These Are the Signs Xi Is Losing Power in China | Gordon Chang

I think that Cining has lost control of the Chinese military and I think that he has lost some influence among civilian CCP leaders. We have seen a number of unexplained disappearances as rumors grow that Xiinping is losing power. I'm sitting down with China analyst Gordon Chang to get his read on what's going on. Producer prices in July were down for the 34th straight month and that shows you the state of the Chinese economy. In this episode, we dive into infighting in Beijing, US China tariff talks, and the recent stunning destruction of a Chinese coast guard vessel by a Chinese navy worship. You can't have an accommodation with a regime that believes it must destroy you. And China's regime believes it must destroy us. This is American Thought Leaders and I'm Yana Kellik. [Music] Gordon Chang, such a pleasure to have you back on American Thought Leaders. Thank you so much, Yan. We're going to talk about communist China, of course. We're going to talk about, you know, the realities of the economy, some big changes, kind of leadership struggles and and things like this within the CCP. But before we go there, this bizarre event where a Chinese Navy ship basically destroyed a Chinese Coast Guard ship and and the US is sending ships into the region. What's going on there? Yeah, on Monday, a Chinese Navy uh destroyer actually cut the bow off a Chinese Coast Guard cutter. Both of those Chinese vessels were chasing a Philippine Coast Guard cutter near a Scarboro shaw in the South China Sea. Scarboro is really important. It's very close to the main Philippine island of Luzon. It guards the mouths to both Manila and Subi bays. Very strategic. The Chinese want it and they are trying to chase the Filipinos out um due to some really very clever seammanship on the part of the Philippines. They maneuvered the Chinese ships so that they collided and right now China is out for blood. Uh they've been humiliated. Um, one thing about this incident is important, um, and it's not getting that much attention, and that is that four Chinese Coast Guard men, um, were thrown into the sea after that collision. The Chinese destroyer did not render assistance. The Philippine Coast Guard cutter actually came back to look for the Chinese sailors, but nobody was found in the water. This shows you the nature of the Chinese regime that they're leaving their own people in the water and the Filipinos who have every reason to be agrieved were the ones to render assistance. That just shows you what we're up against with regard to Beijing. But it it it's just bizarre though. Like I mean those seammen are presumably valuable, right, to the to the crew and so forth. I mean it just doesn't make a lot of sense. A human life doesn't mean very much to the regime. And we know that because the flag of the People's Republic of China is red. It's red for blood. They are willing to spill blood. And as people have pointed out, um the person who was killed the most Chinese in history is Ma Zong, a Ma who is still revered by the Communist Party. That tells us almost everything that we need to know about the People's Republic of China and the Communist Party. So there's been this new development of course there's a US destroyer that was sent into the region per you know there might even be more going in uh as we speak and just frame for me very briefly like what has actually happened in that region like how these islands have been changed by uh the Chinese regime. We need a little history here because this is Scarboro. In the first part of 2012, both Chinese and Philippine craft were crowding around that feature. Uh the Obama administration brokered an agreement for both sides to withdraw their craft. Only the Philippines complied and that left China in control of Scarbor uh since then. Now, the Chinese have not reclaimed Scarbor. In other words, they have not tried to turn it into a permanent outpost like they did in the South China Sea in the Spratley chain. But we got to remember what the Obama administration tried to do in 2012 was to make this go away. And the problem was that emboldened the worst aspects in the Chinese political system by showing everybody else that aggression worked. And so right after the incident at Scarboro, the Chinese ramped up pressure at another Philippine feature, second Thomas Shaw, also in the South China Sea. They then started the reclamation of those features in the Spratley and they ramped up pressure in Japan and the Senkakus in the East China Sea, which the Chinese claim is the Dalus. So the Chinese are pretty aggressive. They're pretty bold. They think they're in control of the situation. And the United States, and this is to the great credit of the Trump administration, has uh stationed two US Navy vessels, the Higgins, which is an Arley Burke destroyer, and the Cincinnati, which is a latoral combat ship. They are now about 30 nautical miles away from Scarboro. Just about uh about 24 36 hours ago, the Higgins did a a pass by Scarboro within 12 nautical miles of that feature. Um that is important from a technical point of view. Um the Chinese were enraged. Um this is even though the Trump administration so far has acted perfectly in terms of trying to establish deterrence, this could really go very badly. We could see regionwide war sparked by what the Chinese plan to do at Scarbo. Because although the Trump administration has handled this correctly, we're not driving events. the Chinese are and that means they get to decide whether the world goes to war at Scarboro. Well, and over the past, you know, decade, 15 years or so, they've actually, you know, bottom line is they've built military bases across all these islands in the South China Sea and presumably there's the same intention. I mean, basically taking land which is not theirs, building on it, expanding it, building on it, building military bases and saying, "Hey, this is us. We've been here all along. Yes. And um at some point the um the rest of the world's got to push back because China's made it very clear, you know, um Cining talks about him as being the only legitimate ruler in the world. And since 2017, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory. So what's at stake here is this is not just a feature in the South China Sea. We're talking about Cinping's ambitions to rule the universe. And I know that people will think that that's ludicrous, but we've got to actually start to listen to what this guy is saying and his officials. And they've made it very clear. They believe that they are the world's only legitimate ruler. Um, and that means that the United States in their view is at best at best yan a colony. So, at some point we're going, unless we want to decide that we are going to get down on our knees to the Chinese literally and figuratively, at some point we're going to have to stop them. And I believe that we need to stop them at Scarboro. You know, people can disagree, but clearly the accommodative approach in 2012 at Scarboro has just opened the door to more Chinese aggression across the region. That approach doesn't work. We are going to have to be more robust. And yes, this is incredibly dangerous, but that's because through choices we've made in the past, we have left ourselves with only incredibly dangerous options at this point. So, let's talk about Xiinping and his uh approach. Of course, he's sort of taken this more uh mauist approach to governance uh in in communist China, but at the same time, his leadership is fraught increasingly, and this is something we've been following at Epoch Times quite a bit. Um, but I I I would love to hear what you think about it. I mean, just recently there's examples of being people being removed on the one hand, you know, in the military, then in the in the central commission as well. There's, you know, someone that seems to be, you know, basically out of favor all of a sudden, uh, on the Xiinping side. What how does that all look like? How does this internal turmoil play out right now within the Chinese Communist Party? And what does it mean for us? I think that Cining has lost control of the Chinese military and I think that he has lost some influence among civilian CCP leaders. Start with the military. Um um his number one guy in the military, his number one loyalist, his hatchet man, General Hui Dong, has not been seen in public since March 11th after the two sessions. and the you know the New York Times article 3 4 days ago and and just about everybody says well Cuning has been sacking his own loyalists and and that's possible but I don't think that it is right and the reason is u that from July 9th of last year there have been a series of articles in PLA Daily the main propaganda organ of the Chinese military that have praised collective leadership quote unquote that's a direct challenge to Cining one-man rule style. And so um these articles were written by people who are aligned with General Joe Yang Sha who is the number one unformed officer in the military who is known to not be on particularly good terms with Cining. Now, General Chang is um he's the number one vicechairman of the Communist Party's central military commission and I believe that he was responsible for getting rid of General Hui Dong and some other Cining loyalists recently. This indicates the balance of information that we have and by the way we're guessing here of course but the balance of information is that Cinping no longer controls the Chinese military because General Jang does. Um on the civilian side of things, it's less clear. For ba basically five weeks, Cinping just dropped out of uh propaganda. He dropped out of sight for the most part. Those times he did appear in media. He was appeared in roles which showed that he had been diminished in stature. Beginning about let's say the second week in June, um he has had a more prominent role in media. We also saw the dis disappearance of a senior Chinese diplomat, Liu Jao Chao. Um, and we don't know what's going on there. This follows, of course, the disappearances of other civilian leaders. Again, this is really murky. Not all of it points to Cining losing influence, but some of it does. We will know a lot more after the fourth plenum in October. um because I think we will see uh a number of things uh occur. So um it's sort of like stay tuned but I think that there is intense infighting in this regime and that has all sorts of consequences for our dealing with China and how we can work with Beijing. In other words, I think we can't because the regime is not in a position to deal constructively with anybody at this point. Thank you for tuning in to American Thought Leaders. In a world where spin and agendas dominate the headlines, I'm proud to bring you unfiltered insights from the brightest minds in America from a relative outsider Canadian perspective. To keep this possible and to access even more exclusive content, in-depth documentaries in our daily digital newspaper, consider subscribing to the Epoch Times today. It's your way to support independent journalism. Just hit the link in the description below to subscribe and unlock the full American Thought Leaders Experience and so much more. You can try it today for just $1 a week. So, just hit the link in the description below. And now back to the interview. Going back to this uh uh incident at the Scar Bro near the Philippines. Um does that does this impact how uh that situation will be viewed? Because of course, as you mentioned, this is extremely embarrassing to the Chinese regime, their own Navy ship basically destroying one of their Coast Guard gutters and and you know, they're going to be looking for someone to blame presumably as they do because the Communist Party can never be wrong or in error. Yeah. Um this if if you give me a little time for background here, I have not been worried about the Chinese uh starting hostilities by launching an invasion of the main island of Taiwan. And that is for a number of internal Communist Party reasons. I just don't think it's in the cards. Um but that's not to say that Taiwan is safe or that the region is safe because we have seen belligerent Chinese activity on a continual basis from South Korea to Japan to Taiwan to Philippines to far away Australia. And I've always worried that one of those incidents can spiral out of control. And if they do, the regime cannot deescalate because of what we've just been talking about, the political problems. There's something else that could cause problems and that is um somebody in the regime could be Cining could be General Jao Yao Xang Jang Ya Sha um could very well decide that it's in his interest to let an event spiral out of control or to pour fuel fuel on the fire. And it's not because they want to start a war, but because I think that a political figure could decide that a conflict would be in his political interest. Because for instance with Centin Ping, it could prevent others from moving against him from challenging or deposing him if there is a conflict with for instance the Philippines or the United States. And that's why I'm really concerned about what's happening at Scarbor right now because the Chinese in general, even if things were calm in Beijing, would be looking for blood, somebody else's blood. And now things are much worse because of the political turmoil. So I think that this is an exceedingly d this is a very dangerous time right now. Well, so given this reality and I and I think you know there there's a number of people uh in this current administration who understand these various elements and also just in general in America there's been a shift where people kind of understand the realities of the Chinese Communist Party and its ambitions at a greater level at least than than than in the past. How is it that we are funding you know our investment banks giant investment banks are funding IPOs like cattle and of course I'm not talking about cows here I'm talking about this giant no well now you know apparently extremely successful battery manufacturer where the batteries are used in Chinese military submarines I mean this is a military company why are we funding these things this is where I get really angry um it is strategically wrong for us to deal with these Chinese companies for the reasons you suggest. But it's morally wrong. It's morally wrong to help um an enemy. China has declared the United States to be its enemy. They did that in May 2019, for instance, when People's Daily ran a landmark editorial that declared a quote unquote people's war on us. Um PLA Daily in March of 2023 defined people's war. We didn't need a definition of people's war. We know what that phrase means. It goes back to the Mauist era. Carries great resonance in Communist Party thought. But in in case anybody needed clarification, in March 2023, PLA Daily defined people's war as total war. So we know what's going on here and yet we maintain relations with Beijing. Um, and Gordon, if I may jump in, and I think total war means, you know, this unrestricted war, basically using all means to wage warfare to diminish the enemy in all sorts of ways. Yes, absolutely. You're absolutely right about that. Um, unrestricted warfare is that title of that slim 1999 book by two Chinese Air Force colonels that argued that China could use any tactic to take down the US. And two years before 9/11, they even wrote about Bin Laden attacking the United States. Bin Laden, who China had a relationship with in 1999. So let's understand what the stakes are here. So we should have no business, no commercial, no investment ties with China. This is wrong. And future generations are going to look back at us and say, "Who were these Americans?" So yeah, this is just morally wrong. It is just kind of bizarre because I was just uh listening to Roger Robinson speaking about this this of course this Catalow IPO was in Hong Kong and the reality is that that it's actually paving the way for several other maybe even in the kind of teens uh IPOs of of this nature and which is just kind of bizarre because Hong Kong's you know independ financial independence has been shattered right by the CCP's encroachment. It's just something again it kind of boggles my mind. Yeah. Well, since June 2020 um when China imposed its national security law on Hong Kong, Hong Kong no longer is the one country, two systems high degree of autonomy um that was promised in the Sino British Joint Declaration for 50 years starting from July 1st, 1997. So, we know what's going on and and here is where also I get angry. you know, we we've given Hong Kong special treatment um for instance on our sanctions and stuff like that on the assumption that it's autonomous. Well, of course it's not. It hasn't been since 1997. So, um we just fail to understand and and it's sort of like we're determined to fail to understand, but we're going to lose people. We have lost people um because of this. We've lost Americans, you know, tens of thousands of American lives from fentanyl, 1.7 million American lives from CO. And I mean, how many Americans does China have to kill before we finally wake up? So, again, it's kind of a bizarre development uh with uh the ascendants of the current Intel uh CEO. You know, of course, the President Trump has been advocating for him to remove himself because of his involvement with uh I mean a number of Chinese Communist Party uh related entities and I just want to get you to speak on that a little bit for me here. Yeah, Lit Bhutan uh is one of the most capable American executives. Um he's got the right vision for Intel and he's also got the strength to take on Intel's chairman Frank Yuri who has misguided ideas about what uh Intel should be doing. But I believe Intel must fire uh Lip Bhutan. And President Trump was right two Thursdays ago when he um demanded that uh that Tom um be removed. The reason is that town was um chief executive of Cadence um from the period 2008 to 2021 and from 2015 to 2021. Cadence um engaged in 56 sales of design, software, um hardware and other tech products to a Chinese defense university um the National University of Defense Technology which is essentially the Chinese military. These sales were illegal because uh the that university was on the commerce department's entity list. So, um, Cadence, um, two weeks ago plead guilty to one count of conspiracy to violate US export controls and agreed to pay a fine of more than $140 million. But that's not where the matter should drop. Cadence CEO, Lip Bhutan, should be investigated for his role in this. So, I don't care how capable Lip Bhutan is. He put the life of every American at risk. This is uh one of the basically very difficult realities uh we have in you know frankly every western liberal democracy that that works with China that has been doing engagement with China my in Canada you know this is maybe even you know a level up from here in the US um but there's this kind of there's been this deep engagement and there's you know a lot of people that have been touched by it um and in some in very very you know serious ways compromised ways and and this is just something we have to deal with as a society uh in general. You have thoughts on how to how to approach that because you know a lot of people entered with good presumably good intentions and and just you kind of ended up in this situation or do you view it differently? Well, we're a democracy um and democracies are very bad at defending themselves until a lot of people get killed. So let's go back and look at al-Qaeda, which I think sets the pattern. I mean, actually, if you want to look at the pattern, you go back to Toqueville in the 1800s. But let's look at something recent, something that Americans still may remember. And that is in 1993, al-Qaeda killed six Americans with the bombing of the North Tower of the World Trade Center. And we couldn't care less. Um, and so we couldn't care less until one day when Osama bin Laden reached out and killed 2,977 Americans. And then we said, "How did that happen?" Well, it happened because we were determined not to look at what was going on and with al-Qaeda and what Osama bin Laden was saying. We had a feeble response from President Clinton to al-Qaeda. We had Republicans who were criticizing Clinton. um for being too tough on al-Qaeda. So, this was bipartisan failure. Now, China is so much more powerful than al-Qaeda ever was. Um and so, we could very well lose our country over this. And so, this is a time when we Americans are going to decide whether we are just going to surrender to China or whether we're going to fight for our society because we're going to have to fight for it if we want to keep it. Well, and one way this is manifesting actually come to think of it is you know the state department recently released its uh you know human rights report which uh China features very prominently in and especially in this realm of transnational repression ch basically the Chinese communist party targeting Americans and targeting people on American soil and of course this is a pattern that happens elsewhere. So you know this I I I guess I'm just trying to add a little bit of color. Maybe you can speak to that a little bit. Um that this is this isn't something that's that's isolated. Even there's there's basically direct action on people here in our country right now. There are networks of Chinese agents, operatives, and soldiers. Um we know this um for a number of different indications and we can run through all of them. Um but uh just to give you one example and that is it was great that the FBI closed that secret Chinese police station in Chinatown, New York City, but according to the Daily Caller and the New York Post, there are at least 7 to nine more of them spread throughout this country. And uh no administration, either the Biden administration or the current Trump administration, has taken the effort to close these down. Um, I think that the number one priority of Tom Holman, the borders are shouldn't be people at Home Depot in Los Angeles. It should be um these Chinese networks. We know that they're extremely dangerous. Um, with the increase in the flood of Chinese migrants during the Biden years, we saw a change in the composition of those Chinese migrants. So if you go to the beginning of the flood, we were seeing primarily family groups come across. In other words, people who were desperate to live in a free society. Towards the last year of the Biden administration, the composition had changed. At least twothirds and in some border crossings, 85% of the Chinese migrants were single males of military age traveling without family members, often pretending not to speak English. Border Patrol knew that some of them had links to the Chinese military. And by the way, towards the end of the Biden years, we saw these packs of males come across with identical kit. This occurred while there was an increase in tempo of Chinese nationals trying to gain entry into our military bases, either by sneaking in, barging in, or by attempting to enter through um false um under false pretenses. There's been illicit surveillance of our bases and our infrastructure by the Chinese. They're preparing for attack. They're looking at our patterns. They're studying our vulnerabilities. And the only reason why we have not been attacked on our own soil is because Sinping or whoever is in charge in China right now has thought it not to be in China's interest to give the GO signal. But once they give the GO signal, we will be fighting a foreign enemy on our soil for the first time since the hour of 1812. You know that it's in incredibly good point and it's something I think we we don't kind of cover enough like these this this is an actual reality and it's even unclear you know how many were in this gotaways group people that weren't even you know sort of assessed uh at all known to known to have come in in the first place. Yeah. Well, um, give you an example. In February of last year, uh, we we always talk about our southern border, but the northern border has been a problem as well because in February of last year, um, we had CNN reporting that border patrol apprehended three Chinese migrants who were trying to sneak into Maine undercover of darkness. What made this ominous was that there was a fourth Chinese migrant on our side of the border who was there obviously by pre-arrangement helping him the other three to get in. Now, if you're coming into our country because you want to live in a free society, I mean, the first thing you did was you surrendered to Border Patrol to put yourself into the asylum queue and to get generous benefits from cities like New York. If you're coming into here trying to sneak in, you're coming in for some nefarious purpose. I don't know what it is. Maybe it's to attack the United States. Maybe it's just to be a criminal. I don't know. But the point is, you're here for no good. And let's remember what we have seen um in the no good category. Um let's talk about that secret Chinese biological weapons lab in Reedley, California, which had at least 20 pathogens, including the one for Ebola, and almost a thousand mice that have been genetically engineered to spread disease. I talk about Ebola because we know that the Wuhan Institute of Urology, they are now studying Ebola. In other words, they're studying to make it more lethal or even worse, more transmissible. Ebola in nature has a 50% fatality rate. I mean, I I keep thinking about uh you know, we have a a Hong Konger who is is in an asyle in America who has a bounty, a literal bounty on her head for being in protest movements uh in Hong Kong, right? We have uh you know Chinese agents sitting in jail uh for trying to uh you know bribe IRS agents to remove the Shenyun dance performance groups uh 501c3 status to prevent them from being able to function. Um we have we have all these examples of basically the long arm of the CCP kind of coming into America including for example this or this the Chen Chenpeing the organ harvesting survivor trying to threaten him trying to lure him back into China to shut him up. There's all these examples of of this uh whole phenomenon of uh uh uh you know let's say these Chinese police stations and the type of work that the people and those might be doing. Yes. Um and and and you know here, yes, the Chinese are malicious. Um but I save my great greatest anger for Americans, American officials, because look, we know what the Chinese are doing. We we know what their networks are doing. We know what their consular officials are doing. This is our country. So for instance, the Chinese students who've gotten so much attention, we know that Chinese consular officials and Ministry of State Security agents monitor, surveil, and coers them. They've been doing that for more than a decade in the United States. And yet we have permitted this to occur. This is this is our country. So yes, the Chinese are going to do all these things because we let them do it. And we have got to start um saying no, this is impermissible. We need to roll up these networks. We need to send these people to prison or expel them if they're diplomats, but in any way get them out of our society. So, what can I say, Yan? This is on us. This is a failure of the United States to defend itself from a known threat. I think the American people should be outraged at China, but they should be even more angry at the people that they elected to defend them and protect them because those officials and those leaders haven't been doing that. Gordon, when we last interviewed, it was just the beginning of these uh trade US trade policies uh that looked I think we discussed this that looked to us like they were specifically looking at countering the Chinese Communist Party. of course other other countries as well but with a particular interest we've talked about trans shshipment and trying to stop that phenomenon now we're many months into this policy we're kind of in I think the the CCP has just been given uh kind of an extension on kind of coming up with a deal before you know those uh tariffs uh numbers will increase where do you think things stand right now and at by the way I just might mention this is at the same time when you know Apple for example is promising to invest massively in US manufacturing and start building iPhones here. That's interesting. So anyway, there's there's all these dimensions. How do you see that element? Well, the Trump administration this month has given China a second 90day extension on those elevated tariffs. Uh normally delay helps China because it gives them more time to steal our intellectual property and to engage in predatory trade practices. Um also, um this is 90-day extension covers both the Halloween and Christmas shipments. So, you know, normally this would help China. This time might be a little bit different, Yan. And the reason uh two reasons, first of all, our tariffs are uh general tariff rate is 30%, their tar general tariff rate is 10. So that's somewhat advantageous and the 20% difference is because of fentanel uh the fentanyl tariff. The other thing and more important reason why this might actually this delay might actually help us is because President Trump is uh signing up these framework trade deals with other countries and these deals tend to redirect trade away from China. So for instance, the UK deal in May actually has provisions which say that the reduced tariff rates for British goods coming into the US apply only if they don't have components from countries of concern which is China. Um so that redirects British trade and uh away from China but also you know we're seeing the EU deal um which was incredibly important um a big defeat for China and you know then there's Japan, South Korea, Indonesia um so these things are moving in the right direction. Um but the problem here though um and it's a propaganda one the propaganda is important um the China is making the case that um it holds the whipand over the United States u that they're winning the trade war and um from an objective point of view one could argue that they're right um but they are that view is now predominant not only in the United States but around the world So Trump is in the short end of this and um what's what what is really concerned is that Trump holds the high cards most of the high cards here. Um and he's still playing a he playing a very strong hand in a very weak manner. Now I think Trump is just trying to be generous. But the point is until Trump changes the dynamics by imposing costs on China, the United States looks like it's finished. um which is the Chinese argument. So Trump needs to do something about it because propaganda is real and it's important and has real life effects. As far as I can tell, the president is aware that uh you know the virus from Wuhan played a very significant role in him not being elected back in 2020. Um, and you know, from multiple sources, you know, basically has saw the I guess the the hard ball that the CCP played by, as we've discussed a number of times on this show, weapon weaponizing the the the spread of the virus and and things like that, like very very aware of these things. So, you know, h how does this comport with what you're telling me here? Well, we know that China's been messing in elections. Um, and you're right, Trump was, as they say, if you go back to January, February of 2020, people were saying that Trump was a shoein for re-election. Um, but then the virus happened and, uh, that we know that in the 2020 election, China was using text messages to spread disinformation to undermine Trump. It was using its, uh, bots on Facebook, Twitter, um, Instagram to attack the president. Tik Tok was against him. So that was very clear. Um, China had the vote, the one vote that was decisive in 2020. Fast forward, um, you know, we looked at this 2024 election. We know the Chinese propaganda held tariffs in the general election. Um, so we we we know what China's been doing. Um, and yet we have not taken steps to get China out of our elections. I guess what I'm saying is it looks to you like, you know, China's kind of has the upper hand in this trade scenario because of the propaganda um because of the way the hand is being played. Um at the same time, uh it doesn't it doesn't seem to make sense that the the president would be blind to that. Like how does this how does this comport? Well, I think Trump has a very generous view of the world. um you know and he's we saw this in his first term. Um uh with regard to his sanctions on ZTE, I mean he was worried about Chinese workers. Um I wouldn't have been I worry about American workers. I worry about worry about American national security. But this is a consistent theme and and Trump was very clear in an interview with Brett Bearer when Trump in May was in on his Gulf tour the the Gulf region in the Persian Gulf region. Trump actually said, "Look, if I had pressed China, um China could break apart." And you know, we could we can argue about whether Trump's assessment was correct. I think he probably was correct. But u the point is Trump actually does not want to um take down the communist party because he's worried about the instability. So he is not using American leverage in the trade war to the extent that he should because he's concerned about uh the stability of China and the unfortunately the Chinese are not reciprocating the gesture. They are maliciously attacking him. And this is something that we Americans have got to understand. You can't have an accommodation with a regime that believes it must destroy you. And China's regime believes it must destroy us. And I know Americans don't want to hear that, but the point is if we don't understand the nature of the Chinese regime and what it's doing, we will lose our country despite the fact that we're a far stronger society than China. So Trump is just totally misguided on this and he has opened the and he's got the most of the high cards and he's not playing them. Um, now that's my assessment. Maybe something else. I don't know what's going on. I'm not in his mind. But the point is that he is uh allowing the Chinese, at least at this point, to look like they're winning. So, I think Trump needs to go and and bring the hammer down on China and shows who's boss. What do you think would happen if the Chinese Communist Party were to fall? I mean I I I think there's very real concern about this given for example the economic reality which we haven't talked about yet right for example we have you know bank loans going to going negative right well let let's talk about that briefly again about the reality of the Chinese economy briefly um you know basically the one pillar left seems to be the export the tariffs are you know obviously affect that pretty massively um what's the status okay China reported 5.2% growth in the second quarter of this year. It's probably about zero. Um and we know this for instance from price data which shows that the country is stuck in deflation. There's mild consumer deflation but more important there is producer price uh infla deflation. Um producer prices in July were down for the 34th straight month. and and that shows you um basically the state of the Chinese economy. Cinping has turned his back on consumption as the fundamental basis of the economy which means that his only way out of this is to export more and so that means more production more factories that means more deflation. This is um terrible economics. Almost everybody inside and outside in China recognize it. But uh the communist party is not going to change it for a lot of reasons which are really important. One of them is that um production is key to communist economics. Not just Chinese communist economics but communist economics overall and also it doesn't help that Cinping is preparing for war. So these things tend to make it more difficult for him to switch to a consumption-based economy. You mentioned bank loans. Bank loans are an important tell and the reason is that although the Chinese government has made a lot of money available to the Chinese banks, Chinese banks don't want to lend it. They don't see um any good lending opportunities. And that's because companies in China don't see good investment opportunities. Now, China's trying to increase money supply through more bonds, but it's really not working. So these bank loan um declines in bank loan volume really important um indication of where the Chinese economy is. Well, so here's the question, right? Is is communist China too big to fail and de facto by not uh uh you know using all the cards or whatever? because I think I think you're right that the US absolutely does have the economic cards and through tariffs and and other means and so forth. Um and this you know fear there I think there's legitimate fear of what might happen if it were to collapse but you know so let's talk about these two dimensions. Is China too big to fail and what might what do you think would be the reality if the Chinese Communist Party were to collapse? Well, people think that China is too important to fail, but nobody is uh immune to failure, big or small, and the Chinese regime could fail. And matter of fact, the Chinese regime is worried about failing. And we see this from a number of things that it's been doing. Um what happens when it fails? Um I mean, there any number of different scenarios. One of them is um people who said that they were a member of the Communist Party on Monday can say that they're a member of the Chinese Socialist Party on Tuesday and we can see essentially the regime reconstitute itself. I mean that pretty much happened in the Soviet Union when it became the uh the Russian Federation. So that's possible. Um I tend to think that the military will be running the country effectively. I think General John Yosha is the most powerful figure in China right now. Um so we could see essentially military rule, maybe not formal military rule, but we could see that um or there could be just unrestrained chaos. U in October 2022, um despite all the social control mechanisms that the Communist Party has put in place, Chinese people just went on a rage. Um I mean for any number of different reasons for about three and a half months we saw protests across China. Some of them in places like Shanghai and Beijing some of them um where people were demanding the uh communist party stepped down and Cinping stepped down. Um but what we saw was just volatility in Chinese society and people just were no longer afraid of the regime. They were out on the streets. They were marching. They were angry. Um, and that's entirely possible for what happens when the communist party fails that there is nobody able to instill and to enforce government order. So there could be complete chaos, the country could split apart. Everything is on the menu, gone, everything. Well, and and presumably also what happened, you know, in in Poland uh after ' 89, which is, you know, there's a lot of debate about, you know, whether there were too many concessions to the communists early on, but ultimately uh uh Poland was able to build itself into a very robust, free uh you know, arguably the best economy in Europe right now. Entirely possible. Um, China could be successful without Communist Party ideology. Um, and Taiwan and Taiwan is the is the model, isn't it? In a lot of ways. I mean, it's a good this is Taiwan is a model, but the Taiwanese don't think they're Chinese. Um, so that's that's a complicating factor, you know, but essentially, yan, there's anything that can happen. Um, given that it's China, when we have seen um political change and radical political change, usually things don't work out very well. So, you know, anything can happen. The third Chinese revolution probably going to look very different from the first two. Well, and and and we have this situation where, you know, I think it's upwards of, you know, 450 million people have actually quit the Communist Party as part of the Tui Dang, you know, quit the CCP movement. So, I mean, I I I think there's there's there's positive there's there's sort of, you know, positive reasons to to think uh that good things could happen. I mean, here's the bottom line, right? Is it correct, right, in your mind, and I it sounded like you don't think it is to to basically in effect keep propping up the regime through the engagement? No. I mean, yeah, American presidents on three occasions have propped up the Communist Party. Richard Nixon did that in 1972 when he went to Beijing, rescued Maong. George HW Bush did that in 1989 um after the Tenement massacre and I think that Bill Clinton did that in 1999 with his deal that paved the way for China's assession into the World Trade Organization in 2001. Um you know, one could argue that Nixon did the right thing as the Cold War when most people thought the United States was losing the struggle, but there was no justification for 1989. Um, and there was no justification for 1999 uh for Bill Clinton. So, yeah, when we rescue the Communist Party, um, it is not it's it's had disastrous results for us. So, I'd say let's not do this again. Um, let's work with our friends and allies and partners and let's not uh try to rescue a regime in Beijing that is determined to kill Americans and in fact has killed a lot of Americans. This is, you know, forget the strategy. This is morality. This is morally wrong. It is morally wrong to support a regime that has resulted in the deaths of millions of Americans. Well, and and you know, 100 million of it, at least of its own people and its own people. Gordon, uh, this has been absolutely fascinating conversation. A final thought as we finish. We're at a point where um we are going to have to fight to defend our country. Communist Party is falling apart. We don't know how far the disintegration process will go, but we need to have uh robust measures to protect the United States, our friends, and our partners. Uh this is one of the most consequential moments in history and we had better get this right because if we don't get this right, I fear that uh the future of humanity is going to be a lot darker than we envision now. Well, Gordon Chang, it's such a pleasure to have had you on. It is such a pleasure to be here, Yan, and I very much appreciate the opportunity. So, thank you. If you like what you just saw, please consider supporting our independent journalism and subscribing to the Epoch Times. Just hit the link below. [Music]