tv Heritage Foundation Discussion on Chinese Infrastructure and Connectivity... CSPAN December 17, 2018 10:00am-11:43am EST
graduates and give irish access to unused visas. which currently are available only to australians in specialty occupations that require a bachelor's degree or equivalent. in return, ireland would offer additional work visas to americans among other concessions. that's going to be the end of our program today. we are going to take you now over to the heritage foundation this morning. on a roadram today is oldiative turning five-year . the program today talking about history and future of that initiative. live coverage on c-span begins now. >> what it is, what is attending to do. chinese, intentions behind it. in fact, in terms of nomenclature, it was called a couple different things. at one point, maritime silk road.
they called it a one belt, one road initiative for a little while. until, i think beijing came to the conclusion that it sounded a little but too exclusive. although, it certainly made more sense to call it that. and then finally, they settled on that. none of these changes in nomenclature actually changed the substance of the initiative. and it's the substance we are here to talk about today. from a geopolitical perspective, i understand it's a very big deal. a friend of mine in singapore like to tell me that it's an attempt by the chinese to create a common geopolitical space that they dominate. for me, a lot of geopolitics seems like metaphysics more than it does political science. i will of the faithful in the audience judge what exactly that means and how important that is. but i concern they testify to the impact it has had on perceptions in the region.
particularly, in india and in japan. i think myself in all of our panel have heard that from the indian and the japanese particular league. but other regions are very concerned. in addition to seeing the benefit and economic side of it, and at the very least from a political perspective, it's obviously intended to increase chinese influence around the world in addition to whatever kind of economic impact it has in china. and that has an impact on u.s. interests, both in the region and beyond. so, we are here to talk about changes. call china'se trillion dollar infrastructure but how perceptions are changing about it and how reactions are evolving both in the indo pacific but also how things are changing about the way the chinese themselves and
the governmental party in beijing see it. so to help us through that, we have three panels. first, we are going to turn to jeff smith, heritage research fellow covering south asia. he came to heritage foundation just a little over one year ago from the american foreign-policy counsel where he served as director of asian security program. he is author and editor of two books that are out right now. asia's quest for balance, china's rise balancing the indo pacific very much get that what we are talking about today. perspective to all these issues. peace,lso author of cold the china and india rivalry in the 21st century. in fact, an expert on that particular relationship. he is also the author of the recently published heritage paper on precisely the issue that we're talking about today called china's broken road initiative.
strategic implications and international opposition. you can pick up a copy of that outside of your watching online or on television. you can download a copy of this paper. in hisll talk to that owner mark today. , but iff will tell you kept myself as a fortunate one. his office is right next to me and i can have his brain on a very regular basis. and he really can't say no. then, we will turn to the codirector of the east asia program and director of the china program. he has done some other interstate things in washington. she worked at bookings for a while but she has also worked in beijing. she was a chinese analyst for the international crisis group, specializing on china's foreign-policy in the developing world. she did that were from beijing,
so she is specifically well-equipped to talk about the chinese perspective. she's been looking at it in some detail for a long time. and then we will turn to dan. dan is senior fellow at the center for new american security. joining, he worked for the office of undersecretary defensive policy where he served as senior advisor for asia integration. who was recently on staff that just cannot a couple months ago with a paper entitled power play, investing in china's growth strategy. that comes to us with a lot of very freshly developed perspectives on what the u.s. policy response should be been it's, i think, appropriate and fitting and very useful to have him finish up our panel discussion. then, we will turn it over to the audience and take some questions and it's, i think, ape and fitting and very useful to have hopefully have a good conversation here on the topic. that, we turn it to jeff to
get us started. thank you. heritage forto hosting this event. thank you to the panelists for coming out today and thank you for all those in the audience that are interested in this event and all those watching from home. maybe the headline for my remarks is that the ri has a problem at the moment. just a few tidbits of news help highlight and underscore that .eality they worked to scrub or remove any positive mention of the belt road initiative from any u.n. resolutions. there were, as of last year, three separate u.n. resolutions that is some way offered a degree of praise. these three groups work together
last december to have the bri removed from two of those and this year, they successfully had the third resolution scrubbed of any praise of the bri. there was a report this month that china has commissioned internal reports highlighting the backlash to the bri. the aim of continuing the outward push at a time when the economy is struggling. authorities have stepped up scrutiny of the ri projects and investment and are deliberating possible regulations. i think he will talk about this more, but there is greater signs every month and recognition in beijing that narrative surrounding the bri has become negative and from beijing's perspective, problematic. andrew small, a noted expert on china and particularly china and pakistan relations, said the first phase of the road is effectively over. a new model has not yet emerged, but it is clear the deal is almost entirely focused -- and
is no longer sustainable. with the possible exception of italy, as far as i know, no major western country has signed the roads cooperation agreement or memorandum of understanding. the trend in most cases is moving in the opposite direction toward greater negativity for the bri or hostility toward the bri. and we've seen that reflected in, frankly, an unprecedented wave of measures unveiled by western countries the last year or two restricting foreign investment, implicitly directed at china. when i think about concerns about of the ri, this is a relatively new phenomenon. shell road has been around for five years. and as of a year and a half ago, if you go back to just june of 2017, there was only one country in the world that was vocally critical of the ri, and that was india.
and the shift in the united states came in about august of last year. shortly after a trip to india, secretary defends matusz came back and offered some very vocal and direct criticism of eri and congressional testimony. and that opened the floodgates. shortly after that, we saw australia began to voice its own concerns. the european union and a succession of u.s. officials have now sort of unveiled a number of criticisms against of the bri and the tone for the bells and initiative has fundamentally changed across western democracies. the opposition that india has expressed almost from the outset has continued. theseke to separate concerns into two categories. direct concerns and indirect strategic concerns. some of these are inherent to the bri. the concerns that are being voiced by the west and others. they relate to the lack of
standards, transparency, and accountability. these are things you're familiar with. i'm sure you for before if you've been watching the bri. the way the deals have been done in secret and objectionable provisions. that these deals have facilitated corruption and nepotism. the risks that they are undermining existing lending institutions at a national standard and producing a race to the bottom. in some cases, these cooperation deals appear to be a one-way street. dissipating nations assume large sums of chinese debt, paying high rates of interest to chinese financial institutions who are compensating chinese firms using chinese materials and chinese workers who are being back into the chinese economy. according to a study by csi s, chinese firms use 89% chinese contractors and only 7.6% local contractors.
that's in contrast to the multilateral development banks and traditional use closer to 40% local contractors. there are certainly questions about the financial sustainability and the risk of debt distress. countries participating in that the ri. his of 270 bri projects that they are tracking across the globe, 32% of them are now on hold for financial problems. i think pakistan presents an interesting case. the china pakistan economic corridor is, by some accounts, the largest bri project on the books. as much as 62 or $63 billion has been pledged by china in this economic corridor. pakistan's external payments next year will surge by 65%. tom $7.7 billion annually
$12.7 billion. meanwhile, the foreign exchange reserves over the last two years have fallen 40% from $16.1 billion to $10 billion. that is unsustainable. china's own tax administration in march warned that pakistan likelihood to repay debts is extremely low and the return on chinese investment in pakistan is very low. and, in some case, might be supporting that debt. 23 of the 70 countries that are participating in the bri are at risk of debt distress. according to the center for global development. trouble, in serious including mongolia, montenegro, pakistan. those are the direct concerns i have with the bri. there are a separate set of ,oncerns, strategic concerns
that are not inherent to the dri. but, that are being merged with an amplified by the bri. and these are concerns about the way that china does business. rise in assertiveness and nationalism and the changes to chinese foreign-policy that we see largely since 2008. power.growth of chinese the intolerance for dissent. chinesessment of dissidents abroad. the arrest of four hours and china crackdown on the academic freedom i most counts, most china experts will you that there has been a shift over the past decade in china's foreign-policy and domestic policy for more assertive nations and in some ways a more progressive nation at home and the bri, as an extension of chinese influence, has amplified
some of these concerns and sort as a proxy for some of these concerns. power, outgrowth of china's global times, i saw a very interesting article last year. december 2017. china's power starkly contrasts with soft power and typically understood in the west. soft power centers on attraction in persuasion. yet, sharp power revolves around manipulation and distraction. the article insisted china's use of stealth to shape public opinion and influence the influencers is undoubtedly sharp but not course of. china -- not coercive. china is only taking advantage of a situation rather than undermining the system. they concluded that while the u.s. and its allies have long
been banned by transforming china through peaceful evolution, what an irony it is to see this in reverse. so, with these strategic concerns, you've seen a number of chinese practices related to the belt and wrote of that have given us pause. and i think sri lanka in some ways presents a sort of modern example for why some in the west and india are so concerned about the nexus between the nexus and geopolitics. in the way in which a sensibly economic investments may be used to advance china's strategic agenda. many of you are sort of familiar with that case if you've been following it. essentially, there was large chinese investments being put into white elephant projects, airport that had variable commercial value. deals that were signed in secret
that were later found to have contained very objectionable provisions including granting land and air space, granting china sovereign control over airspace. -- there was a report in the new york times that from the start, the intelligence and strategic possibilities of the location were a part of the negotiation. chinese demands centered on handing over equity rather than allowing any easing of the financial terms. several instances of chinese practices in sri lanka that have called concern in the west and even in india. that's why i think india was one of the countries that oppose it from the start. i think it's also important to note that these investments in sri lanka, these concerns date back to 2008, 2009, 2010 before
the bri. these concerns have been around for a while. that nots why i say all of this opposition is inherent to the bri, its inherent to concern about the way china does business and the bri has just served to magnify that. lanka, they were playing political football in many developing countries. in burma,n it pakistan, malaysia, indonesia, aldi. growingon countries are concerned about china's practices and investments to criticize parties and when they win elections and come to power, they're are questioning, canceling, reviewing, amending these deals with china. think dan will talk more about this than i will, but you have seen a much more concerted effort not only
the west to, but in push back against chinese investment but also to promote an alternative vision for regional infrastructure and there are legitimate infrastructure needs. to provide them with an alternative that doesn't carry so many strings attached. so, having said that, i've left a lot here for q&a, but i want to come back and just reiterate that i think five years later, the bri does very much have a brand problem. and i wonder what i ask myself can china change, can they change the bri, can they change international perception of the ri, i'm not particularly hopeful. recognized chinese very early on that there were some perception problems, even before this opposition crystallized in the west.
you saw it in their attempt to change the name as walter mentioned from one build one road to the bri. they tried to relabel, recognizing how much opposition it has generated in india, given that it is traversing territory claimed by india. china seen efforts inside to reshape the narrative. but i haven't seen debate any efforts to fundamentally change the way we do business. and ultimately, i think that is the only way we are going to be able to assuage some of the concerns in the west and the developing world, simply changing phrases and elements of the narrative is not going to cut it. but changing the way they do business, changing the fundamental, changing the bri, a project that there is the hallmark of president xi jinping that is very much part of his legacy that is enshrined in the chinese constitution, is no easy
feat. so i very much look forward to my co-panel'ss views on how china is viewing this changing international environment toward the bri and i look forward to the q&a. thank you. >> could i just ask you a question before we move on. you and i have talked about this before. what responsibility lies with the government themselves for taking the money? so often, we talk about that, they are just passive recipients who are victims of various programs. but we don't talk much about why they took the money in the first place. what is wrong with the governments in these places and that, if the deals are so bad, why do they so readily take them? >> great question. in some cases, the deals are bad for the country. on a long-term basis.
for the sustainability of the economy, they may not be real bad for the ruling party or the dictator in power or whoever's pockets are being lined or whoever's project is being carried out. if you are from the rural district and you've risen to be sri lanka's president, it's a good thing if you can get an international airport and a port build with district. so you're going to take that deal and you are going to take the money that starts flowing into your campaign coffers illegally from chinese firms and there's an election a few years later. but is that a good deal for the country when the terms are actually revealed later on? many in the country and the opposition, many economists find that, no, it wasn't a great deal. but part of the problem is that these deals are being signed in secret. they are not up to the standards and the level of transparency that we are used to and they might have been rejected. biteah, i differ a little
and you know this, in terms of what we think of the prospects for chains in china. one of the things that i think does argue for more change is something that beijing will understand, the practicality of it. that is, that it's becoming obvious that these projects are not sustainable in the way that they do them. you go in, you put all this political capital and economic capital with a dictator or somebody and that he's gone and thegot to adjust some of projects canceled, others gone under a different terms. just from a practical perspective, you would think in beijing at some point, they are going to understand that in order to be sustainable, they have to conduct differently. tot's a good segue maybe tell us was going on in beijing. >> thank you for the invitation to be here. >> i really enjoy your remarks about the external assessment of
the rip. and i will talk about some of the internal analysis about where bri really stand. and i think one thing is quite clear, that bri is not -- if bri reveals anything about china strategy, it's not as mature, it's not as sophisticated as we thought it would be. bri did not come up with a comprehensive or a completely withe thought process project design and with everything thought through. which is why in china, the people say with reform opening up, the remark was that we are crossing this river by feeling the stones. so this turned out to be the second time in china's crossing the river. so, in terms of the assessment of bri at five years, it's very difficult to draw a completely black or completely white
conclusion. and it's very difficult to say that it's completely a success or completely a failure. the glass is half-full or half-empty, depends on how you see it. and where you stand. so, from the analysis inside china and the focus internationally, of course, most of the attention has been focused on the problem. because where there is a problem, there's room for analysis and there's room for news. of the effectiveness of the impact, i feel it's very difficult to draw a binary conclusion about the bri. years,mple, after five if we compare china's external influence today with china's external influence back in 2013, i think there's no doubt that china has been able to expand its influence and expand its impact and influence over andtries in the middle east
countries in africa, some countries in europe as well. and if we could compare the numbers and say that there are countries that are like-minded countries to china and the countries that support china's infrastructure projects, of course, i would say the number of those countries are increasing as a result of bri in the past years rather than decrease. haswe know that you ride encountered problems in countries such as malaysia, sri lanka, pakistan. commentpreciate the from the opposition parties having doubts about the economic viability and sustainability of this infrastructure project. however, if you look a little once they become the ruling parties of these countries, they do need to work with china on infrastructure.
and i think that is fairly clear in the case of government in burma which is just established a bri committee with china. how to better promote across burma and that is also, to my knowledge, true in the case of malaysia. where, the government has come up with a project that it was the chinese to sign. so, i think this party problem or transition problem for china, china is no longer a new problem. been ableinese have to establish some level of confidence that there's an opposition party and there's a transition, eventually when a look for partners, especially financiers of their project, of ,heir infrastructure project china is still a very big player in the room.
the chinese have developed some semblance of confidence or comfort. who are originally suspicious of the arrive, namely japan and india, the top of the list, but again, this year, we also note that japanese relations and chinese and indian relations have also improved rather than deteriorated. of course, the main reason for that is not bri, but the uncertainty with u.s. policy and the uncertainty of policy adjustments of these countries in the context of the great power composition. ofn from the point of view the great power composition that we know that the arrive has other problems, but it doesn't mean that the competitiveness or the challenge that bri poses to the international system has decreased significantly as we thought off that. year, we look at this know that this year, chinese
majory has run into some problems in terms of investment into the ri. seeing the investments lloyd down. for example, during the first half of this year, the total amount of china has put in the country's was close to $7.7 billion which is 15% decrease compared to the same last year. and if we compare the whole investmentchina's into bri countries is only around 12% of china's global fdi. if that shows you how much china's really investing. and if we compare the context of it, which is a key component of the economic logic for china's to absorbeate jobs, the overcapacity in the domestic markets, we also see that the total amount of contracts signed during the first half of this year equals about 33% compared to the same year in 2017.
slowed down ofis the economic input and output on the bri. this year, of course, is a cumulative effect of what happened during the past four years, but i would also argue there's alsoreason this logic. when china first thought about bri, the overseas infrastructure market could be an opportunity and since china has accumulated a large amount of federal reserve at the peak, turn also needs to reinvest somewhere. therefore, use china's foreign reserves to open the market and create an opportunity for china's domestic market. at the same time, it will also
create the influence of that china has outside the chinese border. viability, iic would say that the very beginning of the ability, that e beginning of the bri was not the consideration for china. they were very eager to use a pr campaign and to portray pri as a benevolent effort. as a benign public goods that china was providing to the world. the economic viability's, at the beginning, was not a top consideration. if we look at the financing, the sources of financing for bri, public financing, especially, financing from policy banks such as china development bank's and china accident, definitely occupies the largest shares, the largest majority. for a lot of these infrastructure projects, a lot of bri, the support from tbb or china xm, yearly, is higher than 80%.
for example, in malaysia, you see that china accent providing to the agreement, accent was providing 85% of the financing. the other 15% was going to be financial capital markets by malaysia. the internal logical problem of chinaodel is that considers these markets and opportunities as failed to take in consideration of an essential problem that why the market as i was been there, but the capital is not there. in other words, the chinese were hiding their eyes in markets and opportunity and the contracts these countries could afford, to ask questions that why international bankers and financiers have not identified these opportunities as good ones. the essential
problem. china saw the market and china was willing to use its public financing to support a chinese company's goal into those markets. once there, and after a couple of years, they realized that many of these countries have risks. supplemently high risks. that is part of the reason of the cannot raise the funding of the projects. china came in with a very large pot of money. we are willing to split these projects in your country. that is where the chinese wakes up to the next problem which said is this sustainable. when the countries receive the money from the chinese side, is create questions inside pakistan. people started to ask why is china willing to throw this much money into our country. they started to make demands.
in 2017, when you talk about cpac, china backed him for -- quarterly, a lot says that chinese free eight project. it is not advancement and it is not loans. the chinese policy communities spend a lot of efforts to create -- correct the misunderstanding telling the pakistanis that this is not free money. we also need returns by the end of the day. that creates problems politically. in countries like burma, sri lanka, with chinese dinner -- generosity, being interpreted as being appear motive. why is china being so generous with its financing when nobody else is going to help us out? in some african countries -- countries, they had a different interpretation. which is that we were not be
able to repay the chinese loan. we were not going to the able to repay loans anyway. chinese have had already, established a record of forgiveness -- debt forgiveness. that alleviation in africa. in some countries, some leaders in africa, very much relying on the fact that china come in the future, will excuse those debts. the chinese set what is your reaction to that, we do have a track record of debts for african countries. may become a depending on the significance of the country, depending on the significance of the country, the chinese believe that they will forgive some of the debt. but maybe not all. does forgiveness will come with a political confession. and strategic conventions of the chinese men. if we look at how china sees bri today, i would say that the introspection or -- of search --
soul-searching about the problem, why this has generated so much as activity is very much on the top of the agenda these days. so, a lot of these lessons or these problems obstacles, i don't think the chinese expected them. when they first came up with the old war, bri. these five years have offered the chinese the opportunity to go into these obstacles and go into these faculties and to understand what the problems really are. the question is are they going to have an effective adjustment or correction of those problems. on that, i agree with jeff. sentimental policy adjustment or policy change or rebranding is going to be extremely difficult. it has been shaped, has been promoted for foreign strategy. the signature project. the chinese are
going to rebrand it or fundamentally restructure the bri, it is going to lead to a conclusion that it was wrong. i don't think the chinese politics today will afford that kind of development. more likely, we are going to see adjustments and motivations of how bri projects are being carried out. i mentioned three of them that -- most popularly discussed in china. the first one is that the chinese are trying to figure out ways to widen or broaden the sources of financing for the projects. the chinese have been very eager to talk about public private partnership for quite a while. that, for theis projects to be proposed and approved, they need to come up with at least additional sources of financing that does not completely rely on policy banks
in china. why, aib does not completely serve the bri. aib could survive an example that you to see the projects supported. introduce other sources of financing into the project, is a key area that the chinese are looking into. however, the problem is coming back to the economic viability of these projects, until china can prove that these projects are investing in ergonomically sustainable and profitable in the future. difficult to draw international financiers into these schemes. the reason, china could argue that we are there for not only exonerating reasons, but also china's domestic market reasons for china's domestic political reasons. those rationale or those reasoning do not necessarily apply to other masters.
the chinese will have to look hard at their economic hurdle and if they want to sell international financiers they would have to do a better job. the second area that i see a lot of soul-searching in a china is how to change the relationship between the infrastructure projects that local economic activities. the chinese logic is that once you build of the road they will come. you build around, the factories will come, investors will come, the job will follow economic activity will follow. that was the china model. beenmodel, so far, has not apparent or evident in the bri countries. for in the bri projects. when the chinese look at the reason why, a key essential reason is that bri projects are mostly flying between the chinese side and risking the government a central government. but not the local government.
when china builds the railway in ethiopia, they signed the -- local governments were not involved in the process. creation for the follow up of the economic activities are not included in the schemes so far. how to include local governments isthe bri projects is to -- a key area. the last one that i hear most is a distinction between -- internal problem or defect with the bri design. g2 g means government to government. business to business. when the chinese talk about bri they want to tell the government that these are economic activities. they are carried, they might be carried out by state owned enterprises. a state and enterprise is essentially by being other
dates, there is few economic and commercial players. they are not political players. that is the message. they are hard to send. therefore, when a contract is , the chinese want the receiving government to understand that this is not a government activity. this is a commercial actor, activity. therefore, they want the government to respect the economic logic of the project. the reality is that, on one hand, chinese companies activities are being perceived as government activities. which means that they have to take into consideration the political need of the chinese central government when they sign these projects. testne example that i can that came to mind is when china and thailand were negotiating about the terms for the financing terms for the final
tire railway project, a thai government told the chinese that considering the friendship between our two countries, you should give us these -- these preferential cover ships. that is where the companies activities are being perceived as government activities. on the other hand, when the think aboutanies their economic viability and think about the profitability of these projects, they are also being perceived as part of the government players. therefore, creates this conflict between economic liability and the political friendship with the risking countries. example that comes lined in pakistan whether chinese financing is investment or regard and as loans or -- regarded as create. as worst -- but seems worse the haven chinese companies have also been equated to
irresponsible activities by the chinese government. that is where bc a lot of research, projects being done about whether the chinese --panies are really doing playing a positive role in the projects, playing a magic role in china's strategic design. the chinese companies behave irresponsibly in the local community they are perceived as part of china. to regulate the behaviors of the chinese companies is also another issue that china is thinking about. i would say there are two views about china. the bri isne is wasteful. china'sndering away hard earned foreign reserve. and is also generating the repercussions and perspective from the western world. from the developed world.
also, the collusion or part of the assessment come up a trade wars that we are seeing today between u.s. and china is also prematurely challenging the hegemony of the united states. the more positive assessment is that there is no free lunch. lunch in a free receiving countries for china. china's going to this learning curve. china will have to modify its behavior going along the way. both of the negative and positive. thank you. >> that was terrific. thank you. i'm so glad you focused on all these economic ships of it. especially regarding the viability of the projects that you are investing in. a lot of the response that you hear from the u.s. side is that we ought to essentially be competing with the chinese for what our bad investments.
somebody, somewhere is going to be on the hook for those investments of the u.s. makes it. it will be the company or the bank that makes the investment if it iss. taxpayer guaranteed by the u.s. government institution or agency. i'm glad he got into that appeared hope we can talk about that more in the queue and a. let me turn to dan. excellent. thank you. thank you for turning out. i am impressed by your dedication this late in december. also on the american perception, the american response. i want to start of big picture. we are here to talk about the developing road at five years. the united states and china are engaged in a competition to shape the course of the 21st century and, in this content, it is whether the prevailing international order has back
stop to the peace prosperity and created will endure. whether china's emerging vision will prevail. the developing road is the cornerstone of china's ambition in his competition. it is already free shipping the world. -- reshaping the world. big picture. while it turns five i would argue americans respond at year two. failure ofts a imagination much like we saw in the case of chinese land reclamation in the south china sea. i see -- i think american policymakers do not appreciate the scope. it would serve to advance chinese interests in the world. military access, financial leverage, radiating liberalism abroad. ,hat said, if the u.s. response
i would argue that given the dissolution chinese investment, there is very much a moment of opportunity for the united states to form not only a offer a, but to compelling alternative vision for economic development in digital and physical connectivity. let me turn to the u.s. response thus far. perception of my what has worked, what hasn't, and how the u.s. can proceed moving forward. under the current administration, the united states has taken a strategic perspective on the road. viewing it as part of a larger competition with china for global power and influence. looking at the public government line, we have seen escalation of rhetoric. even more so than jeff said. 1.5 years ago, u.s. officials
talked about many belts, many roads. the u.s. trump in summit in 2017, called for alternatives to the initiative that comes with many strings attached. u.s. officials were certainly critical. fast forward a year. the rhetoric is much sharper. vice president pence going to aipac in 2018. quoting saying we don't drown our partners in debt. we don't hours or compromise independent united states openly and fairly. we do not offer a constricting one-way road. in last week, national security advisor both in -- bolton, the u.s. strategy, developing road as i quote, a plan to develop a serious trade route leading to and from china with the ultimate goal of advancing chinese global dominance. you have seen a hardening of u.s. rhetoric from the thinly
veiled critiques to one that essentially says this is a power-play by china for global domination. beyond this escalation of rhetoric, the administration has put together a series of initiatives called -- often working closely with congress. that begins to look like an increasingly competitive and comprehensive approach to developing road. -- identify every program and initiative. let me hit a few highlights. a key part is resourcing. one of the major critiques has been trying to deploy billions of dollars. where the u.s. has very few new resources to throw at the challenge. this has changed recently. for example, in october, with bipartisan support in congress and that part of the the equalization of investment meetings has passed sunday president trump. what this act does is double the u.s. -- double america's finance capacity $60 billion creating a lot of new resources.
again, we can talk about where should we be encouraging these investments. it is the most significant change to the u.s. in the last generation. the new u.s. international developed finance corporation that will result from this isolation also has a much more flexible and expensive book head than the current overseas private investment corporation. also on resourcing, just last week, the house and senate passed the reassurance initiative act. it will authorize more than 1.5 billion over the next five years. , u.s.ate department agency for international development in the pentagon also supporting a variety of activities. while the u.s. is never going to match china's resources, it has far more to put in than it did six months ago. push by seen a major the united states to operate with allied partners to advance
alternatives to chinese backed infrastructure. the united states over the past year has signed bilateral agreements with australia and japan. in most recently acquitted and neutral lateral partnership. there are actual concrete projects. at aipac, vice president pence aveiled a new plan to develop $1.7 billion electricity grid in papua new guinea. this involved japan, australia, new zealand. whereare concrete areas the united states is cooperating with its partners to advance alternatives. a key part of the administration efforts topproach is constrain chinese opportunities to invest in country. the u.s. to summarize unveiled a new transaction advisory fund. it would help countries evaluate potential chinese deal and not be taking advantage of in the way that happened in sri lanka. at aipac, vice president pence
unveiled a transparency initiative. unclearils are fairly at this point p or from what i can discern, the u.s. was for investigative journalism entries where china is investing in the country making it harder for the deals of chinaom with long-term leverage. there is also some significant initiatives. new smart cities partnership. a lot of activity on the u.s. side. i would argue, it is more coherent and comprehensive than what we have seen in the past. trending in a positive direction. all that being said, headway compared to a year ago. remains's response pretty much a work in progress. the administration deserves credit as republican party's in congress. there is more work to be done. what are the next steps in my view? one is to advance a positive alternative vision.
enhanced u.s. investment and bilateral trade deals are necessary and insufficient. the united states needs to advance and pursue multilateral high-quality trade and investment agreements. -- sharp circle distinction between trade with china. massive jobs and location, here at home, the overwhelming benefit derived from economic engagement. potentiallyis controversial at this point. there is not a multilateral trade and investment agreement on the table, the response might be inherently incomplete. at the same time, the u.s. needs to do more to develop an effective counter narrative to china. others point, from the panelists, a narrative, the chinese have advance, very much on its heels. given the setbacks that have occurred. at the same time, the u.s. today lacks a robust public diplomacy capability. withuld really play out what is or to directors still
being the largest source of fbi in the indo pacific today. have they are -- there been some positive steps by the administration, for example, a growing global engagement the ovaln china, office will not be able to lead a conference of pull government approach. it is very much need for creative thinking in this area. at the same time, a narrative without facts on the ground is not very compelling. beyond having more effective public diplomacy toolkit, the administration in the government takes things seriously, are there a handful of high-profile, but also commercially viable projects that the u.s. could back in the indo pacific, middle east, and -- latin america, this could become a core of -- time, the passage of the build act. potential game changer in terms of u.s. resourcing. legislation that falls in
motion leaves a lot to be determined by the administration and congress. the weather a new international development finance corporation will realize potential as the tools compete or not. men's very much in question. there are a few areas i would argue, the administration and congress come together to ensure. the corporation lives up to its potential. for example, one would be creating a new office for strategic interest -- investment. long-termon competition with china, not specify, the development finance corporation with bgp directly. time, u.s. develop and finance has been rated on the return on investment, which -- an area that was not defined by great power competition. have ater may stimulating confession on this. u.s. is going to compete with china. some pride will be in place -- place with the regulatory environment. a lot more risk. congress and the american people will have to take it perspective on what is the appropriate level of risk and what are the returns.
if we are going to compete with china head on. new development corporation, i would argue, it needs to have the ability for certain financing, legislation that created it does not create expedited funding. with countries increasingly rethinking investment, there are opportunities for the u.s. to come in and offer an alternative to nato. congress should think of creating a new authority for resource financing. there areation, definitely some untapped opportunities. one of them is the on coordinating national effort. bilateral partnership and australia. -- in australia. development banks to direct those resources and projects on the matter most from economic and security perspectives. europe is also an increasingly influential player in this infrastructure space be the european union recently unveiled a new conductivity strategy.
if you ask people in brussels, they will see it is not, it is very much an alternative. there are opportunities for the u.s. to engage with europe on structural projects. lastly, i want to turn to the digital domain. a key area for the u.s. china competition. there has been a lot of focus on bridges, roads, ports. all the hard infrastructure associated with chinese strategy. the digital is, i would argue, is the most consequential. optics, networks, telecommunication, online platforms. intever china is advancing the digital space, it ultimately touches on not only american security interests, but prosperity. and values. china is exporting elements of its surveillance complex to their countries through the export of what they call smart cities. digital siden the could up its game. working with europe and to establish a digital development fund that would support
information connectivity products in developing countries. only companies that adhere to globally recognized norms and online privacy. the u.s. can also expand the digital attache program. which is only about 12 countries. it is part of the department of commerce. the way for u.s., -- economies to engage with developing countries. i would close by saying the u.s. response to developing road is much more coherent and copper hansen than in the past. it still has a decent ground to move forward. with countries around the developing world, concerned about the negative application of chinese investment. united states very much as the window of opportunity and now is the time to seize it. thank you. >> thank you. we could have a whole program on the build act and its effectiveness and how it is likely to work.
maybe you can respond to the spirit we will have a brief exchange on it. two points you made about it actually contradict the two main points that were used in the summer. one, it is about china. it is not specifically about china, it is a doubling of opec. who knows how this money will be spent? once companies start accessing funding,plying for the i am not convinced that it will go to strategically important areas vis-a-vis the chinese. the other thing is the risk. the other selling point for this was don't worry as it does not cost anything. it does not cost the american taxpayer a dime. we might have to invest in something that is risky. things that will come back to hurt taxpayers. howdy respond to those two issues? >> absolutely. there was a significant tension in congress and how to build that. you had often the right-wing
side of the political spectrum, support for the build act as a tool. on the left-wing, more seeing it as an opportunity for development and u.s. engagement in the world. there is both. it is appropriate that the legislation did not expressively call out china when you look at the final language, it did call for competing with state back investment initiatives. there is a selfie reference to china. is, iuch what is needed would not call it to the counter china office. having a part of the new development finance corporation, a be looking at strategic and villous -- investment to work with the department, the intelligence community, look at what are the handful of projects or locations that matter. we should not be throwing money at banning chinese products that don't have a lot of consequence for american security. take a hard look at the world and say these are where we need to make our investments, even after -- even if the return may
not be as good pure it i would not want to serve counter china office. i would frame it as strategic investment. it is a concern i have. the new development finance corporation, many who sign onto it will not have the focus on strategic confrontation with china even if it is on the risk, think it's an area right for debate. overall, the new development finance corporation has to be for american resources but if it is seen for an instrument in advancing u.s. influence in competing with china, some of activity may be in countries where there is more risk and ideally we will be balanced where you have more investment in areas that are likely get a return. it's better to creatively socialize congress and the american people that some of these investments are going to more bluntly motivated and ideally they will have a positive return. it's different metric and we have had in the past.
and if there's any room for disagreement on how much of the portfolio should be more geopolitically oriented versus where the u.s. private sector would go. on turnover questions, sometimes a little bit of thinking time involved in the transition between the panel and questions, so please give it some thought in the meantime i do want to ask incident question, which is you laid out all the possible ways where the current debate is in beijing in terms of adjustments on pri. forhere any opportunity institutions outside of beijing to play a role in shaping whatever those changes are, whether it's on bilateral basis with the europeans, japanese-americans, whether it's financial institutions like adv and world bank that may get involved, we saw as the way aia be developed which a lot more international influence, is the bri open to international
influence on its standards in a way that money is governed? >> great question. there have been questions about whether international community can actually play a role. those depends on where systems come from. china reach a very enthusiastically to japan to cooperate and collaborate on the bri projects. in the heaven quite cautious at the very beginning, but starting -- shinzothe eighth abe administration's lender with china and recently the recent agreement about china japan cooperation with their country. a lot of those corporations will have a direct impact over the bri projects. i think there is that possibility. for the multilateral development
banks, the chinese have been quite eager to get them involved in some of the bri projects. will strategically important ones because they may not make total sense in managementbut projects and commercial projects , the chinese are very eager to involve them. i think one question is that whether the chinese will be open to collaboration where the united states issues related to bri. i think the official narrative from beijing is of course we are open, we would love to, we want to cooperate with united states if u.s. is had such an intention. i think the internal judgment is that given how much u.s. china relations have soured and how how problem there is and much power in opposition is currently involved, i think the the dialogue is very small.
having said that, i think one group of actors that have been particularly active in the bri from the united states or the private sector players. you see for some of the bri projects, because they are major of researcher project, companies like ge, honeywell and caterpillar see bri is a great opportunity for to increase their sales in china and not only in china but also in for example, africa. and there are american companies that are specialized for example and security that are providing advice and human services to chinese companies operating in those logically follow countries. i think those are primarily private sector engagement with china based on economic logic of projects but not really political cooperation. >> and go right here first.
>> thank you. i'm from the of our times. my question is about chinese teleconference. initiativeis bri advance the interests of hawaii and the tv in these countries, especially with respect to the rollout of five g infrastructure? >> anyone particular well-positioned to address this? >> am happy to and others can chime in. element of bilson road is this new digital so gross, the chinese are making a big push for their domestic information technology-based to go abroad and part of the umbrella of belton road and that , i believemponents portugal i should just signed a deal with waterway on 5g, so there is a 5g components of this. if much larger. for example, while way is trying of urban their sort
surveillance program where you have public security cloud linked to maybe surveillance toeras and exporting this east africa, the middle east, indonesia as well. i am most familiar with the dtv feast of this, the digital part is the future including an element of belton road for sure. >> right here. >> first comments, a cynic would interpret the shrillness of western criticism of the bri as a sign that the bri is actually succeeding. my question is, how to the participating countries feel about china's promise not to versusin their affairs our belief that we have not only
a right but a duty to meddle in other countries affairs echo >> that's a good one for you. versus our>> and my by the idea that western criticism is a sign of the bri's success if there weren't many signs that those in beijing believe the bri has run into real trouble as well. criticism,st western is chinese state-owned enterprises, it's organs of the party, its parts of the chinese state that recognize their not only major financial problems but also narrative problems. it's not only in the west, it's in the developing world. is it arguably china's closest ally on the planet, pakistan. where there's discontent and criticism. i don't think we can simply say well the bri is working because the west is unhappy about it, it's more complex and deep. the opposition. the second part of your question
about the non-interference in domestic affairs that has been a key tenets of china's way of doing business, it's propaganda about the way it does business. in practice, that has very much not been the case over the last few years. and that trend has been moving in the wrong direction. and that is china has been interfering more and more in the domestic affairs of others, whether it is in the legal system, whether it's in terms of academic freedom, other it's in terms of suppressing dissent in other countries, essentially, enforcing alignments with chinese foreign-policy. any criticism or dissent against chinese foreign-policy is being met with sharper sticks and greater efforts to punish those who are disobeying beijing. and again, we can go back to 2010, the nobel peace prize in
norway, we can look at singapore after the south china sea ruling, we can look at south it agreed to deploy the sad missile system, we can look at unprecedented level of interference australian politics and we see a trend over the past six or seven or eight years of china growing more brazen in the degree to which it interfered with the politics and economics of host countries. there is a great deal of evidence to support that contention. and evidence that is spread across the globe in the west and in developing countries. butan talk more about that, part of the component of short power that i discussed in my presentation, and tolerance for dissent. and dissent is met with retribution and that has been a steady and clear trend.
>> on journalists here i have a question, when you were talking about this, you mentioned that burma had set up a bri committee or a body of some sort to help the cooperate. my question is, is that action typical of what other countries have done, or is it more engagement than surrounding countries have done, and if it's more, did united states take any action to try and convince them >> thank you. is it more than what china has done? , what other countries have done in terms of raising the chinese bri, if you look at countries, adding burma is the one that has actually established the specific committee dedicated to choose advanced on a bri in the
country. i don't see that another mainland southeast asia and countries. and i don't see that in maritime countries. if you talk about pakistan and compare burma to pakistan, pakistan does have dedicated government court and of the to support the process, china pakistan economic order. embracement, the embracing of bri has come relatively from the chinese standard, and they were hoping that the governments, they were understanding that with political traditions that happened in 2015, the government could have a different attitude towards the chinese in their country. it has to not to be that the government at the very beginning was quite concerned about the implication of the chinese of a structure projects particularly associated with the deep-sea port. was the crisis in
their time state, that is pretty into themyanmar back pariah state or status in the international community. there are sanctions and isolations and myanmar again and i think for now government to deal with that is a political without also created inadvertently or as a consequence is that china again turned out to be almost the only one supporter of burma internationally. and i think that international context has laid the foundation to establish the belton road community. anything from outside. iswas policy towards myanmar
they are dominant by the human rights agenda. burma is strategically important, therefore he deserves additional consideration from the united states. but in light of the revenge of crisis, not see that happening. me morehink what takes practical than some others out there looking at this problem and really looking at the practical impact is that i come to it for more was southeast asia background. that is mostly via been focused on over the years. i just know that all of countries in southeast asia will take the money. see are not going to eventually motivate them not to take the money or to take worse terms than someone else. in the burma example is a good one and that something's happened after the crisis, but i did the first things
was reach out to the chinese after she was elected and the chinese vice versa reshot to her. the chinese were building connections for she won the election. the chinese are flexible and practical and i know everyone in the region is, and that is why i tend to want to look at this in a way that acknowledges i did was reach out to the chinese after she was elected and the chinese vice versa reshot to her. the chinese are going to be a major economic influence in southeast asia and many other places that we're talking about for decades. we have got to find a way to deal with this is not geopolitics 19th-century or one the cold war dealing with it is not going to work. >> right here in the center. >> on with the pakistani spectator and you mentioned something about training people in those countries for these projects, are those trainings on the basis of one week into
afghanistan, and a lot of pakistani students here of usaid projects that were basically designed to get new generation, give them more american organization help them for future to protect american investment in that part of the world. designed toso the training thatt mentioned, is that modeled on ago orrom 30 or 40 years a very limited project that would train some pakistani how to help those projects financial basis. chinave hard feeling that is ban beckoning -- bandwagon and. pakistan and india are still learnlose, the letter english and english as their official language. shortsightednd of
that when we have this kind of plan in pakistan, his wife had jewish background and he has two kids from there. , weead of supporting him are being very reactionary and shortsighted. because there's training that we use for the united states, we need to offer more programs like this in order to give the americans out of the picture they don't try to take over the country like the chinese are. we shoulde saying have chinese currency there. very open question if they want forake over the country investment in those countries. -- uestion is basically
>> exactly how are we going to ?se the id to help >> treasury has an of technical assistance that supports training for foreign officials to understand and manage these types of projects and evaluate the financing. with this sort of new financial consulting for advisory service, think it will be on much more case-by-case basis. i think it will probably be much more targeted and help countries understand when you have a chinese offer, what does it need in terms of long-term repayment ability and what are the actual terms? ideally build more capacity to manage projects. and the reality is often
sometimes the chinese products are not even the most cost competitive. there are cases where the port was given to a chinese company that was a merchants of good the game's there's a transition. he will be exactly modeled on the past, there a lot of interesting multilateral involvements. singapore has an for structures and are about excellence, you get a match to try and limit that to train more officials around the region to manage and adjudicate these contracts. time thing i've had a hard , from a southeast asian perspective is that i have met so many brilliant economists and financiers in asia and malaysia skepticalere and i'm sometimes it's really training that is necessary. i think maybe in the maldives, even in sri lanka, you'll brilliant people, educated in
europe and the u.s. and major institutions and economics. the people who built the indonesian economy were all berkeley educated economist's and now suddenly these people don't have the capacity to try to understand the complexities of their interaction with china and the legal instrument is to do that? i don't know. it is in the heavenly able to reconcile. i haven'tomething been able to reconcile. more to thet cuts heart of the bilateral u.s. pakistan relationship and this is something that you subject i'm very interested in a passionate about but one a bit divorced from the discussion centered on the bri we are having today. it is something we can follow-up up on the sidebar with after the presentation. thank you.
>> thank you very much interesting discussion. my question is about the role of russia in bri. another was some talk before linking the eurasian economic union with the bri that kind of died off. the main part is would you say but relationship between china and russia and central asia related to bri is competitive work cooperatively both -- competitive or cooperative or both? >> is really good question and frankly russia's not come -- is not a component of the discussion on bri very often a maybe that is a mistake. it's not an issue i've looked at very much except that i can say that the level of chinese economic presence and influence in central asia just in the past decade or so has been transformative.
russia was the dominant player there for a long, long time. and just in the last 15 years or so, the position with china has flipped to the degree where china is now in many cases the largest trading partner or source of investment for most of the central asian stand. moniker of this technical partnership the two countries have formed, russia has seemed relatively comfortable with this significant increase in chinese influence and presence there. i have not seen any public signs yet that has generated real tensions in the relationship. has formallysia supported and endorsed the bri and encouraged others like india to be more supportive of the initiatives themselves. but haven't studied the issue from a russian perspective enough to offer israel granular level of analysis on that. think there are basically
two asset that aspects as you look at in terms to the russian relations with the bri, one is bilateral and the other is regional. bilateral, ofat course as the risen list shows the relationship has been described as a partnership that is higher than opera partnership which means china and russia exley do coordinate on their positions coming to international matters and we do in certain russian support the south china sea, not about the chinese claim but china's position on the international ruling on the south china sea in they joined with them exercises on the south china sea and coordinate or uncoordinated activities in the east china sea vis-à-vis japan. asia, issue of central when bri was first proposed in 2012 and all the
policy discourse and discussion in china about bri, the ferocious criticisms on the bri, one is that it china's going to central asia, it's going to russia's backyard and the other criticism is that middle east, china, really, are you sure you want to go there? in terms of central asia, with the ukraine crisis, they really limited russia's capability to not work with china or to oppose china or stop china from advancing into central asia. for my research i have not seen too much russian opposition or efforts to undermine china's effort in central asia stands in terms of their researcher project. but another component of this is the policy road. that goesf the angles to europe. see the mostwould
successful commercial projects between china and russia ever. it has been built and has been producing starting from 2017. ton on the chinese want invest in that port, the russians decline the chinese financing because of the strategic location. what we also see as russia trying also raising the way to invite china to invest in the northern sea route because russian is to update infrastructure and it doesn't have the financing. on that, the chinese have been very reluctant. there is much more talking than actions in reality, because with the chinese see is russia portraying a concept of dividends in the future about without arn sea route willingness to make any
compromise to the chinese about the commercial profitability. own free china's navigation of the sea route. overallre talking impression of bri is china is afraid of russia would be an obstacle and now russia's not an obstacle. >> i'm a journalist from australia, studying in the asia-pacific at the moment. i will note that the a string government just last week of the week before pass legislation to prevent foreign interference our politics. without mentioning any country specific. think that the beijing areople in
so unsophisticated that they cannot see that these third world countries can pay the big loans back? countries like on a want to and , allolomon islands strategic areas for ports and airfields in world war ii. , a huge wall was built in a place were only one container movement happened the week in trade. wharf for anough aircraft carrier. do we really think that they'll see that these things are not going to work in my second part is i'm adjusted to note does the departmentt work operate within the united states like it does in australia, interfering and pressuring chinese students and i know this happens in australia, having studied it.
thank you. >> is a very good question. he gets to some of the motivations that he addressed. thank you so bri is not fundamentally economic undertaking and as for the problem. -- that is part of the problem. >> it's never just either/or. for any great power khamenei foreign policy or for strategy, cannot just be shortly through one purpose. it just doesn't happen with any great power. country theyhich are allocating more strategic consideration and more economic consideration, it depends on the country. 17, csiack in 2016 or is that a report about the belton river initiative basically saying the chinese are categorizing them -- the countries into three categories, countries with utmost strategic
significance for china to exploit, china is willing to basically lose 70% of the investment they are making into the country and for some other countries, its 50% in other countries is 30%. i think it would be incorrect to say that china has only one goal coming to belton road. it has to be a comprehensive calculation on different things. i would argue that from a fragmented point of view, from the actual policy remediation is what is -- as smooth as the policy designed look like from the very beginning. else?one especially the second bit about strategic nature. i think we talked about it to some degree and it will talk but after. many take two final questions and then we'll use that for everyone to wrap up.
>> economic slowdown in china, serious debt overhang. onthis having any impact bri? is there any indication here that there is any rethinking of perhaps china has overextended itself? >> right here also. john, a student from george washington and i have a question. example of debt to china. how can countries like sri lanka come out of debt? >> start with jeff and will answer those questions in any of a closing thought she might have.
>> is a you would be best position to answer the first question on how the economic slowdown may be impacting chinese assessments of the bri. >> with sri lanka, think they presented an interesting case elections, you had a party very much the type ofagainst deals that were signed with china pledging and promising to revisit these when they came into power, renegotiate and cancel them. what happened was the government came into power and finally got a look at the actual numbers, which had been secretive for a long time. he really did not have any idea how much debt to china. they merely put a hold on several projects and asked to see the terms of the deals, found objectionable provisions
inside the deal, including freehold basis. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. e clerk: the speaker's room, washington, d.c., december 17, 2018. i hereby appoint the honorable francis rooney to act as speaker pro tempore on this day. signed, paul d. ryan, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by the guest chaplain, reverend dr. dan c. cummins, peoples church, jacksonville, texas. the chaplain: come pray with me. heavenly father, creator of heaven and earth, redeemer and sustainer of life, this season of hanukkah and christmas, may
we never forget. little is much when god is in it. a little oil in the temple menorah should not have lasted eight days, but it did. a widow's small jars of flowers and oil should not have lasted almost three years. but they did. they did because you, father, were in it. in the menorah, in the jars. the little town of bethlehem was not supposed to bring forth a king, but it did. a young virgin could not give birth to the son of god, but she did. they did because you, father, were in it. in the village, in a virgin.
, ther, when we feel so little remind us again that we can do the impossible when god is in it, when god is in us. in jesus name, amen. the eaker pro tempore: chair has examined the journal of the last day's proceedings and announced to the house his approval thereof. pursuant to clause 1, rule 1, the journal is approved. the chair will lead the house in the pledge of allegiance. the lobby can join in. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.
the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to section 1501-c of the f.a.a. re-authorization act of 2018, public law 115-254, i am pleased to appoint ms. ann w. peterson of falls church, virginia, to the syria study group. thank you for your consideration of this recommendation. signed sincerely, nancy pelosi, democratic leader. the speaker pro tempore: without objection, when the house adjourns today it shall adjourn to meet at noon on wednesday, december 19, 2018, for the morning hour debate, and at 2:00 p.m. same day for egislative business.
the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, on december 12, 2018, pursuant to section 3307 of title 40, united states code, the committee on transportation and infrastructure met in open session to consider four resolutions including in the general services administration's capital investment and leasing programs. the committee continues to work to reduce the cost of federal property and leases. the four resolutions considered include two construction per expects, one authorization perspective, and one lease perspective and represents $44 million in savings in avoided lease cost and space consolidations. i have enclosed copies of the resolutions adopted by the committee on transportation and infrastructure on december 12, 2018, signed sincerely, bill shuster, chairman. the speaker pro tempore: referred to the committee on appropriations. without objection, the house
stands adjourned until noon on wednesday, december 19, 2018, for morning hour debate and at 2:00 p.m., same day, for legislative business. wednesday. congress has until friday midnight to -- to approve remaining government funding bills or plus of the government will shut down here live coverage here on c-span. heritageou back to the foundation. wechsler china will be more close down. in the past, the argument is if you could buy some on the international market, why do you want to make it yourself?
now the argument is see, that is why, because you do not want to toject your vulnerability the united states. these are the hard questions going on in china about the restructuring of the economy, and where china will be going. anyll say bri has not had choosing supply. with business contracts they need, to dilute and digest overcapacity. i do think that will continue. >> i will be fast. there was an interesting study arguing that given the trade tensions between china and the u.s., you will see china putting more resources trying to diversify away from the american market.
to waser thing alluded china trying to bring in western supplemento try and the funds into the denver -- the endeavor. a final point which comes down to geopolitical return on investment. i do not want to put words amounts, but we would come down the side that the relatives focused on the geopolitical return on investment in the u.s. is grappling with the fact we have always thought about the economic state as a commercial investment. the challenges when we try the lime. thank you again to the great panel. >> thank you very much and aanks to the panel for terrific discussion. it is just what i was hoping for. thank you. [applause]
owen will 8:00, jenny talk with new york times columnist paul krugman about her time in charge of the fed. about current risk in the financial market. here are some of her remarks. take leveraged lending, i don't think the banking agencies have sufficient tools. if it is a with that safety and sound problem for the bank. if it is a question of selling risky things into the market, that could undermine financial stability, we don't have the set of tools to deal with that. are seeing a lot of pushback against regulation and to some extent, look, after eight years
of writing thousands of pages of regulation, it probably should be adjusted around the markets. particularly smaller institutions. we are seeing more of that decadeng now more than a , there is a huge focus on deregulation. plus, there was an agenda of unfinished work. we made some progress and there was a big to do list of things that still needed to be worked on. i'm not sure we are working on the things in the way we should and then there is regulatory pushback. is currently the professor the university of california in berkeley. you can watch the entire interview with paul croom -- krugman tonight at 8:00 eastern. we talk of a for thousand eight financial crisis. cu