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American business leaders meet with Xi Jinping in Beijing, where CCP's control over investments and factories in China limits their freedom. Despite the lucrative opportunities due to cheap labor, the risk of doing business with a transnational terrorist group like the CCP is high. Negotiations are needed to address these concerns and potential sanctions.

Einar Tangen, senior fellow at the TAIHE Institute and CIGI, discusses China’s shifting international diplomacy, including recent high-profile meetings involving Xi Jinping. He argues Beijing has studied Donald Trump closely after Trump’s first election, finding that his behavior is transactional and that China needs a “formula” for handling him. He says China has decided to be “somewhat firm” because attempts to be nice to Trump can lead to mocking and personal affronts, citing examples such as Zelensky. He also emphasizes that China must manage not only Trump but also the rest of the world’s repeated question—“What is China going to do?”—and he argues China is not seeking a toe-to-toe military confrontation with the United States because it would risk war, including nuclear war, and would drain resources from society. Tangen describes how China frames the issue through “red lines” and a claim that there is a path to dealing with Trump, alongside messaging such as security for all countries not dependent on others’ insecurity, each country’s right to development, and respect for sovereignty. He further argues China believes an appropriate endpoint for dealing with the current global system is outlasting it and leading by example through action rather than relying on messaging. He then turns to the question of how the United States arrived at Trump, arguing Trump is a symptom of a system dedicated to “anti-democratic democracy,” rather than an instigator that changed everything by himself. He traces what he calls structural changes back to the Powell Doctrine of the 1970s, which he says outlined that the American public cannot be trusted and that businesses should become aggressive in taking control of media and courts, fighting consumer protection, labor laws, and universities. He connects these developments to corporate influence in politics, arguing it increased money in elections and allowed corporations to back candidates with “as much money as they want.” He then links this to foreign policy shifts, including a “Clean Break Doctrine” associated with Richard Pearl, which he says emphasizes that Israel should dominate or decimate rather than pursue diplomacy. Tangen adds a third element through what he describes as Eldridge Colby’s 2021 strategy, “Strategy for Denial,” claiming it proposes denying China access to trade routes by controlling choke points (such as major canals and straits) and denying access to energy by intercepting or preventing distribution of what China produces. He presents these as a “blueprint” connecting domestic political control, exported logic into foreign policy, and foreign plus economic policy together. He also argues that changes in corporate leadership—from longstanding business families to “hired help” professionals—removed local community ties and oriented companies around profit-and-loss spreadsheets focused on maximizing shareholder value and bonuses, which he says helped shift aims and objectives. He describes this broader environment as producing a “world where there’s no empathy,” where civilian and prisoner killings are justified by cause, and where he claims “no heroes” exist because the approach relies on dehumanization and absence of empathy. To illustrate China’s approach and the global South perspective, he cites Belt and Road Initiative investment exceeding $1.3 trillion since around 2015, and discusses what he calls “dead trap diplomacy” claims about Sri Lanka’s Hambantota port. He says Hambantota port expanded cargo handling by 175%, requiring tens of millions of dollars in further expansion due to insufficient capacity, and argues there is typically a ramp-up period before profitability in ports. He connects this to his view that China expects skepticism but responds through continued performance rather than persuasion, noting that China “has given up” on quickly convincing critics and instead tries to convince “by action.” Tangen also argues that addressing U.S.-Israel-Iran escalation cannot be handled by China alone and requires overwhelming international coordination. He proposes that if countries do not trade with parties pursuing escalation, “all three of your economies will literally collapse,” describing this as peer pressure in an interconnected world. He further says the United Nations is “useless” due to veto power and argues a broader governance initiative may be needed. He describes the current global environment as containing “more than 80 conflicts,” with a crisis affecting a large share of energy and food through downstream impacts. He argues maximalist positions persist because there is no trust and parties feel the other side will not concede. He says that without an endgame, leaders rely on hate and refusal to talk, which he says increases the likelihood of war. In discussing media and political dynamics in the West, Tangen and the other speaker argue that rationality is being condemned and that opponents are treated as inherently evil—casting diplomacy as appeasement and making it difficult to restart negotiations. They also discuss censorship, harassment, intimidation, cancellations, and sanctions directed at academics and media figures who argue for adjustment to new realities. He describes discourse as shifting toward personalized accusations and lists examples of delegitimization through claims such as “apologist,” “propaganda,” or extremist labels. Tangen emphasizes that security competition shapes the debate: recognizing an opponent’s security concerns is treated as taking their side, which he argues prevents resolution. He says historical patterns—Vietnam, Iraq, Afghanistan, Libya—are associated with narratives that conflict would end rapidly with prosperity, concluding instead with “a trail of tears.” He argues there is no endgame when parties refuse to talk on moral grounds, and he hopes economics and trade can help reopen pathways toward negotiation, referencing the idea that after long periods of war, states often shift when they become economically constrained. The conversation ends with Tangen and Einar Tangen agreeing to stop there, with Tangen thanking him and expressing hope for continued rational debate about where the world is heading.

Jiang Shuichin argues that rapid shifts in international power generally become highly disruptive and destabilizing, often coinciding with major world-order changes after major wars or state collapses. He says the Iran war could have wider ramifications beyond the Strait of Hormuz and the region, potentially dragging the broader world into escalating conflict. He explains that the Gulf Cooperation Council (GCC) has long been a major driver of the global economy by selling oil cheaply in US dollars and recycling revenue into the US economy. If GCC states were removed from the global economy, he says it would have “tremendous consequences.” He claims that within “a month or two” the world could run out of strategic fuel reserves, grounding airplanes. He also links the conflict to global food supply, stating that the Tigray War provides one third of the world’s fertilizer, and that during the global growing season widespread famine could occur within “five months” or “six months,” especially in Africa. On the Middle East’s reorientation, he argues that Iran can control the Strait of Hormuz de facto, collect tolls, and de facto use it to reconstruct its economy, industrialize, and build stronger trade relations with China and Russia. He says the US imposed a naval blockade to embargo Iranian oil exports to China, but that enforcement is difficult due to the Indian Ocean’s scale and US resource limitations. He asserts that the UAE is “most desperate for war” after losing control of trade through the region’s shipping and finance hub. He adds that Saudi Arabia faces long-term threat dynamics because Iranian influence and proxies affect both Hormuz/Straight security and the Red Sea. He claims Israel wants the war to continue to advance the “Greater Israel” project and warns it has discussed attacking Turkey and Egypt next. He frames the region as a “powder keg,” arguing it is hard for the status quo to persist and predicting possible future breakout regional hostilities, including possible US airstrikes against Tehran and possible Israeli false-flag escalation modeled on the Gulf of Tonkin incident. He suggests the status quo could last “the next three to five months,” arguing Trump would avoid being seen as a loser and might pursue a tentative agreement before shifting attention elsewhere. He presents Cuba as a potential “next global flash point,” arguing the US embargo blocks Cuba from accessing fuel, food, and water, and that Raúl Castro could be indicted, recalling a prior pattern involving Maduro and special forces. He says Russia is heavily invested in Cuba and that both Russia and China are trying to support it. He predicts the Middle East conflict could expand to other flashpoints worldwide, including the possibility of tensions involving North Korea and South Korea, and he claims the war in Europe will also escalate. In discussing Russia’s Ukraine war trajectory, he references an attack on a student dormitory in Luhansk that reportedly killed at least six students and says Putin promised swift retaliation, framing this as potential movement from a “special military operation” toward declaring war and switching to “total war.” He then argues that European elites are trapped in a self-reinforcing fantasy that Ukraine is winning, describing domestic and institutional dynamics that prevent acknowledgment of losses and sustain continued war support. Regarding China’s and Russia’s roles, he says Iranian Foreign Minister Araki visited both Russia and China and claims Putin told him Russia is supportive of the Iranian people and views the US and Israel as aggressors. He says if Iran faces difficulties, Russia would reinforce Iran through the Caspian Sea and describes Russia’s response to GCC complaints about Iran. He contrasts China’s approach as neutral and mediation-focused, arguing China seeks peace and ceasefire so the world can return to global trade and that China refuses a clear stance. He also claims China might sign an agreement with the US to buy more LNG to compensate for lost Middle East LNG, especially Qatar. He describes negotiations between the US and Iran as having “three sticking points.” The uranium issue, he says, could allow compromise through allowing international inspectors while keeping uranium. The Strait of Hormuz control, he says, is core to Iranian security and not something Iran would give up. The third sticking point is Lebanon and the requirement that any peace treaty with the US also applies to Lebanon, including Israeli withdrawal from Lebanon. He argues that Israel’s offensive in Lebanon makes lasting peace unlikely and suggests any settlement with Iran would be tentative and could resume within “at most six months.” He argues the US cannot retreat from the Iran war because US financing needs depend on the world continuing to buy US Treasuries and because continuous bombardment is limited by depleted munitions stocks after earlier sustained airstrikes. He states that to “fight this war effectively” the US would need ground troops, which he says would require a national draft and also a chain of events to justify the invasion, including a need for “justification” to rally Americans and create broader economic chaos that would make the invasion acceptable. On Israel’s “Greater Israel” project, he argues that Lebanon is part of the project and that even if the US and Iran reach tentative terms, Israel’s long-term objective would continue, preventing permanent peace. He also claims the Zionist lobby has significant political sway in the US and cites campaign spending aimed at defeating a Republican congressman to warn others. He further argues that conflict models in Europe and Asia are tied to a broader US grand strategy: shifting global conflict to sustain debt and delay economic constraints. He says the US would aim to retreat geographically while still financing and arming partners to prolong wars. For East Asia, he claims the US might allow Japan and South Korea to handle more while American forces and allied structures support containment dynamics. Finally, he argues that Taiwan’s status quo is not sustainable and points to a “grand bargain” after Trump’s China visit. He says Western reporting frames the visit as unproductive, while Chinese media and experts view it as a breakthrough that could end the trade war. He claims the bargain could involve US access to China’s financial market and China opposing Taiwan independence, with the US pausing or blocking a weapons shipment to Taiwan and considering onshoring semiconductors. He states he expects Taiwan to be a future flashpoint only near-term at minimum and argues the next major flashpoint could be North Korea rather than Taiwan. He closes by describing a Western “legitimacy crisis,” attributing it to demographic crisis, financialization, and moral decay, and arguing it will lead to a decline of Western society. He also argues immigration debates are framed as purely pro-immigrant versus racist, while culture and cultural cohesion are not addressed.

Elon Musk is heavily influenced by the Chinese Communist Party (CCP), particularly through Tesla's Shanghai joint venture, which is fully controlled by the CCP. This connection explains why he avoids criticizing the CCP, even during significant events like the COVID lockdown protests. While he has made some positive contributions, his business ties suggest he is compromised and unable to take a strong stance against the CCP. Overall, he is viewed as insincere and beholden to the interests of the Chinese government.

During my campaign, I supported Taiwanese independence. I hate China, and I hate Xi Jinping. I've denounced China and would die for America. I'm making it clear that these people will never be near me again. I have nothing to do with them! Do you want me to shout from the rooftops that the CCP is bad? Because I think Xi Jinping is a piece of shit, and he should go to hell. I believe that the most important relationship is that between China and the United States. We need leaders to see that China is now a peer. We are better off as partners. We can do business and trade, and have student exchanges. Every four years we hear the same China bashing, but after the election the tone changes. They do this because it riles up the voters. But that kind of rhetoric is harmful.

In this conversation, the host and professor Yasheng Huang discuss the evolving US-China trade tensions, China’s rare earth move, and potential implications for Taiwan, the global economy, and geopolitics. Huang explains the context, prioritizing how these developments might unfold over the next few years. The discussion opens with the claim that markets react to talk of a US-China trade war and that the world watches China-Taiwan dynamics. The host emphasizes China’s rare earth export restrictions as a powerful lever, noting China refines about 90% of the world’s rare earths, mines about 70%, and holds about 70% of reserves. He posits that this tool could influence global tech, AI, missiles, and defense hardware. Huang clarifies that the official rationale frames it as an export control requiring those who use Chinese rare earth processing to submit applications, with civilian uses supposedly allowed and defense-related uses scrutinized or prohibited. He notes that the line between civilian and defense uses is not clear, and that rare earths are integral to everyday devices (phones, computers) as well as military tech, making the proposed restrictions potentially disruptive to both civilian and defense sectors worldwide. The timeline of US-China tensions is reviewed. The host recaps US fentanyl tariffs on China around 10%, followed by broad tariffs in May, a Geneva 90-day truce, and later a stop on five-nanometer chip exports to China in May. August saw some relaxation of restrictions on seven-nanometer chips, with a cap on revenue from certain Chinese sales. Huang adds a mid-September development: the US imposed docking fees on Chinese ships in US ports, and China announced a rare earth export control, which Huang believes was possibly timed to influence a potential Xi Jinping-Trump summit in South Korea. He argues this rare earth move is unlikely to be narrowly targeted at the US and suggests it may be a bargaining chip—though he thinks China may have overplayed its hand. The conversation then explores China’s broader strategic position. The host notes China appears to be resisting Trump’s tariff strategy more than other countries, which have reached deals with Trump. Huang agrees and adds that China’s rare earth move could accelerate other countries’ efforts to develop processing capacity for rare earths, reducing China’s longer-term leverage. He compares the situation to Apple diversifying suppliers after China’s zero-Covid policies but stresses that diversification takes time and may not solve immediate supply concerns. He also contrasts hard assets (gold, Bitcoin) and soft assets (dollar-based financial leverage), arguing that the rare earth move could spur decoupling in the long term but immediate effects are constrained. The dialogue addresses China’s economy and productivity. The host mentions warnings of overhyped China growth and questions about weak productivity and debt. Huang distinguishes between productivity at the economy-wide level and company-level views; he notes productivity in the US is boosted by efficient enterprises but China’s total factor productivity has been negative overall due to waste and inefficiencies. He explains that overbuilding, such as empty housing, contributes to high debt levels because efficiency gains are offset by waste, leading to a higher capital requirement for each unit of output. He emphasizes that academic analyses consider both visible and hidden inefficiencies, while executives may focus on visible indicators like factories and infrastructure. On military capacity and strategic threats, the host raises concerns about China’s potential to overwhelm US naval capacity with large numbers of ships and China’s drone capabilities in modern warfare. Huang cautions that a full-scale invasion of Taiwan would mark “the end of the day” for the Chinese economy due to a shift to wartime production, reduced exports, and high debt. He suggests the current structure of the Chinese economy relies heavily on exports and consumer activity, which wartime mobilization would disrupt. Turning to governance models, the host asks about democracy versus autocracy. Huang distinguishes ideal democracy from implementation, arguing US systems exhibit autocratic features (gerrymandering, electoral college) and noting the US could perform better with a more open democratic framework. He argues that China’s autocracy has not necessarily delivered superior long-term growth; micro-level comparisons show that growth correlates with openness, not autocracy alone. He highlights that China’s economic expansion has been strongest in less tightly controlled regions, while more centralized control has coincided with slower growth. The final topic addresses Trump’s strategy and its impact on global dynamics. Huang contends Trump’s approach has elevated the status of autocratic leaders but that Europe and other nations may seek to balance by establishing closer ties with China, depending on China’s stance on Ukraine. He notes that leaders view Trump as transactional and that other countries tend to engage to safeguard their economic interests. The host and Huang acknowledge that the geopolitical landscape remains fluid, with China’s rare earth policy, US policy shifts, and Taiwan’s status all contributing to a complex, evolving strategic environment.

The conversation centers on escalating US-China tensions, with a focus on trade restrictions, rare earths, Taiwan, and the broader economic and political systems of the two powers. Professor Yasheng Huang, born in China and now a US-based academic, provides a framework for understanding how these moves fit into longer-term strategic aims and implications. Key points about rare earths and export controls - The Chinese Ministry of Commerce described the move as an export control rather than a pure export ban: those who use the Chinese rare earth processing must submit applications, with civilian usages allowed and defense-related usage scrutinized or prohibited. Huang notes the definition of civilian versus defense usage is unclear. - He emphasizes that rare earths are ubiquitous in electronics (phones, computers) and that magnets produced in China are essential for US missiles, air defense, and other military equipment. If China fully implements the controls, it would “send shock waves globally” and amount to a sudden stop in production of equipment and devices, with a broad, non-targeted impact on the global economy. - Huang argues that the policy is not well targeted as a bargaining chip against the US; it would affect any user of the Chinese rare earth processing. He suggests the move may have been intended to pressure for a summit with Xi Jinping and Trump but notes China may have overplayed its hand, especially given weaknesses in US agricultural exports and domestic farming pressure. Timeline and strategic context - The dialogue traces recent US-Chinese trade steps: fentanyl tariffs by the US; subsequent broad tariffs; a Geneva truce; halting five-nanometer chip exports; then relaxing some restrictions to seven-nanometer chips with revenue caps on Chinese sales. The rare earth move is positioned as a broader leverage tactic around a forthcoming summit in South Korea. - Huang highlights a mid-September US docking-fee announcement on Chinese ships and a China retaliatory “stocking fee” on US ships, underscoring asymmetry in leverage. He views the rare earth restriction as potentially aiming to strengthen bargaining ahead of the Xi-Trump meeting but notes it may not be well calibrated. Implications for the US and the global economy - The rare earth restrictions would create a global shock given their role in electronics and defense tech, with a diffuse target that affects multiple sectors across nations. - In the short run, the move gives China substantial bargaining leverage over the US and over allied economic planning; in the long run, it could spur other countries to build processing capacity and reduce dependence on China. - Huang compares this to Apple’s 2022 diversification away from China after COVID-19 controls, suggesting that strategic shifts toward diversification take time, even if motivated by short-term shocks. Economic outlook for China - Huang distinguishes between China’s impressive infrastructure and manufacturing prowess and underlying macroeconomic fundamentals. He notes debt-to-GDP has risen since 2008, with productivity trends trending downward, and widespread inefficiencies—that is, “net” productivity is negative when counting unseen inefficiencies. - He describes overbuilding in real estate (empty cities and warehouses) that increases debt while not translating into enduring demand, contributing to strains even as headline growth remains around 5%. He argues that the perceived efficiency from visible factories does not capture systemic inefficiencies. - The distinction is drawn between hard assets (like infrastructure) and “soft” financial advantages (dollar-based financial power). He asserts that while hard assets like rare earth resources and manufacturing capacity are real, the long-run relyability of autocratic efficiency is not guaranteed; personal income growth in China has historically been higher when the political system was more open, such as in the 1980s. Taiwan and the future of cross-strait relations - Regarding Taiwan, Huang notes that the day China invades Taiwan would mark the end of the Chinese economy because wartime adjustments would disrupt the export-driven model and debt-financed growth. He stresses the importance of delaying a potential conflict to preserve the status quo. - He also points out that the Taiwanese leadership’s push for formal recognition of independence, alongside US rhetoric, creates risk, while acknowledging China’s strategic aim of reunification but calling the timing and rationale crucially tied to economic and geopolitical calculations. Democracy vs. autocracy - The discussion turns to governance models. Huang argues that the US system is flawed in ways—such as gerrymandering and the electoral college—that undermine democratic ideals, though he cautions against oversimplifying comparisons with China. - He contends that China’s autocracy has enabled rapid growth but that long-run household income growth in China has not kept pace with GDP growth, especially under more autocratic leadership like Xi Jinping’s. He highlights that openness correlated with higher personal income growth in China’s history, suggesting that “open autocracies” or relatively less autocratic regimes may yield stronger household outcomes than outright autocracy. Trump’s China strategy and Europe - Huang suggests Trump’s approach has elevated autocratic leaders’ legitimacy globally, including Xi’s. He notes that Europe could move closer to China if China repositions on Ukraine, but that the rare earth move complicates that alignment. European reliance on Western security and American leadership remains a factor. Overall, the conversation frames rare earth controls as a high-stakes, potentially destabilizing move with mixed long-term consequences, while exploring the connected dynamics of China’s economy, cross-strait tensions, and the comparative advantages and vulnerabilities of democratic versus autocratic governance in shaping future geopolitics.

Many Western corporations are unaware of the true nature of the Chinese Communist Party (CCP) and its leader, Xi Jinping. Throughout history, no organization has survived when dealing with the CCP. Xi Jinping has transformed the party into his own, and it is no longer representative of communism. It is crucial for corporations to realize this for their long-term benefit. The New Federal State of China is a group that possesses internal intelligence about the CCP. They can provide valuable information and protection, not just for profit.

Mario interviews Professor Yasheng Huang about the evolving US-China trade frictions, the rare-earth pivot, Taiwan considerations, and broader questions about China’s economy and governance. Key points and insights - Rare earths as a bargaining tool: China’s rare-earth processing and export controls would require anyone using Chinese-processed rare earths to submit applications, with civilian uses supposedly allowed but defense uses scrutinized. Huang notes the distinction between civilian and defense usage is unclear, and the policy, if fully implemented, would shock global supply chains because rare earths underpin magnets used in phones, computers, missiles, defense systems, and many other electronics. He stresses that the rule would have a broad, not narrowly targeted, impact on the US and global markets. - Timeline and sequence of tensions: The discussion traces a string of moves beginning with US tariffs on China (and globally) in 2018–2019, a Geneva truce in 2019, and May/June 2019 actions around nanometer-scale chip controls. In August, the US relaxed some restrictions on seven-nanometer chips to China with revenue caps on certain suppliers. In mid–September (the period of this interview), China imposed docking fees on US ships and reportedly added a rare-earth export-control angle. Huang highlights that this combination—docking fees plus a sweeping rare-earth export control—appears to be an escalatory step, potentially timed to influence a forthcoming Xi-Trump summit. He argues China may have overplayed its hand and notes the export-control move is not tightly targeted, suggesting a broader bargaining chip rather than a precise lever against a single demand. - Motives and strategic logic: Huang suggests several motives for China’s move: signaling before a potential summit in South Korea; leveraging weaknesses in US agricultural exports (notably soybeans) during a harvest season; and accelerating a broader shift toward domestic processing capacity for rare earths by other countries. He argues the rare-earth move could spur other nations (Japan, Europe, etc.) to build their own refining and processing capacity, reducing long-run Chinese leverage. Still, in the short term, China holds substantial bargaining weight, given the global reliance on Chinese processing. - Short-term vs. long-term implications: Huang emphasizes the distinction between short-run leverage and long-run consequences. While China can tighten rare-earth supply now, the long-run effect is to incentivize diversification away from Chinese processing. He compares the situation to Apple diversifying production away from China after zero-COVID policies in 2022; it took time to reconfigure supply chains, and some dependence remains. In the long run, this shift could erode China’s near-term advantages in processing and export-driven growth, even as it remains powerful today. - Global role of hard vs. soft assets: The conversation contrasts hard assets (gold, crypto) with soft assets (the dollar, reserve currency status). Huang notes that moving away from the dollar is more feasible for countries in the near term than substituting rare-earth refining and processing. The move away from rare earths would require new refining capacity and supply chains that take years to establish. - China’s economy and productivity: The panel discusses whether China’s growth is sustainable under increasing debt and slowing productivity. Huang explains that while aggregate GDP has grown dramatically, total factor productivity in China has been weaker, and the incremental capital required to generate each additional percentage point of growth has risen. He points to overbuilding—empty housing and excess capacity—as evidence of inefficiencies that add to debt without commensurate output gains. In contrast, he notes that some regions with looser central control performed better historically, and that Deng Xiaoping’s era of opening correlated with stronger personal income growth, even if the overall economy remained autocratic. - Democracy, autocracy, and development: The discussion turns to governance models. Huang argues that examining democracy in the abstract can be misleading; the US system has significant institutional inefficiencies (gerrymandering, the electoral college). He asserts that autocracy is not inherently the driver of China’s growth; rather, China’s earlier phases benefited from partial openness and more open autocracy, with current autocracy not guaranteeing sustained momentum. He cites evidence that in China, personal income growth rose most when political openings were greater in the 1980s, suggesting that more open practices during development correlated with better living standards for individuals, though China remains not a democracy. - Trump, strategy, and global realignments: Huang views Trump as a transactional leader whose approach has elevated autocratic figures’ legitimacy internationally. He notes that Europe and China could move closer if China moderates its Ukraine stance, though rare-earth moves complicate such alignment. He suggests that allies may tolerate Trump’s demands for short-term gains while aiming to protect longer-term economic interests, and that the political landscape in the US could shift with a new president, potentially altering trajectories. - Taiwan and the risk of conflict: The interview underscores that a full-scale invasion of Taiwan would, in Huang’s view, mark the end of China’s current growth model, given the wartime economy transition and the displacement of reliance on outward exports and consumption. He stresses the importance of delaying conflict as a strategic objective and maintains concern about both sides’ leadership approaches to Taiwan. - Taiwan, energy security, and strategic dependencies: The conversation touches on China’s energy imports—especially oil through crucial chokepoints like the Malacca Strait—and the potential vulnerabilities if regional dynamics shift following any escalation on Taiwan. Huang reiterates that a Taiwan invasion would upend China’s economy and government priorities, given the high debt burden and the transition toward a wartime economy. Overall, the dialogue centers on the complex interplay of China’s use of rare-earth leverage, the short- and long-term economic and strategic consequences for the United States and its allies, and the broader questions around governance models, productivity, debt, and geopolitical risk in a shifting global order.

Mario: Markets crash every time there's talk of a trade war between The US and China. The world is waiting to see what happens between China and Taiwan. Will China invade? What will The US do? Today I spoke with professor Yasheng Huang. He was born in China; his father and grandfather were in the CCP; he is now a professor in the US after Harvard. We discuss the real economic situation in China, how a trade war would look over the next two to three years, and whether China will invade Taiwan. Mario: How are you, professor? Yasheng Huang: The official rationale is that it is not an export ban. It is a form of export control in which those who use the rare earth process in China are required to submit applications for using the Chinese rare earth process. If fully implemented, this would send shock waves globally because every electronic production uses rare earths. The threshold is set so low that virtually everybody has to submit an application. Civilian usages are claimed to be okay, but defense-related usages will be scrutinized or prohibited. The definition of civilian vs. defense-related usage is unclear. The missiles the US is supplying Ukraine, air defense systems for Israel and other allies, and equipment for Taiwan all require rare earths and magnets, of which China supplies a large majority. Mario: What would be the impact on The US if China proceeds with these restrictions? Yasheng Huang: It would amount to a sudden stop in the production of equipment and devices globally because rare earths are used universally in electronic production, from phones to computers. It’s not a sharp division between civilian and defense uses; the impact would be broad and significant, not well targeted. Mario: The timeline includes US fentanyl tariffs, a Geneva truce, halting five-nanometer chip exports, and later allowing seven-nanometer chips with limitations. Then China announced the rare earth move. Why did China take this step, and what is the strategy behind it? Yasheng Huang: The timeline is broadly correct, with mid-September adding US docking and stocking fees on Chinese ships. The rare earth move is not targeted specifically at the US; it targets any user of Chinese-processed rare earths. It appears aimed at pressuring ahead of a potential Xi-Trump summit later this month in South Korea. It’s a high-pressure tactic that may overplay their hand, given weaknesses in US agriculture exports and farmer distress. The move likely seeks to leverage leverage ahead of the summit, but it is not well tailored as a bargaining chip. Mario: It seems China is fighting the US more than most other countries. Do you think they overplayed their hand? Yasheng Huang: The rare earth export control is not tailored to the US and could prompt others to build processing capacity elsewhere, reducing China’s long-term leverage. In the short run, China has substantial bargaining power, given the short-term constraints in the US economy, inflation, and supply chains, but long-term effects include diversification of processing capacity by others, including Japan and Europe. The situation resembles Apple diversifying production after zero-COVID controls, which reduces reliance on China over time, though it takes years. Mario: Let’s discuss the economy. Some say China’s economy is weak now, with debt rising and productivity declining, though growth remains around 5%. How do you assess China’s economic health? Yasheng Huang: There’s a distinction between growth and productivity. Past predictions of collapse were wrong, but today China experiences economic strains. The debt-to-GDP ratio has risen since 2008, and incremental capital to output required for each percent of growth has increased. Productivity numbers trend downward; there is a large amount of waste in the economy—unwanted goods sitting in warehouses, overbuilding in housing, and high logistical costs. The academic view emphasizes that aggregate total factor productivity is negative, meaning inefficiencies outweigh gains from new infrastructure and devices. The result is an economy that is growing, but less efficiently, with structural strains. Mario: The debate around democracy vs. autocracy comes up here. Could you comment on the Chinese model and the contrast with democracy? Yasheng Huang: There is a distinction between ideal democracy and how it is implemented. The US system has flaws—senate gerrymandering, the electoral college, and political money influence—but China’s autocracy is not the sole driver of growth. Historical comparisons show that once China opened up under Deng Xiaoping, growth accelerated, and regions with less central control grew faster. Autocracy alone does not guarantee growth; in fact, per-capita income growth was higher in some less centralized regions during earlier reform periods. In this sense, the correlation between openness and growth is nuanced. The Chinese economy has benefited from less autocratic periods, and the long-term sustainability depends on governance and openness rather than simply the political system. Mario: And Trump’s strategy toward China? Yasheng Huang: The Trump administration elevated the prestige and legitimacy of autocratic leaders globally, but long-term economic balancing depends on how others respond. Europe may move closer to China if China’s Ukraine policy shifts, and if China revises its stance on Ukraine. European leaders see Trump as transactional and pursue pragmatic deals to safeguard economic interests. The global balance depends on actions by China and other nations, not only on US policy. Trump’s approach has created a shifting geopolitical landscape that could influence future alignments. Mario: Professor, this has been an incredible conversation. Thank you for explaining the trade war dynamics, rare earth restrictions, and the US-China strategic posture. Yasheng Huang: I enjoyed talking with you, Mario.

China is considered a formidable adversary like Russia, and the speaker suggests that they should also support their side. They openly ask China to back them, just as Russia is believed to support Republicans. Additionally, they encourage China to obtain President Trump's tax returns, implying that the media would greatly appreciate it.

The United States believes China will attack Taiwan because America is always looking to start new wars to justify defense spending. America needs to find new enemies, and it believes that the greatest threat to American empire right now is China, even though there's no evidence of this. Currently, China sends America cheap goods, and the U.S. gives China U.S. dollars. The Communist Party is storing the wealth of the Chinese people in American banks, which benefits America, Wall Street, and the Chinese Communist Party. If China takes over Taiwan, America doesn't lose much. The semiconductor industry in Taiwan could be moved elsewhere. However, America has hubris and must save face.

The next US president needs to clearly state that the US will defend Taiwan and strengthen its relationship with India to counter China's influence. The speaker believes that the Second Amendment can also deter foreign autocrats, as it has in America. The lack of a specific deterrent strategy allows Xi Jinping to encroach on Taiwan. The reason for this is fear, stemming from the US's economic dependence on China. The speaker highlights the double standards in economic relations, where China is given preferential treatment despite its actions. The US cannot rely on China for pharmaceuticals and semiconductors, and an outsider is needed to fix the broken establishment.

The speaker emphasizes the rise of China as a positive development and dismisses the idea of slowing down Chinese growth. They criticize Donald Trump's approach, accusing him of hysteria and xenophobia towards China. The speaker also mentions Joe Biden's stance, suggesting that he believes China always wins. The transcript ends with a mention of a trade agreement and a disclaimer about the content of the advertising.

The speaker updates viewers on developments between Donald Trump and Xi Jinping and says the talks are “getting very interesting.” The speaker contrasts Trump’s approach toward different countries: they say Trump “bullies” European leaders and that those opponents are “weak,” but that this pattern does not apply with Russia or Iran. The speaker claims that when Trump goes to China, he will not be able to negotiate in the way he usually does, citing the situation involving Iran. The speaker reports that China is taking a harder stance. China is described as saying that future sanctions will not matter—“we’re not gonna pay attention”—and that China will continue tariffs with the United States, including a 77% tariff on American beef and a 22% tariff on soybeans. The speaker adds that these tariffs have upset American farmers. The speaker says China’s position is that it will consider lowering tariffs if the United States comes to China “and you ask nicely,” and describes this as a reversal. The speaker then introduces the “Thucydides trap,” attributing it to a Greek warrior turned philosopher and describing it as a theory about US–China relations: when one power grows much larger, it can overtake another, making war between them difficult to avoid. The speaker says Xi raised this concept in his opening remarks, expressing hope the United States and China can “transcend the Thucydides trap” and “forge a new model” for relations, with the idea that both countries being large does not automatically require them to clash. The speaker highlights Xi’s warning about Taiwan. They say Xi called the “Taiwan question” the most important issue in China–US relations and stated that if it is handled properly, the bilateral relationship will enjoy overall stability. The speaker reports that Xi then warned that mishandling it would lead to clashes and even conflicts, putting the entire relationship in jeopardy—framing it as a direct warning to Trump that interference over Taiwan could become “really serious.”

The globalist elites, including those who met with Xi in San Francisco, have no concern for the Chinese people trying to enter the US. They are happy to see Chinese people forced to become illegal immigrants and take over American jobs. We need to be the voice for these Chinese people and decouple from the CCP instead of supporting engagement policies. Biden wants China's economy to grow, but the best way to help the Chinese people and make them self-sufficient is to disconnect from the CCP.

Afshun Rutansi speaks with Professor Zhang Weiwei, director of the China Institute at Fudan University, who has translated for Chinese paramount leaders including Deng Xiaoping. Rutansi frames the discussion around Trump’s visit to China amid the Israel-Iran war context and events including officials meeting in Delhi and a reported Saudi initiative for a West Asian aggression pact with Iran ahead of Putin’s and Xi Jinping’s scheduled meeting in Beijing. Rutansi asks whether Chinese officials understand that Xi Jinping is meeting a U.S. president responsible for attacking one of China’s key energy trading partners. Zhang says many Chinese prefer Trump over Harris for being “slightly more honest,” and contrasts Trump’s “decent respect” for big powers such as Russia and China with perceived hypocrisy from Biden and Harris. He argues that China should manage damage through dialogue given U.S.-China as the two largest economies and military powers. Rutansi raises historical memory, arguing that the U.S. deliberately prevented China from buying grain during Mao’s famine and imposed a naval blockade of food. Zhang responds that, during the Cold War, although no “hot wars” occurred between the U.S. and Soviet Union, China faced the Korean War and the Vietnam War as direct military confrontation with the U.S., and that China remembers the U.S. drawing lessons from those conflicts and that China would fight back if “red lines” were crossed. On claims that Trump is “destroying China while smiling” and attacking China’s energy supplies, Zhang says operations tied to Venezuela and Iran are aimed at controlling oil China needs. He says Venezuela represents less than 3% of China’s total oil imports, so it “will not affect” China’s oil supply, while the Iran situation is “more serious” and is treated as a mistake from which China can benefit due to long-term energy planning pursued for about two decades. Zhang says China’s energy dependency on foreign supply is at maximum 15%, and outlines China’s current energy mix: about 52% from coal described as “processed green coal,” 20% from renewables, and the rest from traditional oil and gas, with roughly 70% of those fuels from foreign sources. He lists diversified oil supply routes including lines from Russia, Central Asia, and Myanmar, and highlights a railway connection between China and Iran as “hugely important for Iran.” Rutansi asks whether this railway was bombed as part of a U.S.-Israeli campaign; Zhang says the U.S. “really dare[s]” not to damage it overall and that on the whole it is still moving. Zhang links U.S. efforts to containment with previous trade and tech wars starting in 2018, saying they “failed completely,” and cites an ASPI report comparing critical high-tech technologies where he claims China beats the U.S. in 57 of 64. He argues China’s position is that the Strait of Hormuz should remain open and places responsibility for the crisis’s consequences on U.S. and Israeli military action, while also saying China has “strategic partner” relations with Iran and Gulf states and hopes for reconciliation between Iran and the Gulf States. In part two, Rutansi asks why China was not hosting or acting as intermediary in negotiations and whether China spoke through Pakistan. Zhang says China prefers “behind the scene, low key” approaches. Rutansi then addresses claims that China could use rare earths as leverage and asks why China exports rare earths to the U.S. Zhang says China has exercised stricter control over rare earth exports to the U.S. since the previous year, stating that for a one-year period there would be no rare earths for military purposes, and that China can exercise this control during negotiations. Rutansi asks whether China will reduce exposure to U.S. treasury markets; Zhang says China-U.S. trade relations are normal overall, but that Trump’s trade war led to a sharp drop, and describes China’s “socialist market economy” as driven by private and public enterprises. He rejects “moralistic perspective” as the main lens, stating that China follows international law and Chinese law, condemns aggression, and applies sanctions through the United Nations if necessary. Rutansi criticizes propaganda narratives and asks about the U.N. General Assembly president Annalina Beerbok calling Xi Jinping a dictator, asking whether that makes things difficult for China and the U.N. Zhang argues the issue lies in EU politics and what he calls low caliber of EU, U.S., and NATO leadership, and says he predicted that without political reform, worse leaders would be elected. On whether working classes in NATO countries will see through propaganda that China is the enemy, Zhang says opinion surveys show China’s impression improving gradually in Southeast Asia, the Middle East, Africa, Latin America, and in the West, especially among young people, attributing this in part to widespread use of Chinese hardware and software. He also explains that American and other foreign companies invested in China because of profits, and says the trade war and tech war drove high-tech firms to consolidate business interests in China; he mentions Apple, Tesla, Microsoft, and says Boeing has not been purchased in nine years while Boeing’s CEO is now in China.

China is currently experiencing a cultural revolution similar to the one in the past. The chairman's goal is to achieve common prosperity, which has led to the takeover of private industries and companies. Jack Ma, the CEO of Alibaba, was forced to retire and disappeared for a few months after criticizing China's regulators. There is a power struggle between different factions within the government. Chairman Xi changed the constitution to allow for unlimited presidency, and he is known as a hardcore communist. Many celebrities and wealthy individuals have become quiet and low-profile, as they fear disappearing or facing consequences. People still disappear in China, and there are secret prisons known as prisoners conscious.

Mario: Markets react to talk of a US-China trade war, with global attention on China-Taiwan risk. I spoke with Professor Yasheng Huang to discuss China’s real economy, what a trade war could look like in the next two to three years, and whether China might invade Taiwan. Mario: You describe the rare-earth export restrictions China announced as a major move. China refines roughly 90% of the world’s rare earths, mines about 70%, and controls a crucial supply for tech, AI, missiles, private and fighter jets. The official rationale is that the policy is an export control rather than an export ban; those using Chinese-processed rare earths must submit applications. Civilian usage is said to be okay, defense-related usage will be scrutinized or prohibited, though the definitions of civilian versus defense usage are unclear. The move, if fully implemented, would shock global supply chains since rare earths are embedded in almost all electronic production. Professor Huang: The policy could trigger a global production disruption because rare earths are used universally in electronics—phones, computers, and more. The threshold for needing approval is set very low, effectively implicating almost every user of Chinese-processed rare earths. The policy isn’t narrowly targeted at the US; it affects any user of the Chinese process. If fully enacted, it would be a broad economic shock. Mario: The timing follows a series of US actions: fentanyl tariffs on China around 10%, broader US tariffs on many countries including China in April, a Geneva truce for 90 days, and then May’s halting of five-nanometer chip exports to China. August saw partial relaxation, with seven-nanometer chips allowed but capped revenues from China for NVIDIA and AMD at 15%. Then mid-September, the US imposed docking fees on Chinese ships calling US ports, and China retaliated with a rare-earth move. Why did China take this step, and does it aim to pressure for a summit with Xi Jinping and Donald Trump later this month? Professor Huang: The broad timeline is accurate, though mid-September docking fees added asymmetry in favor of the US. The rare-earth move likely predated that, possibly prepared for a summit in South Korea. It’s not well tailored as a bargaining chip since it would affect many countries, not just the US. China may be signaling leverage ahead of a potential Xi-Trump meeting and reflecting tensions in agricultural exports—China has largely stopped buying US soybeans, causing farmer distress. The rare-earth policy is a high-pressure tactic that may overreach. Mario: You compare China’s stance to the US, noting that China seems to be pushing back more aggressively than other countries, and that this move could accelerate a shift away from US-dollar dominance toward hard assets like gold or Bitcoin, and toward domestic rare-earth processing in many countries. Could this be a long-term strategic disadvantage for China? Professor Huang: In the short term, China has substantial bargaining leverage in rare earths since processing capacity is scarce elsewhere. In the long run, the move is likely to spur other countries to build processing capacity, reducing China’s leverage. The analogy with Apple’s supply diversification after China’s zero-COVID policies shows such diversification will take time. If other countries build processing capacity, the relative power shift could occur over a longer horizon. The geopolitical calculus should consider timing: short-term gains may come at long-term costs. Mario: You discuss the difference between hard assets and soft assets like the dollar, and whether China’s move could motivate countries to diversify away from rare earth dependence. Could you expand on that? Professor Huang: Hard assets (gold) and soft assets (dollar credibility) differ in impact. Rare earth processing capacity is a hard asset-like dependency; diversifying away from China’s processing could reduce China’s leverage over time. However, short-term disruption is likely to be broad, since electronics’ reliance on rare earths is pervasive. In the long run, countries will build refining and processing capacity, making the West less dependent on China for these inputs. Mario: Turning to China’s economy, some critics warned of collapse in the early 2000s, but China grew. Now, growth is around 5%, though debt-to-GDP has risen and productivity appears to be slowing. How does Professor Huang reconcile these views? Professor Huang: The early-2000s collapse predictions were incorrect, but today China faces real strains. The debt-to-GDP ratio has risen since 2008, raising the incremental capital needed to generate each percentage point of growth. Productivity has trended downward; there is a difference between the business-executive view and the academic view. Executives see impressive factories and automation, while academics point to waste and overbuilding—factories producing goods no one wants, empty housing, and higher logistical costs. Net economy-wide productivity is negative, due to inefficiencies offsetting gains. Mario: You compare democracy and autocracy. Some argue China’s centralized, long-term planning works for growth, but Professor Huang notes that personal income growth in China was highest when the system was less autocratic. He argues Deng Xiaoping’s openness—less autocratic than today—drove significant growth, while Xi Jinping’s more autocratic leadership coincides with a growth slowdown. How does he view the balance between political structure and economic outcomes? Professor Huang: He distinguishes between ideal democracy and current practice, arguing the US system is flawed in ways that impede governance (gun control, healthcare, etc.). He notes that autocracy is not the sole cause of growth; historically, less autocratic or more open autocracies in East Asia grew more rapidly than more autocratic regimes. For China, the data suggest that more open regions grew faster than tightly controlled ones. The correlation does not support the idea that autocracy automatically delivers robust growth. Mario: Finally, you discuss Trump’s China policy. Trump’s transactional approach, allied with a perceived US weakness, has shifted dynamics. How will China respond if Europe leans toward China, and could Ukraine policy influence that? Professor Huang: Trump elevated autocracy’s legitimacy, potentially aiding leaders like Xi. Europe might move closer to China if China softens its Ukraine stance; however, the rare-earth move complicates that. Indian leaders understand Trump’s transactional approach, encouraging engagement to safeguard national interests. The global balance will depend on China’s actions and Europe’s response, with the Ukraine position remaining a critical factor.