This is an audio transcript of the Rachman Review podcast episode: ‘China in the age of Trump 2.0’
Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week’s podcast is about the future of China. My guest is Joerg Wuttke, a man with more than 30 years of experience of living in China, where he served as president of the European Chamber of Commerce. China’s been the foremost target of Donald Trump’s tariff wars, but the country continues to make rapid technological progress, and it’s now reaching out to Europe. So is this a moment of danger or opportunity for Xi Jinping’s China?
[MUSIC PLAYING]
News clip
It was a technological leap that shocked Silicon Valley, a newly unveiled free, open-source AI model that beat some of the most powerful ones on the market. But it wasn’t a new launch from OpenAI or a model announcement from Anthropic. This one was built in the east by a Chinese research lab called DeepSeek. And the details behind its development stunned top AI researchers . . .
Gideon Rachman
The unveiling of DeepSeek, widely billed as China’s answer to OpenAI and other US-based AI firms, was a moment of euphoria in Beijing. It seemed to demonstrate that efforts to slow China’s tech progress, led by the US, had failed. But China has many other issues to deal with. There’s falling property prices, a shrinking population, and complaints from entrepreneurs about overbearing government. There’s no one better placed to make sense of all these conflicting forces than Joerg Wuttke. But before we dealt with the issues of today, I asked him to explain how his China journey began.
Joerg Wuttke
I took the train from Heidelberg to Beijing in 1982 with a couple of friends and, of course, that was passing the Soviet Union and going into post-Mao China. Lots of bicycles, blue and red tyres, married girls had short hair, the other one has braids. So that was China, you know. Then going back, I studied in Taiwan, came as a businessman in ’87 again and stayed and worked in China for 35 years, and I was witness to the largest economic comeback story ever. So I was very privileged sitting in the first row.
Gideon Rachman
And you saw several cycles of it. At what point did it become clear to you that China was reaching take-off, because you were there presumably during the Tiananmen phase when it must have felt that it was all gonna fall apart.
Joerg Wuttke
Well, I was there in June ’89 and it felt like China’s going back to the dark ages. I even gave a TV interview stating that. Luckily it was never broadcast. So I went into Shanghai in ’93 and it felt like something is happening. And I remember going to the city mayor’s hall in Pudong to look at the scale of the dream of China or Shanghai, how it’s going to look like. And I said to my assistant, let’s go, this is crazy. It will never happen. And of course, it happened faster than . . .
Gideon Rachman
I remember actually going to Pudong at that period, and yeah, it was just warehouses. The idea that it would look like Manhattan 10 years later seemed incredible.
Joerg Wuttke
That sort of calibrated me that you have to be humble about China’s abilities. You always underestimate China in many ways. And then it was sort of flat because it developed, but there was a lot of headwinds, structural problems. And then my hero popped up, it was prime minister Zhu Rongji, and he basically squeezed China into the WTO.
Gideon Rachman
That was around 2003.
Joerg Wuttke
Well, he was prime minister in ’98 to 2003. And then that period of time, again there’s huge resistance and backlash. At the time, we still had policy debates in China. He got China into WTO in 2001, and then they took off. So there were two take-offs. One is ’93-’94, sort of slightly, and then the real one was 2001, when it also opened up. I was co-founder of the German chamber in ’99, and then it was 2000, opening up the European chamber to do advocacy work. I became president 10 years. And it was the time where you felt like you can engage, you can help, you can give Chinese ideas to reform herself. And that has been fading away. It was starting in 2005, definitely after 2008.
Gideon Rachman
So in fact, do you think that the reaction against liberalism or against the idea that China might gradually become a more liberal state had begun before Xi Jinping comes to power in 2012?
Joerg Wuttke
Yes, and the reason was that we were less alluring. We were less of a model. The great financial crisis, 2008-2009, basically robbed the reformers a model to say, you know, their system is better than ours. Just look at freedom of capital and freedom of speech or whatever. So that was the first point where I think China was thinking we don’t have to follow the west. We have a more stable financial system.
Gideon Rachman
And then Xi does come in and he does change the system. I mean, it becomes much more personalised around him. There’s so much that happens after 2012, but if you had to summarise the impact of Xi, what’s it been?
Joerg Wuttke
Well, Xi came in and changed everything to my surprise and to the surprise of many Chinese leaders themselves who are now sitting in prison somewhere. And he definitely has a very strong idea about how this all should look like and no one has better put it together like Kevin Rudd in his recent book on Xi Jinping. Economically, he wavers to the left, it’s Marxism; and politically he turns to the left, it’s Leninism; and in foreign policy, so Kevin puts it, he turned to the right, it is populism and nationalism. So in a way Xi Jinping has changed everything, he has very much personalised it and he has made it very clear that actually China is a communist society lest we forget.
Gideon Rachman
Yeah. And you said that there was this sort of resurgence of confidence when China opens up under Zhu in the early 2000s and so on. But is China now once again conscious of its flaws because they’ve had this property crash, they have a big demographic problem, the economy’s slowing?
Joerg Wuttke
Well, you never know what they realised at the water cooler when they’re standing there, the top three or four leaders, if they really realise how much the sentiment in China among the population has changed, becoming more negative. But at the same time, I think it comes in waves. You had definitely some optimism after the Covid tsunami passed us in January-February ’23. And we all thought that China is gonna bounce back like it always does. And it did not. And then basically, we realised how severe the real estate crisis was. People definitely all of a sudden realised that their apartment is worth 40-50 per cent only of what it was worth before, if it has been finished already, 90mn apartments are empty.
And then, of course, it was the kind of pressure on private entrepreneurs that built up over the years that has been leading to the exodus of many of these people. A third of my neighbours in the compound in Beijing actually left. A third of the houses were dark at night.
Gideon Rachman
These were Chinese people?
Joerg Wuttke
Yeah, all Chinese people, all venture capitalists. They either felt insecure. I mean, this kind of tech shakedowns, endless audits and then this politicisation of everything, you know. But I guess that was actually addressed by Xi Jinping in this famous meeting, in this convention last month when he met the private entrepreneurs. He explicitly addressed this kind of tech shakedowns and the audits which are unnecessary.
But he framed it also saying, you guys, you can make money, bring China forward tech-wise. But at the same time, it’s clearly under the auspices of the party. The party will always have the upper hand. I was in November in Beijing and it was palpable pessimism. Now I was in Shanghai last month and it was far more optimistic than I expected. And it has to do with two things. One is DeepSeek and the other one is the dismantling of the American dream, basically.
Gideon Rachman
So let’s take both of those then. DeepSeek, this Chinese AI, the kind of answer to ChatGPT. Why is it regarded as such a breakthrough?
Joerg Wuttke
Well, the Americans have been really tough on China on high tech, withholding semiconductors, not allowing ASML, for example, to send their latest equipment into China. And that has really hurt them a lot. And then, of course, they realised that on AI, they’re falling behind because they don’t have the chips, they don’t have the money, they don’t have the resources US companies have. And it was a bit of a concern.
Then this kid comes up, Liang Wenfeng with this DeepSeek, and basically showcases that he doesn’t need foreign help. He can do it with the existing array of semiconductors. And it has chance to be much, much cheaper, indigenous and open. And of course, China can’t believe their luck. And there’s a real DeepSeek effect across the sentiment in the leadership, but also in the economy. Everybody tries to see how DeepSeek is gonna impact their business.
Gideon Rachman
And it’s not the only evidence that China can make these breakthroughs without America. I mean, you’ve had EVs as well, where China’s where.
Joerg Wuttke
Well, China has a track record of not necessarily inventing anything new, but they are the world champions in development, in application changes, in process changes. Solar technology was a German technology. Wind was possibly Danish or Spanish. We had EVs. I mean, my grandfather was running trucks on batteries already. But the skill set they have with this huge and seemingly endless bench of engineers is to take a technology, scale it up, improve it, make it less costly, and make it more efficient, and that’s where it came in. So we have to watch that space.
I always say that whatever China plans will be scaled up and will become eventually overcapacity. And in this respect, when the US was cutting off China from a couple of items, I said, you know, you might actually come across unintended consequences. The Chinese might come back from a completely different corner in a better fashion than you anticipated.
Gideon Rachman
And the third example, I guess, is the Huawei phone, where, again, they tried to effectively destroy Huawei, and Huawei came up with a . . .
Joerg Wuttke
Yeah, I mean, when secretary Raimondo landed in Beijing, they launched a new model just to make the point, you know, which was a bit provocative. But again, the sanctions do hurt them, so don’t get me wrong, but it stimulates this incredible group of people that actually are not state-owned enterprises. They are these fabulous Chinese entrepreneurs, and they were the ones stifling. They were voting with their feet, moving out of Beijing. And I think that was very timely when Xi Jinping addressed them and says, guys, here’s the sandbox, you can play there, you can be at ease, but at the same time, I control you.
Gideon Rachman
Yes, and it was interesting as well that Jack Ma reappears at that meeting you’re referring to, and his purging, if you can call it that, and disappearance from the scene seemed like retrospectively a turning point in the wrong direction.
Joerg Wuttke
Well, I mean, Xi Jinping was signaling I forgive you if you stick to the parameters that I give you. And I think it’s sort of luring those neighbours back to China that actually left already. Now it’s fine if you disagree with a couple of things, but just stick to business. Don’t get into politics, don’t get vocal, just make China more self-reliant.
Gideon Rachman
Do you think it will work, do you think Xi will be able to give them the space they need?
Joerg Wuttke
Well, I guess everybody will wait for reality to sink in. To what extent is party control, which clearly was communicated, is going to be there, is going be implemented. Is decision-making entrepreneurial? Or will it always have a last political spin? Time will tell.
Gideon Rachman
You said the other thing that’s boosting confidence is the destruction of the American dream by Trump, but I guess it must be kind of double-edged because he’s hitting them with so far 30 per cent tariffs and there may be more to come. I mean, we’re talking ahead of April 2nd, but it looks like Trump will do further stuff. So that’s a threat as well, isn’t it?
Joerg Wuttke
Yeah, I mean, on top of the existing 10, he added 10 and then again 10, so it is 30 altogether. And it’s sizeable. I mean it’s $550bn imports from China into the United States. So for the Treasury, it’s a cool $100bn additional income if it works out like that. And he’s selling it as the Chinese are going to pay for it. It’s a value-added tax at the border, framed as an external revenue service. But as a matter of fact, it is myself living in Maryland paying these taxes in the shop.
Gideon Rachman
Can you see the taxes coming through already?
Joerg Wuttke
No, no. And that’s the thing. Obviously, you said that the February inflation data was lower, so what’s the problem? It takes about 90 days. So let’s wait until summer when it shows up at the shelves, but it will show up at the shelf.
Gideon Rachman
And for the Chinese economy, how big a threat is it? I mean, this is their biggest market.
Joerg Wuttke
It’s inconvenient, but it’s not going to be a threat for the economy. I mean, yes, they are partly export-dependent in some provinces, but overall the economy is huge. It’s a $14tn-$15tn economy and the exports to the US are $550bn. They had been responding very carefully, leaving space for negotiations and escalation and tellingly the tariffs are not going be launched on Fool’s Day, which would be more appropriate than the 2nd of April.
But let’s see how they hit China. So far China has been singled out and hit as the only country. Steel and aluminium was basic for everyone. The red line is possibly withdrawal of the normal trading status, PNTR. That will really cause economic warfare if the US withdraws that from China, which would immediately lead China’s products to be subject to 50, 60 per cent of tariffs. So if they add another 10 per cent, depends where, but again, China has loaded its gun. They definitely looked at the red states. They have identified exports from swing states to the Chinese economy, and they will hit first and foremost. So . . .
Gideon Rachman
What kind of things? Like soyabeans?
Joerg Wuttke
Well, it’s definitely going to be bourbon, and it’s going to be Harley-Davidson, the famous jeans, Levi jeans and other things. They, like Brussels, I guess, have identified where it will hurt more and would likely cause the red state representative senators, governors to call up Donald Trump. No one else can lobby Donald Trump better than the red state’s representatives. Certainly, he doesn’t listen to foreigners.
Gideon Rachman
How much do you think the Chinese are able to, at the moment, talk to the Trump administration? Is there a dialogue going on?
Joerg Wuttke
Well, I am not privy of knowing what’s going on behind the screen. My assumption is, from what I hear from my friends, is virtually nothing goes on behind the screen. The Chinese are mightily puzzled about the non-responsiveness on the Trump side on the fentanyl proposals they have sent to him. So the Chinese have been trying to reach out, but in the system of the White House and in the wider sphere of DC, the officials of the United States are more reluctant to engage because they don’t really know what they can commit to. What is the big man really thinking? So yes, I guess that there’s little communication going on in a time when actually it’s as much needed. We will see, also with the Europeans, we’re on the same boat in a way.
Gideon Rachman
You say Europe and China are in the same boat. You headed the European Chamber of Commerce. How do you think Europe is going to respond? Do you think it’s going to get closer to China as a result of Trump’s trade war?
Joerg Wuttke
Well, definitely we have the same toolbox like China. We look at the red states, we look at retaliation, of course. But at the same time, the difference is huge. I mean, you know, we have as European continent plus Britain, European Union is $3.4tn of investment in the United States. The American companies have $4tn of investment in the European continent. So we have $185bn invested in China as a stock over 20 years. It pales in comparison to what we do with Americans.
So if we think that China is an alternative to the US, think again. On the investment side, it’s totally different and trade-wise, European 27 exports to China went down and has now reached the level of Switzerland. So the Chinese market is next for what is as important to us as Switzerland. Will we turn to the Chinese? No, they are not from the same lake. We are deeply embedded with the United States and it’s gonna be very hurtful, but we are gonna remain embedded.
China, as the Commission outlined a while ago, is a partner, a very esteemed partner; is a competitor, in particular in the global south; and is a systemic rival, we have different political systems. But important is the sequence of that — partner, competitor, rival.
Gideon Rachman
Right. Now, over the last four years, before Trump came in, it seemed like the US and Europe were beginning to be on the same page on China, with this common talk of de-risking, which I think was language that the European Commission came up with. You were still in China during that period. How did you feel about that policy of de-risking since you were heading the European Chamber of Commerce in China?
Joerg Wuttke
I can be partly blamed for this label. I was part of the drafting a little bit. I think it was an excellent speech. I think there was really a wonderful concept which was benchmarked against decoupling. We didn’t like decoupling. We said, you know, we have to engage with China. We just have to find segments where we are politically liable, where we depend to a point which is not good for us. We have outlined this — with magnesium, rare earth, vitamin B and the like, but it’s less than 10 per cent of our trade with China. So we have to define where we are at risk and then we have to bundle it, do the resources right, and see that we can produce our own penicillin in Germany or in Europe, for example.
But de-risking was then basically derailed, so to speak, because the Chinese assumed this was decoupling with European characteristics, because the Americans embraced that, and that was sort of giving it a bit of a challenge. I think we have to de-risk, clearly. China has proven to take political advantage in some areas. They disliked some Swedish actions and then Sweden couldn’t get through a graphite. They have taken Lithuania off the trading list as all of a sudden one member state was a country non grata. So we have to watch the China’s playing hard ball and we have to see how we protect ourselves. And I’m really happy about the Commission coming up with a toolbox that addresses that. So we are all for fair and square trade. We welcome Chinese investment into the European Union. but it has to be to the benefit of our union and not just shell companies operating in Europe somewhere. But nothing, nothing substitutes the United States as an economic partner.
Gideon Rachman
And yet you represented BASF, the big German chemicals company, and there were those who said, well, BASF is the poster child of a risky investment in China. They were making a $10bn investment in China, you shouldn’t be doing that, that’s crazy. So how do you reconcile that with your argument that de-risking does need to happen?
Joerg Wuttke
Well, first of all, you know, if the chemical market globally, if 50 per cent is in China, you should match it with an equal footprint of your sales in that country, which happens to be less than 15 per cent. So it was a mismatch of under-represented in China, over-represented in the European Union. That doesn’t mean that you’re shifting locations, but you actually have to build up a presence where the market is. And it was very telling that in summer of 2018, when BASF signed this $10bn 100 per cent facility, ExxonMobil followed four weeks later, 300km to the west in the same province.
Gideon Rachman
That’s the US oil company.
Joerg Wuttke
Well, that’s the big multinational out of the US, $10bn, 100 per cent, 300km to the west, no one talks about it. So German companies have a big economic footprint in the car industry, so does Tesla. And Tesla had 100 per cent. So in a way, they’re hammering European business of being too overextended. But again, if you are investing every year $9bn to $10bn into the Chinese economy, and Europeans can prove it that actually they do $9bn to $10bn every year in taxes. I mean, who do we depend on?
Gideon Rachman
But there is also a counter-argument, well, you’re putting your own business at risk because China’s taking this nationalist turn and they’re going to force you out eventually anyway or steal your technology. What’s your reply to that?
Joerg Wuttke
First of all, we are there for a purpose. You operate as a European company to make money and they almost did make a lot of money. Why would you withdraw from a market that actually generates so much cash that actually it covers a lot of holes in your finances back home? You can see it with Volkswagen now. China was a major chunk of their profit over the last years and now basic profit goes down. Their presence in China has been challenged. And of course it showcases the fact that all of a sudden the money is missing and you have to close factories in Germany on this one.
Now, should we have done this earlier? Yeah, we could have done it earlier and then we would have laid off people in Germany much faster because the money from China was missing. No, we have been trying to be operational there to make money, but second is, we are in the fitness club China. We are there in order to learn to be faster, lab-to-market, not 18 months, but maybe 15 cycles in producing new cars, not three years, but two years, learning how to actually develop new technologies and processes in these clusters. So in many ways, particular in the car industry, and particularly also there in the digital sphere, we have to be in China to catch up. People don’t realise we have followers and not providing technology. So people always ask me, is your IP challenged there? In some segments, yes, but overall, we are two years to six years behind Chinese companies.
Gideon Rachman
And that’s such a reversal, I guess, from the China when you first arrived, where they were catching up and they were learning from us.
Joerg Wuttke
Yes, totally, and we should learn from that, how they managed to get there so fast. And it has to do a lot also with the schooling system. They emphasise much more mathematics and science. Fifty of the top 100 universities in chemical engineering, in instrumentation, in engineering and such are in China. So we should see how we can get our kids faster introduced to digital experiences. We don’t have to copy the Chinese. Certainly not, but we should learned from them. And that’s very hard to realise that people have to admit we can learn from the Chinese. So we have to.
Gideon Rachman
And just on the de-risking thing again. If you look at, say, the experience with Russia, in the end, the biggest risk of all was that Russia invaded its neighbour and it then became impossible for western companies. And there is an analogy with China. I mean, people talk all the time about the threat that China will invade Taiwan. Is that something you can hedge against? And how seriously, as somebody who really knows China, who has followed the debates, should we be taking that threat?
Joerg Wuttke
Well, again, Russia’s invasion in Ukraine is seen as a local impact with a regional shockwave. In particular, in energy. I think if there is a war or even a blockade in the Taiwan Strait, that will immediately have global implications, far bigger. Twenty-one per cent of global trade goes through the Taiwan Strait, so far more than the Red Sea. The Taiwan Strait is way more important than the Red Sea or the Suez Canal. Every third container is coming from China. So if the Chinese would block by having an invasion or war in the Taiwan Strait, they would basically shoot themselves in the foot, you know.
Besides, the Taiwan Strait is twice the size of D-Day, the beaches in Taiwan are very slick and very difficult. They only have 40 approachable beaches and on top of it, there are mountains behind. So, Beijing is very aware of the military challenge of attacking Taiwan. That leaves it basically the option maybe of blockade, but a blockade would mean the disruption of global trade, which would basically cause insurance rates to skyrocket, which would cause financial markets to go gaga, and who is hit first and foremost? The trader number one in the world, China.
Gideon Rachman
So you think probably it won’t happen?
Joerg Wuttke
Well, I guess it won’t happen if we have a clear-cut status quo that is remaining, that Taiwan will not be declared independent by any major state. So we need deterrence and assurance, deterrence that Taiwan actually can defend herself and assurance that no one’s going to recognise Taiwan and Taiwan has to also signal that they will remain in the status quo. And then Beijing will certainly not be happy, but they will not intervene, you know, and just wait until time happens. I always tell my Chinese friends, you know, just look at East and West Germany. The moment we had a more peaceful engagement, there was an approach and eventually there was unification. But this kind of bullying and stuff like this that also West Germany did in the ’50s with the Halstein Doctrine, it’s nothing that brings China anywhere close together with Taiwan.
Gideon Rachman
Do you think in the long run they will be one state?
Joerg Wuttke
Not in the next decade or so, I don’t think. Too many things have happened in Taiwan. The young generation has a Taiwanese identity, and for many, mainland China is not an attractive partner. What happened in Hong Kong? But again, you have to face reality. It’s an important trading partner, it’s an investment place. They share the same heritage, so there is similarities, and history has to work itself out there, but it cannot be forced on the Taiwanese people.
Gideon Rachman
Yeah. You mentioned the Russia-China relationship a bit earlier. One of the bits of thinking that’s floating around Washington is this idea of doing the reverse Kissinger and warming up to Russia to split it away from China. What do you think of that idea?
Joerg Wuttke
Well, my father-in-law was Russian ambassador in China for 14 years, and there’s no way in hell that Putin or Xi Jinping are going to allow the Trump administration to split them. That’s simply not going to happen. Russia is more dependent on China than ever. Russia knows that China has been a reliable partner, and China has in many ways also misusing Russia in its gas and oil deliveries being very lowly priced. But they need each other, and the Trump inspiration has displayed nothing else but inconsistency, and they will notice this. So yes, there will be closer engagement, certainly with the Trump administration from Moscow and from Beijing, but it doesn’t mean at the cost of splitting these kind of alignment they have built up over the years. China and Russia are not allies, don’t get me wrong, but they’re deeply aligned and they rely on each other’s consistency and reliability.
Gideon Rachman
Just to finish, let’s take a couple of steps back. You’ve emphasised, and I think it’s been a really useful reminder, the immense strengths of Chinese society in engineering and in many other ways. But in some respects, at least from the outside, it looks like quite an unhappy society, and one with very difficult social challenges, particularly now the population is declining. People aren’t having children.
Joerg Wuttke
Well, I think Covid really had a huge impact, in particular in the city of Shanghai. Divorce rate last year went up by more than 20 per cent. Families refuse to have children. You used to have a one-child policy, meaning you cannot have more than one child. And now there seems to be a one-child policy, you should have at least one child. The replication rate has to be 2.1. China is somewhere at 1.1.
Gideon Rachman
2.1 to keep the population stable.
Joerg Wuttke
Very low, but you know Shanghai is 0.6. And you can notice this. There are more people walking around with dogs than with aprons, and they’re closing children wards in hospitals, so it has stressed our society in many ways.
Gideon Rachman
It can’t simply be Covid, then.
Joerg Wuttke
No, it’s a build-up of the one-child policy, it’s a build-up of actually having a society where there’s a lot of pressure on the young kids to sustain a family with two parents and four grandparents and a mediocre pension system and unemployment. We had 11mn graduates last year, and last year I think was just about between 8mn-9mn birth. So you can anticipate how many graduates they’re gonna have in 20 years from now. It might be in 3mn or 4mn. So China is running dry. Its working population has been negative since 2018 and the population has been shrinking in 2022. So India is now the biggest, most populous country.
So China’s ageing at typical China speed, so to speak. They are ageing faster than actually they have the money ready in order to sustain this kind of population. So it has stressed our society in many ways and maybe there are some responses in the last National People’s Congress, but the ageing of society and the kind of frustration among the younger generation is palpable and the government finds it very difficult to respond to it.
Gideon Rachman
And there are also a declining number of foreigners now in China. I mean, I guess when you first went and over the period, it was the place to go to. Lots of people wanted to live in China
Joerg Wuttke
Well, I mean, the number of foreigners is actually increasing, but we were doing an investigation in the chamber how many European Union citizens are there. And I did it three years ago, it was about 50,000. So we all fit easily into the Bird’s Nest, the soccer stadium in Beijing, and we can chip in some Brits and some Swiss and whatever. So we are definitely below 100,000, which is 0.0 whatever percentage. It’s notable. But the number of foreigners is increasing because in the southern part of China, we have an influx of Cambodians, people from Laos, Bangladesh, and so forth, because they’re running out of farmers in that region.
So expats are leaving and peasants are coming. We had 10,000 American students in China, in Covid it was 300, and now we bounce back to 1,000. That pales with 300,000 Chinese students studying in the United States. So in a way, we are missing out on the human factor, the kind of emotional empathy that develops once you live in China. We are missing out on people that can explain to us China in 10 to 20 years.
Gideon Rachman
Final question: you’ve moved to Washington now, this might seem a slightly odd question, but is there anything about Trump’s America that reminds you of Xi Jinping’s China?
Joerg Wuttke
Oh, very much so. I mean, they are both populists. They are nationalists in every sense of the word, and both love industrialisation. Trump has a good reason to it because this country is less industrialised than maybe people wish. China has 34 per cent of global manufacturing and only 12 per cent of the global consumption. You would assume that they focus more on consumption than add-on manufacturing. But no, in this respect, they’re similar, but in many other ways, of course, they are very, very different. Xi Jinping is a very predictable man, a calculating politician that has a very solid system around him, and Trump is just a one-man show.
Gideon Rachman
So you’re saying that the American system is more ramshackle than the Chinese system.
Joerg Wuttke
Yeah, but on the pillars of existing institutions that have been very solid and have been basically guiding the Trump 1.0 administration, and I really count on the US maintaining that system, that judiciary remains independent. The Senate eventually should wake up and find its own role. This is the shock-and-awe period of Trump 2.0, and we have to see how that all works out in the second half after inflation set in, after the supply chains have been challenged and maybe people come to their senses.
[MUSIC PLAYING]
Gideon Rachman
That was Joerg Wuttke, who now works for Albright Stonebridge in Washington DC, ending this edition of the Rachman Review. Thanks for listening and please join me again next week.
