tv Book Discussion on Dealing with China CSPAN December 29, 2015 9:10pm-9:54pm EST
the front runner, not the favorite of the party bosses >> directly following at 11:00 p.m. eastern joined book tv as we attend the book party thrown for karl rove. live with calls, e-mails, and texts from noon to 3:00 p.m. eastern. his most recent release want to migrate city as well as 1st in his class, a biography of bill clinton. book tv this new year's weekend three days of nonfiction books and authors , television for serious readers. >> 2010 treasury secretary henry paulson talks about his memoir. >> thank you all for being here and for being patient. i jumped in the car and race
to as soon as i could. thank you very much. speaking about something very relevant to what you have worked so hard on. i want to talk about the book and the broader economic context of china and the word about hank paulson. i know something about the stress and policymakers behind-the-scenes. i don't think anyone put this country on a footing for the future. writing here about his perspective is a policy maker with his long experience in china. the hundred visits going back years and years. and so the perspective from the private and public sector come together as we assess our greatest economic rivals in the banker, and
until very recently banker of uss. secretary paulson, thank you for being here. >> thank you. it is my great pleasure to be here. i thank you all for being here and for waiting. i waiting. i am looking forward to the conversation. >> dealing with china is a fascinating insight. the president's news conference trying to explain the transpacific partnership , the fast-track that he has just gone with divided democratic support and opposition from the incoming democratic minority leader chuck schumer. the democratic party is divided and it will be a big election-year issue. he was trying to make the argument that fast-track authority is not anything
other than what has been granted to every president except richard nixon. the ultimate deal is still to be negotiated and this transpacific partnership which is so important to our role in asia has unique human rights and labor protections which previous deals of not had an that if we don't buy into it will be left in the dust and china will just run circles around us. >> first of all the president is right it is essential to get a train deal done. we will be able to negotiate the best possible deal if we can initiate any deal at all if the pres. doespresident does not have that because otherwise how the other side no that it was a real negotiation.
all this does is put us in a position to negotiate a deal. secondly, i think the transpacific partnership is extraordinarily important for a number of reasons. it is important to our credibility from our national security, economic security because this administration is rightfully made this is his priority. it is important that we do it. secondly, as the president alluded, china, and, china, and we will talk about that later, but china is very active, forging economic linkages, benefiting china and the world and the economic linkages, trade and investment they believe
helps the economic and national security influence. and then i'd taken a step further. the reason this is important is the national security starts with economic security. i don't think china, as we will talk about later, is a formidable competitor. they should not shrink from the competition. it is something we should welcome. trade people, the positives far outweigh the negatives. we have been a huge beneficiary. we continue successful, 4 percent of the worlds population, does not go out an attempt to do as much business as possible, you can put them all around. but what i argue which is to me a no-brainer, even those
that disagree with me on trade generally should want a deal like this. is focused on asia. it's important that we continue to be strong economically, diplomatically and militarily in asia. >> how would you grade this administration in terms of its so-called pivot to asia? some felt it was more talk than action. >> first of all, this has been us policy for a long, long time. i forget, the 49th and 50th state, but we have a state in the pacific, a major asia power for a long time. the whole region has benefited from the presence, the security blanket is
provided. ii take a look at the huge economic benefit. provided for china and everyone else. i think that is important. the reemphasizing and putting more emphasis on asia is important. to step back even further because this book is about dealing with china and i wrote it because i think this is such an important bilateral relationship in every major global issue are most of them will be easier to solve, more difficult for not. this relationship is becoming more complex and difficult because they are increasingly a competitor. it is usually important in the areas where we have a shared interest.
this administration has done a great job there we can begin to solve this problem unless china is a big part of it. but for the biggest emitter carbon emissions and the us working with china is important. the upcoming summit attests to the importance of that. i think the issue with us china is one that a lot of people talked about. there always crises someplace else. as a tendency to go from crisis to crisis which is natural. they spend more time i got the better some of the crises would be easier to solve.
if the us continues to strengthen its economic situation, chinese respect strength. i think that the biggest challenge which are saying over and over again to us, per tolerance globally and a very strong position in asia is our ability to fix our own economic situation and financial situation. china has got tremendous challenges and issues, more than we do. they need to reboot their whole economy. they are working to do that. you can make as big a mistake exaggerating there strength, overemphasizing as you can underestimating. that is putting it in, i think, perspective. i think the administration has done a job which is very
comparable to what with the policy very similar to what we have had for some time. we need to recalibrate. this is a different china. i think it's going to be more difficult to get important things done but more important to get those done. >> one of the things that is so revealing in the book, you have seen them. the personality portrayal of zoology and the other leaders including the current president are so fascinating. as you assess their ability to handle the enormity of the economic reform challenge, the corruption challenge, i wanted to drill down. you 1st got to know one of the most interesting economic thinkers in chinese history, recent chinese history, think -- tell me
about your relationship and why you think it was such a pivotal check to the character. >> that is a great question. the 1st chapter, the 1st scene is meeting you. the reason i have so much respect in terms of driving reforms and they are never easy. he made some really difficult, tough decisions he was a tough, clear thinker. there is great resistance to change. the story, the first-order i tell us about this china telecom, now called china mobile ipo.
the 1st major ipo restructuring the china did. and i said that when we worked with friends at goldman sachs, germans on deutsche telekom, it taken 16 years. and this was done in six months. what he did command he was a mastera master, tell the story of how these transactions fit into the bigger picture. use them as letters to drive reform in china, open up china to more competition and use it internally, these external deals just like you use the wto china succession >> he reminds me of my 1st trip to china with ronald reagan in 1984, still talking going into the trip
of the red china. definitely a buzzword. by the time he came out after a stop in shanghai and meeting with university students we had several days stop in alaska and fairbanks and he had a news conference and ronald reagan agreeing to communist started talking about the so-called capitalist, the chinese capital, seeing a different side of china clearly in terms of what they wanted. if they still feel the chinese military, the government itself according to every us official talk to is still stealing intellectual property, targeting us with cyber attacks he makes no mistakes
issues, an economy that needs to be rebooted, the news to be an organization model for corruption is rife throughout the party. huge environmental problems, they need to change the relationship between the central government and the provinces, denies the government. all these challenges and he -- so he is talking about and driving toward economic flexibility here. the same time he is tightening the controls in certain areas. in the political system, the internet and us, how can you do to it the same time?
the party as a source of stability in the institution a strong enough to drive reform. i look at it and say, this can be a road to success long-term. how would you all the things thatthey need to do in terms of building the kind of companies they want to build to compete in a global system, having the private sector do as well as they want to innovating if you don't open yourself up to competition of ideas. i ran the company for a couple of years. i don't know how you run a companya company that's a global company if you're not totally connected. but you mentioned cyber security. just say a few words about that. i spent a lot of time on that in the book. a number of things get conflated in the cyber area. there is cyber -- the potential for cyber warfare which is alarming.
no country, no biggest i was was country is going to want cyber warfare. it is destabilizing. and there is cyber espionage , and that is something that the chinese to aggressively comeau we do it aggressively, and other major companies, there is finger-pointing but we all do it. then there is cyber as you deal with the internet and censorship. there is cyber in terms of procurement of technology. that's gets into the national security area than the last issue cyber theft of intellectual property. and i say in dealing with china that ii think this is the most divisive, dangerous, destabilizing, economic issue china doesn't
play fair. hard to make an economic system work with that, and there are not easy answers. i basically make two -- oversimplify, two oversimplify, two points. we need to do a better job protecting our system and secondly, in addition we need a multilateral approach where we work with other nations command that has been made more difficult because some of these other issues involving conflated. after snowden it is harder for the us to have high ground. i would argue that the cyber theft of intellectual property is a different issue and one that should be much easier to have the high ground.
>> my point would be the point of the white house makes, on intellectual property come on the theft of trade secrets they do it from their own government, from the military. when we do it it is not the us government. >> clarify, i don't think we take intellectual property. property. there is no evidence of her of any intellectual property breaking into computers and taking it for intellectual property and using it for private sector use. in china this is rampant. and it sure looks like sponsorship by the chinese government. it is hard to tell because the state owned enterprises play a big role, but it is a problem and it is unique.
i agree with the government on that, but in terms of how to deal with it it is not an easy thing. i don't agree that some of the things they have done have been very effective. >> good afternoon. my name is ronald zeitlin. i have a son who has been working with you for quite some time. you have already alluded to your relationship in the event opportunity to work with shooting thing. can you expand a little bit and compare the reform
climate make this question has been reinforced. i had lunch yesterday with the chinese academic says that as a result questions the anticorruption campaign the chinese bureaucracy has been paralyzed. >> i would say 1st of all, people underestimate the difficulty of getting things done. i write about this in several chapters, the 1st bank deal, the 1st two in petro china. when you're laying off hundreds of thousands of people and we describe in the book what it looks like as a medieval village. they had their own dormitory stores, hospitals, schools.
it wasit was -- and they come in and deal with that was difficult. this job maybe even more difficult. because reform installed when you have a certain amount of success. it is hard to get people to change. he is looking to change. i don't think -- i can think in the history of the world willfor a return to change so much on such a massive scale. so is one thing to talk about rebooting an economy, but if your reliant on finance to invest in infrastructure you need to, and that's not going to work because it has built up so much to come up with a different model and 12 the different tax system and they are working hard on it
and aa different relationship with your center in the provinces is hard command it is looking to redo,, the courts, the legal system, do with the environment, deal with the property rights issues, people are so unhappy and now let's talk about the corruption campaign. this is the most extraordinary thing i have witnessed because it extends to every part of the party, every part of society. they have already punished over a quarter of a million people, and over 70 five minister level. and it seems to be intensifying. this is driven 1st and foremost is corruption is such a huge problem and he believes the party will describe -- survive if they don't do with it. secondly, there is division
on a number of issues, no consensus. people think just because it is an authoritarian government that someone at the top can make an order and it will all get done. i think it is going to take getting a lot of things done but to get the more difficult things done it will take years and getting people people in importantin important positions and i believe a secondary purpose of this campaign is to amass and concentrate more power quickly it's going to take more and get more people in key positions. so this campaign also by striking that sections of the state owned economy and vested interest, it's a tool
on the toolkit to help get things done. this is she is trying to reform big parts of society, make all sorts of changes. given the size of the economy he has sensible. the biggest challenge and the best opportunity is to open up parts of the economy that have not been open to competition by the private sector. and 70% of70 percent of the jobs come from the private sector, opening up those that there are again vested interests in the right about the importance, and shot
asked about the tpp which is important. this bilateral investment treaty they are negotiating is usually important because it is open , fighting to open up markets for us companies and workers and health reformers in china. >> thank you. i am an attorney. what would you say about our relationship in terms of the deficit, us deficit in terms of china and the other part is having read 1 billion customers in china incorporated and knowing how under those authors us companies really were taking a beating,a beating, especially cellular companies and companies like at&t and motorola that establish the infrastructure but were then kicked out in terms of maintenance contracts and it was kind of
a mess. and i know i think there is one company recently that was find hundred $65 million. doing business is difficult, and i just wondered what your perspective is on the change. >> you can see after my last question brevity is not my virtue. it's funny, but not that funny. [laughter] >> let's start with the deficit. i say that dealing with our deficit problem in fixing our entitlements is usually important to the comments made earlier. in the short-term i have people say to me are you concerned the chinese of the
largest foreign creditor? a tiny bit, essentially the same and they said that wouldn't bother me. i would be grateful. i am concerned about the amount of debt that we have, not the fact that china is a creditor. as important as china's serving is accredited us, our situation is much more, they should be more concerned that we are because it is -- a larger percentage of their foreign reserves are invested in our debt. in terms of us businesses, us companies doing business in china, you are right. it is difficult. and that is one of the
reasons why i would like to see a bilateral investment treaty. it is difficult for a number of reasons. the technology companies you're referring to the having problems, it looks like this is going to be something we are dealing with for a while because there is now this national security element. we say we won't take cte equipment, we have. and so the question is how much of these technology products get balls off? i think that would be very dangerous. your reading today in the papers about the chinese had backed off for a while on their role which would have prohibited idea or other equipment. so that is something to watch carefully and something that i think is
very important. but the other questions really get to the reason why we need a bilateral investment treaty. on the positive side china is our fastest-growing export market. us companies have more investments in china by far than they have here. us companies tend to do well in the china market. but with the bilateral investment treaty does would right now every foreign company investing in china needs to get approval. the bilateral investment treaty of those industries that are precluded, theoretically everything else is available and you can come in and compete a level playing field.
the aspects of the level playing field, the conditions of the state owned enterprises is not just hurting us companies. it hurts china's private sector companies. special preferences because andrea asked me about some of the early deals. if he had continued they would have continued to reform the enterprises, opened up to competition, but therefore stopped and a lot of these companies have special advantages, preferences, subsidies, regulatory preferences which need to go. it is challenging. there is a very attractive market and we need to work harder to open it up. >> how concerned should we be about the slowdown in gdp? >> we should be concerned, not by the slowdown because but we should be concerned and watching some of the challenges that they have.
that the new normal,normal, this is a country that grew double digits for a good while. the premier talked in terms of new normal in terms of the 7% growth. i think that is maybe even a bit optimistic, but the key thing to look at is not the growth rate. the keeping to look at is the source of the growth. because if they have an economic model that cannot continue to be as reliant on exports and municipal investment in debt. excuse me and infrastructure which is leading to increases in municipal that. and so what i look at and say how are they getting growth because of they owe back to stimulus and investing in infrastructure which leads to bad debt, then i think there is more
of the danger that they will have when the reckoning comes it will be serious and can spread to the overall economy. people are being described, when you're as big as chinese can keep growing. you should be concerned about whether they have a good rate of sustainable growth. >> time for one more question. >> former "washington post" reporter. we are seeing some really dramatic photographs of china's industrial centers. what evidence do we have
that the chinese are transitioning away cocoa assumption for energy production due to effects on chinese labor productivity and other concerns about economic impact on their economy and your risky business colleague recently allocated a lot of funds to try to replace coal production in the us. he mentioned that the chinese respect strength and leadership. what can the us government do to strengthen chinese commitment at the table of the climate negotiations in paris in december? >> you've got a lot in that. >> let me just add that hank paulson is a lifelong committed conservationist and environmentalist. this it cemented area where he has tremendous knowledge.
>> thank you. and the paulson institute, the biggest programs we have our air quality and climate and the us china council focused on sustainable urbanization. so, and i see where the issue -- with the question comes from. if you had asked me going back, if i was sitting here today and did not know how bad the air was which i sure do. we can hardly see. a chapter of a book is called darkness at noon. if i was told all the things of the chinese would do it
is all been blown away by this breakneck growth what gives me hope? what gives me hope are several things. first, the leaders understand the problem big-time because the chinese people. the chinese people are demanding action. i think the survival of the party depends upon making progress. they have changed the way mayors and governors are evaluated. if you visit with any senior official they would reel off
theyrealize they gdp and economic statistics because they knew if they did that now they are being evaluated and the performance is being evaluated. so they will give you the progress. it just looked terrible. seventy-three out of 73 provinces, unique problems. the upside of the reason my we are focused on this area is energy efficiency. 40 percent of carbon emissions come from buildings.
one of the things the paulson institution is working on the upside. the most difficult issue is the mix of coal. the projections in the deal of the obama administration came to, the agreement with that requires them to do the things they say they are going to do, there going to have to change that. so there is -- it is difficult, important, but i would say that the obama administration's agreement is usually important because 1st of all the
demonstration that the chinese care a lot about our relationship with the us. they didn't have to do that but they did. they don't announce these things lightly. they really enhances it. i think it would have been hard to see much progress there without this and having done this it creates a better environment for getting things done. >> i just want to -- our time is up, but this book is a wonderful read. we have been talking about tough issues of the economy today. just read what hank paulson writes about where he was on september 11 and personal engagements with these people.
contain domestic abuse, love triangles gone awry in the men who lit himself on fire while drunk on whiskey. >> saturday evening at 6:00 o'clock author and historian james watson highlighting similarities and differences between both tragedies. at 10:00 o'clock the 1965 mvc meet the press interview who is assistant labor secretary authored a report on the causes a black poverty. >> i believe that what president johnson said, you cannot keep a man in chains and take the chains off them and say your free. they have to be made, people have to be given the opportunity to compete. i believe that we should make a special effort.