies in the United States, but that's not caused by China. That's caused by the wrong policy of the US government. That's the end result of the chips war launched by the United States against China. Now if we look at history over the past several decades, China has again and again and again demonstrated its capabilities. No, China wanted to join the International Space Station. The United States said no. The United States even adopted the Wolf Act to prohibit NASA and other US government from working with China in space activities. It forced the China to develop its own version of the space station and now the Chinese space station is more advanced, more sophisticated, much more modern compared with the ISS.
And given the fact that the ISS will need to retire in a matter of one year or two years, the Chinese space station will be the only space station in orbit for the coming 10 years, if not even longer. It's the same case with GPS. Now, China wanted to work with the United States on GPS or with the European version of that etc. They came up with denial and denial again forcing China to come up with its own version, the Bato version. And now the betal version of the global positioning system etc which is much more sophisticated than GPS itself. It involves two-way traffic. transmission of data etc. more accuracy etc.
So the United States actually created its own competitor by try to deny China the benefits of cooperating with the United States or with the west as a whole. So the simple story is very simple. Work with China on equal terms. Don't deny China access because if you try to deny China access, if you try to choke China, you end up with a much more formidable competitor.
<Haiphong>
Yeah. And this is being borne out of, you know, there's been so many headlines, it's almost a flurry given that I think there's much more attention on this reality you are laying out even among mainstream western media circles. Um in the New York Times they're talking about China's going to make the US irrelevant. It will be the new dominant power. the economist is talking about China is now cool. The west you have streamers coming here, major figures coming here talking about China showing China. you have the South China Morning Post talking about shifting power dynamics that now the US needs to talk to China. it needs to conduct relations with China on a completely equal footing. talk about this shift because it wasn't so long ago that the United States um and still to this day we have of course foreign policy circles mainstream media talking and you've had experiences your mainstream media where they do talk about China in a very dimminionative and maybe degrading way but more and more there is this acknowledgement of a reality that things have changed but in this relationship quite dramatically. Maybe talk about that what what gave rise to this change how do you see it taking place now in the the larger sense
First of all I would say the international order we living now was established in 1945 after defeating Nazi Germany in Europe and Japanese fascism in Asia Pacific and it's structured around the United Nations, security council of the United Nations and the international order established in 1945 was never meant to be unipolar world. It's always a multipolar world and that's the reason why five permanent member states of the United Nations Security Council each has a veto power. China, US, former Soviet Union, today's Russia and Britain and France. So unipolarity was not meant to be the case. Multipolarity was designed as the international order.
Now since 1945 there were ups and downs in international relations, geopolitical movements etc. But China has always been very much at the head table. China was the first country to sign the UN treaty actually and China has always been a permanent member state of the United Nations Security Council. So if anyone anywhere in the world tries to dismiss China not only ever since 1945 but let's say for the previous 5,000 years. I don't know what that person is doing. I think if you really run out of your knowledge, go to a library, go to a digital library to see how much China has been here, you know, contributing to civilization of mankind as a whole, not only for one year, 100 year, 1,000 year, for 5,000 years. So that's the reality. That's the ultimate strength behind China's economic rejuvenization, I would say.
Now secondly, I think for the United States to practice what professor Paul Kennedy of Yale graduate school history department said, overreach. Don't overreach because any country big or small, strong or weak, if you practice overreach, eventually you'll be second guessed because eventually your capabilities are not going to support your overreach. And this probably is exactly what's happening to the United States. For the US government to publicly announce that policy prohibiting all the countries in the world from using Huawei chips is a typical example of overreach. I mentioned no one under the heaven and no god in the world has authorized the United States to practice that massive amount of overreach.
Practicing overreach will exhaust you, will eventually weaken your out will hollow out your overall strength and will make you a secondary country. That's not because other countries want to make you secondary. It's because by overreaching you actually hollow out your own self. Now, China does not want to see the decline of the United States. I believe China's peaceful rise is not premised on the decline or the demise of the United States. I think China and the United States can coexist very well.
President Xiinping of China said the Pacific is big enough to accommodate a very successful United States and a very successful China. And more recently he kept saying the world is big enough to accommodate both the United States and China developing in their different ways both in their own successful demonstrations. So I hope the world will be better served if China and the United States will view each other and deal with each other as equals and never indulge in the fantasy that I can impose my god on you. And I think China and the United States respecting each other will be the mega trend. I even coined the term it's called a merry China.
America plus China becomes a merry China. A merry China means a merry America and a merry China. And China America combined together will become a merry China. So that will make the world a marrier world I hope. So I always want to single out those warmongerers in Washington and say come to me or I come to you. Let's have a debate. Let's really get to the bottom of that. What can you gain if you want to maximum bullish bully China? If you want to impose war on China and if you want to destroy China, can you really destroy China?
Now if you give me one second I would say Washington is also suffering from what I coined Tonia Harding syndrome. You know Tonia Harding was a national champion in figure skating in the early 1990s. she was very much worried about Nancy Carrian out of Massachusetts and eventually Nancy Car Tony Harding's husband and his associates teamed up together to whack the kneecap of Nancy Carrian putting her out of commission. And Tony Harding continue went on to win the national championship. But eventually when the dust settles, Tony Harding was banned from national figure skating in the United States for life.
That's a sad story. I think Washington is suffering from Tony Harding syndrome. It views China as a potential competitor. It wants to whack the Chinese kneecap one way or another. That doesn't solve the problem. China will continue to rise. China will really excel in excellence and China will become one of the most important and impactful country in the world as China has been for the past 5,000 years. You're talking about China being the only surviving civilization for 5,000 years without interruption of its culture and civilization.
That's a real phenomenon. I hope many people in Washington will see China as it is and will no longer indulge in the fantasy that China as a civilization can be wrestled down to the ground and we can extinguish the Chinese civilization or wipe it out or to reduce it to irrelevance. No, China refuses to be reduced to irrelevance.
<Haiphong>
Well, that gets me to this question then, Dr. Gao. You know, as as China rises and as you mentioned, there's this overreach and this overreach from the United States spans not just with China, which happens to be one of the biggest examples, if not the biggest, but of course, we saw what happened with Ukraine and what continues to happen with Ukraine. Sanctions on Russia. Similarly, you mentioned China crawling on the ground. No, it's never going to happen. Begging the United States for mercy. Well, Russia didn't do that either. We see secondary sanctions on Iran targeted at China. But yet these two countries continue their path of development and their mutual cooperation especially around energy where the sanctions are targeted. But a big question is now as the west the United States at the head of it if we can say that is coming to grips with China's rise. There's all kinds of talks about China and its own sphere of influence. And this mainly centers in the Asia-Pacific but really in terms of the entire global south and global majority. Whenever China is talked about in the Western media, it's usually with China seeking a sphere of influence, right? So it's Asia, Africa, Latin America that this cooperation is not really cooperation. It's seeking dominance. What's your assessment of this? Will China as it rises seek its own sphere of influence or will it do something different?
No, I think China is a country really focusing on the world as a totality, you know, sphere of immune influence for China. No, it's completely wrong. I don't think China has a way of looking at the world, dividing the world up into spheres of influence. Why? Because China looks at the world as a totality. China now is the largest trading partner with about 140 countries in the world and there are only about 200 countries in the world. For the rest, for the remaining 60 countries or so, China probably is the second largest. So you think of China looking at the world as a totality rather than dividing it into spheres of influence of opposing blocks for China every country in the world all the 200 countries in the world are equally important.
For example if the head of state of let's say a small country in the Pacific region comes to China he gets the same protocol as for example the president of a much larger country. There's no difference in substance. It's the same protocol because we view each country big or small as important country, as a country that China need to engage with in equality on equal terms. That's number one. Number two is that by promoting free trade, China now is the largest trading nation in the world. We always say, you know, if you look at the 10 largest container ports in the world, seven are in China. China helped Laos to build a railway. China helped Indonesia to build the highspeed railway from Bandon to Jakarta. China is now helping Malaysia to build the eastern corridor eventually going to the Indian Ocean side.
For example, China is helping Peru to build the most sophisticated container port in Changhai, north of Lima. And China's working with Brazil to build highways and railways connecting the Atlantic coast to the Pacific coast linking with the Changhai port. And you see such examples again and again. You see China building all these infrastructure projects etc. Why? Because know we started the reform at the opening to the outside world more or less around 1978 and we believe in two principles. The first principle is that to build a road will make more money for all involved stakeholders. So we want to build roads so that efficiency will be promoted, connectivity will be promoted.
Secondly, you cannot really achieve real wealth without developing our industry. So China always wants to build factories to produce something for example rather than spending the bulk of the time on financial engineering. Financial development is important but it can never replace industrial production. So we want to build connectivity. We want to maximize productivity and efficiency and we want to make sure that China produces, China make things and China invents things going forward.
This means the world is a totality. The world should not be divided up into my kind versus your kind, my spheres of influence versus yours. And if you go to any country in the world now, regardless of the brainwashing done by the United States, probably by the US international development agencies, there are voice of America which is closed and all the other agencies etc. If you really try to use a pragmatic perspective looking at China, I think you'll come to the conclusion that China is a force for good. China is promoting free trade and China is working very hard using their brain power and the muscles and the bones try to produce for the benefit of all the consumers in the world.
And I used to say that in the midst of this maximum trade war launched by the United States against China and against the rest of the world, I really want to ask the American people, you know, by using made in China goods, have you really gotten any benefit? Have your kids become happier with the toys made in China? Have the Christians become more spiritual by reading the Bibles made and printed in China? Have the American patriots become more patriotic by saluting the national flag of the United States made in China? Have the athletes become better performing by wearing shoes produced in China?
You have so many examples of the American people really getting the benefits of things made in China. Why should anyone be ashamed of things made in China? And why should anyone be punished by using things made in China? Now, China is the leading nation in electric vehicle. And I truly believe eventually the internal combustion vehicle engine vehicle will be replaced by the electric vehicle of all kinds. The United States should really make this leap of faith to embrace EV car of all kinds and eventually to face out ICC vehicles because if they do not seize this opportunity this whole revolution will continue without the United States and eventually the US automobile industries will become irrelevant.
<Haiphong>
Well, this gets me to Dr. Gao what you were saying with the US economic situation as it isolates itself visav China. I wanted you to talk about this. It's really important you we see the United States with this overall position in the world as a hegemon and then we have China um rising and becoming especially in the economic realm of just a dominant player in its own kind of way. But many people would see this in the United States and I want your thoughts on this. You know, you mentioned China's benefits or the benefits that the American people have received from cooperation and trade with China and then you also mentioned the rest of the world benefiting through cooperation with China.
Well, many people in the United States have been told that actually China cooperation with China has been exploitative that China has reaped benefits at the expense. This is what Donald Trump's whole narrative is. It's well, China's run away with all of the benefits and it's been the United States, even the American worker that's been left to dry. And then of course you have the narratives in the media talking about you mentioned Voice of America, but there's many other examples with cooperation with China from the global south for example. There's actually many negative outcomes. What's your response to this especially as we are moving toward this multipolar world? It appears that China's status does need a kind of course correction in terms of how American people but really how the world sees China. I think the world is moving in a much different direction but the United States in particular. What do you say to the American people who have been told for so long that it is China that has been at the root of of of so many of their problems?
Well, I would say ever since 1978 especially starting somewhere in the 1980s and it's accelerated in the 1990s, many American companies came to invest in China. this was actually one of the driving forces for speeding up China's modernization and industrialization. That's for sure. And I think the Chinese people were grateful that we had foreign direct investments from the United States, from Germany, from Japan, many European countries, AAN countries, overseas Chinese community investments in China,
etc. All pitching in to help lifting the Chinese industrial production. But for all these investments into China, no investment was forced by China. Pointing a gun at the company say you need to relocate to China or I punish you. No it's all free economy it's all business decision by the board by the management etc they look for the multinational companies they look at the world as a totality and then they pick and choose they choose the best place to put their company.
And China really cut down all the red tapes, reduced all the bureaucracy, focuses and opened up you know widely to welcome foreign investments. I would say 40 years ago if any foreign investor coming to China say I have money you'll be treated as a king. Now if you come to China say I have money China probably will not blink say what do you mean I also have money. So you need to say I have money and I have more technologies. I have brand name for example. I have a a global distribution network etc. And whatever I can offer can be combined with the advantages in China to make greater products for distribution not only in China but for the rest of the world.
So I would say American companies came to China over the decades for two purposes. one is to produce in China and sell to the China market which by calculation is one of the biggest market in the world. The second thing is that I produce in China because I utilize the advantages in China. It started with let's say cheap labor etc. Now it's more kind of connectivity advantages, supply chain etc. and then I produce in China and export to the United States or to the rest of the world.
Same case for German companies. They came in earlier than the Americans. They started automobile plants etc. mostly to sell to the China market. But eventually in more recent years, for example, starting around 2000 and accelerated after 2010, they found production in China so efficient. So they start to produce more in China to be exported to the rest of the world. It's pure commercial decision. It's pure economic calculation. It is not done by ideological motivation at all. It's not geopolitical consideration at all.
So I think for the American people never believe in anyone who said China rapes the United States. No, China never does that. And I always ask people, tell me what's the fun of raping the United States, the largest military power in the world. It's nonsensical to come to the wrong framework, wrong ideology about China raping the United States or China taking advantages of the United States. Secondly, when we look at trade between China and the United States, you know, trade in good is one thing. China has a surplus. Yes. Trading services is another thing. The United States has a huge surplus in its trading services with China.
And then if you look at US companies operating in China, they make huge amount of revenue, huge amount of profit which is larger combined together than the total US export to China. So you cannot be one dimensional looking at China US relations. You need to be multi-dimensional, very objective in looking at US export to China in goods, US export to China in services and US multinationals operating in China making huge amount of revenue and profit feeding back to their global operations.
Now there is a saying that while the general motor in the United States was losing money, General Motor operations in China is making money actually the profit they make in their China operation feeds back to make up for the losses in their US operation. This is the reality and I hope media in the world will become more objective to tell the real truth. And this is the truth I'm dealing with almost on a daily basis. I think we need to be objective.
We need to see why the American companies or the European companies, Japanese companies, uh, China's Taiwanese companies come to make investments in China. What draw them to China and how they perform in China and what are the benefits for the American
companies, for the American society at large and eventually when the American people buy made in China products? Are they being forced by some country holding a gun, you buy China made the product etc. You do not buy products made in other countries. No, it's free will. I think it's the freedom of the choice of the American people and it's the freedom of choice for all the countries in the world. That's why for the 140 countries in the world which consider China as the largest trading partner of theirs, no one was threatened with a gun pointed at their head. Deal with China only. On only buy China products and when you sell your commodities to the rest of the world, don't sell it to any other country. Sell only to China. No, we engage in free trade. We engage in real freedom and liberty of trading with each other. Trade is good. Trade is liberating. Trade in itself, free trade in itself is emancipation.
<Haiphong>
Then my last question to you Dr. Gao is the world is changing. You mentioned multipolarity and multipolar world several times in this conversation. I wanted to ask you about your outlook on the future of the multipolar world, China's role in it given we have innumerable crises in the world. not least I cover the Ukraine conflict, what's happening in West Asia, Gaza, etc. And then we also of course have what's happening here in the Asia-Pacific and the threat of conflict here. So your take and assessment on the future of the multipolar world as it continues to grow amid these challenges and what China's role in it will be.
Well, when we look at the world of today, what really keeps me awake at night is that if major countries in the world as far as artificial intelligence is concerned do not cooperate then the real competition will not be between China and the United States or US and Europe or Japan etc. The real competition eventually will be in artificial intelligence versus homo sapiia. That means mankind as a whole may become less relevant in the world and eventually AI will probably declare independence from mankind and will really subjugate homo sapien as a subordinate species. Now maybe some people would love to see that phenomenon become true but I do not want to see that.
I want to see major countries especially in the framework of artificial intelligence, China and the United States cooperate rather than weaponizing AI because I think if any country really wants to weaponize AI or turn AI into American intelligence rather than artificial intelligence for the benefit of mankind. Sooner or later, and most likely sooner rather than later, AI will break free from mankind. And that probably will be the demise of homo sapiens. And that nightmare should not be excluded. We should all work together to make sure that that possibility does not become a reality. And that will require very close cooperation between and among all the countries especially leading countries in AI.
And that's why I'm very saddened to see that in the AI conference in Paris when they talk about this international agreement, the United States and the United Kingdom refused to sign that agreement on international cooperation for the management of AI. That may be a turning point for eventually AI breaking away from homo sapien. That is the biggest nightmare I have right now.
Now shorter than that I think I'm firmly convinced about the inevitability of peace between China and the United States. And I walk everywhere. I go to every country talking about the inevitability of peace. And I'm becoming a such strong advocate opposing war between China and the United States as I oppose war between any other countries or against any other groups of people in the world. So I think if we firmly believe in the inevitability of peace and we all declare that the destined for war scenario as applied to China and the United States is a fallacy. It's not going to happen.
But then we need to promote peaceful ways of solving all the problems and between China and the United States. The United States will need to spell out in clearer terms what exactly they want to achieve. They want to hold down China to the ground. It's not going to happen. China refuses to be held down. If they want to move manufacturing jobs back to the United States, China can help. If the United States wants to prepare against a potential financial meltdown as what happened in 2008, China has all the widows to help the United States or to bail out the United States if that financial crisis happens again. I don't think there are any other country or groups of countries which will have the capability and the wherewithal that China has. But you need to incentivize China to be prepared to work in the right direction to help bail out the United States if the United States is hit with another international financial crisis as what happened in 2008.
I hope it will never happen, but if it happens, that will be the moment of truth as to whether the United States will be able to line up China's support as Secretary of Treasury Hank Polson did in 2008. And I hope Secretary of Treasury Besset will do the right thing to make sure that China and the United States are not tearing each other into pieces, but be prepared to cooperate now in ordinary time or in extraordinary time or even worse in times of great disaster and great crisis. I firmly believe China and the United States should cooperate, treat each other as partners and we can maximize benefits for the American people as well as the Chinese people and mankind will be better off especially if mankind can keep its leading position in the world as we understand and refuse to be subjugated by the runaway AI.
<Haiphong>
Dr. Victor Gao, thanks so much for joining me today. It's great to be here in Beijing to have this great conversation and yeah, I look forward to more cooperation not only between me and you but also US and China. Thanks so much. Thank you very much. Thank you for having me.
