The Global Economy im joined now by u. S. And lee in new york she is author of will chinas economy collapse and what the u. S. Can learn from china and in ankara we crossed the road. He is a professor of econometrics as well as the president of the foundation for International Economic research and. Roles in effect i mean you can jump in anytime you want and i always appreciate what youre going to annan in new york as i said in my introduction and it appears that the pandemic is receding and globally although individual countries still have some serious issues but now is coming in the next phase of this crisis and figuring out the damage that has been incurred and how to move forward and you know in preparing for this program there are all wild estimations out there you know the elbe the you all of that. There seems to be no consensus so there seems to be it seems to be politically driven depending on how much you. That 11 letter 3 here what is your thinking here because the terrain is changed a lot and even if when things start opening up a lot of people are very hesitant to spend because no one knows what the recovery is going to look like its going to be a selfreferential issue for him yes i think theres also no agreement as to what indicators are going to look at. Inter member whether this is going to be an l. D. R. You there are folks who point to the stock market. And they basically say oh you know since its rocketing that means and things are looking well people dont realize that the Financial Markets now are very much decoupled from the real economy because. We know that as more money gets invest and it in various corporations that means it is going to be. Fewer people actually going to get employed because these investments are going into technology into robotics into Artificial Intelligence and so yes maybe individual corporations might do better coming out of this crisis but for the average person theyre going to be even faced maybe theyre facing weaker prospects Going Forward and so i think that thats clearly one area of disagreement. I think that there are so many variables there that makes it very difficult to. Come to any. Sort of consensus in terms of what its going to look like because a lot of countries are going to have various policies. In terms of what theyre going to roll out and thats going to have different effects and so what were going to see in china im sure is going to be very different from what well see in the u. S. And that is why its going to be very difficult to do you know one of the interesting things if and didnt use the word that theres going to there are elements of protectionism that have to be thought about here theyd be able really im thinking about borders in a way that they havent for a very long time and thats certainly one pretty negative localization one of the things that really worries me is that 1st of all we had 2002009 millions and millions tens of millions of people around the world particularly in the western world never recovered from that tragedy and now we have this one and this is all in totally different magnitude from the bottom up not the top down and it particularly the case i know best is the american case we have another massive shift of wealth to the wealthiest ok and the one of the issues that imo. Concern with this growing inequality and it was pretty bad before this happened and now it is rated at a speed that is and im going to have to agree with dan i mean there are so many indicators out there its hard to understand what that magnitude is but i think its pretty fair to say that it is. Order of magnitude greater than it was in 2100 we dress that go ahead. Then the latest aircraft i have ever. Changed well lets start with id probably agree with. Me because we are making him stink by looking at their financial indicators on the line talking about the real difference of. The. Us so far as ansett the financial war popular as we are become too from the real economy but the point is. As you mention. There is going to be. Radical structural changes in teams that are working specifically in terms of the group of decision something with my 980 s. Peter. Who runs asian has expanded and. Has you know become killing only closer and closer integration among the economies. As we call it for now i mean our i see a new mode of globalization i call if you like a lot to say the short of globalization by shortly after claiming that it by short globalization i mean there from our war specifically says there is this in our broken lives which is you know in the lives side of the economy. Some mayors will start looking at more than a local local part of global you know like you know turkeys going to look for some place in russia you know we are in European Union instead of looking for someplace in china and United States. Because of. As i said theres something within 1800. Patients has been based or export benny and that. Collusion you know between 1950 s. And the 1980 s. In the physician was a. Substitution you know of the 1980 s. It has become a sport oriented things are says ation so much for all now to be known from polluted from europe we cannot change the sex of the colonies investor is the sex of. Economies as in all of us have to be now welcome news you know of a couple of the cheats depending on how things are going to have it all from our sources we have now you know as. Well we have open economies now we need to get an international partner. Point now is the question is when we are going to get is part with lives thats what im calling sure local station in the same way you told your answers if it could be much more regionalized ok if you into my life but im not meaning you know by you know im not talking about the last day again ok im not talking about regional unions economic unions im just walking about Regional Economic relations markets much more closer originally coming from its not china who is going to go to china to asia and one of the things ive been thinking a lot about since this crisis started and im a very harsh critic of most elements of globalization i make a very clear to my viewers that it seems to me that in the west globalization took on the form of financial ization with a country like china actually made real things real economy seats a globalization a real economy versus if the globalization of any actual ization and i think that that is going to cost will we see it right now a lot of tensions because theyre very different interpretations of how you benefit from globalization go ahead yes i would say that the way the u. S. Has activist called. It was a show that was really about. Wishing their corporate profits around the world and in the countries that invited us corporations in they clearly saw their people benefit from it because there was no Real Investment in their infrastructure and. Then until china came along. You know globalization was such that it was really a one way street to the us once china came along and suddenly you saw a lot of profitability around the world. Where local economies got to benefit and grow and. And so though the pie was actually getting larger and so. I would say that in this case after this crisis is over i dont agree i think that there is going to be a fracturing of supply chain because of political reasons and if that the u. S. Clearly wants to go its own way there are id you know pressuring companies to bring back their productions locally. I mean i think you know i have i think we just have to be realistic i mean that horse left the barn 20 years ago ok i understand the rhetoric and i understand the political impetus behind it but realistically speaking that is like a stalin 5 year plan a harsh one ok i mean it doesnt work that way in the west theyll get well maybe out of this crisis will work that way by us i dont know you know im just saying is that you know intellectually you understand that in because but the reality on the ground i dont see what it what is the u. S. Government going to do so both force under sanction of American Companies investing abroad i mean you know again you know could listen to the senate floor it all sounds patriot. Not in the flag and every the musics playing but at the end of the day sheryl you say whoa really going right i think its really under realistic its hard for any. Realistic economist to to see how this develops because you supply chains are very complex so. Just to make something very simple like shoes why did those companies that used to make it in china like moved it down to be a nom because you know they wanted to access cheaper labor than now theyve left vietnam and went to western china because they discovered that importing is a rubber from you know malaysia or cambodia you know was difficult unless they ordered large amounts trying to get the number of people to make the shoes. You know they would strike if they didnt get he raises so they discover that there are so many other issues when they try to move their operations out of china and so they discovered that the station sees the complexities you know make more sense to stay in there and this multiplies 10 times a 1000 times more when youre talking about say electronic goods you know an apple i phone steve i mean tim cook has very much sense that its not possible to do it any other place other than china and so because of all these companies that feed into the supply chain is the u. S. Is going to try to make their cars just in the u. S. Like good luck because you have. All the right where we should be laughing because this is it a real crisis youve been youre absolutely right i mean youve already laid out very clearly becomes like City Building shoes what about you know a car a computer a smart phone youre absolutely right go back to any group before you go to the break years i mean is that really kind of been to with some of the the well. What youre calling a short localization call. If the material isnt. Where theyre going to mentalities and theyre going you know. When youve got all the world you know have changed dramatically. No. Chains you know there are small chains i mean use of chains and you and he chauncey edging one of those you know chain chains where the great jimmy is me before were before the me he had a very weighty long chain so ok but now we are going. Through local chains and you know. I have to i have to jump in here were going to go to a short break and after that youre getting your discussion on the Global Economy and the recovery states are. All. You cannot be both with yeah youre walking. To my. Horror one else seemed wrong all but all all all just dont call. Me ill get to shape out this thing called the etiquette and gentleman because betrayal all over when something find themselves worlds apart. Just to look for common ground. Well im out across the uk where all things are considered i remind you were talking about the Global Economy and the recovery. I want to go back to you. Its going to focus on the u. S. China. Show because thats really what it is your own. Home. If you put you positive the question that you know because of the way the supply chains are right now and i kind of reacted to it its going to be very difficult to chase and change that arrangement of decoupling is possible i mean if that but honestly. You monk is economic decision to make because these are not just state actors these are private actors their shareholders their them sooners and all of this i mean do you see this kind of just as a 2020 november general election issue to get past all of this because the reaction in the United States it was far from perfect and im being very generous right now with decoupling that is a tremendous pass to go down and i dont think people after what youve just said to us about shoes and then you know about i phones you think they owe it to sions and Business Leaders understand the magnitude of making that decision i think that politicians and certain policy makers in washington. Mander stand it but they dont care and the reason is this they see this competition to china as a Big National Security issue because theyre so worried about. China eclipsing the u. S. In economic and political power around the world and they look at the situation in the us and think theres no way theyre going to be able to compete with china as a population that is you know 3 times larger or times larger and they. Dont have the u. S. Doesnt produce the same number of engineers that china does and so they think that the only way that they can stop chinas rise and end maintain a superpower status is by trying to throw really radical policies there to disrupt. All and shueisha in and out forcibly probably you know create a depression like situation because then nobody can grow and therefore the u. S. Will still maintain its economic leverage in that case what you want to look at that with the kind of disruption in pretty clearly clearly where the u. S. Economy is in a deep recession ok what is going to happen the next you quarters is anyones guess but i think as we speak right now there is a deep recession here and we in the unemployment numbers tell you everything you need to know but i mean that is that from what youre saying that just spikes ok if we cant be number one we cant be prosperous the way we were reporting this pandemic nobody will be i mean if that is the law thats a bullying approach thats not looking for answers the process go back to angry here i mean it is sort of like the poet and have to say here i mean. This is this means that the lead salut west particularly the 9 states not understand that the its not military power this is going to solve problems its a country thats best that are in deep ok that is this revolution there were experiencing in the Global Economy right now and as i said theres financial ization theres really going to be a development of globalization and ill whoever is going to round up the bull by the horns the research and development is going to be one is going to be supreme and maybe even use the word hedge a monic if you want go ahead and you. Think not doesnt happen. And hasnt hurt me is you know in this sort of that has been said many times that he has not even be productive with improvements enough. For you know for sure for things to be cute or. Not in the long run this. You know who you meet those chinese they know they can live you dont mean resonance in the mini. The u. S. And invest in economies in general but i think the short run we have to take into grant that you know one 4th of all g. D. P. Is by the United States and another one for. P. V. And approximately one for the chinese you know shes about turkey per cent so in the miniature. Economy i mean answers that hands off the United States and the rest so. If you are going to talk about how his you know through our. Economy before. You know us is according to me it is more advantages that its very well and get it it seems to me and when we go to you. This rhetoric is coming out of washington i mean correct me if im wrong here but if this is the assumption that if the United States feels that believes that china needs the u. S. More than the u. S. Needs china i mean i think thats a thats a thats not to take thats not absolutely true and certainly not clear i mean again if the u. S. Is always talking about global norms ok but its only the norms of day here too and everyone elses house doing it here is their interpretation i mean isnt that a risky proposition that they need us more than we need them go ahead. Yeah i remember reading somewhere that when the u. S. Think tanks try to do an inventory like how many things have chinese parts and you know obviously are imported from china and it was so high that they actually could not publish it and has kept that you know a state secret because i just assumed that you know its nice to just i saw the same thing and it had actually to do very specifically with the Defense Department and how. Many of the supply chains of their own equipment that they buy from producers american quote unquote its all outsourced everywhere else i mean there is some of these Weapons Systems there are a percentage of the parts and components are like 708090 percent out sourced from abroad ok i think were on the same wavelength here i mean were making my point right here you could make that snap decision but then you could be left holding the bag for a very long time and that in itself is a National Security risk as they would see it right and so therefore if they say that. China needs seen us more than us needs china. I think that again its probably rather it because they havent backed it up with very specific examples if you just talk about import export numbers that really doesnt tell the whole story and i think that. You know the Election Year could be playing into this rhetoric but if the u. S. Really is serious about trying to stop you know the trajectory of chinas growth. You know theyre going to end up hurting the u. S. Economy in the baby as well and i think some of the elites have made this calculation and said well. Thats fine because we still dominate in the Financial Sector we still dominate in. The Internet Technology like Cyber Security and so forth. And so they probably feel that in specific areas that are important and strategic in terms of. Media and financial control and so forth that maybe they still hold the cards and its possible they still think that because the wrong certainly is still relying on the u. S. Dollar to a great extent as a World Reserve currency and so the u. S. Continues to sanctions as a way into. You know ben countries to their will and and so i think that theyre probably looking at it from that standpoint. As to the rest of the economy not about it too and i think it is such a grave mistake to the use the dollar is a political weapon because all you do is devalue the dollar i mean they must be our currency but i define it as something that you everyone universally house trusts in but if its starting to start manipulating it serves very specific and selfish political ends then people are going to me we received a dollar is a shit going on all the time its not happening quickly i agree but more and more countries are exchanging goods in their own currenc