He is the distinguished fellow

at the Age of Research Institute

of the National University of Singapore.

We're here to discuss his new book Has China Won,

The Chinese Challenge to American Primacy.

Thanks for joining us.

- My pleasure.

- I can't think of a more important playing field

on planet Earth to zoom in and explore

than the one you have chosen.

What inspired you to write this book?

- Well, I see a great tragedy coming

and it's a completely unnecessary tragedy,

this coming geopolitical contest

between the United States and China.

And the basic message in my book

is a very simple one

which is that a geopolitical contest

between the United States and China

is both inevitable and avoidable.

So I try to explain in the main part of my book

why it's inevitable

and why also the United States should really think very hard

and deep before it plunges

into this geopolitical contest with China.

- So where did the pressure mount

that put us on this inevitable trajectory

which is so dangerous?

You can speak to both American and Chinese contributions.

- Well I think it's clear

that both sides have made strategic mistakes

that in some ways led to the eruption

of this geopolitical contest.

But in a more fundamental way

the geopolitical contest

was actually in some ways inevitable

because the history teachers 2,000 year logic

which to some extent Graham Allison has captured in his book

Destined for War,

that whenever the world's number one emerging power,

which today is China,

is about to overtake the world's number one power,

which today is the United States,

that inevitably the geopolitical contest breaks out

and then both get locked into a struggle.

But of course, the other question is

what triggered it now?

And the trigger was caused by strategic mistakes

made by both China and the United States.

In the case of China,

what I try to document in the book

is that there was for a long time

a very powerful constituency in the United States,

the American business community,

that was so engaged with China,

making lots of profits from China,

and therefore that constituency always applied the brakes

whenever the United States seemed to be heading

towards a struggle against China.

- They used to have these treasury reports

and within the currency manipulator

and they always stopped shy of declaring that.

- Exactly, you're absolutely right

and that actually is a demonstration

of the point I was gonna make.

And what happened was that this time around

when Donald Trump launched his trade war,

the logical thing should have been

for the American business community to say stop,

we have a lot of stake with China.

Instead, they just stepped aside

and allowed the trade war

to carry on against China.

So that was China's big strategic mistake.

But as I try to document in the book,

the mistake made by the United States

was in many ways much bigger.

And it was a bigger mistake

because the United States decided

to launch a major geopolitical contest against China

without first working out

a comprehensive, long term strategy

on how you deal with a country

that has got a population

that's four times bigger

and the United States is only 250 years old,

less than 250 years old.

China has been around 2,200 years.

And what is shocking is that no thought was given

to this at all.

And this insight was given to me actually

as I documented the book, by Henry Kissinger,

in a one on one lunch I had with him at his club.

And so that thought led me to investigate further

about what are the potential other mistakes

the United States is making

in proceeding with this geopolitical contest?

So the goal of my book

is actually to help United States, help Americans,

to think very hard and very deep

before they take on an assignment

which future historians will marvel at

that they just jumped in two feet first

without thinking hey, what am I getting myself into?

- Well I sense inside of American political economy

there's almost a page from the playbook of Bismarck.

If you can't solve your problems inside,

look outward and pick an enemy to unify your people.

And the problems,

which you cite very eloquently in the book,

of more than half the population

having a declining standard of living since 1989,

is really quite daunting and quite distressing.

- Yes, you see what I've tried to point out in the book

is that there are lot of misconceptions

that Americans have about their own strengths

and about China's weaknesses.

So for example, it is taken as a given,

it's like ideological certainty

that when a thriving democracy

takes on a geopolitical struggle

against a communist party system,

the thriving democracy will always win,

as it demonstrated in the first world war

against the Soviet Union.

But then if you dig deeper

and you try to understand

what is the core situation of American society today

and the core situation of Chinese society,

you discover that the United States

is actually having to deal

with some major structural challenges.

And one of the key structural challenges

is that the average income of the bottom 50%,

yes 50% of the American population

has been sliding down over a 30 year period.

And as I try to analyze in the book,

this is not just an accident.

This is a result of deep structural forces

in American society

that have moved America away from being a thriving democracy

towards becoming a plutocracy.

And by contrast,

China in the 30 year period

where the average income of the bottom 50% in America

has been sliding down,

in the same 30 year period,

the bottom 50% in China

have had their best 30 years in 3,000 years.

So at a time when the Chinese people

are experiencing the most amazing improvements

in their standard of living,

you must remember also

for most of Chinese history,

the bottom 50% struggled to survive.

They would die in famines and civil wars

and they had a very rough life.

And the last 30 years,

they have access to education, housing, health care, travel,

in a way they never ever had before in their lives.

So after China has gone

through the best 30 year period ever

under the Chinese communist party,

the United States is telling the Chinese people

why don't you get rid of the Chinese communist party?

And the Chinese people are scratching their head

and saying, excuse me, I've had the best 30 years.

And the Chinese communist party is succeeding

because while in theory it is still a communist party,

it is a communist party that is the exact opposite

of the Soviet communist party.

Because the Soviet community party

was run by all operatics.

The Chinese communist party

may possibly be the most meritocratic political party

in the world.

And the selection process

results in the best minds

running China today.

You met some of them - And experienced.

- You know Yan Xishan

you know how brilliant these people are.

So by going into this whole ideological reflex

and saying, hey,

democracies can always overcome communist parties,

the United States hasn't done a deeper analysis

and realized that this is not a contest

within a democracy and a communist party system,

it's a contest within a plutocracy and a meritocracy.

- You talked about it being a party of representation.

How that is maintained,

whether that is stable,

is still true for the last 30 years.

- Yes.

At the end of the day,

running China,

keeping a country of 1.4 billion together every day

is a massive challenge,

which is why for most of Chinese history,

China has more often been divided than united.

So the period like what China has experienced

for the last 30 years

with a strong central government

delivering phenomenal improvement in living standard

to its people

is very rare in Chinese history.

And so if you compare the record in governance

of the Chinese communist party,

especially after Deng Xiaoping launches Four Modernizations

40 years ago in 1979,

it's quite amazing what China has accomplished.

And the Chinese must always measure

the record of their governance

not against what other countries have achieved

but what has been achieved in Chinese history.

And no Chinese government ever in Chinese history

has improved the living standards of the Chinese people

as much as the Chinese community party has.

And you're right,

I call it the Chinese civilization party

because the main goal of the Chinese communist party

is not to promote or to export communist ideology.

The main goal of the Chinese communist party

is to revive Chinese civilization

and bring it back to the standing and respect

that it used to enjoy in the world

for over 2,000 years.

And the key driving force in the Chinese mind,

which I think every American should be aware of

is that the Chinese are acutely aware

that they went through something like maybe 150 years

of national humiliation

starting from the opium war of 1842

going up to the Japanese occupation

and so on and so forth.

So they've gone through a lot of humiliation

and their desire, therefore,

is to regain the respect that China used to enjoy.

And it is somewhat sad that just at the moment

when the Chinese people feel

that hey, we are now finally achieving something meaningful,

that's the time when America decides to slap China.

The only thing to remember is you see,

they're trying to humiliate us again.

- And the scar tissue in the United States

echoes of the cold war visa vie the USSR.

And in your book you do a very nice job

of showing why the Chinese challenge

is very different than the Soviet challenge

in terms of weaponization and arms race,

in terms of ideology,

there are just many aspects

that you desegregate.

- Yeah, well I think you know

the reason why I encourage Americans

to think deeper

is that if they look very carefully

at the track record

of what China is doing

and what the Soviet Union is doing,

it is actually quite shocking

that in the geopolitical contest today

between China and United States,

instead of China behaving like the Soviet Union,