Gordon Chang
Appearances
Morning Wire
Manhattan Manhunt & Congressional COVID Report | Afternoon Update | 12.4.24
The opposition, the progressives, the leftists, really have been sympathizing with North Korea. They've been attacking South Korea's democracy, but that was not a reason to declare martial law, and it was declared really poorly. The unions are very much controlled by leftists, which means they're controlled by North Korea.
Morning Wire
Manhattan Manhunt & Congressional COVID Report | Afternoon Update | 12.4.24
They can do a lot of disruption in South Korean society, as they've done in the past, and now they've got a reason to do so.
Morning Wire
Trump-Zelenskyy Talk & UPenn’s Federal Funding Paused | Afternoon Update | 3.19.25
It not only has port operations at both ends of the canal, it's got infrastructure there. It's got a lot of state enterprises. So there are many ways that Beijing can block the canal if it wanted to. And some people say that the first indication that we will have that China intends to use force in East Asia will be an accident. in the Panama Canal because that will prevent the U.S.
Morning Wire
Trump-Zelenskyy Talk & UPenn’s Federal Funding Paused | Afternoon Update | 3.19.25
Navy from surging ships from the Atlantic to the Pacific fleets through the canal. So there's the concern.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Right now, I think that Xi Jinping has configured the Chinese political system in a way which is really belligerent. Got to remember that when he became China's leader in 2012, he inherited a consensual political system, where no Chinese leader got too much credit or too much blame. But by taking power from everybody else, he's created a lot of antagonism among senior figures.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And he has made nationalism to be something that defines his rule, which means that only hostile answers are considered as acceptable, because he has set markers for himself. He set them over Taiwan, Japan, Philippines, elsewhere. So if he goes back on it, which I think he's trying to do now, but when he goes back on that, other people are going to hold him to account for that.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Yeah, I think, well, certainly this month we have seen him moderate his position. And he's doing that, I think, because, as I mentioned, he does not want to take on Trump right now. He doesn't think China's ready. And, you know, we've seen Xi Jinping basically being afraid of Trump. That started in April 2017 when Xi was at Mar-a-Lago.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And remember, at dinner, Trump stood up and said, I've just launched 59 missiles on Syria. Syria, by the way, is China's friend. And Xi Jinping was disrespected big time by Trump. And Xi was quiet. I think he was flummoxed. He did not know what to say. He could not respond. And that fortunately set the tone between the United States and China for the four years of Trump's first term.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Now you're seeing Xi Jinping seeing something that he really didn't want. a return of Trump to the Oval Office. So, I think that what we have seen, at least this month, is Xi Jinping cooling it. This may not last, probably won't last, but at this point, I think that Xi Jinping is trying to walk it back.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And that's going to be hard for him, because as I mentioned, he's created all of these markers for himself, and they are the test of his legitimacy. And so, with a very nationalistic wolf warrior for diplomacy, as they call it, that means he may not be able to control escalation. And as I said, only the hostile answers are considered to be acceptable ones.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
In the first term, they love Trump. They love Trump, not because of what he said or what he did. Matter of fact, they didn't like what Trump said or did, but they liked his being unfiltered, being free, being spontaneous, being a human being. That is in comparison to Xi Jinping and especially his predecessor, Hu Jintao, who was just basically lifeless.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
The other thing that they loved about Trump was that he took on the elites and won. And that gave them inspiration that they could do the same thing in China with the elites that they really, really hate. So from a style point, style points, Trump was just very popular in China. And by the way, that fed into the Communist Party's deepest fear about the United States.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Communist Party believes it is in an existential struggle with the U.S. And it's not because of anything that our leaders say or do, but it's because of who we are. You have an insecure regime, and Beijing is worried about the inspirational impact of our values and form of governance on the Chinese people. And Trump just makes this so much worse for the Communist Party.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
It is filtered. China realized, the regime realizes that they can't keep out all news. So what they do is they spin it. They spend an extraordinary amount of effort putting news into context because they realize that one way or another, it does seep in. But yeah, they're trying to censor things. CNN will go off the air at times. because the regime doesn't like what they're hearing.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
They do still have the Great Firewall, which is the world's most sophisticated set of internet controls. They don't try to keep out everything because they know that they can't be North Korea, but they are moving in that direction. And that's why Chinese netizens say that they are West Korea.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
China has enormous leverage over Kim Jong-un. It chooses often not to exercise it, but when China really wants something, it gets what it wants. You have a lot of people in New York and Washington who say the Chinese and the Koreans hate each other, and they've hated each other for centuries. Yes, all of that is true. But Kim Jong-un knows that the survival of his regime depends on China.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
As they say, Russia is the ambulance, China is the hospital. Also, that's true for Russia. And I think Xi Jinping believes that he not only has enormous leverage over his friend Kim in Pyongyang, but also his friend Putin in Moscow. Because Moscow is only in this war because of Chinese continued assistance. If China cut it off, Ukraine would win fairly short order.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
So right now, I think that this whole notion that China is upset about the growing relationship between Russia and North Korea, I think that's wrong. I think that actually the sale of shells, short-range ballistic missiles, provision of troops, all of this, I think, was masterminded by China.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And by the way, we got to remember that North Korean troops have been in Ukraine for a very long time. Because the North Koreans have been selling the shells and the short range ballistic missiles. And they've had North Korean logistics people there. And there are even reports that a long time ago, North Koreans were killed in Ukrainian attacks.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Now, what was new is that you have four combat brigades, so that's about 12,800 troops, and with a promise that more will be coming. People are talking 100,000 or so. We don't know where this will end. But yeah, this has been going on for a long time. China also has had advisors in the front lines, because they've been supplying drones and other stuff.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
So, of course, the Chinese know the North Koreans have been there for months.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Sure. You know, Trump always talks about negotiating with foreign leaders. You know, these military to military channels, Mike, I don't think that they're important. And the reason is the Chinese talk when they want to talk They don't talk when they don't want to talk. The presence of a hotline or an established military communication channel is completely irrelevant.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
President Trump's picks indicate that he's going to, first of all, go for tariffs, which we saw in the beginning of this week with the announcement of 25% tariffs on Mexico and Canada and the additional 10% tariffs on China for fentanyl. And clearly, Trump is probably going to add some more tariffs on China as well. This is important because it's going to rearrange trade flows around the world.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
I mean, we don't have what is necessary, which is the cell phone numbers of our counterparts. Because no Chinese general, no Chinese admiral will talk to us until they know the firm direction from the Politburo Standing Committee. So you can have all the established channels you want. They're not going to speak to us. And that's been the history of these hotlines that we have had with China.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
They don't speak with us until the direction has been set at the top of the political system. So let's stop chasing these Chinese generals and admirals. You know, if they want to talk to us, They have our phone numbers. The area code is 202.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
You can talk anytime you damn well please, but just call us because we're not going to chase you to the ends of the earth to make ourselves in an inferior position. And by the way, the defense minister of China is not Lloyd Austin's counterpart. The defense minister in China is a much junior official to Lloyd Austin. So Lloyd Austin, he shouldn't be trying to talk to the defense minister.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
He should be trying to talk to his real counterpart in the Chinese system. His real counterpart is actually Xi Jinping in his role as chairman of the Central Military Commission of the Communist Party. And Lloyd Austin should insist on speaking to Xi Jinping when they have, quote unquote, counterpart discussions.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
I certainly will do that, Mike. And by the way, on that other point, I've already got one boss, and I don't think I need another one.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And because of that, I think these picks are good ones. because we're talking about people who will support his tariff initiatives. So I think when you look at Treasury, his nominee Bissette probably was a little bit reluctant about tariffs to start out with. But there is reporting that Trump insisted that he support tariffs should he nominate him.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And so this is going, I think, in the right direction. And of course, you have China hawks. You have China hawks at the State Department, Marco Rubio, and as National Security Advisor, Michael Waltz. So right now, the president has made it clear where he's going, at least as a first position in his administration. Do you imagine...
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Probably both. A lot of people talk about these tariffs as negotiating tools, and Trump has used that. In his first term, he imposed the 25% across the board tariffs in 2018. And in the beginning of 2020, he had his phase one trade deal, which I think was a mistake. But nonetheless, you can see that the tariffs set the stage for that agreement. This time, yeah, he could negotiate them.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
But we've got to remember that during the campaign, he talked about tariffs continually. And it wasn't just sort of off-the-cuff talk. He actually discussed McKinley and the effect of the McKinley tariffs on the American economy. And that shows that he's actually done a lot of learning about this. Because this is a president who obviously believes deeply in rearranging trade through these levies.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
What's fascinating, Mike, is that throughout this month, we have seen China go uncharacteristically quiet. It is peripheral seas and airspace. And that's a real indication that the regime in Beijing is very concerned about Trump. They're giving him a wide berth. They don't want to take him on, at least at this stage. And that's a real indication of, I think,
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
and the realization in Beijing that they have got to please Trump. So, at this time, at least, and I don't know how long this will last, but at this time, at least, things are going fairly well. We've also seen some other things in China setting the stage. So, for instance, again, throughout this month, China has been forcing down the value of the renminbi.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
That looks like anticipation of a trade war with the United States or anticipation of very high tariffs. When we go back to 2018, when Trump imposed his Section 301 tariffs, China picked up somewhere between 75% to 81% of the cost of those impositions. And this time they have even more incentive to do that.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
So I think that this move to force down the value of the currency is a real indication that they're getting ready, as you say, setting the table. So it's not just geopolitically, it's also from an economic point of view as well.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Well, China has already imposed export embargoes on certain rare earths, and they could increase that. And as you point out, during the early months of the pandemic in 2020, they threatened to cut off pharmaceuticals. Got to remember that, yes, we have got to buy, but also China's got to sell. So I think what would happen would be, if they were to say, impose export embargoes on pharmaceuticals,
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
we'd still be able to buy Chinese pharmaceuticals. We may not be able to buy them from the Chinese directly, but we can buy them through third parties. Go back to 2010, China imposed an export ban on rare earths to Japan. Japan actually just bought them directly from Chinese state-owned enterprises, which had to sell despite the embargo.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And the embargo lasted a month or two, and then Beijing just capitulated. So I think we'll probably see the same thing here. If China were to impose export embargoes on the U.S., they might be more determined with us than they were in 2010. But nonetheless, the market is a global one, and we'd be able to source what we need. Higher price initially, but we'd be able to do it, Mike.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
If things really go south, and there's a possibility of that, of course, China probably wouldn't be in a position to export stuff, even if it wanted to. And we would suffer mightily, especially pharmaceuticals, which is a warning to us that this is something that we need to do on an emergency basis. We should have done this a long time ago. But nonetheless, we have that critical vulnerability.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Bottom line? We need to be prepared for China to do anything, at any place, at any time. Because Xi Jinping is under domestic pressure, and he can lash out. And we got to remember that in Beijing today, only the most hostile answers are considered to be acceptable. And I don't know if he can control escalation. Having said all that, at least at this moment, China is not ready to go to war.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
It's not ready to go to war because the senior leadership of the PLA, People's Liberation Army, is in disarray with all of these purges which are continuing. Also, we have a Chinese military that just doesn't want to go to war, which is the reason why we've been seeing the removal of officers who are opposed to war.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And we also have a Chinese military that, although it has a lot of shiny new weapons, is not confident because they have not fought a war since 1979. In that 1979 war, their first string army got beaten up by Vietnam's third string. We saw real failures of command in 2020 when China launched a surprise attack against India in Gawang. This doesn't look good for the Chinese military.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
Also, we know the Chinese people don't want war right now. This is a populace that is really angry at the leadership, and they're in no mood to go after and kill people, especially people that they consider to be Chinese. In other words, people in Taiwan. People in Taiwan don't think they're Chinese, but the people in China do, and the people in China do not want a war, especially with Taiwan.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
And then you got to remember one other thing. For Xi Jinping to launch a big war, combined air, land, sea operation, he's got to give some general officer, some admiral, or some general total or almost total control over the People's Liberation Army. making that person the most powerful person in China. Xi Jinping doesn't trust his general officers even in the best of moments.
The President's Daily Brief
PDB Situation Report | November 30th, 2024: Trump’s China Strategy & Security Breaches in the UK
He's certainly right now not going to trust any other figure to make that person more powerful than he is.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And the reason is that we have been seeing since July 9th of last year, these articles in PLA Daily, which is the main propaganda organ of the Chinese military, we've been seeing these articles praising collective leadership, quote unquote. That is a direct challenge to Xi Jinping.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And so these articles could not have been maintained without the support of the senior leadership of the PLA, which means the senior leadership of the PLA is in, you might say, open revolt or not open revolt, but it's in revolt against the Chinese leader. Now, if you've got the guys with the guns not happy with you, That means your control over the military is weakened.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And also, I believe that there's senior civilian party officials who are gunning for Xi Jinping, figuratively, not literally.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Well, Xi Jinping is taking the country off the cliff. The military can see it. I don't think that they're happy about that. The primary point of contention, though, would be that Xi Jinping has been purging people. They've been taking away their livelihoods. The other generals and admirals, they don't like that. And so they don't want this at all.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I think you have a military right now, which is very divided. So it is not the type of military that is actually prepared to go to war, even though they've got some pretty neat weapons. some of them which are better than ours. But the point here is that the military is a political military and now it's very politicized.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Yeah, everybody, basically. So, you've narrowed it down, Gordon. Yeah. I thought you were going to ask, is there a specific person, which is the reason why I was shaking my head. No. I don't know if there's a specific person, but there are a lot of people who are unhappy. And the reason is, when Xi Jinping became general party secretary in 2012,
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
The understanding and the norms and the guidelines in the party was that he was only going to get two five-year terms as general secretary of the party. And that means after the 10 years, there would be a whole new generation of leadership. People would get promoted. What Xi Jinping did by taking a third term was he was denying a whole generation of leadership the chances for promotion.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And that means these people are not happy. They may not have the power to challenge Xi Jinping openly, but I think that they're waiting for sea to fall so that they can rise. And that means he's got a lot of enemies within the political system, basically everybody.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Yeah. There are no rules in the party anymore. So, anything can happen. So, you know, in arts, you know, we always say, well, you know, in America, you know, the president has a short term because he's got midterms and then he's got four years, he's got to be reelected. And we say, you know, we Americans are short term thinking. But Xi Jinping, because he's jumped the roles,
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I mean, he has an election every day. And so, he's got a really short-term thinking. He needs to get by hour by hour, because in that system, anything can happen. You know, if you go back to Mao Zedong, that was sort of supposed to be a collective leadership. Mao got rid of the rules. Mao was supreme, but it also meant there were no rules.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Now, his successor, Deng Xiaoping, instituted and started to institute norms and guidelines and understandings about the way the party would transfer power from leader to leader. Xi Jinping jumped that, which means anything can happen, Mike. So, the mechanics of it are anything, anything is on the table.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And especially, remember, Xi Jinping, I know this is going on a little long, but I need to give you some context. Yeah, please. When Xi Jinping took over in 2012, no senior Chinese leader got too much credit or too much blame because every decision was made by consensus across the top of the political system.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
But by taking power from everybody else, Xi Jinping ended up with total or near total accountability, which means when things are going bad, Xi Jinping is being blamed for everything because he's got nobody else to blame. So you can see how that system can work where enough people get together and say, Xi Jinping, you're out.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And by the way, we've got a lot of unhappy military officers who are ready to come in to Zhongnanhai, which is sort of like their White House. So things can be a little dicey there right now.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
A lot of presidents have let the China trade matters slide, and Trump had the courage to take this on. We hold all the high cards. We're the bigger economy. China is the trade surplus country. They ran a $295.4 billion merchandise trade surplus with us last year. So they've got everything to lose, and we don't.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Well, I really appreciate it, Mike, because this is an important conversation that you wanted. So thank you. I'm very happy to be here. Love to do this again.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
But Xi Jinping believes that he can intimidate President Trump into surrendering preemptively because they're trying to get Wall Street, C-Suite, Main Street to put pressure on Trump to cave in. I don't think Trump will do that because we know on Wednesday, Trump imposed tariffs of 145% on China. And that's a real demonstration of political will.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I think the Chinese are going to take a long time to come to the table. This is going to be a lot of friction, a lot of tension, but we need to get this done and we need to get this done on our terms.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I think that they understood that Trump reacted to the bond market by the Japanese dumping bonds. So that's one way. But I think ultimately, they realized there's a real danger in this. And that is, the US is going to come to terms with a lot of countries. Japan, South Korea, the EU. That's going to leave China out in the cold.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Because as senior Trump officials have been saying this week, those countries that come to terms with us early are going to get the best deals. And China is sitting on the outside because they can't pick up the phone, which means they're going to be pretty much in trouble. Remember, these guys in Beijing, they're not going to be selling a lot of stuff to the US because of the 145% tariff.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
That means they're going to dump their products on other markets. Other markets, they're just not going to accept this flood of Chinese products because they cannot see their own manufacturing sectors being decimated. So China is in a really difficult position because it is now more export dependent than it has ever been.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Yeah, I think there's very little room to maneuver. And the reason is that China's predatory trade policies and its criminal acts, they're inherent in the nature of the Communist Party system. These are the things that have got us upset about China in the first place. These are the things that Beijing cannot negotiate away.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
The other thing here is that Xi Jinping has configured the Chinese political system so that only the most hostile answers are considered acceptable. So, the economically rational thing for Xi Jinping to do is to pick up the phone, call Trump, and sort of make a lot of concessions to get a deal.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I mean, Xi Jinping can make concessions and say, I'm never going to honor them, but that would be the rational thing to do, to get Trump to say yes to something. But C can't pick up the phone. And that's because he's boxed himself in.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Xi Jinping has declared the US to be China's enemy. They did that in May 2019 with a landmark editorial in People's Daily, which declared a, quote unquote, people's war on us. That is a phrase which has great resonance in Communist Party history. It's total war. So if you believe that you're in total war with an enemy, that you're in an existential struggle,
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
How can you make concessions to that enemy? Your position is you've got to defeat them. You've got to destroy them. You can't sort of make nice to them. You can't make big agreements with them.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
So I think that Xi Jinping has now sort of put himself in a position where he is only going to accept something where it's clear that the United States has submitted, has gotten on its knees and begged China for an agreement. I don't see Trump doing that. And so, this is going to be very, very difficult for the Chinese regime. And we have to understand that the regime may not survive this.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I've been wrong on timing before, so I'm probably the worst person to ask that question. But I don't think that they can sustain it for too much longer. And there's a couple of reasons. Xi Jinping, because he's turned his back on consumption as being the fundamental basis of the Chinese economy, there's only one way out to rescue an increasingly grim situation, and that is to export more.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
China's not growing at the 5.0% pace reported for last year. It may not even be growing at all. But we know the trend is down because we can see price signals that suggest, actually, screen deflation. But even if China were growing at 5.0%, it probably wouldn't be growing fast enough for those guys to pay back debt.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
China not only has a problem with Trump at this moment, China not only has a problem with an economy that looks like it's contracting, China has now, it's 2008. In 2008, they did not want to suffer a recession. So they overstimulated their economy. They piled on the debt. And now that debt is just too heavy. So you've got all of these crises hitting at the same time.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And so Xi Jinping, a couple of months ago, he looked like he was going to rule the world. Right now, he's going to be lucky just to wake up alive in the morning.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Just to tie up that one point, I think that they're going to wait too long to sit down with Trump. I think that they are going to try and flood other markets. I don't think that's going to work. I think that Xi Jinping probably is seeing a closing window of opportunity. And this is the way I believe that he's calculating things right now.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
He knows that a war would be really, really unpopular with the Chinese people, especially a war on Taiwan. But I think that Xi believes that a war would help him in one very critical way. That is, it would prevent other Communist Party figures from challenging him. So I think it's in his interest for, you know, maintain these provocative activities.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And remember, in the last couple of weeks, we have seen Chinese provocative activities in South Korea against Japan, against Taiwan, against the Philippines and against Australia. So something's going on here, which isn't very good. And one of these provocations could escalate into a war. I don't think Xi Jinping can control that escalation. He can't come to terms with whatever he's picked on.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
So this is one of the more dangerous moments in history.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Yeah, because I think he needs to make sure that other senior Communist Party figures don't challenge him. This is what Mao Zedong, his hero, did. He did it during the Cultural Revolution. Mao couldn't start a war abroad, but he could start a war on elements in Chinese society. That's exactly what he did, shore up his position in the Communist Party leadership.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Xi Jinping, however, has the military to start a war, and that's what I'm really worried about. I don't think that he would start a hostilities with an invasion of the main island of Taiwan. I don't think the Chinese military is ready for that. I don't think that Xi Jinping is ready for it. And there's a lot there.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
But the point is, Taiwan could easily get involved in a war that starts elsewhere, because once a war starts somewhere, it's going to spread throughout all of East Asia, and we're going to see conflict. It's just going to envelop all of these societies.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Yeah, that was Thursday from the foreign ministry, which was really quite extraordinary when you think about it, because it was over the top. It was a throwback to the Korean War. It was basically a threat that we'll go out and kill people if you don't come to terms. in our terms. So, I worry about that as a signal. It shows the mentality of the Chinese regime. And I think it shows desperation.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
And a desperate communist party is a very dangerous entity. So, yeah, I mean, we can't stop doing what we're doing because we absolutely have to do it. But we got to recognize and we got to be prepared for some pretty bad outcomes.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I don't think it's tight at all. And let me give you an example. In the Communist Party's military, because the People's Liberation Army reports to the Communist Party. It's not a state army. There's been purges upon purges, especially since around July of 2023.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
Most recently, the number three or the number two officer, depending on who you talk to, a guy named General He Wei Dong has been disappeared. He hasn't been seen in public since March 11th. And there have been reports that U.S. intelligence believes that he has in fact been taken out. This means, you know, a lot of people say, well, Oh, you know, Xi Jinping just sacked another senior officer.
The President's Daily Brief
PDB Situation Report | April 12th, 2025: Can China Survive A Tariff War? & Russia Launches Spring Offensive
I don't think that's the case. I think it's more likely that Xi Jinping's enemies at the top of the Chinese military took out a Xi Jinping loyalist, General He.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Well, it's not best friends forever, but it could be best friends for decades. And it is a relationship which is much stronger than most people thought. You know, we had a lot of very smart people in New York and Washington say, oh, you know, China and Russia will never get along. Well, okay. I don't care what happens in the year 2100. I care what happens right now.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And in the here and now, China is backing Russia almost to the hilt. You know, we see this with not only the elevated commodity purchases, which is the answers to the war, but China opened up its financial system to sanctioned Russian institutions. We got diplomatic support, propaganda support, weapons support.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
We have Chinese soldiers in Ukraine, some of them mercenaries, some of them there with the sanction of Beijing. So, you know, Putin is very important to Xi Jinping. You know, and yes, he is the junior partner, but Vladimir Putin does things that China doesn't want to do itself. And so, Putin is absolutely essential to Chinese foreign policy as Xi Jinping sees it. So this is a proxy war.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And China is a combatant. We have got to recognize that. We have failed to recognize that. And we're not imposing costs on China for its support of that war effort. And, you know, to put this into context, We have China and Russia destabilizing North Africa, fueling insurgencies that look like wars. We have China with the same tactics supporting Iran in its assault on Israel.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
We now have China's support for Pakistan in what could end up being a war. So this is China destabilizing the world. And to go back to the Point about trade. Trade allows China to do this. So if we trade with China, what we are doing is we are fueling the destabilization of the world. We're fueling all of these wars. And if we want peace...
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Wir werden eine sehr schwierige Entscheidung machen und sagen, nein, wir werden nicht mit China handeln, weil wir keine generalische Kriege um die Welt wollen. Und das ist, wo wir gehen, Mike. Das sieht jetzt aus, als wären wir in den Anfangsstufen von der 3. Weltkrieg. Erinnere dich, in den 1930er-Jahren gab es verschiedene Kriege, die sich in was wir jetzt als 2. Weltkrieg bezeichnen.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
The same thing I think is happening right now with China and Russia fighting directly or indirectly around the world. So all of these regional conflicts, as we call them, they all have global significance.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Their end is to rule the world. Not control it, not dominate it, not examine it, hegemony over it, but to rule it. That's their end goal. And it's not just this world. Since 2017, Xi Jinping's officials have been talking about the lunar Mars as sovereign Chinese territory. So, this is total Chinese rule. That's their end.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And yes, I know it sounds ludicrous, but we need to start paying attention to what the Chinese say. Because we did not pay attention to Osama Bin Laden. We didn't pay attention until that day that we will all remember, where he killed 2,977 Americans. Then we paid attention. We gotta pay attention to what the Chinese are saying and we certainly gotta pay attention to what these guys are doing.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Yeah, we have not heard credible reports on numbers. We've just heard the reports that they are there and they are nominally there for observing. But I believe that they're there for more than just observing. That would not make sense to me, that they were in such a limited role.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
It's sort of like a client state these days. It is a state which wouldn't survive, I think, without substantial amounts of Chinese money. Because if the Chinese money weren't there, I'm not sure that the government could really survive. What we have is the Pakistani military is bulked up with Chinese weapons, Chinese planes.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
So, for instance, I mean, the initial reports are those Chinese J-10Cs actually took down India's Rafael planes from France. We know that those Chinese planes have Chinese over-the-horizon missiles. And there's just all sorts of indications there. In the Korean War, you know, American pilots were fighting North Korean MiGs with Soviet pilots.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
We haven't had reports of Chinese pilots in Pakistan yet, but I wouldn't be surprised if that's the next step. Especially if this does turn into a war and India starts getting the advantage. And I think that that I don't know if this will turn into a war, but if it does, I think India eventually will start crushing Pakistan and then you'll see the Chinese there in numbers.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
The Pakistanis took the Indians by surprise by downing those at least two Indian planes. I don't think India is going to let that happen again.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
A couple of hours ago I would have said yes, that's what I expected. With Trump saying he wants a result, I'm afraid that we're going to be pressured into some sort of mutual reduction of tariffs. Remember, there's the reduction of tariffs. That is a win for China. And the reason is, our tariffs are remedies for the theft of US intellectual property and for China's predatory trade practices.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
If we reduce our tariffs, this is unilateral disarmament. Because we are taking away our remedies. Because China is going to continue to steal our stuff and they're going to continue with their predatory policies. So, that's a win for China. And I'm really afraid that that's going to occur.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Treasury Secretary Scott Besant and US Trade Representative Jameson Greer will be meeting one or more vice premiers from China. You know, the Senate actually started saying that this meeting would be talking about talking. Trump a few hours ago said, well, you know, we need something to come out of this meeting.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Absolutely. Look, we've had injurious China policies for three decades. We've had injurious trade policies for three decades. We Americans can't think that we can get out of this without costs. And if we're not willing to pay this cost, we are going to be a very diminished country. And so if you don't want a future, sure, yeah, let's continue to buy cheap stuff from China.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
If we want more wars around the world, yeah, let's continue to buy this cheap stuff. But we're Americans and we've got to make sacrifices. And this is a tough message for the American public. I know it's not one that any politician is willing to say, but let's face truth. So many times in the past, we have failed to face reality and we have paid for it.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And sometimes we paid for it in the lives of many Americans. Let's not do this again.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And of course he tweeted or he put on Truth Social that 80% tariffs seemed about right. That would be down from a general rate of 145. But on some Chinese products, the rate is actually 245 because of the existing tariffs. I don't know where this is going to go. The Chinese are hanging very tough.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
We heard a statement from some Chinese premier or something in Russia now for the May 9th Victory Day celebrations with a very tough line on the U.S., So, we'll find out when we find out. And I know that's an unsatisfactory answer, but when we start thinking about the normal trajectory of US-China trade talks, they take forever.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And these will probably take forever unless President Trump makes concessions. So I hope that he doesn't make concessions for the sake of getting a deal. We have had this dynamic too many times in the past. It never, never works out for us. So I hope we don't go into it again.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
They were again saying what the United States was wrong and was engaging in bullying tactics. And China would never give in to this. They didn't actually make the specific statement, which is really important, and that is China was saying that the United States would have to withdraw its unilateral tariffs for even talks to begin. So that was a concession.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And we know from a substantive point of view that China has recently circulated what it calls a whitelist. In other words, goods it was going to allow into China tariff-free. Now, about a week and a half ago, we saw reporting that about 25% of America's products going into China were coming in tariff-free. In other words, China was making unilateral concessions, was not announcing it,
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
This was for things like semiconductors, aviation parts, industrial chemicals, medical devices and some medicines that China obviously couldn't get elsewhere. And so this was an important climb down from the Chinese and it was in, you know, they got nothing from the US for doing it. So look, the Chinese position is extraordinarily weak. President Trump recognizes that.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
I just hope that he understands that now is the time to press the advantage.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Sie senden ihren Vizepräsidenten He, der ihre Hauptverkäuferin ist und sehr beeindruckend, jemand, der gute Verhältnisse mit Xi Jinping hat. Und jemand, der einen Rang hat, der vergleichbar ist mit dem Vizepräsidenten Bissets. Das ist ein Beweis, dass sie das ernsthaft nehmen. Was noch mehr ist, kann ich nicht wirklich beurteilen.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
von der Komposition ihres Gruppes, weil sie es nicht wirklich erläutert haben, außer für den Vizepräsidenten.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
It is an attempt to keep some factories open. And the reason is that a lot of these items, like the industrial chemicals and the semiconductors, for instance, they're necessary for China to build and make the products that it then exports. So, yes, to keep some factories open, that's what they're doing. I don't think they're trying to placate workers as such.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Although there are worker protests across China, the regime has been able to control them up to now. So I don't think that at least now they're worried. They should be, but I think it's more just to make sure that China can continue to get the components it needs in order to export. With regard to some of the medicines and medical devices,
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
I think those are just that China needs them themselves and they can't get them elsewhere. So that's an attempt, I think, just to make sure that their health system doesn't break down.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Long term, if we take a long term perspective, yes, they're growing. Now, even before President Trump took his second office, China's export sector, basically medium and small size factories, a lot of them in the southern portion of the country, were having problems, because they weren't having orders.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
And because they weren't having orders in sufficient quantities, they were not being able to pay workers. And so there were worker protests. then these go back to the beginning of this year. Now, Trump's tariffs and the threat of tariffs have made life much more difficult. We've seen factories close probably in the thousands.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
That's true, but I think that it sort of creates an impression maybe a bit larger than it needs to be, because there are tens of thousands of these small factories. So if they lose the thousand or two, it is not something which is going to threaten the security of the regime.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
The one thing about protests that we need to keep our eye on is that in the last few hours we've been hearing that in Shenzhen, which is the city across from Hong Kong, there was a protest in front of a bank. And that means, I think, to work back. We know that China's small loans and business loans are in trouble. They've been defaulting at an alarming rate.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
That means probably some of the smaller banks and financial institutions are having problems with liquidity. which means they're probably restricting withdrawals. That would account for the protests in front of the banks. There are also reports, which I think are more speculative, that there are bank protests in Shanghai and Beijing.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
I'm not sure I believe that, but the point is that those are the rumors that are now circulating. They come from manufacturing sources, which I think Normalerweise sind sie ziemlich gut berühmt, ziemlich akkurat. Wir bekommen also eine Bildung, dass nicht nur die Proteste verbreiten, sondern auch generell, jetzt geht es zum Banksystem.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Das kann für China kritisch werden, wenn der Zentralbank die kleineren Institutionen mit Liquidität nicht zerstört. Es gibt Restriktionen, was der Zentralbank tun kann. Das wird also die Herausforderung sein.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Yeah, that number comes from US investment banks and some foreign investment banks are releasing numbers in that range. You hear 16, you hear 20 million. This is a number which sounds precise, but I'm not so sure. And the reason is, it all depends on how the tariff war goes. So, if the tariff war goes really badly for China, we're talking well in excess of 20 million jobs.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
If Trump caves in, then that number is really exaggerated. So, we'll find out. And by the way, I don't think Trump will cave, but I do believe that his general instinct to make a deal can sometimes push him into things that are not as advantageous for us as Remember, we've got all the high cards here right now. We're the trade deficit country. We're the bigger economy.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
China's economy is probably contracting right now. So Trump doesn't need decay, especially because this is so critical to our future.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
Well, Xi Jinping is there. And for Vladimir Putin, that's really important, because this is the biggest non-secular holiday in Russia's year. And this year is especially important, because you've got the war in Ukraine. Xi Jinping wants to show his solidarity to Russia. We're seeing all of these statements actually there as...
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
They're as exaggerated as they normally are about China-Russia relations, but make no mistake about it. China and Russia are on the same page and they're working very closely. Remember, at this point, there are Chinese military officers in the Ukraine war. They're at the front. They're nominally observers. I suspect they're also advisors.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
But in addition to that, there are Chinese mercenaries actually fighting for Russia in Ukraine. And they are supposedly without the stamp of approval from Beijing, but you could not have... Military age men getting visas to go to Russia and when the regime knows exactly what's going on. So I think China is just trying this on.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
They're seeing the reaction of the United States and the West to the introduction of Chinese soldiers. And so it is not inconceivable, Mike, that we are going to see not only mercenaries, but we're going to see China actually fighting in Ukraine.
The President's Daily Brief
PDB Situation Report | May 10th, 2025: Xi’s Weak Hand: U.S.-China Showdown & India And Pakistan On The Brink
I know that sounds a little bit inconceivable, but, you know, we go back about six months and the idea of North Korea having, you know, 12, 13,000, you know, North Korean soldiers actually fighting in Ukraine, I mean... No one would have said, oh yeah, yeah, of course that's going to happen.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think the Chinese regime is a little unhinged because the rhetoric certainly is not justified by what's occurring today. And I think it reflects a couple of things. I think, first of all, the Chinese are just enraged that President Trump is not deferring to them. For millennia, Chinese diplomacy has been intimidation of others. And Xi Jinping has been particularly good at it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And probably Trump right now has just said he's had enough. But the other thing is that these tariffs do pose a danger to the Chinese economy. Xi Jinping has turned his back on consumption as the basis of the Chinese economy. That means his only way out is to export. And it's not just Trump's tariffs. When Trump does this, he's giving inspiration to others.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
He's giving them cover to others to do the same thing. So I think that the Chinese are panicking in addition to just being so upset that we're not bowing down to them.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That's a great question. Because if we go back to 2018, when President Trump imposed his Section 301 tariffs on China, 25% across the board, China absorbed somewhere between 75% to 81% of the cost of those tariffs. And now China has even more incentive to do that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
The only thing is that China right now might have less flexibility to do that for various reasons, technical ones related to the currency. But the point is a good one. And I think China will absorb a majority of the cost. It's going to hurt them, but I think they're going to do it because they have no choice.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Canada and Mexico present a very different situation than China. And Trump did not back off on the China tariffs. He imposed two rounds of 10% across the board tariffs. He didn't blink. With Canada and Mexico, there are reasons to just deal with them in a different way. They're our neighbors. They're friends. We have an integrated economy with them.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And a lot of people think that Trump is trying to sort of isolate China. Well, to do that, you need to have both Ottawa and Mexico City on board. You need their help. So I think there's a lot going on here that is more complex with regards to the Canadian and Mexican tariffs, which President Trump has delayed.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
There's no indication that the Chinese have improved on fentanyl. You know, it was very interesting today that the Chinese government put out a timeline of all the fentanyl control measures that they've put in place over the years, but they've just gotten worse. Xi Jinping has violated promises to three American presidents now about fentanyl. As President Biden in 2023...
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
President Trump in 2018, and President Obama in 2016. So, you know, when the Chinese say, well, you shouldn't be imposing costs on us. You should just be trying to talk to us with mutual respect. Well, we've tried that now, and it hasn't worked. So President Trump did the only thing that he could do, which was to go after China for killing basically 70,000 Americans a year. Do you anticipate...
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think that we're going to see more trade turbulence. And the reason is that it's not just fentanyl. It's also predatory and criminal trade practices, especially the theft of US intellectual property. And I think Trump also knows that he's got the upper hand. Remember, the Chinese economy is less than two-thirds the size of ours.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And especially if you were to look at the Chinese economy and its real estate, because they exaggerate their gross domestic product numbers, it's even smaller than that. But the other thing is that China is the trade surplus country. Last year, its merchandise trade surplus against the U.S. was $295.4 billion. Trade surplus countries have no ammunition in trade wars. Trump knows that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So, China's only hope is to try to convince parts of the American public to work on Trump. But if that doesn't work, and I don't think it will, Trump is going to hit these guys, as he should, no question about it. All right.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's probably the property sector, which is completely overbuilt. In September 2023, a former senior statistics official in a public forum said that China had enough vacant apartments for 1.4 billion people. But he admitted he might be wrong and the number of vacant apartments be sufficient for 3 billion people. There's just no way to get out of that in the near future.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's just a question of supply and demand, which, although China exercises a lot of control over the economy, supply and demand still works in China. So, that's probably their weakest link. But there are a lot of other weak links, Mike.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
I think he has less ability to change than he once did. I don't think he's the all-powerful supremo that he was, let's say, four or five years ago. And we're seeing signs in the Chinese political system of real instability. So, for instance, at the top of the Chinese military, the People's Liberation Army propaganda organs are now praising what they call, quote, collective leadership.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That is a direct challenge to Xi Jinping. And that means that a lot of the turmoil that we see in the upper ranks of the military, this could very well be the foes of Xi Jinping actually purging Xi Jinping's people. We don't know that yet because it's obscure. But the point is, these things don't happen in periods where Xi Jinping would be the supreme leader.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So I'm not sure he has that same sort of strategic autonomy that he did when China was obviously successful and he was getting all the credit for it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Well, two developments since Marco Rubio went there on his first trip as Secretary of State. First of all, the Panamanian president, Molino, said that he would not renew his Belt and Road memorandum with China, that he might even cancel the existing one. But the news this week is that BlackRock, the American financials company,
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
asset manager, biggest in the world, by the way, is buying and taking over two Chinese port operations in the canal from CK Hutchison, which is the mega port operator around the world in Hong Kong, subject to Chinese rule. Those are the ports at Balboa on the Pacific side of the canal and at Cristobal on the Atlantic side.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And these are the two port operations that have attracted a lot of attention because they could be easily turned into Chinese military bases when Beijing gives the order. So that is stunning news. It means that China is being muscled out of the canal zone, which is great because China still can block the canal, but it's losing its basis to do that.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
There are other Chinese operations in the canal zone. We need to get rid of those as well. But this is a very good sign. And it means that in other countries that are getting sick and tired of China, they'll be inspired to do the same thing. So with a little pressure from President Trump. We can do it.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yeah, I think it is, actually, in Latin America, for sure. We've had some problems with some of the other Chinese ports, but generally, Beijing has been able to negotiate its way around them, most clearly in Sri Lanka. But yeah, this is really terrific news because this could be the beginning of not just a trend in Latin America, but around the world as well.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yeah. In the People's Republic, no entity, no person can ignore or disobey an order from the Communist Party. And that's also true of Hong Kong. Hong Kong was supposed to be autonomous, supposed to have one country, two systems for 50 years. But that ended in 2020 with China adopting the national security law for Hong Kong. which meant essentially full Chinese control of Hong Kong.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And so we had to assume from a national security point of view that CK Hutchison would close the port, the canal zone, if given an order to do that. And clearly, the Chinese military and Chinese operatives, Ministry of State Security, were based in the canal zone, probably at those two port operations. So, it was really important to get them back.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And it's important to continue to eject China from the canal zone, because there's still a dozen ways that China can block that canal. Right.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
Yes. And President Trump has opened up an office of shipbuilding in the White House itself, which shows you that it is a priority. American shipbuilding has withered away. And there are a couple of things that President Trump has done. So for instance, go back a week, The U.S.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
trade representative announced that it was imposing million-dollar-plus fees on Chinese-built ships and Chinese-owned ships that entered U.S. ports. That gives all sorts of people incentives to build ships elsewhere. And that's a good thing to get it out of the People's Republic of China. But it also incentives for American shipbuilding.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And we need to do this, not just for the Navy, which is woefully doesn't have the shipbuilding capacity anymore, but also just regular commercial ships, which are really important. It's the lifeblood of trade. So this is, again, great news.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
By far, by far. They're well ahead of South Korea, which I think is in second place. But China makes something, and correct me if I'm wrong, something like over 50% of the world's ships.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
That I don't know, Mike. But if you said 15th, I would say that's really high. Would have been, my guess, even lower than that. But one other thing. South Korea, which is a US treaty ally, is going through a political crisis. And it's not inconceivable that within three months, they could have basically a communist as president. This is really serious stuff.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So that means number one and number two, shipbuilder would basically be in Beijing's orbit.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
It's really high. About a month or two ago, it would have been close to 90%. Fortunately, things are moving in a much better direction. What happened is President Yun Suk-yeol, a conservative-leaning figure, declared martial law on December 3. He was impeached by the National Assembly on, I think, the 14th.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
The constitutional court decides this month and maybe in the next week whether to remove him or not. If he's removed, there's 60 days for another election. Now, Yoon was really unpopular even before martial law. He had an approval rating below 20%. Now, because the leftists have overreached, his approval rating is at least in the 40s and in some polls over 50%.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
So even if he is removed, there's a real possibility that another conservative could be elected. But we know the leftists control the electoral, the National Election Commission. They've been rigging elections since at least 2020, which means no matter what the South Korean people, how they vote, is probably going to get a leftist as a president.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And the leftist candidate is pro-China, pro-North Korea. He might even be a communist himself. If he's not, he's very close to it. This is really, really very dangerous for us.
The President's Daily Brief
PDB Situation Report | March 8th, 2025: Trump’s Ultimatum to Hamas & China’s War Warning
And often corrected by Mike Baker. So, yeah. Thanks very much.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
You can thank Xi Jinping for that, because he's causing problems across the board. And you mentioned his 2025 New Year's message, and there's so much in there to talk about, because it reveals, I think, a regime which knows its problems.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
especially starting with the economy, because clearly he says, well, I've got a lot of confidence we'll meet our 5% target, and then talks about a lot of, or at least hints at reasons why he's not going to make target.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Yes, he's not going to take responsibility. But the problem is that he's a neo-Maoist, and he has a vision for the Chinese economy, which certainly fits in with the 1950s, but is not really taking into account the reality of what's occurring in China right now. What he's doing is he's turned his back on consumption as the fundamental basis for the Chinese economy.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Consumption contributes somewhere like 40% of China's GDP. Most countries 60 to 65, US over 70. But that means that Xi Jinping has only one way to solve a very difficult situation, and that is to export more to the world. That means he's put his fate in our hands. And it also means that we can shut out him from the United States and other people can do that with their countries as well.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
So he's really very difficult position right now. And he's subject to external concerns like no other Chinese leader before. But is that something that...
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Yes, because we don't have political will. You know, just think about it, Mike. We're not protecting ourselves against Chinese cyber attacks. We've known these going on for decades. We've got the means to stop it. We don't stop it.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And so, you know, you can make the argument that the United States is one of the weakest countries in the world because we're just not defending ourselves from a known threat. Same thing with tariffs. But if we wanted to, if we had to, Yes, we could start shutting the Chinese out from our markets. But, you know, think about this.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
We are financing the buildup of the Chinese military, which is configured to kill Americans. And, you know, future generations are going to look at our leaders. They're going to look at us and they say, who were these people?
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Well, from his perspective, things aren't that bad because he's putting China on a war footing. He's manufacturing. He's making sure that China is self-sufficient. He's doing all sorts of things. And from his perspective, I think he probably likes it. The problem is that from a point of view of economics, he's driving China into the ground.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And that means that if he doesn't go to war soon, he's going to lose the ability to go to war. And that is something that means he can take us by surprise, because I'm sure at some point, he's going to see a closing window of opportunity.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Okay. First of all, what he's doing is he's incurring a lot of debt. China has a total country GDP to total country debt to total country GDP ratio of, I think, about 350%. You're in the danger point where you're getting to 200%. So China's in a very difficult position. He's got to have a debt crisis, and he can't really resolve it. His position is he's going to try to increase investment.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
In other words, factories, high-speed rail lines, all those other things. The problem is that he's driving prices down in China by this excessive production. When you drive prices down, you have deflation. Things get cheaper. And Xi Jinping is quoted by the Wall Street Journal as saying, don't the Chinese people like it when things get cheaper? Well, of course, as consumers, we do.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
But the problem is when you're a consumer, you don't buy things when things get cheaper because you're going to wait six months or a year until prices are lower. And so what we're seeing is a large portion of the Chinese economy consumption is now, I think, shrinking. And China is now in a debt deflation sort of cycle. We should know about this because that happened to us in the 1930s.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
So the way to put it to Mike Baker, the economist, is China is looking at the Great Depression.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Yeah, it's big. It is very big. And it has a lot of money. It's not spending. And the other thing about the middle class, it's getting poorer. About 70% of the wealth of the Chinese middle class is property. Property prices are plunging because there's too much of it. Give you an example of how much is too much. or how far they're in it.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Last September of 2023, a former senior statistics official in China said that there were enough vacant apartments to house the entire Chinese population of 1.4 billion people. Although this official said there are other estimates that show that there are enough vacant apartments to house 3 billion people.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Now, the law of supply and demand doesn't work exactly in the same way as a command economy like China's, but it does apply. And that means property prices are going down, which means that 70% of the wealth of the Chinese people is shrinking.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And a lot of Chinese people are not very happy about this situation right now, which is the reason, and here this is for Michael Baker, the economist, that's why we're seeing record amounts of both legal and illegal capital flight from China. That doesn't happen when you're growing at 5%, as Xi Jinping claims, which is his target.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
It happens when your economy is about zero, which is where China is right now, because of the deflation, and you've got the debt overhang. So this is a pretty grim situation. It's not insoluble, but it is insoluble if it's countries led by a malice. And that's where China is right now.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
A lot of it is going out to Hong Kong, which is part of the People's Republic, but it's outside of China's currency walls. And then from there, it goes all over the world. It goes into the United States, goes into Europe, goes into... Southeast Asia. But money is leaving in really big numbers.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Wall Street Journal did a story not too long ago in October, which said that by their estimation, and these numbers are very rough because China doesn't tell us the truth. But the Wall Street Journal said that the amount of illegal capital flight in the four quarters ending in June of 2024 was $256 billion. That's a pretty big number because that's in addition to the legal capital flight.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
So, we're seeing money leave China, which is a real indication. And we're seeing all sorts of very strange phenomena in the Chinese financial markets right now. So, this is a problem that is getting worse by the week. And as I said, it's not insoluble, but it is when you have someone who is ruthlessly determined to pursue misguided policies.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
That's a really important question. There are a couple of things they can do. One of them is they leave. We have an unprecedented number of Chinese migrants from both our northern and southern borders. Some of those people are dangerous elements, but most of them are just people who are desperate to live in a free society.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
The other thing that you do is you keep money offshore, and there are a number of illegal but simple ways to do that. The other thing is you buy gold. Gold is basically capital flight for the poor, because they can't get their money out, but they can get their money out of renminbi-denominated assets, local currency assets. So you buy gold, because gold has an international value.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
I mean, its price is set by global markets, not by inside China. Yeah. So, there are those things that you can do. But the other thing you can do is, and this is really fascinating, you just opt out of society. You got a lot of young, middle-class Chinese who are really privileged, who have just said, I'm out of this country.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And they can't leave, many of them, but what they do is they, quote unquote, retire. That's the phrase that's being used now. They retire to the countryside and they become farmers. Or they just do nothing. They just sit in their rooms and opt out of society. So those are the ways that people are reacting. There is unprecedented gloom in Chinese society.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And the one place we can see this is plummeting birth rates. Because their people are so pessimistic, they do not want to raise a child in China.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
He probably doesn't have that much support, but he is able to coerce people. And in the absence of love and adulation and all the rest of it, that's where he's right now. No one wants to take him on. But we are seeing some really interesting phenomena, for instance, in the Chinese military.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
So Chinese military propaganda is sort of like a, normally it doesn't say very much, but now we are seeing all of these pieces that praise, quote unquote, collective leadership. In other words, not one man rule, which is associated with Xi Jinping. We were also not seeing something in Chinese military propaganda. And that is, we're not seeing as much of Xi Jinping as you normally do.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And that leads some people to believe that maybe Xi doesn't have as much support in the Chinese military as he once did. And that's important because the People's Liberation Army is the biggest power block in the Communist Party. Especially since the middle of 2023, there have been extraordinary number of purges and suicides among senior officers, especially in the rocket force.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And everybody has sort of assumed that this was Xi Jinping purging people that he had previously picked. Well, that's one explanation. And maybe that's the most, certainly it's the most prevalent explanation you hear. But the other explanation is that people who are Xi Jinping's opponents are purging Xi Jinping's people. And there's evidence for that conclusion as well.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
The bottom line, Mike, we don't know. But the point is, we are seeing things that clearly show instability and intense infighting at the top of the Communist Party, including the Chinese military, which, by the way, is a party organization. So things are just uncertain and they're unstable.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
I think party elders, and these are former leaders, they haven't fared so well. So, for instance, if we go to October 2022, Communist Party's 20th National Congress. You see Hu Jintao, who was Xi Jinping's predecessor, being escorted out of the meeting. And Hu Jintao was only seen in public once since then.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
That was at the funeral ceremony memorial service for Jiang Zemin, who was Hu Jintao's predecessor. But there are reports that Hu Jintao and his family have been detained. And I think that those reports are credible. So it hasn't gone very well for people who have expressed opposition to Xi Jinping.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
As I said, nobody really likes him because, you know, among other things, he has denied opportunities for other people. You know, under the Communist Party's system, before Xi Jinping took over, he was going to have a 10-year term at the top, and then somebody else would step in.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Well, by getting an unprecedented third term, what he's done is he's prevented a whole slew of leaders from coming to the fore. They don't like that, of course, but they don't feel that they're in a position to actually oppose Xi Jinping. It's only the guys with the guns, People's Liberation Army, that actually feel that they can say what they want. So this is a fascinating situation.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Yeah, well, he called it reunification, which is incorrect because the People's Republic has never ruled Taiwan. And in fact, throughout all of history, No Chinese regime has ever held indisputable sovereignty to Taiwan. I can go and wonk out on you on that if you want, and I'd love to do that, but let me just put that to the side for a moment.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
The problem for Xi Jinping is not only does he get his terms wrong, but he's wrong when he says that the reunification of Taiwan and the mainland is a trend of history and no one can stop it. Because as time, in fact, goes on, Taiwan and China are diverging. And you can see this most clearly in self-identification surveys. In the last big survey, which was done by the Pew Research Group,
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
This was from the middle of 2023. The results were 67% of the people in Taiwan viewed themselves as primarily Taiwanese. Only 3% viewed themselves as primarily Chinese. And the really bad news in all of this, because it gets worse for him, is that in the younger age cohort, those 18 to 34, the numbers are 83% Taiwanese, 1% Chinese.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
So, if Xi Jinping wants to annex Taiwan, he's not going to be able to do it voluntarily. He's going to be able to do it by force, because the people in Taiwan, although of course they want good relations with China, they don't believe that they are Chinese. So, when Xi Jinping in his 2025 New Year's message says, oh, we are all one family, which is the term he used, well, I don't think so.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
There are a lot of people who don't think they're part of that family.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
On a controversial topic like this, we really don't have precise views of the way the Chinese people think, because you can't actually say what you think, and no one's going to ask. But let me put it this way. I don't think the people in China think about this issue all the time. If you were to ask them, you would probably get an answer something like this.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
95% would say, yes, Taiwan should be part of the People's Republic. But if you were to ask them, would I give my only son or daughter to go across the Taiwan Strait to kill Taiwanese to annex it? You're down in the single digits. And the reason is, there's a couple of reasons. First of all, Although we just went through this, people in Taiwan don't think they're Chinese.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
The people in China, because of relentless indoctrination, think they're Chinese. And the Chinese people in the mainland will tell you this. Officials or common folk will say, Chinese do not kill Chinese. So, you know, if Xi Jinping is thinking of launching an invasion of the main island of Taiwan, it's just not going to get a lot of people. This would be really, really unpopular.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
That's in general. It's worse now because of the economy, because of the gloom in society. The last thing that people in China want right now is a war. What they want is to go back to the old times of always increasing prosperity, property prices going to the sky every month. They want to go back to where they were 10 years ago. So they don't want a war.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
And they certainly don't want to kill people for that. So I think it would be really unpopular. Now, there are on the Chinese internet, as there would be in every country, there are hotheads. But they are a very, and I think, decreasing proportion of the Chinese population right now.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
I think this is this year and next year and maybe going to 2027 is the period of maximum vulnerability for a couple of reasons. One of them is I don't think Xi Jinping is going to start a war because he wants to rally the Chinese people. I think even he knows that that would be unpopular. But he might go to war to prevent other senior Communist Party leaders from deposing him. That's a real risk.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Because if you're Xi Jinping, you've built up this incredible military, and you know that the economy is not going to support it. So you're in a use it or lose it situation. And as I said, I think that he is very concerned about what other senior Communist Party leaders might do to him. So this is what his hero, he reveres Mao Zedong, the founder of the People's Republic.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Mao did this exactly so many times. I mean, for instance, he started the Cultural Revolution to prevent other senior leaders from getting rid of him. And I think Xi Jinping is going to do the same thing. I don't know what's going to happen. I can give you a lot of reasons why he will or won't do something, but the point is that I think that he is going to realize he's got to move.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Remember, he is the most ambitious aggressor in history. He not only believes that China is the world's only sovereign state, he believes that the moon and Mars should be considered sovereign Chinese territory. And if you have that expansive view of the world, then you realize you're going to lose it because your country is falling apart underneath you.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Well, you are very tempted to go out and accomplish your objectives.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
You have to ask someone whose name is Donald John Trump that question. I don't know what Trump would do. I can tell you what Trump has said. He said, basically, I'm not going to tell you. I can tell you what I think Trump should do, but that's really hard to predict. But this is not just a question of Trump. This is also a question of Xi Jinping.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
I think that if he goes to war, that Taiwan will not be his initial objective. And let me just sort of scope it out for you. For Xi Jinping to start hostilities by launching an invasion of the main island of Taiwan, He's got to give some general or admiral almost complete control over the Chinese military because that's a combined air, land, and sea operation.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
That makes that general or admiral the most powerful figure in China. In the best of times, Mike, Xi Jinping doesn't trust anybody with stars on their shoulders, but now is certainly not the best of times. And you've got a military which I think doesn't want to fight for various reasons.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
They like to huff and puff, and they like to intimidate, but I don't think they really want to go and have a major operation. They'll go take on the Philippines, as they're doing right now, but I don't think they would start hostilities with an invasion of the main island of Taiwan. Now, they might do something in the Philippines. I think that they do. That spreads. That spreads to Taiwan.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Taiwan is involved in a war. United States gets involved in a war because these are our treaty allies. All sorts of things occur. But this is like war spreading very fast. But if you're talking about... invasion of the main island of Taiwan as the way of starting hostilities, my sense is the chance of that is pretty low.
The President's Daily Brief
PDB Situation Report | January 4th, 2025: Terrorism Hits Home & Beijing’s Strategy for 2025
Well, thanks, Mike. And have not only a happy, but a safe new year.