Name: Eastworld Spotlight: China vs. U.S. response to pandemic
Uploaded: 2020-05-28
Duration: 19 min 3 s
Description: ‘Has China Won?’ author Kishore Mahbubani joins Fortune’s Clay Chandler.

 CLAY CHANDLER: Welcome to Eastworld. Our guest today is Kishore Mahbubani. Kishore is one of Singapore's most respected diplomats and strategic thinkers. He served as Singapore's Permanent Representative to the United Nations. He's held the position of President of the Security Council. He's the former dean of the National University of Singapore's Lee Kuan Yew School of Public Policy and the author of numerous books, including Can Asians Think?, Has the West Lost?, and most recently, Has China Won? We want to talk about all those questions in our conversation. And he joins us from Singapore. Kishore, thank you so much for being with us here on Eastworld. KISHORE MAHBUBANI: My pleasure. CLAY CHANDLER: Let's start with Singapore, if we could. Can you describe for us what the condition is in Singapore these days? Has Singapore flattened the curve? KISHORE MAHBUBANI: Well, I think we have flattened the curve in terms of the numbers. I think they are more or less stabilized. But as you know, in Singapore we have two sets of numbers-- one for the population at large, which is almost over 5 million. And the cases from that is now down to three or four a day. And then you have a small group of 300,000 foreign workers who live, I guess, in a community of their own. And they have been very highly infected. So the large numbers you see from Singapore are not from the Singapore population, but from the foreign worker population. And I would say Singapore is doing an extremely good job of managing that. And the Prime Minister of Singapore very generously sent a message to the families of these foreign workers in India and Bangladesh saying, please don't worry. We will take care of your husband, your brother, your father, and so on and forth. CLAY CHANDLER: In the United States right now, there is a big debate about how much of the success of particularly the major Asian economies has to do with having more centrally controlled authoritarian political systems. And there are a lot of people that say that, oh, the reason that China was able to get a handle on this thing so quickly and contain it to Wuhan and the surrounding Hubei province was that they were able to crack down in a much more kind of relentless way, keep people from moving, use these kind of color-coded health apps on mobile phones in a way that would have been completely impossible in a liberal democracy like the United States. Do you buy that analysis? Or do you think that that's perhaps not fully reflecting all the different factors at play? KISHORE MAHBUBANI: Yeah. I mean, if you don't mind me being a bit candid in my reply, it's an easy cop-out. It's an easy way of saying, oh, of course, it's only these authoritarian, dictatorial, communist systems that can do well. But of course, as you know, East Asia is not uniform. And South Korea has done well. It is a robust democracy. Australia and New Zealand have done well. They're liberal democracies. So it is absolutely a cop-out. But I think the more fundamental reason why East Asian countries seem to be coping better is that, unlike the United States, where the institutions of government, as you know, became sort of delegitimized, defunded, demoralized after the Reagan-Thatcher Revolution, after Ronald Reagan famously said, government is not the solution, government is the problem-- CLAY CHANDLER: [CHUCKLES] Yeah. KISHORE MAHBUBANI: --I mean, East Asia, by contrast, there's always been a deep respect for institutions of government and a realization that if you undermine institutions of government, society will suffer. So in the United States, as you know, the standing of the Federal Aviation Administration went down after the Boeing 787 crisis. The standing of FDA and CDC has gone down over the way they mismanaged this crisis. So I think that the more fundamental turn that America, United States, needs to make is to understand that societies succeed when they combine the invisible hand of free markets with the visible hand of good governance. And United States has been fighting a one-handed battle against COVID-19. We've been fighting a two-handed battle. CLAY CHANDLER: Oh. Let me ask you, if I can, about China's experience with the virus. On one hand, China has had extraordinary success in containing it. It's kept total cases down below 85,000, compared to 1.6 million now in the United States, and still clocking over in the US at a very high rate. New cases in China are just about eliminated. They're down in the single digits. And they largely were able to contain this to a single geographic area rather than let it spread nationwide. So that's the success. On the other hand, right now in the United States and in Europe, there's a lot of criticism about China. They let the virus originate there in the first place. There is criticism about the effort at the provincial level to silence the whistleblowers who were first warning of it. And then there's been a lot written in the Western media about the two-week delay in January between when the central government knew of the seriousness of the virus and when they actually swung into public action and were transparent about it. How on balance should we regard and interpret China's response? Is it a success, or is it a failure? KISHORE MAHBUBANI: The reaction in the United States to China is not necessarily being driven by reason and analysis, but also driven by emotion and a geopolitical desire to bring down China. So that dimension is also in play. And as you know, they say truth is the first casualty in war. And that's also happening in the geopolitical contest within US and China, which frankly, actually, both sides, logically-- United States and China-- should have said, the enemy of my enemy is my enemy. So for United States, enemy number one today is COVID-19. And China is also an enemy of COVID-19. United States and China should be coming together, logically speaking, to fight a common enemy. But instead, as we know, the contest between the US and China has been heightened by COVID-19. And the fact that it's been heightened confirms the thesis of my book that this contest is being driven by deep structural forces and not necessarily affected by personalities. You've got to understand the structural forces to understand why this contest is so deep. CLAY CHANDLER: Perhaps it's too extreme to kind of talk about winners and losers. But is it possible to draw some conclusions about whether China or the United States, which of these two of the world's two largest economies, have emerged relatively either better off or less worse off, I guess, from the pandemic? KISHORE MAHBUBANI: The paradoxical answer I'll give to your question is that the United States might win best by not trying to win. And I say this because, as I explain in my book, the United States is so focused on preserving its primacy in the global system. It is doing so by actually not paying attention to the well-being of its people. And with the United States spending so much on defense and fighting unnecessary wars-- we see $5 trillion in the Iraq war-- at a time when the average income of the bottom 50% in America has gone down over a 30-year period. Now, just imagine if the United States had taken that $5 trillion, instead of burning it in Iraq, and given it to the bottom 50%, each person in the bottom 50% would have received a check for $30,000. CLAY CHANDLER: As the severity of the virus became known, and as it spread, it has really polarized the two economies. You talk about this kind of potential of the two countries sliding into another cold war in your book. Do you see that as inevitable? And do you share Dean Alison's view in that sense? KISHORE MAHBUBANI: I think the term "cold war" is misleading. Because within the United States and Soviet Union, there was no trade. You didn't have 300,000 young Soviet students studying in the United States from the Soviet Union. So the relationship within the United States and China is far more dense and interlinked and much more complex. And you can't have a simple separation as you did in the Cold War. But what makes it even harder is that, in the case of the relationship between the United States and China, I agree with [INAUDIBLE]. And one of the structural forces driving it is always, who is number one and number two? That's primacy. But in addition to that-- and this is the sensitive part-- this is the first time a non-Western world is emerging as the number one power. And in the Western psyche, there's always been a fear of the "Yellow Peril." And at then end of the 19th century, the United States had Chinese racial exclusion acts. So the fear of what I call the "Yellow Peril" it is real. So there's an emotional dimension to it. And then thirdly, United States expect maybe reasonably, unreasonably, that the more they engaged China, China would open up its economy and open up its political system and become a democracy like United States. That hasn't happened. But future historians will be puzzled that a country that is less than 250 years old like the United States expected that when you engage a 4,000-year-old civilization, the 4,000-year-old civilization will become like a 250-year-old country. These are the strange aspects of the US-China relationship. And the complexity of that is what I tried to bring out in my book, Has China Won? CLAY CHANDLER: In a way, for many decades, the US did have a strategy. And that was the strategy of engagement with China, as you mentioned just now, was predicated on this idea that China would eventually change and become more like the United States and the other Western democracies. Part of what's precipitated this shift in view, I guess, is a growing consensus in Washington that, as you point out in your book, now also includes many members of the business community who were once great allies of China, that the old engagement policy wasn't working and that the US was being taken advantage of. How do you answer to people who claim that that coherent strategy was a failed strategy, and that although we may not have one now, at least it's better than the old flawed consensus? KISHORE MAHBUBANI: China's alienation of the American business community-- and I devote a whole chapter to that-- was a serious mistake on their part because they lost the biggest constituency that was, in a sense, applying the brakes to any kind of negative policies towards China. But at the same time, I don't agree with the view that the engagement policy has failed. It has failed to create a liberal democracy in China. There's absolutely no question about that. CLAY CHANDLER: Mm-hmm. The dissatisfaction and the frustration of the global and particularly the US business community, what do you see as the primary source of that? KISHORE MAHBUBANI: I believe that after the 2008-2009 financial crisis, a little bit of arrogance crept into the minds of Chinese policymakers. And it wasn't helped by the fact that the US Treasury, as you know, sent emissaries to China at the height of the crisis telling China, please don't stop buying US Treasury bills. Because if you stop buying US Treasury bills, the markets will go down even more. And China, as you know, cooperated with the United States in that area. But it also gives the Chinese the sense, we have arrived. And therefore, they began to be a bit more assertive and pushy towards businessmen-- and gradually, as you know, arrogance. Just as the arrogance in the West after the Cold War was a factor that really damaged the West, as I documented in Has the West Lost? And similarly, arrogance in China after the 2008-2009 financial crisis also led, in part, to the alienation of the American business community. CLAY CHANDLER: We're headed for a turbulent period in American politics right now as we approach the November election. Do you see the US-China relationship deteriorating further as we near the election? And if, for whatever reason, President Trump is not successful in being reelected, do you see the chance that that relationship could improve? KISHORE MAHBUBANI: I can confidently predict that between now and November for the elections, relations between US and China will get worse. Because the easiest way to win votes in the United States is to bash China. Normally after the elections, things get better. But this time around, things may get superficially better under Joe Biden because he'll definitely be more courteous in the way that he speaks to China. But paradoxically, in the case of China's interests, it may actually be best served by the reelection of Donald Trump, because Donald Trump has done so much to reduce America's standing in the world. By reducing America's standing in the world, he has opened geopolitical space for China. So four more years of Trump may actually be good for China, even though it'll be painful in the short-term to give them long-run [INAUDIBLE] dividends. CLAY CHANDLER: I mean, there doesn't seem to be that kind of leadership that enjoys the mandate of the general public here in Hong Kong. It seems to me that, inevitably, the reaction to this legislation-- we'll see it later this evening, I suspect-- KISHORE MAHBUBANI: Yeah. CLAY CHANDLER: --will be further protests, further demonstrations, a great deal of unrest. That comes at a very sensitive time when there have been numerous pieces of legislation introduced in the United States to strip Hong Kong of its special trade status. Do you see that as a possible outcome of the announcement from last week? Could the United States take that course of action against Hong Kong. KISHORE MAHBUBANI: Sadly, I hate to say this, but Hong Kong is going to become a political football in the new geopolitical contest that is broken up between the United States and China. The sad part about being a football is that the players enjoy kicking the ball, but the ball is the one that gets damaged and broken at the end. So that's the danger that Hong Kong faces. It is very sad that many people in Hong Kong are not even aware of how, when a new geopolitical contest like this breaks out, they must understand the geopolitics to avoid becoming a victim. CLAY CHANDLER: Can we think forward to kind of, if there is that sort of response from the US government, the Congress, what the Chinese countermeasure to that might be, is there a range of actions that they might take against the United States? KISHORE MAHBUBANI: The levers that China has against the United States are very, very few. The United States is still, by far, the much stronger power. But at the same time, I must add, if the United States takes any measures against Hong Kong, the people of China will not suffer. The 1.4 billion people in China will not suffer. But the 7 million people in Hong Kong will suffer. So as you know, Hong Kong enjoys some preferential access to the United States. It loses that preferential access. It doesn't affect China. It affects Hong Kong. CLAY CHANDLER: I wanted to ask you about one of the most, I guess, important arguments in your book, which has to do with the global supremacy of the US dollar. You describe this as potentially being an Achilles heel for the United States. Can you talk to us a little bit about what you mean by that and what the risks there are? KISHORE MAHBUBANI: It is amazing privilege that the United States has. And it is a privilege because the rest of the world trusts the US dollar as a neutral, effective public good that they can utilize. But now when you weaponize the US dollar and then you use it against a people who actually use it as a public good, the US dollar becomes like a razor blade. You can use the razor blade to shave yourself. But the razor blade can also cut your own fingers. So everybody is now going to be a bit more cautious, and although right now, there's absolutely no threat to the US dollar in the short-term-- no threat at all. But I can confidently predict that, over time, things will change. And it is actually in the interest of the United States to prolong the global reserve crisis in this as long as possible. CLAY CHANDLER: Kishore, I want to thank you so much. This has been a fascinating conversation. We look forward to checking in with you again in the future. Until then, stay safe. And then thank you very much. KISHORE MAHBUBANI: And thank you for asking such good questions. CLAY CHANDLER: [CHUCKLES] KISHORE MAHBUBANI: [CHUCKLES] 

Eastworld Spotlight: China vs. U.S. response to pandemic

International

‘Has China Won?’ author Kishore Mahbubani discusses.

Comparing China vs. U.S. response to coronavirus pandemic

‘Has China Won?’ author Kishore Mahbubani joins Fortune’s Clay Chandler.