NICK EICHER, HOST: Today is Tuesday, March 10th. Thank you for turning to WORLD Radio to help start your day. Good morning. I’m Nick Eicher.
MEGAN BASHAM, HOST: And I’m Megan Basham. Coming next: The Olasky Interview.
Since 2008 WORLD’s editor in chief has interviewed George Friedman seven times. He’s an international strategist and the chairman of the organization, Geopolitical Futures. Earlier this year Friedman spoke about a handful of international challenges—including Iran, Syria, and North Korea. Today we’ll hear what he had to say about China.
EICHER: It’s often described as an emerging world superpower, but China’s economy and infrastructure are in trouble. And the challenges surrounding the corona virus are making matters worse. How the U.S. relates to this military and manufacturing powerhouse is crucial, but perhaps China isn’t as strong as it wants the world to believe.
BASHAM: In this excerpt, Marvin Olasky begins by reading from a 2015 article by Friedman.
OLASKY: China. You write: “To the extent possible, the United States should relieve pressure on China by facilitating its exports to the United States. Now the past several years we’ve actually been very deliberately trying to make it harder.
FRIEDMAN: The reason I say that was, look, China was in the process of rapid growth. But China’s also headed for problems, which is, if you grow too fast., you destabilize your economy. The United States had an interest at that point in not applying pressure, but obviously after that point, China had reached a point where he was coming apart, which most people don’t recognize. They don’t recognize it because they see China making all sorts of gestures—heroic gestures—but the Chinese economy is staggeringly weak.
They claim it is going to grow at 6 percent, 7 percent, they actually don’t know how fast it grows, they have no way of knowing, but their banks, which is the first place you see problems. Those come because their loans aren’t repaid. And their loans weren’t paid because something is wrong with the business. So we’re now in a very different place than that.
OLASKY: So, we tend to look upon China as so big, so strong, and so mighty, and you’re saying there are just enormous cracks
FRIEDMAN: It takes a long time for the media to adjust to reality. What China was up until 2008 was a raging export power. Capitalism always has a country that is a massive exporter at low rates. It used to be, in the 19th century, the United States. Now it was Japan, then China, but they all reach a dead end. And that dead-end comes when they desperately try to borrow money to make exports. They make enough money in the exports to pay off their debts, but they’re not making any profits.
So you could have very large growth, like they did in Japan. These things are not very hidden. It’s not very sophisticated to see this. But the media falls into an interesting position where it puts a country in a particular place: China—economic miracle—will overtake the United States in five years. They never come back and notice it hasn’t overtaken the United States, even come close. They don’t notice that their ideas like “One Belt, One Road” are not happening. They stick with the basic un-nuanced belief. And that’s, you know, that’s the media.
OLASKY: But our tendency constantly seems to be to overrate, the difficulties we face in some ways another word so we know the United States, and we know all the divisions we have, etc., etc. when we look at Iran or China. We don’t see those, and so we tend to think “oh no, oh no…”
FRIEDMAN: During the Cold War, we vastly overrated Russia’s military capability. It was a wonderful thing we did, because by over rating it. We overmatched them. We over awed them. One of the values of the United States, is that it tends to overestimate its challenges, particularly foreign challenges. Tends to think more of them than they should.
And as a result, they exert themselves enormously to deal with it. We may not remember in the 1980s, the Japanese were the China.
FRIEDMAN: And the United States, made an enormous issue of its that we have to be more like the Japanese and build their economy. Well, we left them in the dirt. So I think that one of the strengths of the United States, compared to other countries, is where France always underestimates its enemies. We overestimate them. And we exert that energy.
OLASKY: And we get worried…remember with Japan: “oh they’re buying up everything, buying Rockefeller Center, oh no, oh no.” Well, they overpaid.
FRIEDMAN: Why did they buy Rockefeller Center? The Japanese economy was doing so well. So, there’s a kind of strangeness in our thinking. But I’m not sure it’s vice. It makes us a very uncomfortable people to be around, or to be one of, in which everyone is always in some form of panic. But in fact, again I go back to the Cold War, the massive overestimation of Soviet capabilities.
OLASKY: But why then do we take these absurd claims so seriously?
FRIEDMAN: Well, this is like watching a baseball game, and not watching the game. By asking the guy in the next seat what’s happening. Right. Our problem is that we can’t see the world. It’s out there, you can look at it. You can judge for yourself. Alright? You can buy a guide to what’s happening. Okay, but the problem that we have is, we’re not interested in what’s happening in the world, far more than being influenced by the press. We’ve tuned it out. And that’s because the press has to show us the world either.
OLASKY: I enjoy, to a great extent, your skepticism, cynicism, and so forth. But what hope do you have?
FIELDMAN: I hope is that the human race has lived through this so many times and excelled and continue to do so. But the hope is the very fact that we continue.
EICHER: That’s George Friedman speaking with WORLD’s Marvin Olasky. More of their conversation is available in the March 14th issue of WORLD Magazine.