China's President Xi Jinping at an economic leaders' meeting during the Asia-Pacific Economic Cooperation Summit at Lima's Convention Centre on November 20, 2016 in Lima.

China's President Xi Jinping at an economic leaders' meeting during the Asia-Pacific Economic Cooperation Summit at Lima's Convention Centre on November 20, 2016 in Lima.

Some say President-elect Trump’s rejection of the Trans Pacific Partnership and threats to pull out of the Paris climate accord would hand global leadership over to China. Diane and a panel of guests discuss how China’s global role could expand during the Trump presidency.


  • James Fallows National correspondent, The Atlantic magazine
  • Geoff Dyer Foreign policy correspondent, Financial Times; author of "The Contest of the Century: The New Era of Competition with China--and How America Can Win"
  • Minxin Pei Professor of government and director of the Keck Center for International and Strategic Studies, Claremont McKenna College
  • Elizabeth Economy Senior fellow and director of Asia studies, Council on Foreign Relations; co-author: "By All Means Necessary: How China's Resource Quest is Changing the World;" author: "The River Runs Black: The Environmental Challenges to China's Future"

Watch: President-Elect Donald Trump On His First 100 Days


  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Some argue that President-elect Trump's rejection of the TPP and threats to pull out of the Paris Climate Accord would hand global leadership over to China. With me to talk about what a Trump presidency could mean for China's role in the world, James Fallows with The Atlantic and Geoff Dyer with The Financial Times.

  • 10:07:22

    MS. DIANE REHMJoining us from a studio in New York City, Elizabeth Economy at the Council on Foreign Relations and by phone from California, Minxin Pei with Claremont McKenna College. I'll be interested in your questions, your comments. You are always a part of this program. Give us a call at 800-433-8850. Send us an email to Follow us on Facebook or Twitter.

  • 10:07:57

    MS. DIANE REHMWell, it's good to have all of you with us.

  • 10:07:59

    MR. JAMES FALLOWSGood morning, Diane.

  • 10:07:59

    MR. GEOFF DYERThank you. Thanks, Diane.

  • 10:08:00

    MS. ELIZABETH ECONOMYGreat to be here.

  • 10:08:01

    MR. MINXIN PEIGood morning.

  • 10:08:01

    REHMGeoff Dyer, Mr. Trump released a video last night talking about the TPP and his vows to pull out. Explain to us briefly what the TPP would or would not do and why it has become so unpopular.

  • 10:08:28

    DYERSo this is, in a sense, Donald Trump's first executive act. In this video last night, he said that he is not going to push ahead with ratification of the TPP. We knew this was going to happen. This is absolutely no surprise, but he's following through with this campaign commitment. The TPP, or the Transpacific Partnership, is a 12-nation trade deal. It's countries both in the Americas, the U.S. and three countries in Latin America, and several countries in Asia, including Japan, Vietnam.

  • 10:08:55

    DYERAnd there are various ideas and part of it is just a normal trade deal. It's about lower tariffs to, you know, facilitate the trade of goods between the countries. But there are other aspects as well. From the U.S. point of view, it was also about trying to write rules that would be more favorable for -- to have trade rules more favorable for the U.S. and less favorable for China. So the rules about subsidies to state-owned companies, which is an area where Chinese companies are getting a lot of advantage in the world these days because they get these big subsides from the Chinese state.

  • 10:09:23

    DYERThere are labor regulations, environmental regulations that the Chinese are not so keen on. So President Obama, when he was trying to justify the TPP, he would always say that if we don't write the rules, the trade rules for the century, then China will. And what we're starting to see is that wasn't just an empty threat. As it happens, just this weekend, there was an Asia Pacific Summit in Peru, brought together a lot of these countries.

  • 10:09:45

    DYERI'll just read you a quote from Michael John Key, who's the New Zealand prime minister. He was at the summit and he said, we like the U.S. being in the region, but if the U.S. is not there, that void needs to be filled and it will be filled by China. And at least at a symbolic level, if not at a substantial level, we're already starting to see that happen two weeks after the election.

  • 10:10:06

    REHMSo James Fallows, if the U.S. does not go ahead with the TPP as Donald Trump plans, how does China benefit and move into a leadership role?

  • 10:10:23

    FALLOWSI think it essentially becomes a matter on trade and we can talk about climate later, of China being able to strike one by one deals or regional deals with the partners in Asia. For almost all these countries, China is already their leading trade partner and so China can strike deals that have different labor standards than the U.S. might look for, different state subsidy standards, as Geoff was saying. And I think the way I've tried to explain this to people in the United States is that within the U.S. political debate, all the discussion about TPP was as a proxy for all the pains of the American economy in the last 20 years.

  • 10:10:56

    FALLOWSAnd it was trade and therefore it was bad and people were against it. Within Asia, this was discussed as essentially what was going to be the rule setting body for the next generation of economic and strategic interactions there. Would it be basically a U.S.-centric set of standards and rules on environment and subsidies and the rest or would it be, by default, a set of Chinese deals with the countries. So in the absence of this U.S. arrangement with a number of other countries, including Australia and New Zealand and notably not China, China will naturally be filling the void.

  • 10:11:28

    REHMSo to you, Elizabeth Economy, China is now pushing ahead with another regional trade pact that would actually exclude the United States. What would that involve?

  • 10:11:47

    ECONOMYSo China has, for a number of years, along with Japan, also, been leading a push to develop a trade agreement called the regional comprehensive economic partnership and the trade deal encompasses about half of the world's population and about 30 percent of the worlds GDP. So it is not inconsequential. It was viewed as a counter -- or the TPP was viewed as a counter to RCEP as it's commonly called, although it's fundamentally different because as, I think, Jim was suggesting, the TPP was really a higher standard trade agreement.

  • 10:12:25

    ECONOMYHigher labor, environmental standards, it required a greater action on the issue of subsidies and reform of state-owned enterprises for countries like Vietnam. So it really would've taken -- not only would it advantage U.S. companies because our companies already operate at those high standards, but it would've sort of empowered reformers in countries like Vietnam to push forward with their own economic reforms and, again, move along the path that the United States really wanted to see.

  • 10:12:57

    ECONOMYWith RCEP, with China, which, yes, does not include the United States, you know, this is lower end trade agreement and it really is set more -- has laxer standards, will allow for more exceptions in terms of the goods and the sort of opening of service sector. It's more suited to China, than to the United States.

  • 10:13:19

    REHMSo Minxin Pei, when we talk about lower standards for the environment, for quality of goods, what does that mean in reality for China, other than taking the lead? Does it mean simply that they can operate as they choose, even if other Far East countries join in?

  • 10:13:49

    PEIWell, I do not know the specifics of China's trade agreement, China's conditions for joining this partnership, but what I think the long term impact of this partnership is China will really become the regional commercial hub. Because right now, China essentially plays the role of the passing through manufacturing that a lot of the goods manufactured in China, a lot of the goods China imports from the rest of the region, would ultimately go to the U.S.

  • 10:14:27

    PEIBut with this partnership, China will eventually become the final consumer of this and these countries reliance on the U.S. will be progressively less. And that will have very serious geopolitical complications because in the end, the countries in the region will say, now China is our biggest customer. The U.S. essentially has locked itself up. We will have to reassess our long term strategic relations with China. That's really the most important part.

  • 10:15:02

    REHMAnd Geoff Dyer, Donald Trump is also saying he would impose higher tariffs on goods coming to the United States from China.

  • 10:15:15

    DYERThat's definitely one of the threats he made during the election campaign. One thing that's happened since the election is the signals out of his team are that he's going to be much less aggressive on this than had perhaps seemed the case. One reason why the stock market is booming at the moment is that before the election, investors feared that Donald Trump would start a trade war. Since then, they've got these signals that maybe he won't be so aggressive and they're actually -- they're much less pessimistic about what a Trump administration means.

  • 10:15:40

    DYERI mean, for instance, Trump will have to do something, will have to show that he's taking action, but there are lots of things he could do that stop well short of a trade war. So, for instance, last year, the Obama administration imposed 400 percent tariffs on two specific types of Chinese steel products. The U.S. does this quite a lot. But what happens is it comes out as a press release on a Friday afternoon from the U.S. trade representative's office.

  • 10:16:03

    DYERWhat Trump could do is simply do that same kinds of things, but announce from, you know, the Rose Garden or the White House and it'll make people seem as if the U.S. government is taking much more action when really, it's really just doing a lot of the kind of trade enforcement actions that it always has been doing.

  • 10:16:16


  • 10:16:16

    FALLOWSAnd part of the reality that may be setting in on the people around Donald Trump -- I don't know whether it's setting in on him or not -- is that the United States and China are functionally one giant economy at this point. They obviously do very different things. They have different ambitions. China is a huge and still, on average, a very poor country and still very polluted country and run by different kind of government.

  • 10:16:37

    FALLOWSBut in supply chains, in markets for U.S. exports of all sorts, it is something you can't just sort of rip apart and say, as Donald Trump did at one point during the campaign, well, if we just break our relationship with China, they'll crash so fast they won't know what's going to hit them. So I think the reality of this -- in a way, it's a larger version of the reality he may be confronting with medical care system.

  • 10:16:58

    FALLOWSNow, the Obamacare provisions are built into the U.S. healthcare system now. The relationship with China is built in to almost everything the U.S. economy does now. So tearing it asunder is a lot harder to do than he might have suggested.

  • 10:17:12

    REHMSo you're suggesting that Donald Trump's backing away from simply taking out the ACA, the Affordable Care Act, but allowing some provisions, like staying on your family's health insurance plan until age 26, these little tweaks are built in.

  • 10:17:36

    FALLOWSExactly. And as you know from all your shows on the healthcare plan, the good parts are connected to the less popular parts. It's hard to have the preexisting conditions exemptions, it's hard to have the age 26 without all the other parts to go with it.

  • 10:17:49

    REHMJames Fallows, he's national correspondent at The Atlantic and he's the author of the magazine's current cover story, "China's Great Leap Backward," which we will talk about after a short break. Stay with us.

  • 10:20:02

    REHMAnd we're back, talking about President-elect Donald Trump's announcement that the U.S. will not participate in the TPP, the Trans Pacific Trade Partnership. He says that that will be one of his first acts as president, once he is inaugurated and gets in to the White House. So here we've been talking about China for these first 15 minutes or so, and how it will gain by Trump's withdrawal from the TPP. And yet, James Fallows, your article is titled, "China's Great Leap Backward." Explain what you mean by that.

  • 10:20:54

    FALLOWSSo this was a title chosen by my editor.

  • 10:20:56

    REHMI figured.

  • 10:20:57

    FALLOWSIn conscious reference to, of course, China's disastrous Great Leap Forward of the 1950s, this destructive economic plan they had under Chairman Mao. The idea is that, compared to the progress of the first 40 years of the U.S. and China, from Nixon and Mao onwards, China, in the past couple of years under Xi Jinping seems to have been closing up internally, cracking down, becoming more truculent internationally and harder to deal with. The question is, do we need to rethink our policy of engagement with them.

  • 10:21:23

    REHMMinxin Pei, how do you react to that?

  • 10:21:26

    PEIOh, I completely agree. I think, in the last four years, China has seen a comprehensive retreat from openness to the outside world, from openness internally. There's been a lot of crackdown on civil liberties. A lot of civil rights activists, lawyers in particular, have been harassed, arrested. The Internet is much less freer. And the suspicion about the outside world, I think, is much greater. The degree of nationalism is at an unprecedented level. So all of these signs of regress actually give people like us, including Jim, a lot of worries about the future of China.

  • 10:22:16

    REHMAnd to you, Elizabeth Economy, the question about the environment and what the U.S. withdrawing from or just closing down the TPP, China had said it wanted to make advances in its environmental progress. What do you see happening if the U.S. withdraws from the TPP?

  • 10:22:46

    ECONOMYWell, I think, it's one thing if the U.S. withdraws from the TPP in terms of China's environment. I think what we really need to be thinking about is the impact if -- the U.S., if President-elect Trump begins the process of withdrawing from the Paris Climate Agreement. I think that would signal not only to China, but to the rest of the world that, you know, a country that had become, under President Obama, a, really, a leader in trying to address this challenge, is now essentially taking itself out of the game. Which is important, of course, because we are the second-largest emitter of greenhouse gasses in the world.

  • 10:23:24

    ECONOMYIn terms of what that means for China, I think a lot of people have already started writing articles -- a lot of Western analysts as well as Chinese have started writing articles about the fact that, much like the trade realm, this would afford China the opportunity to step into the breach and become a leader on climate change. You know, would that that were true, I think it would be terrific if China wanted to step up and be a true leader on the issue of climate change.

  • 10:23:48

    ECONOMYIn point of fact, what China has committed to thus far is really not much more than what one might call enlightened economic self interest. Namely, to have their CO2 emissions, carbon dioxide emissions, peak by 2030 -- they'll beat that target -- and to have roughly 20 percent of all of their energy come from renewables also by 2030. Those are important steps. But they're far from global leadership on the issue of climate change. So I remain interested to see what China will actually do.

  • 10:24:23

    ECONOMYAnd one last point on this, I think it's very important, if we're going to try to hold China to account on this issue of climate and environment, to look at what China's doing in terms of exporting its pollution. Because while China's trying to close down its coal-fired power plants in the eastern seaboard for the wealthy coastal areas, it's also continuing to allow those coal-fired power plants to develop in the interior provinces, as well as helping other countries construct them. So I think we should be watching China's...

  • 10:24:53


  • 10:24:53

    ECONOMY...overall commitment to climate change, not simply what it says it's going to be doing to improve its own air quality in the eastern seaboard.

  • 10:25:00


  • 10:25:00

    FALLOWSAnd Elizabeth is of course one of the great world experts on Chinese environmental policy and I agree with what she's saying. I think she would also agree that one of perhaps the brightest spot of U.S.-Chinese interaction in the last five or six years has been their mutual efforts on climate. They've done more good together in that realm than I think in any other. And it'd be really a shame if that entirely went away.

  • 10:25:25

    REHMWhat do you think, Geoff?

  • 10:25:26

    DYERI think that's absolutely right. I think climate change activists see the Paris deal as a first step. They don't see it as a final step, they see it as a first step. And they would want to build on that and move to another step. China signed up to Paris, as Elizabeth said, partly for self interest. Because it needs to reduce its own domestic pollution for its own reasons and because it wants to be a leader in renewable energy and solar and wind power. But whether it really has the capabilities, the political will, the leadership capacity to take the world on to the next step is a whole different question. And I'm not at all sure that China really has that capacity.

  • 10:25:57

    REHMWe have a tweet from Sue, who says, liberals in the U.S. are the only people supporting TPP and globalization. Of course, Hillary Clinton was against the TPP in the end.

  • 10:26:14

    FALLOWSYes. This became, within U.S. politics, a sort of toxic-waste type subject. You know, Bernie Sanders was way against it. Hillary Clinton became against it. Donald Trump was sort of instinctively against it, the way he's against all trade deals. I would suggest to the listener, Sue, that if you go anyplace outside the United States, especially in Asia, you will see that is not the case. There is a large -- I'd say a large majority of the non-Chinese population of Asia, which viewed this as a progressive step for environmental interests, for labor rights, for a higher standard of interaction.

  • 10:26:48


  • 10:26:50

    PEIYes, hi. I think there's not much knowledge in the U.S. about what TPP actually does. TPP, if you look at its impact on the trade in goods, is a very -- makes a very small step. Because there's not going to be a lot -- a flood of goods into the U.S. It actually really improves environmental standards, service sector, and deals with protectionism. So this lack of knowledge is really shocking. That most Americans who do not know about TPP would imagine that, with TPP, another gigantic flood of goods manufactured in China will -- Asia will come. And then there will be a lot of job losses. That is totally untrue.

  • 10:27:40


  • 10:27:41

    ECONOMYRight. And just two points, adding to Minxin's point. I think most analyses of TPP said that, overall, American incomes would rise by about 0.5 percent as a result of TPP. And beyond that, I think if you look, there were a number of polls that were done over the course of the past year that demonstrated that anywhere between 58 to 70 percent of Americans supported a U.S. engagement in trade and free trade and were not necessarily opposed to the Trans Pacific Partnership. So I think the voices that became loudest, unfortunately, were those that were opposed to TPP. But it's far from the case that it was only liberals that were supporting TPP.

  • 10:28:22

    REHMYou know, I am old enough to remember when Henry Kissinger and Richard Nixon opened the path to China 40 years ago. This seems like a total turn around.

  • 10:28:39

    DYERWell, as Jim said, I mean, there have been some bright spots in the U.S. generalizations the last years. Climate change was a big one. But here we are in a situation where, you know, we're now in uncharted territory. We really don't know how Donald Trump is going to approach China. Some of the things he said about China have been very aggressive during the campaign, particularly about trade. But some of the things he said about security should actually open the door to China. He's been very critical of the U.S. alliances with Japan and South Korea.

  • 10:29:04

    DYERSo our situation here, we have a new administration coming in and we really have no clear idea of how it's going to approach East Asian security issues, East Asian economic issues and how it's going to approach the U.S.-China relationship.

  • 10:29:15

    REHMAll right. We have a number of callers. I'm going to open the phones. First to Henniker, N.H. Barbara, you're on the air.

  • 10:29:26

    BARBARAGood morning, Diane...

  • 10:29:27


  • 10:29:27

    BARBARA...and everyone else. It's very nice to be with you. I'm calling about the trade issue. And there's a significant issue that is not being talked about. The only one I've heard mention it is Elizabeth Warren. And this is the way countries -- and I'm going to explain it simply, I'm not, you know, a great expert. But, any event, as I understand it, country wants to bring something into our country. We have regulations against it. They go through the court system that's in this bill. We are overridden. The countries can bring in whatever they want to. I am for fair trade, not free trade. And, Diane, I wish you all the best.

  • 10:30:17

    REHMThank you so much. Elizabeth, do you want to -- oh, you're coughing. Okay, James.

  • 10:30:24

    FALLOWSSo I think it's worth thinking this, as an extension in the goods and bads of the WTO that the United States has been part of for, you know, going on two decades, where there is an international body that resolved disputes. Often it's the case they resolved them in the favor of the United States. I think the United States has won more cases than it's lost against China. But there is the idea that there are some -- that, as for international disputes, there are international places where they get adjudicated. So this is not some radical departure from what we've been living with for -- in recent times.

  • 10:30:54

    DYERI would completely agree with that.

  • 10:30:55

    REHMAll right. To Cincinnati, Ohio, Brian, you're on the air.

  • 10:31:00

    BRIANThank you, Diane. It's really a pleasure to speak with you and everybody.

  • 10:31:03

    REHMThank you.

  • 10:31:04

    BRIANI want to share with you, I think there's been a missing of a point as to why a lot of Americans are against this partnership, and that is, the secrecy surrounding the thing at the beginning, in the middle and now at the end. At the beginning, it was, for the most part, written in secret. And I understand why and I think most American people do. Because when you're hammering things out, sometimes what's happening at the beginning doesn't necessarily what -- mean what's going to happen at the end. And you don't want people getting too upset at the beginning.

  • 10:31:34

    BRIANHowever, though, there's a reason the Constitution requires a two-thirds majority to pass a treaty is because they want -- the founders in this country is best served when the people are well aware as to what our government is doing and what kind of agreements they're getting us into. And when you -- Congress, people can't just simply read the bill when it's done and then report back to their constituents as to what they're reading and what is in there, the American people are going to balk at it.

  • 10:32:01

    BRIANWe are no longer going to be ruled by a secret cabal somewhere that we don't have any influence on. It's not a bad thing for the American people to have influence on their congressmen and on their senators and hope that that will have some influence on the policies that come down over the American people. And this TPP is going to be a massive piece of legislation or treaty that will have some far-reaching impacts into the American life. And there's nothing wrong with the American people being able to see what is in this thing.

  • 10:32:34

    REHMAll right.

  • 10:32:35

    BRIANI would like to know how many people have read it.

  • 10:32:37

    REHMAll right. Geoff Dyer.

  • 10:32:39

    DYERWell, we've all been sort of ganging up saying what a good strategic idea the TPP is. So I think it's also fair to reflect on what the caller was just saying. Some of those things are actually very true. And one of the lessons from this process is, even if the U.S. is every to go back to doing these types of trade deals in the future -- probably not during a Trump administration, but in a future administration -- it's going to have to really rethink the way that trade deals are negotiated and the way that it talks about them with the American public. As the caller said, they are negotiated in secret.

  • 10:33:06

    DYERBut also these, you know, business lobbies and business lobbyists are very much involved in the process. They are getting access to negotiators in a way that members of Congress sometimes are not. There are very fair criticisms about some of the labor environmental standards in this deal, about the excessive importance the U.S. place on intellectual property, which some people would say was a (word?) to corporate interests. So the broad argument for TPP are very much in support of it. But the -- some of the things the caller was saying about how trade deals are done, how they're negotiated and how the U.S. talks about them are absolutely fair and they're going to have to change.

  • 10:33:37

    REHMHave you read the TPP?

  • 10:33:39

    DYERI don't -- in all of it? No, I haven't.

  • 10:33:41


  • 10:33:42

    FALLOWSI have been prowling around. I mean, there are metric tons worth of info about this that's available on the Internet. And so in the last two weeks, especially, I have been prowling through almost all of them. I don't know if there's some part I haven't seen, but I've seen a lot of it.

  • 10:33:55

    REHMElizabeth, have you read it?

  • 10:33:57

    ECONOMYI haven't read it in its entirety, no. But I -- let me just say that I agree with the caller in the sense that I think our government needs to do a much better job of explaining to the American public why and how this trade deal will benefit, you know, different sectors of the economy, where certain sectors might actually be harmed, and how we're prepared to deal with sort of job retraining, other aspect of economic development to help those people who might lose their jobs. So I think the selling of it is critical.

  • 10:34:28

    REHMAnd you're listening to "The Diane Rehm Show." Minxin Pei, have you read it?

  • 10:34:37

    PEINo, I have not. Because this is a very specialized area, international trade. But I have to agree with Jim, that there's -- the treaty is not a secret. It is very technically very complex, filled with jargons. I think what -- the sad thing is that the treaty, that this partnership deal came at a very bad time, with very high inequalities. And people tend to blame open trade for all the domestic problems, even though, as I said, based on what I've read about the treaty, that this treaty is going to have a very marginal impact on what already is going on. It is not going to take more jobs away than what -- the jobs that have already disappeared.

  • 10:35:26

    REHMMinxin, we've been talking a lot here about whether China would become a global leader if the U.S. does step out of this partnership. Does -- is China ready? Or does it even want to become a global leader?

  • 10:35:49

    PEIChina is not ready and China does not want to become a global leader. China is ready to become a regional leader. And China is -- China does want to be a regional leader in Asia. Where, if the Trump administration carries out its campaign promises, then China will be well on its way to becoming Asia's dominant leader.

  • 10:36:15


  • 10:36:16

    FALLOWSAnd I think just to extend that, it's been -- from the Nixon-Kissinger-Mao days onward, it's been part of American strategy and interest that we want -- we do want China to develop rather than to stagnate. But the problems of a richer, stronger China are real, but they're not as bad as the problems of a poorer, struggling, fractious China. But -- so the question is, when China's proper place in the sun is at odds with American and world interests, that's where the collision comes. And I think what Minxin is saying, I would agree, is that we're more likely to have those confrontations, those conflicts of interest, in the way that China is now being propelled to regional leadership, than if we continue to engage them.

  • 10:36:55


  • 10:36:56

    DYERI completely agree with that's how China sees the world. It sees itself as wanting to be the Asian leader, but not a global leader. But that's -- in some sense is a kind of false distinction. The Asia-Pacific region now accounts for almost half of global GDP. So if you're the leader in Asia-Pacific, then you really are, you know, pretty much a global leader already.

  • 10:37:14

    REHMGeoff Dyer, he's a foreign policy correspondent at the Financial Times. He's the author of "The Contest of the Century: The New Era of Competition with China -- and How America Can Win." Short break. We'll be right back.

  • 10:40:02

    REHMWelcome back. Let's go right back to the phones and to Ron in Louisville, Kentucky. Hi there, you're on the air.

  • 10:40:12

    RONHello. I was in New Zealand back in April for a couple of weeks, and when I spoke to Kiwis about politics, first of all they all liked Bernie Sanders, and none of them liked Hillary Clinton or Donald Trump. And second of all, none of them liked the TPP or their leadership's allegiance to the TPP, and I don't blame them. I don't like corporate courts telling U.S. lawmakers what to do, which they did with the WTO, and I pointed this out on the show before when you were having a discussion on this, that we have changed our meat labeling laws, which used to require country of origin, and since the WTO told us that we either had to pay a huge fine or get rid of that meat labeling law, we did away with the meat labeling law.

  • 10:41:05

    RONI don't want corporate entities telling our government what to do.

  • 10:41:12


  • 10:41:13

    FALLOWSSo I think to -- let's stipulate that around in the world, in every country of the world, this is -- all the economic pressures of a second gilded age are affecting every country, and there's a squeeze on manufacturing jobs every single place, and also around the world trade is becoming a proxy for all of the pain of this era.

  • 10:41:33

    FALLOWSI think that you're hearing me and other say is a disproportion between what the TPP would actually have done and the envy, the frustrations and pains people are feeling and also the real-world alternative, which is going to be a sequence of Chinese-mediated deals, is going to be worse for most of the constituencies in the U.S.

  • 10:41:53


  • 10:41:53

    DYERI mean, the caller is absolutely right. I mean, this deal is unpopular in many of the countries where it's been signed, in New Zealand, in Australia, in Japan and Vietnam. But that's actually one of the reasons why it's also so damaging that the U.S. is pulling out at this late stage. Essentially the U.S. pushed these countries into signing up to this deal, or politicians in these countries made very politically damaging concessions in order to be part of the deal, and then at the very last minute, the U.S. is saying actually, you know what, we're not taking part. It's leaving them at the altar. That's very damaging to U.S. credibility amongst all these countries to behave towards them in that way.

  • 10:42:27

    REHMHere's a comment from our website from Joey. He says yes the TPP was intended to reduce China's power regionally, and that is why it was a bad deal. The average American doesn't care about our power plays in Asia, certainly not enough to be okay with losing their job. This nation has been selling out its citizens to maintain a global empire, an empire that's costly and which delivers essentially nothing to the working class, James.

  • 10:43:10

    FALLOWSSo the question is whether -- so certainly the United States has borne the burden since World War II of being the policeman of the world, and this has enormous economic burdens on the United States and some advantages, too. Again, the question is whether the alternative of having China fill this vacuum will be better for Americans economically, and I think there's very little reason to think it will be better in terms of jobs, consumer welfare and all the rest.

  • 10:43:33


  • 10:43:34

    ECONOMYI just want to make the point that, you know, initially the objective of the TPP was not to contain China. It was about establishing a trade agreement that would be in service for American companies, right, again that would advantage our companies by setting standards at a level which American companies operate and forcing other countries to adhere to those same standards.

  • 10:44:00

    ECONOMYI do think, however, the Obama administration in a later stage began to try to sell the TPP as part of our rebalance, as part of our pivot, as part of an effort not to contain China but to maintain and assert a stronger U.S. presence in the region. And I think for me and maybe for many of us, that seemed okay. You know, whatever rationale might help to bring more people along with the TPP was fine. But I do understand now that perhaps in some ways that actually diminished, rather than enhanced, the argument for the TPP.

  • 10:44:38

    REHMMinxin Pei, The Philippines and Malaysia have been tilting toward China and away from the U.S., and that despite disputes over the South China Sea. How do you see that moving?

  • 10:44:58

    PEII think in these two specific cases that tilting is not driven by TPP. I suspect, however, that once the TPP is officially dead their drift toward China will accelerate. In these two specific cases, the president of The Philippines and the prime minister of the Philippines do not like what the U.S. is doing to them because the U.S. has been criticizing their human rights practices. In the case in Malaysia, the prime minister is involved in major corruption scandal. So they moved to China just to show the U.S. that they have alternatives, and they do not like what the U.S. is doing to them.

  • 10:45:46

    REHMAnd do you think they will like the U.S. even more or less under a Donald Trump?

  • 10:45:53

    PEIWell it really depends what Donald Trump does to them. If Donald Trump does not criticize President Rodrigo Duterte of The Philippines regarding his extra judicial killings in his so-called war on drugs, then he will move back to the U.S. If Donald Trump ends the investigation into the prime minister of Malaysia's alleged corruption scandal, then he will be fine with the U.S.

  • 10:46:20

    REHMAnd then you've got North Korea standing by, watching all this. How do you think they are viewing this situation?

  • 10:46:32

    PEII think Donald Trump will get a rude awakening, that is there are people out there who will test him, and the North Koreans will be one of them. He -- one of the first things that's going to happen in the next 12 months will be a nuclear test or a missile test, and then Donald Trump will have to think about the world in a much more complex way than he has been doing.

  • 10:46:57

    REHMGeoff Dyer?

  • 10:46:58

    DYERI think that's right. I mean one of the things that's really been happening in the last year is North Korea has shown us that it's much closer towards being a genuine nuclear power than we'd realized. And you've really seen that from the Obama administration in recent weeks. We saw James Clapper come out and say recently that there was basically no chance now of convincing North Korea to back away from its push towards a nuclear weapon. So Donald Trump is going to face a very, very complicated situation in how to deal with North Korea, a provocative North Korea, one that's going to probably do more nuclear tests, as Minxin was saying.

  • 10:47:26

    DYERIt's entirely possible that will be the first real major challenge that he faces.

  • 10:47:30

    REHMAnd what might Trump's reaction to that be, James?

  • 10:47:34

    FALLOWSLord knows, and that is -- that is the issue. I mean, if we look back historically, it tends to be the case that early in a new president's term, something happens that is not what anybody expected.

  • 10:47:44

    REHMSomebody tests somebody.

  • 10:47:44

    FALLOWSYes, somebody tests somebody back to the time of John F. Kennedy and his first meeting with Nikita Khrushchev, where Khrushchev thought that Kennedy was not really up to things at Vienna, and a lot followed from there, perhaps even to the Cuban Missile Crisis, and the early weeks of the George W. Bush administration even before 9/11, there was a plane, a U.S. plane forced down in China, and many things came from that.

  • 10:48:03

    FALLOWSSo something will happen in the first months of Donald Trump's time in office, and we will see whether he and his team are able to react properly.

  • 10:48:12

    REHMMinxin, you have concerns about Trump's military strategy and how that could have an impact on China.

  • 10:48:23

    PEIYeah, well, he has said things that do not make a lot of sense. They are in conflict with each other. For example on the one hand, he's saying that he essentially is hinting that the U.S. will cut its Asian allies loose, especially Japan and South Korea. If he does so, then we can see these two countries go nuclear very quickly.

  • 10:48:45

    PEIAt the same time, he's talking about strengthening the U.S. Navy, and that implies some kind of collision with China. So if he does either, then Asia will be a much less stable place for the Asians and for the U.S. Ultimately the U.S. will have to be sucked back in, into Asia.

  • 10:49:05


  • 10:49:07

    ECONOMYYeah, I think Minxin's right. He has said a number of things that are quite contradictory. My hope, however, is that he's being quickly educated. Prime Minister Abe was, you know, the first foreign leader to get in there to meet with President-elect Trump, and I can only imagine that he helped the president-elect understand the contribution that Japan makes to the alliance and sort of the importance of the strategic alliance between our two countries.

  • 10:49:32

    ECONOMYI also think if you look at the Asia hands that President Trump seems to be surrounding himself with, they are people who support a more forward-leaning presence in Asia, and particularly -- in particular through the Navy. So hopefully this is one area where we're not going to see the U.S. retreat and retrench.

  • 10:49:56

    REHMAll right to Adam in Bethesda, Maryland, you're on the air.

  • 10:50:00

    ADAMThanks, Diane, longtime listener, first-time caller.

  • 10:50:03


  • 10:50:05

    ADAMI was -- I wanted to just comment that I think -- and this is coming from a place -- to be sort of clear, I was working in the administration in places like the Commerce Department and in the White House, not directly so much on trade issues from a strategy point of view. But I do think that the administration, and I think Minxin said this a little bit earlier, oversold the TPP as part of the strategic rebalance to Asia and sort of made it a zero-sum game between the approach China might take in the trade agreements and in writing global trade rules and the way the TPP did so that was more favorable to the values and the way that we in the United States want to see things done.

  • 10:50:53

    ADAMAnd while at some level I think that's true, fundamentally TPP is a trade agreement. It provides for reduction in tariffs and then a series of rules to effect those changes behind the border so that people don't pay lower tariffs but then see their goods rotting on the port or their IP undermined or advantages given to state-owned enterprises, and then a dispute settlement mechanism to be able to resolve some of those issues.

  • 10:51:21

    ADAMSo I think that we needed to be much clearer about the fact that this is a trade agreement. It will not solve all our problems. It will...

  • 10:51:28

    REHMOh dear, afraid we lost him, but you can comment.

  • 10:51:33

    FALLOWSYes, I think that is a very good point, and we'll look back in this time. The difficulty both from the way the administration presented it and the way it entered our politics, it just -- the United States was not able to think lucidly about the pluses and minuses of the agreement.

  • 10:51:47

    REHMYou know, there's certainly the issue of human rights in China, which the U.S. has been trying to speak to. Where do you think this could go, if in fact Donald Trump carries through and says no TPP, Geoff?

  • 10:52:12

    DYERI mean, I don't necessarily think the TPP is related to how he thinks about human rights, but I think one of the safe predictions we can make is that Donald Trump is going to be much less, you know, interested in the human rights situation in China, much less interest in situations that are facing activists and lawyers and the media. And one litmus test will be, you know, whether he decides to meet the Dalai Lama early on in his presidency.

  • 10:52:35

    DYERAnd if he doesn't, which I would think there's probably quite a good chance that he will not, that would be a fairly clear signal that he's not going to push China very hard on those types of issues.

  • 10:52:42


  • 10:52:44

    ECONOMYI agree with Geoff. I think there's been a notable absence of discussion of this kind of issue, and among his advisors, this is not the type of topic that they talk about. My concern increasingly is whether or not we're going to be prepared to stand up to sort of the extrajudicial actions that China is taking so arresting people outside China's borders and bringing them back to China or telling Kenya that they should send the Taiwanese nationals to the mainland.

  • 10:53:13

    ECONOMYYou know, is the United States going to be prepared to stand up to China on these types of issues? I think this is quite frightening.

  • 10:53:19

    REHMAnd you're listening to the Diane Rehm Show. Minxin, I know you wanted to add to that.

  • 10:53:30

    PEIVery quick point. I think Donald Trump's election has really undermined America's democratic prestige in China. The Chinese government has wasted no time in telling the Chinese people that if we want democracy, this is the democracy you are going to get. So it has the prospects of democracy in China for years, and that probably is the biggest outcome from last week's election results.

  • 10:53:56


  • 10:53:56

    FALLOWSI'm actually going to Shanghai tomorrow for another trip and planning to meet, among others, with some Chinese journalists and activists who are trying to pursue press freedom and other rights within China. And when you have a president-elect who spends half his time denouncing the failing media, it's a -- the United States has different standing in this discussion than it did before.

  • 10:54:19

    REHMYou know, as members of the press, I really do have to ask you what you make of Donald Trump's rejection of his meeting with the New York Times.

  • 10:54:32

    FALLOWSThis seems -- it would be, I guess, better if it were surprising. It seems a continuation of his not meeting -- having any normal press conferences, dealing entirely outside normal press channels and seeming not to recognize the legitimacy of this part of the democratic fabric. And so I think everyone in the press has reconsideration on his or her mind about what we do.

  • 10:54:50


  • 10:54:51

    DYERI think that's right. I don't know anything about the specific details about the New York Times meeting, but it's part of a pattern or move to a much more conflictual, antagonistic, almost bullying relationship with the media. I mean, he had an opportunity in the last couple weeks, having won this surprising election, to reset things. He could have, you know, had a lot of good will in his direction. He could have tried to engage a lot of people who he had very difficult relationships with before. But he seems to be doubling down on the antagonism and on the bitterness.

  • 10:55:16

    REHMAnd how concerned are you as a journalist about your role during a Trump administration?

  • 10:55:21

    DYERPersonally I'm not particularly concerned. I mean, I'm very, you know, confident in the power of American institutions to provide journalists with the protections that they legally have. But it's obviously going to create a very difficult, contentious atmosphere.

  • 10:55:30


  • 10:55:32

    FALLOWSI agree, and I think that we are all recognizing we're on new terrain now and need to find some way to keep telling the truth or our best approximation of it in very different circumstances.

  • 10:55:45

    REHMAnd how do you see it, Elizabeth?

  • 10:55:51

    ECONOMYWell, it seems to me that Donald Trump perhaps doesn't feel that he needs the sort of typical media, that he can be his own media, he can simply tweet out whatever he wants. He can make his homegrown videos and sort of impart his information directly to the American public without the mediating influence of the media. So from my perspective I find it very disturbing and concerning.

  • 10:56:14

    REHMThe New York Times just reported a few minutes ago that the meeting with Trump is back on. That's very interesting.

  • 10:56:28

    DYERWell the irony of this is he does have a very, you know, love-hate relationship with the New York Times. I mean, he's had more tweets in the last two weeks critical of the New York Times than anything else, but he also does seem to be kind of obsessed with the newspaper. He reads it, he talks to their journalists all the time. It's a very, very strange relationship he has.

  • 10:56:43

    DYERIt's like his relationship with "Saturday Night Live" and so I -- I'm glad the meeting is back on, and God speed to the representatives of the Times who are there.

  • 10:56:52

    REHMJames Fallows, his cover story of The Atlantic magazine is titled "China's Great Leap Backward." Geoff Dyer is foreign policy correspondent at the Financial Times. He's the author of "The Contest of the Century: The New Era of Competition with China--and How America Can Win." Elizabeth Economy is a senior fellow and director of Asia studies at the Council on Foreign Relations, and Minxin Pei is professor of government at Claremont McKenna College. Thank you all so much for being with us.

  • 10:57:41

    FALLOWSThank you, Diane.

  • 10:57:41

    DYERThank you.

  • 10:57:42

    ECONOMYThank you.

  • 10:57:43

    PEIThank you, Diane.

  • 10:57:43

    REHMThanks, all, for listening. I'm Diane Rehm.

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