What kind of treaty do you think might be possible on AI where both countries have some kind of mutual understanding of necessary restraints to prevent AI from going rogue?

In the U.S., you have enormous alarm right now about AI models and what they can do and whether or not they can be secured and be made safe.

And China is the only other major AI superpower.

So it makes sense that these two countries would get together and find a way in their mutual self-interest to restrict elements of this technology so there aren't catastrophes.

There are a few problems.

I think first, China is skeptical that if they slow down, we'll slow down.

And we are skeptical that if we slow down, that China will slow down.

Is all this tech-related stuff one of the reasons why China really wants Taiwan?

Rush, on hedging, I'd be curious how you see the risks that Mark is raising there, that some of these decisions will create essentially path dependence that will, over 10 or 15 years, take us to a very different place.

Well, thanks, Dan, and, and I think Mark makes a lot of sense with what he's offering here.

There's definitely this hedging behavior going on.

But what I wanna do is bring back hedging in the context of history because I think it's helpful to take a look at the last twenty, twenty-five years post Cold War period as itself anomalous, right? This was a period of alliance cohesion which was unique.

But if we go back to the history of alliances during the Cold War when we faced an existential challenge, you saw a lot more acrimony than I think people remember.

And I think if you look at hedging from that perspective, then it, it doesn't seem as much as a departure from broader historical norms.

And let me just give you a few examples, right? So I mentioned earlier in the 1950s, we had a Suez Crisis, right? The US essentially threatened to sink the British pound over British foreign policy.

Kurt and Rush, let's start with you on what might lead us to a worse place when it comes to alliances.

amazing.

They're two times our share of global manufacturing.

They're bigger than the next nine countries combined.

They're three times our power.

They're three times our car production.

They're 11 times steel, 20 times cement.

And they don't just produce a lot.

But how do you explain to people in simple terms, why it even matters?

What has changed in the relationship since then?

Well, you know, the biggest change is probably that China feels far more confident today than it did in 2017.

This is a China that just last year felt that it decisively won a trade war with the United States.

Let's not forget that the US increased tariffs on China to 145% last year.

China responded by restricting the flow of rare earth minerals and magnets, upon which, frankly, American manufacturing depends, and that would've been, you know, a devastating blow to the US economy, and President Trump essentially did fold.

He pulled down the tariff rates and decided to pursue a much more stable, even conciliatory relationship at times, with China to make up for that, uh, that moment in the trade war.

Since then, Beijing has felt that it has the wind in its sails, that the so-called East is rising and the West is declining, to quote Chinese Communist Party texts.

I, I mean, how does China regard this conflict? A- and do you think it will actually shape the outcome of what we're gonna see in the next few weeks or even months?

Uh, and I'm just wondering what you think of the thesis and, and, uh, if you agree there's some truth to it, uh, what you think the US n- how the US, you think, needs to adjust.

Yeah, I think there's some, uh, there's something to the point that no successor power's order looks the same way as the predecessors did.

The US system didn't look like the British Empire, and whatever the Chinese are going to build won't look like our system either.

It'll look different.

And I think the Chinese system probably , I'm not sure if I would say they're not zero-sum thinkers.

I think that they're quite realpolitik in their party texts, but that doesn't mean that they don't understand and appreciate things like, you know, the use of commerce, for example, as a way to build influence with folks, or the use of aid, or the use of scientific diplomacy.

That is, they have a more expansive toolkit even as they pursue, I think, what are in many ways traditional power political aims for a country like China.

And it seems to me more likely that the Taiwan-China issue is resolved without a big conflict, and I'm just interested in what your thoughts are on that.

Uh, I mean, how does China regard this conflict? A- and do you think it will actually shape the outcome of what we're gonna see in the next few weeks or even months?

You know, I think that China looks at this conflict as a, as basically an own goal for the United States, an unforced error, that the US essentially has once again put itself into a Middle East quagmire.

It is expending large quantities of the munitions that it needs to be able to deter China in the Taiwan Strait, and it's spending lots and lots of money to do so, and the net result might end up being that the US essentially loses the ability to stop Iran from throttling trade in the Strait of Hormuz, that we end up essentially worse off than we were.

And the Chinese know, and Venezuela and Iran show this, that US military power projection around the world is unmatched.

The US has incredible capability.

But a military victory, or rather an operational victory, can also be accompanied by a strategic defeat.

Now, what does President Trump want from China on Iran? Well, China is the biggest purchaser of Iranian oil.

What kind of discussions were you a party to when you were with the Biden administration?

Should, should we attribute any significance to that?

Well, it's interesting.

You know, he's, uh, not only on the trip.

You know, Elon Musk and Jensen Huang were both on Air Force One on the way to China.

Uh, and what's interesting about his inclusion is that it suggests that maybe the two sides will be talking about chips, right? Because that's what Jensen Huang makes.

He designs the world's best artificial intelligence chips.

They're actually made in Taiwan.

Worse, the two countries treat their mutual entanglements on technology and trade as security risks." Does that capture your sense of these guys? [laughs]

Uh, is there any indication they're more interested now?

Well, it's interesting.

Um, the Chinese side basically pulled down all of the military-to-military diplomacy that existed between the two sides in 2022 after Speaker Pelosi went to Taiwan, and they didn't restart it for almost a year and change.

It was basically 2023 November when they agreed to restart it.

It's a big gap, you know, between these two militaries to not have any meaningful communication.

Right now, all of the communication we reestablished in 2023 is technically still open.

The Chinese haven't pulled it down even during the trade war, and I think this tell, tells us something about the Chinese thinking on crisis communication mechanisms.

Okay.

One is your discussion of the importance of scale, and two is the importance of allies, and let's do them in, in that order.

Yeah.

Look, the basic idea is this.

The rise and fall of great powers is really hard to figure out, but one of the things that matters in the rise and fall of great powers is who has scale.

And so if you look across time, Great Britain became a, an industrial power even though it was a tiny island with a small population, relatively small population, um, because it had a first-mover advantage in the Industrial Revolution, right? It, it invented essentially the steam engine, and that catapulted it into the leagues of world powers.

It became the world power, the hegemon.

But the next industrial revolution, the second industrial revolution was, some say electrification.

Um, so is there anything you can do to negotiate them to be more compli- with them to be more compliant?

Can you summarize how you see China and their long game?

The basic point is that China has a grand strategy that's evolved over time to displace the US from its order, first at the regional level within the Indo-Pacific, and then at the global level.

And really, if you look at how China's approach has shifted across time, the biggest variable that has always affected China's strategy is its perception of the relative power gap between the US and China.

Back in the Cold War, the US and China were almost quasi allies against the Soviet Union.

It all changed because of a traumatic trifecta of events from Beijing's perspective.

The Gulf War showed American military dominance.

The end of the Cold War took away the glue that held the US and China together.

Can you explain?

W- How does that quote speak to China's advantages at this moment in history?

Yeah.

Well, you know, ultimately scale really matters in world politics.

That's sort of the first argument we try to make in the essay.

And, you know, it's not enough to be large, right? A lot of large countries don't become great powers.

What they're able to do is scale up.

When small countries scale up, take the Asian tigers, they can lo- become very prosperous.

I mean, how do we think about these obvious disadvantages, Rush?

What does that get wrong? What, what does that miss about the nature of Chinese power at this moment?

I think that ultimately, you know, in 2020, everybody thought China was taking over because the U.S. was, you know, dealing with the fallout from January 6th, manufacturing was challenged, COVID response seemed uneven and uneasy.

Uh, we had alienated some allies, and China was firing on all cylinders.

It was manufacturing, it seemed like it had a approach to manage COVID.

So that was the zeitgeist of the moment.

Then two years later, I think everything changes.

Beginning in 2022, a few things happened, right? The Russians invade Ukraine, and at that moment in time, there was thought that the Russian military was vastly underperforming and maybe autocracies can't do this kind of stuff that well.

What does this mean for the assessment of China that the two of you laid out in the piece, and how do you read Xi Jinping's response over these first days of this trade back-and-forth?