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the jurgen experience and so i think the supply chain issue is is is is a big part of this and the assessment of vulnerabilities and you know we're in a race because it takes you it takes like five six years to develop a fab you know to generate semiconductors there are big investments happening now in in phoenix you know for example phoenix is is going to be the site of a of an a um you know a tsmc uh uh big fab tsmc is the is the chip manufacturer that's based in taiwan right which is you know a single point of failure almost you know for big parts of our supply chain internationally and of course the reason that's significant is it's an it's in a it's in a place that's under threat by the china's commerce party as well yeah i think they're making a samsung plant a chip plant here in texas as well they are they are yeah right and in austin it's outside of austin yeah that's uh it's just terrifying to think that we have to catch up in six years because six years in the world of tech is that's uh a hundred years it's an eon it is but there's there's a lot you can do even before that and i think it's starting to happen in terms of the shifting of supply chains elsewhere you just saw intel is going to invest a lot in malaysia you might think well why in malaysia well i think the key is it doesn't all have to be in the united states it has to be in a number of places so it's resilient right if what if there's a natural disaster a power added outage right you want multiple sources and and of course you know as you mentioned the reason this became apparent to all of us was at the beginning of it right when you couldn't get ppe and pharmaceuticals and and so forth so i think you know i think we're just waking up to this competition and this ought to be one of those areas where we all come together right this should not be a partisan issue at all and it should be a multinational issue right the the reason the subtitle of the book is the fight to defend the free world is we need others to come with us right yeah we need the european union and the uk and japan and australia i think that's starting to happen as well right because you know look at what xi jinping has done just
since the pandemic right foisted the pandemic on the world yo crushed anybody who was trying to ring the alarm bells about it these are reporters and and doctors right then added insult to injury with this wolf warrior diplomacy which i know you've talked about on the show here as well uh and then and then a range of aggressive actions like you know bludgeoning indian soldiers to death on the himalayan frontier right scores of overflights into into taiwanese air defense identification zone weaponizing islands in the south china sea and if they if they succeed there will be the largest land grab so to speak in history and that's you know by the way an area across which one third of the world's surface trade flows right you know the intimidation towards japan a massive campaign of economic coercion against australia and now lithuania and so what i would often hear you know from friends you know in in southeast asia and beyond you know these are my counterparts when uh who are engaging when i was a national school advisor they would say don't don't force us to choose right don't force it to choose between washington and beijing and what i what i would tell them is hey that's not the choice you face right the choice you face is between sovereignty and servitude right and you know the united states is on the side of sovereignty china wants servitude because what xi jinping wants to do and the party's clear about this is they want to establish exclusionary areas of primacy across the indo-pacific region and excluding who us right as the first step in and really being able to rewrite some of the rules of international commerce and political discourse and and then to isolate their their regional rival japan right and so i i think it's we're at a critical moment where we have to compete effectively and this is not this does not mean that we have to we're on a path to confrontation actually i think joe because we had vacated these competitive spaces china became more and more emboldened and we were actually on a path to confrontation when now i think this idea of transparent competition is is what we ought to really pursue with china so do do you think that that makes us less
likely to be in competition with china in terms or less likely to be in conflict with china if we can change our whole uh economic profile here in terms of tech in terms of manufacturing i do i do because i think really we have to recognize what china's trying to do right so people people talk about decoupling all the time and you allude to this a little bit like hey you know businesses have to make a decision right i mean they they've got responsibilities to their shareholders they've you know and and so forth so the whole idea of a complete decoupling that's always been kind of like a red herring right that's not what we're talking about i mean what we ought to do is is ask businesses take a hippocratic oath right don't do any hurt or harm in three areas first of all don't help the chinese communist party gain an unfair differential advantage over us militarily or in the emerging data-driven you know uh global economy second right i mean don't help the party you know don't don't help the party uh perfect it's technologically enabled orwellian police state right don't help them do that don't invest in chinese ai companies right that are extinguishing human freedom and weaponizing people's social networks against them and everything and then the third is don't compromise the long-term viability of your company in exchange for short-term profits right and so many companies have been through this right yeah i mean and and uh and so i think that's a way to think about it and to think about it in light of what the chinese commerce party leadership wants right so what xi jinping talks about is a dual circulation economy right where where they get a grip on critical supply chains internationally i mean if you want to look at human rights abuses look at what they're doing in the drc in the congo right uh in terms of extracting at a horrible humanitarian price the the rare earths that they need uh to continue their their manufacturing of of microelectronics for example um and and but what he wants to do is get a grip on those supply chains and then create enough domestic demand that he doesn't need
anybody else right right that he can write the terms to everybody else that he has everybody else you know uh in a position that of of where he can use coercive power and and what what i describe in battlegrounds is the strategy this is i think the the easy way to think about it is co-option coercion and concealment right co-opt you co-opt businesses co-op deletes right with the lure of short-term profits and access to the chinese market right you know chinese investment and then once you're in right to use that that influence for coercive purposes right look at what they're doing to lithuania look what they're doing to australia right look at what they did to marriott mba at you know us and international companies um and then and then and then to conceal all of this oh this is just normal business practices well it's not normal business practices right if you look at at one belt one road right which is their they have three main strategies right military civil fusion and just gonna describe all these in the book military civil fusion then they then you know associated with that is made in china 2025 which is part of this dual circulation economy becoming completely no longer dependent at all on any external sources of uh advanced technologies for example or aspects of supply chains uh and then and then finally one belt one road which is an effort to create servile relationships with companies by overly indebting them right and so the new vanguard of the chinese communist party you know is is a chinese communist party official accompanied by a chinese national bank guy with a duffel bag full of cash right and and they get the most traction and corrupt governments you know and then once they indebt them for generations right then they can trade debt for equity or they can use it for course of purposes if you say one cross word about the party where to call back all your debt and you're gonna go broke right so so i think we just have to recognize co-option coercion concealment defend against it but then of course you
know as we look to the future how do we how do we maintain and expand our competitive advantages you