>> The Chinese are basically a powerhouse in the global economy.

They are our fiercest competitor.

At the same time, it kind of stinks to be Chinese right now if you're living inside China.

[MUSIC] Hello and welcome to GZERO World.

I'm Ian Bremmer and today we are looking at the relationship between the world's two most powerful countries, the United States and China.

No relationship matters more to the rest of the world.

The choices they make on trade, climate security and AI have ripple effects around the globe and will shape our future in profound ways.

After President Xi's trip to Washington to meet with President Trump, the two leaders are trying to show they can keep it stable, despite the deep divide between Washington and Beijing.

So where do the two superpowers go from here?

After all the handshakes and the friendly words, can Washington and Beijing make any meaningful progress?

Or is the relationship defined by strategic competition at risk of spiraling out of control?

To help us understand, I'm joined by China expert and senior fellow at the Hoover Institution, Elizabeth Economy.

Don't worry, I've also got your puppet regime.

Did you see the new helipad outside?

Yes.

It's amazing, right?

I saw it.

But first, a word from the folks who help us keep the lights on.

Funding for GZERO World is provided by our lead sponsor, Prologis.

Every day, all over the world, Prologis helps businesses of all sizes lower their carbon footprint and scale their supply chains.

With a portfolio of logistics and real estate and an end-to-end solutions platform addressing the critical initiatives of global logistics today.

Learn more at Prologis.com.

And by Cox Enterprises is proud to support GZERO.

Our people are working to build a brighter future in automotive, greenhouse agriculture, clean tech, environmental conservation and beyond.

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Additional funding provided by the Andrew Carnegie Foundation, Koo and Patricia Yuen, committed to bridging cultural differences in our communities.

And... When it comes to the United States and China, the relationship status is complicated.

They're economic competitors, they're military rivals, but they're also deeply tied together through trade, investment, technology and their supply chains.

Increasingly, they see each other as the biggest strategic threat to their own future.

But you wouldn't know that from watching their leaders.

President Trump recently welcomed Xi Jinping to the White House, rolling out the red carpet for a visit filled with fanfare and photo ops.

It's the second summit this year, after Trump's trip to Beijing in May, where he lavished praise on the Chinese president.

We're going to have a fantastic future together.

I search respect for China, the job you've done.

You're a great leader.

I say it to everybody, you're a great leader.

Sometimes people don't like me saying it, but I say it anyway because it's true.

Don't be fooled.

Fancy dinners and compliments aside, the two countries are both trying to answer a fundamental question.

What kind of a world do we want to live in?

And who gets to make that decision?

For most of the past 80 years, the answer was largely shaped by the United States.

But now China has a different vision, a competing one.

And President Xi has been working overtime to make that a reality.

Xi has hosted over two dozen world leaders in Beijing this year.

And ahead of the summit, he traveled to Egypt, North Korea, New Delhi, Central Asia.

And the message, China has friends and influence, and they want to shape a new world order without the United States at the center.

To be fair, President Trump has handed Beijing an opportunity.

America First policies have strained relationships with U.S.

allies.

Washington's willingness to use tariffs and economic pressure, even threats, has left plenty of countries wondering how dependable the U.S.

will be as a long-term partner.

China, meanwhile, gets to show up with a nice pitch.

"We believe in sovereignty.

We support trade and development, and we're happy to do business with you."

But the global system the U.S.

has underwritten since the end of World War II, the alliances, institutions, the security guarantees, that is expensive.

China wants more influence, sure, but does China want the bill that comes with it?

And that's hard to answer when China's own economy is facing serious challenges.

Beijing sparks tension with trade partners by flooding international markets with their own cheap exports.

And then there's the question of what China means by sovereignty.

Beijing says countries shouldn't interfere with each other's internal affairs.

That's fair enough.

But it refused to sign a UN resolution condemning Russia's invasion of Ukraine and rejected international rulings that struck down its sweeping claims to the entire South China Sea.

Not exactly a strong defense of territorial integrity.

Xi is right about at least one thing.

The world isn't binary.

It's complicated, with competing interests and multiple centers of power.

The challenge is whether the US and China can compete for global influence while still finding ways to cooperate in a world that needs both of them, for better and for worse.

Joining me to talk about China, the US and their visions for the future is Hoover Institution Senior Fellow, Elizabeth Economy.

Elizabeth Economy, welcome to GZERO World.

Thanks so much, Ian.

Great to be here.

I guess I want to start with the latest, the second of what looks to be four summit meetings between Trump and Xi Jinping.

In the readout, Xi Jinping talked about how historic it was that these two leaders are going to be seeing each other so often.

Does it matter?

Because so far, the deliverables seem pretty light.

- So I would say if I were being ungenerous, what we've seen over the past two summits has probably just been mostly pomp and pageantry over substantive progress.

But if I were going to be more generous, I would say that actually the two sides are working to develop some new channels of communication to try to build some stability into this relationship.

All the while, right, just to enable them both to compete pretty fiercely.

But I think there is something to having this frequency, this new frequency of meetings that is positive.

I don't think we need all the pageantry surrounding it.

You know, it could just be substantive bilateral meetings that actually produce some more progress.

But I do think it's useful to have them meet frequently.

- How are the Chinese seeing this second Trump administration right now?

Obviously, US policy changes a lot more frequently and is frequently a lot more uncertain, therefore, than what we see out of Xi Jinping in power, you know, without term limits at this point.

Is this more of an opportunity for them?

Is it, let's just be risk averse and do our thing and see what pops our way?

How do they think about it?

- Well, so let me be frank and say, I think there are as many views in China about the United States as there are in the United States about China.

So with that caveat, I think, look, this Trump administration offers both some opportunities and some challenges for the Chinese.

On the opportunity side, of course, President Trump has said, "We now have a non-ideological foreign policy," which means we are not bothering China about their human rights practices.

Congress, yes, continues to pass legislation, continues to push on issues, but this administration has really no interest in promoting the United States as a democratic model in competition.

So with China, there's no democracy versus autocracy framing.

So I think that's a plus from the Chinese perspective.

Also a plus, the United States has stepped back from participating in over five dozen international agreements and institutions like the World Health Organization, the Paris Climate Accords, UN Human Rights Council.

This is all great from the Chinese perspective, or reasonably great, because it opens up the sort of aperture for China to step in and assume leadership roles in whatever or whichever ones of these organizations it wants to.

It doesn't want to assume leadership in organizations where it's going to increase the financial burden.

But if it can take a step and be seen as a leader without adding much more to their own share of the contribution, I think they're all in on the Trump administration sort of saying we're no longer interested in being a leader or the leader on the global stage.

On the other hand, I do think the Trump administration continues to look at China as the greatest long-term strategic challenge that our country faces.

And I think we see this both in terms of the tech competition, where the president has made clear that he wants the United States to lead in the AI tech competition, and also national security.

So, you know, I think, you know, at the outset of the Trump administration, there was all this talk about, you know, spheres of influence and the United States was gonna dominate in the, you know, sort of Western hemisphere.

We were going to leave Asia to China and Europe to Russia.

They could battle it out.

But in the end, yes, Western hemisphere is our number one priority, but Indo-Pacific is number two.

And actually, we've made a lot of moves to bolster our security ties with our allies and partners in the region.

So I think on those two fronts, the Chinese very much recognize that the United States is not taking a step back and actually is trying to become more competitive with China.

Now, when you look at how the Chinese are actually doing, I mean, so much development on the technology side, their capabilities in global energy, their capabilities and supply chain of course that feeds that, robotics, biotech, AI, I mean cutting edge, right, in many areas that they are literally ahead of the United States.

And yet, their domestic economy is not performing well at all.

And so, I mean, when you see them as an economic competitor to the United States and on the global stage, is it overall net-net, as we say, more robust, or is it net-net, these guys are gonna face like incredible downside challenges?

How do you, again, I know both are true, but how do you frame it?

- Exactly, both are true.

So I always think I need to look at Chinese ambitions and what's happening on the ground.

And I think on the ambition side, when you're looking at the tech sector, when you're looking at advanced manufacturing, they are a global powerhouse.

And as you indicate, in a number of sectors, they lead the United States.

And just looking at their deployment of clean tech, of clean energy, it makes me have heart palpitations when I think back to the fact that we had Jimmy Carter putting solar panels on the West Wing of the White House in 1977.

That could be us, were it not for our sort of retrenchment in clean energy, and then our advance and our retrench, and what happens with our electoral cycle.

The US is expanding coal now as the Chinese are pulling away from it.

Yes, yes.

Now, they still are the dominant user of coal, the dominant consumer of coal globally, but you're quite right.

The Chinese are basically the little piggy that built the brick house.

And I think we've seen that during the Iran conflict, right, where they've not only diversified their sources of, you know, oil, but also their sources of energy, right?

They are the leader in clean energy deployment.

They get natural gas.

They get oil.

So I think they've got four months of reserves, right?

So they were basically, they have been basically untouched in many respects by what's happening within the Strait of Hormuz.

So I think they're great long-term strategic planners.

They're a powerhouse in the global economy.

They are our fiercest competitor.

At the same time, it kind of stinks to be Chinese right now, if you're living inside China.

GDP per capita has gone from about 10,700 to 13,700 over the past six years.

That really doesn't compare to where the United States is.

Something like 40 to 45% of urban workers now are in the gig economy, flex employment, where they're not getting access to the full array of sort of social security and health benefits.

They've got 19% youth unemployment in China.

They've lost a huge percentage of their property value, which is where most Chinese had most of their savings.

So, yes, the domestic economy looks bad, but China has the ability, the Chinese government has the ability to suppress the Chinese people.

You don't see protests on the streets in China about their standard of living, about the failure of the Chinese government to provide adequate employment opportunities for the youth because they have this incredibly repressive society.

So I personally think they can continue on this path for a while longer, but there's no date attached.

- So Liz, how much interdependence do you think the Americans should be aiming for long-term with the Chinese?

I mean, there are obviously benefits with having sort of mutually assured destruction.

There's a stabilizing effect of engaging with each other.

There's also a massive amount of mistrust, of course, in terms of what one does when one has leverage over the other.

What do you think, how do you think about that and how do you orient towards executing on it?

I mean, I think, you know, beginning probably in the first Trump administration, definitely in the Biden administration and now in this administration, actually the whole effort of like the Commerce Department, the Treasury Department, to some extent the State Department, certainly Defense Department or Department of War, they're all at some level thinking through this exact question, which is how do we decide sort of what are the critical areas that should be deemed essential for our economic and national security, where we want to have both, you know, a substantial amount of our manufacturing capacity, domestic, you know, at home or in friends and allies.

And where can we afford sort of to leave that aside and just let the global market handle things?

I think the challenge is that as we identify more and more goods, for example, you know, Wi-Fi routers, right?

That's a new one.

Or, you know, EVs, right?

All connected goods.

It becomes harder and harder to discern, you know, where to draw that line.

And I think it's going to be challenging as we move forward, but that's the job, right?

The job is to figure out the difference between cosmetics and semiconductors.

- So when Jensen Huang says, "Actually, you know, we should be selling these to the Chinese because otherwise they're just going to build their own faster.

And we want to have the commanding heights of semiconductors, and that means they're using our stuff."

It sounds like you strongly, you'd say he's talking his book.

That is the wrong way to look at US national security and strategic purpose.

- It's the wrong way to look at national security, but frankly, in large part, because the Chinese don't buy into that.

I mean, you look back to 2015, Made in China 2025, you know, Xi Jinping set as a goal for China to be 70% self-reliant and semiconductors by 2025.

The Chinese are already marching toward indigenization, toward self-sufficiency across an entire array of critical technologies, almost a decade before we even really started thinking about it in a serious way.

So it's a mistake to think that China wants or is willing to be reliant on US semiconductor technology.

It is not.

Xi Jinping is not.

And so I think that's really the failure of understanding on Jensen Huang's part.

- There've been a lot of areas of competition, if you will, where the Chinese have been focused pretty consistently over decades in the United States.

Not necessarily, certainly not as consistently.

One that I've been thinking about a lot recently has been space.

And I'm wondering, you know, assuming that the Chinese, and I think it's generally presumed this is gonna be the case, in the next few years are gonna have someone standing on the moon, right?

And not in gritty, you know, sort of photos, but actually, you know, sort of live, high def, full color, and a Chinese flag.

And the Americans aren't gonna be there.

And what's that gonna mean?

How's the United States, how are the American people gonna feel about that?

How should the Americans react to that when it happens?

- You know, I don't think we're out of the space race game.

I think we have to expect that, you know, China has identified space as a frontier domain where they do want to lead or they certainly want to be as competitive, you know, as world leader United States.

But I think, look, the first Trump administration set up the Artemis Accords.

It was a whole international effort to push forward on space, cooperative, transparent.

The Chinese set up their own organization with the Russians.

We have over twice as many countries that have joined with us as China and Russia have joined with them.

I don't think we're out of the game here.

Now, should we be devolving so much of our space capability to the private sector?

I think that does give me a little pause.

I am concerned about that element of it, but I'm not really worried that we are sort of losing the space race to China at this point in time.

- No, I mean, certainly you look at near-earth orbit and you look at reusable rockets, and I'm sitting here in Austin right now.

I mean, very clearly, the Americans are doing extraordinary things.

I'm just, I think back on 1969, I wasn't born yet, but it was almost a few months away, but such an iconic moment for the Americans can do and will be number one when they set their mind to it.

And now you're gonna have another one.

- But Ian, I mean, you have to allow for China to have its accomplishments.

You have to allow for China to lead in some sectors, to be the best in some areas.

I don't think that our objective should be to keep China down, right?

To prevent China from achieving anything - That's precisely what I'm asking you, yep.

- where they can sort of take pride in their national accomplishments.

I don't think that should be our objective.

You know, our objective should be to ensure that the Chinese don't, you know, gain the capability of sort of basically disabling all our satellites.

That's an objective that we should maintain.

But I don't think it should be to prevent China from having a high def picture of a Chinese, you know, astronaut on the moon.

- Okay, before I close, I wanna ask you about artificial intelligence.

And both sides are racing ahead, both feet on the accelerator.

President Trump has said, "Whoever wins AI wins."

And yet the American people are very divided.

And many of them are very concerned about using AI, about what AI will mean for them.

They don't trust a lot of their leaders.

The Chinese are among the most optimistic in terms of using AI and what it's going to mean for them.

What do you think the implications of that are?

- You know, this is a sort of a big trope that's out there.

I think, let me make maybe two points.

Number one, while the American people are concerned, I think they're concerned about, you know, an array of things and they're rightly concerned.

I think we should be concerned given what we've witnessed just in the past several months with AI agents going rogue, right?

I think we should be concerned about whether or not we have the proper or enough safety protocols.

I think we should also be concerned about data centers, just making sure that are we using clean energy?

Make sure they're not polluting our water.

You know, think through the ramifications for local neighborhoods.

We have 10 times more data centers than the Chinese do at this point.

Our diffusion of AI is basically on par with China domestically, not globally.

They're leading now in terms of the use of Chinese AI models globally.

We're not behind in this AI race at this point in time.

I think China has its own sort of things that are slowing down its AI development, right?

It has content controls.

It has controls over the use of companion AIs.

So it's companion AI.

So I think there are different levels.

We're more focused on safety with regard to catastrophic things.

They're not, right?

Their safety protocols in that regard are not as strong as ours, and they should be.

So I'm not yet worried that because American people are raising more questions about AI, that somehow we're going to lose the AI race.

The only other point I'll make is it's far from clear to me that the Chinese people are more optimistic about AI.

I think there's a form of techno determinism in China.

The Chinese government has said, "This is what we're doing.

"This is where we're going."

I think the Chinese people don't actually have the sort of public right to say, "I don't like this, stop doing this."

What they say is, "Okay, we've got to get on board."

And so that's different from perhaps being optimistic about it.

Liz, is it fair to say that as of right now, five years in the future, we have really no idea and have no confidence who's likely to be winning on AI globally at that point, the Americans or China?

I mean, I guess it also just depends on how you're defining winning, right?

And so, you know, I guess in that sense, yes, I don't think we know who is going to be winning.

Do I have faith in the American system?

I do.

Do I think that if we can get sort of the global export of AI package right, that we could be the leader globally in terms of use of our models, in competition with China?

I do.

But I think that we have yet to see this administration, they've talked about it, but I've yet to see what we're doing that's going to make it attractive for the rest of the world to buy into our system as opposed to the Chinese system.

China's got the whole stack ready to go.

I don't think we're in that position yet.

Liz Economy, thanks for joining us today.

Thank you, Ian.

And now it's time to visit a world where the stakes are a lot lower than the US-China battle for dominance.

And thankfully, no one has access to the nuclear launch codes.

It's time for your puppet regime.

Xi Jinping, thank you so much for coming.

We're gonna do so much together.

- Yes.

- There's so many things to discuss.

Many things.

Did you see the new helipad outside?

- Yes.

- It's amazing, right?

I saw it.

It's so cool.

You can land helicopters on it whenever you like.

Right.

I would like you to stop helping Taiwan.

Well, I would like you to stop helping Russia and Iran, but you don't see me giving you a hard time.

Anyway, did you see the ballroom?

- Yes.

- Should we name it after you?

We could name it "Xi's Ballroom."

I guess technically it would be "her ballroom," but Steve tells me we're done with the pronouns, so... Perhaps we could discuss trade.

Well, that's very boring, but if you want to extend the truce, we extend... Two years.

Two weeks.

Two months.

Two months.

- Fine.

- Good.

What else?

Superintelligence?

They say it's a problem, but I don't think so.

- Agreed.

- Like I made a video of me with lasers for eyes, like real lasers, and people said, "Sir, sir, we need to limit the artificial intelligence."

And I'm like, "What's the problem?"

- Same.

- Nobody can post like me.

You can't post like me.

- No.

- You know, it wouldn't kill you to be a little more expressive, Xi.

You just sit there like you got all the time in the world.

I do.

What does that mean?

I have time, Donald.

I'm just biding it.

No, Biden was so stupid.

You have it easy is what you have.

No midterms, no fake news, no... - Pandas.

- What?

Pandas.

I'll give you two pandas.

- Three.

- Two.

Deal.

We'll put them in your ballroom.

That's our show this week.

Come back next week if you like what you see, or even if you don't, but you have your own ideas about shaping the future of the global order, why don't you come check us out at www.GZEROmedia.com.

[music] Funding for GZERO World is provided by our lead sponsor, Prologis.

Every day, all over the world, Prologis helps businesses of all sizes lower their carbon footprint and scale their supply chains.

With a portfolio of logistics and real estate and an end-to-end solutions platform addressing the critical initiatives of global logistics today.

Learn more at Prologis.com.

And by Cox Enterprises is proud to support GZERO.

Our people are working to build a brighter future in automotive, greenhouse agriculture, clean tech, environmental conservation and beyond.

Cox Enterprises in the business of what's next since 1898.

Additional funding provided by the Andrew Carnegie Foundation, Koo and Patricia Yuen, committed to bridging cultural differences in our communities.

And... ♪♪♪♪♪