#jeffreysachs

He argues that the U.S. is struggling to accept a multipolar world where it no longer dominates unchallenged. With calm clarity, Sachs reveals the deeper geopolitical reasons behind Washington’s anxiety over Beijing’s ascent. If you want to understand the real source of U.S.-China tensions, this video offers crucial insights.

Transcript

0:00

now we should understand a couple of basic things China is roughly the same size as the US economy right now in aggregate Depends how you measure things

There are always two ways to measure things One is at the prices of each country's own markets and then you convert the yuan output to dollar output with the market exchange rate and that's called market prices and the other is a common set of prices that you apply to the goods and services of each country

that's called purchasing power parody adjusted prices and by the market pricesina China's economy in the aggregate

0:50is something like 3/4 of the size of the

0:55US in dollar terms China's four times

0:59larger So that would mean 3/4 * 1/4 or

1:05316 the size or roughly uh in per capita

1:10terms 20% of the US uh um economy in

1:16total size

1:193/4 if you look at it at international

1:22prices or purchasing power adjusted

1:26prices China is a bigger economy and the

1:29IMF F gives us data all the time in what

1:34is called the world economic outlook You

1:36can go to IMF.org and just look at the

1:40data which I do 10 times a day for my

1:43job Uh and if you look at the purchasing

1:47power adjusted prices China is about 30%

1:51larger than the United States in

1:53absolute size So

1:571.3 divided by four because the

2:01population is four times larger So in

2:04per person terms about 30% or 35% of the

2:08US China's poorer per capita than the

2:11United States But it's a big economy

2:14because 1.4 billion people is a lot more

2:17than 335 million people which is the US

2:21population

2:25Now that's freaking out the policy

2:28makers in the US They're bigger How dare

2:32they be

2:33bigger but it's kind of

2:36arithmetic The only way that China could

2:39be smaller than the US is to stay at a

2:43per capita income less than a fourth of

2:46America But why should

2:48they because China's filled with clever

2:51people with good entrepreneurs with

2:54technology Technology flows in this

2:57world It always has and it will continue

3:00to And China now is absolutely in the

3:04front ranks of scientific breakthroughs

3:08and of technological innovation arguably

3:11ahead in many many sectors Uh comparable

3:14in many and behind in some but a

3:18superpower in science and technology and

3:22with superb universities and all of the

3:25things that made for a

3:27highincome country And why not china was

3:30the world leader for 1,000 years at

3:34least uh it lost that lead by a terrible

3:38policy era error in the year 1434

3:43uh when uh the Ming court stopped the

3:47great fleet of Admiral Jungha and China

3:51went protectionist and the next time it

3:56was really deeply exposed to the world

3:58is when British steamers were coming up

4:02the river to bomb the

4:06to to bomb

4:07ditching imperial properties

4:11in in

4:14the first opium war So China is going to

4:19be successful and it's not going to stay

4:22at less than a quarter of US per capita

4:25income It's going to continue to grow

4:28And incidentally you read these days

4:31op-eds oh China's miracle's over Uh

4:34China's finished The Chinese economy's

4:39collapsing This is so ignorant I can't

4:42even tell you Uh China by the way will

4:46have business cycles like the United

4:48States does It will have financial booms

4:51and busts uh nobody has figured out how

4:55to avoid financial crisis in the last

4:57300 years of market economy So China no

5:02doubt has too much debt in some uh

5:06cities uh and in some real estate

5:09enterprises no doubt but China is going

5:12to continue to grow and it's going to

5:14continue to narrow the gap with the

5:16United States in per capita terms It's

5:19going to be bigger than the United

5:21States in absolute terms It already is

5:23by one good measure and it will be by

5:26the other good measure without doubt

5:28unless there's global calamity of some

5:31sort which I'm putting aside for the

5:34moment And so the whole idea of American

5:38grand strategy is really messed

5:41up and this is one should understand

5:45this is the third round of American

5:48policy in this regard It was invented

5:50for the Soviet Union and it was deployed

5:54in the 1950s visa v the Soviet Union and

5:58then interestingly it was deployed in a

6:00lighter way against Japan at the end of

6:04the 197 at the end of the 1980s and

6:08early 1990s because Japan became so

6:11successful that even though Japan was

6:13our ally and has no army and everything

6:16else Japan basically became became an

6:19enemy uh in in economic terms and the

6:22United States landed very heavily on

6:25Japan and said you can't export anymore

6:27to us and you have to agree to that You

6:29have to overvalue your currency by 50%

6:32and you have to do all sorts of things

6:34because we're not going to let you uh

6:36continue to have the success and we

6:38stopped Japanese growth So this is the

6:42third try of this but China's not Japan

6:47uh Japan

6:48is 125 million people and China's 1.4

6:52billion people and Japan is under the US

6:54security umbrella and China is an

6:57independent superpower and it's not

7:00going to sit still uh the way that Japan

7:03did in the early 1990s China's going to

7:07figure out its way around all of this

7:09but that was a big part of what we're

7:13seeing right now So in a deep sense

7:16Mirshimer was right China did nothing

7:20special to provoke any of this other

7:24than achieving rapid economic growth and

7:28economic progress I see nothing

7:32extraordinary Of course every claim of

7:35China's success is they stole it from us

7:37They they cheated This is both fantasy

7:42and prejudice mixed together with the

7:45fact that everybody steals a bit from

7:47everybody else So there was nothing

7:48special about what China did But in any

7:52event it is the playbook contained China

7:56and that's a big part of what's going on

7:59But anyway I said "Oh now reach out to

8:03your counterparts We know all the

8:05technocrats in China all the economic

8:08technocrats of course because we trained

8:10a lot of them There are students uh

8:12there are friends for 30 years or 40

8:15years They said no no no the white house

8:18has said no contact You can't have

8:21contact We're reviewing our China policy

8:25So for the first year there was no

8:27discussion

8:28basically even at the technocratic level

8:32It was amazing

8:35so wrongheaded By the

8:39way as an academic I could keep all the

8:42contacts talk to people see friends

8:46visit Beijing before CO hit um and uh at

8:51least keep open channels But the

8:54administration no open channels at all

8:57And then the idea was the tension must

9:01be good for our politics will show how

9:04tough we are We'll continue containment

9:09We'll be more protectionist We'll have a

9:12build in America policy which is what uh

9:17Trump is not Trump what Biden is trying

9:20to do with the infrastructure act and

9:23the inflation reduction act and so forth

9:28And that is how things

9:30went basically until about six months

9:35ago I would add

9:38in Nancy

9:41Pelos's absolutely absurd and reckless

9:45trip to Taipei You just can't imagine

9:49more irresponsibility than that in my

9:52opinion And she is enormously

9:55irresponsible

9:56uh and uh just playing for the home

10:00crowd But she went and so Taiwan is

10:03added to this

10:05and President Sei uh in Taiwan has also

10:10been in my opinion irresponsible by

10:14rhetoric that is very loose very

10:16dangerous and in the midst of all of

10:19these other tensions just uh raising the

10:23stakes in a way that allow our worst

10:27hotheads and if you want our very worst

10:30hotthehead It's Lindsey Graham Uh dumber

10:33you cannot get Uh and more militaristic

10:37you cannot get He wants war everywhere

10:40This week it's with Iran but before that

10:43it was with China Before that it was

10:45with Russia Uh so this is really our

10:49state of affairs that the

10:53protectionism the grand strategy the uh

10:58irresponsibility of Washington

11:02politicians I think created all of this

11:06I can't see China made one one mistake

11:11by the way rhetorically and that was in

11:152014 when China launched the made in

11:18China 2025 policy which is a very smart

11:22policy calling for China to become

11:25leader in technology in 10 major

11:30areas China said not that we want to

11:34advance in these areas China said we

11:36want to dominate in these areas We want

11:39to lead in these areas That was not a

11:42good idea It would have been much

11:43smarter to say we want to advance in

11:46these areas We could have saved a lot of

11:48grief by a different kind of uh rhetoric

11:53So this is my basic interpretation of

0:03and we know that the US president is

0:05giving the Europeans a hard time and

0:07they've been sidelined he's talking to

0:09Putin directly uh who is tarrying and

0:13not taking a peace deal uh do you think

0:15that the current US president is our

0:17best bet to end the war and if Putin

0:20does not take his deal will Trump be

0:22inclined to use force

0:26the the war in Ukraine was a a terrible

0:31debacle that the United States

0:35sadly walked into over a 30-year period

0:39by expanding NATO despite Russia's

0:43continuing objections don't come closer

0:46to our border don't come closer to our

0:49border i know it i was President

0:51Gorbachov's on his economic advisory

0:54team 36 years ago i was president

0:58Yeltson's economic adviser i was

1:01Ukraine's economic adviser to President

1:04Kuchma so I know both sides

1:07the basic point was Russia wanted some

1:11space so that the United States wasn't

1:14pushing its missile systems its Aegis

1:16missiles uh its military bases right up

1:19against Russia's borders but the United

1:22States said we go where we want when we

1:25want where we want how we want and the

1:28war finally ensued the war could have

1:31ended in 2022 ukraine and Russia were

1:34about to sign a peace agreement based on

1:38neutrality for Ukraine but the United

1:40States said "No no no we want military

1:42bases we want NATO there don't sign the

1:45agreement." So Ukraine continued to

1:47fight so will Trump end this he could

1:50end this he just has to say very clearly

1:53publicly explicitly NATO will not

1:56enlarge to Ukraine that is over we will

2:00not be next to Russia pushing ourselves

2:03into Russia's front yard basically and

2:08if the US does this there will be peace

2:12in Ukraine because the war will end it's

2:15been a war over NATO enlargement the war

2:18will end on that basis unfortunately

2:21President Biden insisted to the last day

2:24NATO will expand to Ukraine president

2:28Trump knows it's not right but he hasn't

2:30quite said it yet so we're close to the

2:32war ending but we're not quite there yet

2:35from what I understand uh the the door

2:37to a NATO entry is more or less shut for

2:39Ukraine uh but what you're saying

2:42essentially is that you hold you're

2:43holding NATO responsible for the war

2:45you're saying this is a war of their

2:47making

2:48look I was there when Gorbachev ended

2:52unilaterally the Soviet military pact

2:55called the Warsaw Pact he ended it and

2:58said peace and the United States should

3:01have ended NATO at that moment but the

3:04United States didn't end NATO the United

3:06States immediately said we expand NATO

3:09actually not immediately they told

3:12President Gorbachov on February 7th

3:151990 James Baker III NATO will not move

3:19one inch eastward not one inch hans

3:23Dietri Genture the foreign minister of

3:26Germany nato will not move eastward at

3:30all i was there in those days they

3:34promised they lied when the Soviet Union

3:37ended President Clinton in 1994 began

3:41NATO enlargement and Ziggnu Bjinski

3:44wrote a book in 1997 explaining Russia

3:46will have no choice but to acquies so it

3:49was kind of like playing a poker game

3:52they gambled they gambled Ukraine's

3:55safety and they lost and it was a

3:58terrible mistake and all the senior

4:00diplomats in the United States knew it

4:02at the time jack Matlock George Kennan I

4:07people that I was dealing with knew that

4:10this was a disastrous policy very

4:12dangerous and very provocative but the

4:14politicians went ahead with it anyway

4:16because they had the idea that the US

4:19was the sole superpower and it could do

4:21what it wants

4:23you've said in the past that Ukraine

4:25could become the Afghanistan of Europe

4:27do you still fear that um and as as a

4:31country as a power that engages with

4:33both sides do you see a role for India

4:36in future peace talks

4:39i see a huge role for India in playing a

4:44major diplomatic role in the world

4:47if I could tell you a little

4:49secret my can I just a little secret my

4:55advice is be friendly with China and say

4:58to China you must admit us as you must

5:02vote now that we become the sixth

5:06permanent member of the UN Security

5:08Council how can we have a security

5:10council without India being a permanent

5:13member it makes no sense at all

5:16[Applause]

5:18and I want China to be your strong

5:21supporter of that i really do i know

5:25that India can help to bring peace in

5:27the world this is actually a peaceloving

5:31country you just had you just had

5:35600 million people peacefully assemble

5:39in the Mahakum Mela unbelievable

5:44[Applause]

5:46we can't have a hundred people in my

5:48neighborhood get together without a

5:50brawl and if you have a thousand people

5:53someone gets shot

5:55and you just had 600 million people come

5:58i think that calls for a big round of

6:00applause

6:03[Applause]

6:07so I want you in the security council

6:09and I want you to be emphasizing as you

6:13did in the G20 that India so brilliantly

6:18led that the world is one family that

6:21was the motto of the G20 this is the

6:24wonderful philosophy of Hinduism also

6:27it's the wonderful philosophy of peace

6:30and you will help bring peace to the

6:32whole world we don't need these wars

6:34this is the most basic point we do not

6:37need conflict they make no sense wars

6:40are the result of

6:42politics you end the war not by war but

6:46by political solutions you end the war

6:49in Ukraine by Ukrainian neutrality and

6:52stopping NATO enlargement you end the

6:55war in the Middle East by a state of

6:58Palestine as an independent sovereign

7:01state living in peace with Israel it's

7:03obvious you end the conflicts in East

7:06Asia by not having a US military buildup

7:10all around the East Asian uh seaways

7:14this is straightforward india can help

7:18bring that about

7:20right um fun fact about uh the UN

7:23security council there are five

7:25permanent members and the one blocking

7:26India's entry happens to be China so

7:28when you talk about India working with

7:30China and India has put the best foot

7:32forward every time so there are issues

7:34to be resolved there uh but since but

7:36just to say I talk to Chinese

7:38politicians and and the diplomats all

7:41the time and I'm always telling them

7:43admit India as the sixth permanent

7:46member yes because it's it's good for

7:50China and it's good for India it's good

7:52for the whole world and I'm also

7:55explaining it's good for China because

7:59we need a multi-olar world we're we're

8:02way past the United States leading

8:05anything okay we wanted to be there and

8:08be cooperative don't make a mess be nice

8:11be be play with the others okay

8:16to have that kind of world India needs

8:19to be there right front and center and

8:23China wants that so China's not just

8:25facing American bashing all the time so

8:29to my view what I say to the Chinese

8:32diplomats all the time is welcome India

8:36into the permanency at the security

8:39council for your own good as well as the

8:42good of the world well what can I say i

8:44just hope they listen to your very sound

8:45advice uh but for the moment China is

8:48looking for trouble not just um to its

8:51east but also uh elsewhere we we've seen

8:54the drills around Taiwan we've seen the

8:56military moves in the South China Sea

8:59and with Donald Trump taking a tough

9:01transactional posture do you

9:04think regions like Taiwan can depend on

9:07American security asurances

9:10if ever there is a place

9:13for Henry Kissinger's adage it is

9:17Taiwan to be an enemy of the United