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[RUSH TRANSCRIPT BELOW] As the Trump administration gives China another 90-day extension on elevated tariffs, I’m sitting down with China analyst Gordon Chang to get his read on U.S.–China trade talks, signs of infighting in Beijing and trouble for Xi Jinping, and the recent destruction of a Chinese coast guard vessel by a Chinese navy warship.

Chang is the author of “Plan Red: China’s Project to Destroy America.”

Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of NTD.

RUSH TRANSCRIPT
Jan Jekielek:

Gordon Chang, such a pleasure to have you back on American Thought Leaders.

Thank you so much, Jan.

We’re going to talk about communist China, of course. We’re going to talk about the realities of the economy, some big changes, leadership struggles, and things like this within the CCP [Chinese Communist Party]. But before we go there, this bizarre event where a Chinese Navy ship basically destroyed a Chinese Coast Guard ship and the U.S. is sending ships into the region. What’s going on there?

On Monday, a Chinese Navy destroyer actually cut the bow off a Chinese Coast Guard cutter. Both of those Chinese vessels were chasing a Philippine Coast Guard cutter near Scarborough Shoal in the South China Sea. Scarborough Shoal is really important. It’s very close to the main Philippine island of Luzon. It guards the mouths to both Manila and Subic Bays. Very strategic. The Chinese want it, and they are trying to chase the Filipinos out.

Due to some really clever seamanship on the part of the Philippines, they maneuvered the Chinese ships so that they collided. And right now, China is out for blood. They’ve been humiliated. One thing about this incident is important, and it’s not getting that much attention. And that is that four Chinese Coast Guard men were thrown into the sea after that collision. The Chinese destroyer did not render assistance.

The Philippine Coast Guard cutter actually came back to look for the Chinese sailors, but nobody was found in the water. This shows you the nature of the Chinese regime, that they’re leaving their own people in the water. And the Filipinos, who have every reason to be aggrieved, were the ones to render assistance. That just shows you what we’re up against with regard to Beijing.

It’s just bizarre, though. I mean, those seamen are presumably valuable, right, to the crew and so forth. I mean, it just doesn’t make a lot of sense.

Human life doesn’t mean very much to the regime. And we know that because the flag of the People’s Republic of China is red. It’s red for blood. They are willing to spill blood. And as people have pointed out, the person who has killed the most in Chinese history is Mao Zedong, the Mao who is still revered by the Communist Party. That tells us almost everything that we need to know about the People’s Republic of China and the Communist Party.

There has been this new development, of course. There’s a U.S. destroyer that was sent into the region. There might even be more going in as we speak. Frame for me very briefly what has actually happened in that region and how these islands have been changed by the Chinese regime.

We need a little history here, because this is Scarborough Shoal. In the first part of 2012, both Chinese and Philippine craft were crowding around that feature. The Obama administration brokered an agreement for both sides to withdraw their craft. Only the Philippines complied. And that left China in control of Scarborough Shoal since then.

Now, the Chinese have not reclaimed Scarborough Shoal. In other words, they have not tried to turn it into a permanent outpost like they did in the South China Sea in the Spratly Chain. But we have to remember that what the Obama administration tried to do in 2012 was to make this go away. And the problem was that it emboldened the worst aspects of the Chinese political system by showing everybody else that aggression worked.

And so right after the incident at Scarborough, the Chinese ramped up pressure at another Philippine feature, Second Thomas Shoal, also in the South China Sea. They then started the reclamation of those features in the Spratly Islands, and they ramped up pressure in Japan at the Senkaku Islands in the East China Sea, which the Chinese claim as the Diaoyu Islands. So the Chinese are pretty aggressive. They’re pretty bold. They think they’re in control of the situation.

And the United States, and this is to the great credit of the Trump administration, has stationed two U.S. Navy vessels, the USS Higgins, which is an Arleigh Burke destroyer, and the USS Cincinnati, which is a littoral combat ship. They are now about 30 nautical miles away from Scarborough. Just about 24 to 36 hours ago, the Higgins did a pass by Scarborough Shoal within 12 nautical miles of that feature. That is important from a technical point of view.

The Chinese were enraged. Even though the Trump administration so far has acted perfectly in terms of trying to establish deterrence, this could really go very badly. We could see a region-wide war sparked by what the Chinese plan to do at Scarborough Shoal. Because although the Trump administration has handled this correctly, we’re not driving events. The Chinese are, and that means they get to decide whether the world goes to war at Scarborough Shoal.

Over the past decade, 15 years or so, the bottom line is they’ve built military bases across all these islands in the South China Sea, and presumably, there’s the same intention. I mean, basically taking land which is not theirs, building on it, expanding it, building on it, building military bases and saying, hey, this is us. We’ve been here all along.

Yes. And at some point, the rest of the world has got to push back because China has made it very clear. Xi Jinping talks about himself as being the only legitimate ruler in the world. And since 2017, Chinese officials have been talking about the moon and Mars as sovereign Chinese territory. So what’s at stake here is this is not just a feature in the South China Sea. We’re talking about Xi Jinping’s ambitions to rule the universe.

And I know that people will think that that’s ludicrous, but we’ve got to actually start to listen to what this guy is saying and his officials. And they’ve made it very clear. They believe that they are the world’s only legitimate ruler. And that means that the United States, in their view, is at best, at best, Jan, a colony. So at some point, unless we want to decide that we are going to get down on our knees to the Chinese, literally and figuratively, at some point, we’re going to have to stop them.

And I believe that we need to stop them at Scarborough Shoal. People can disagree, but clearly the accommodative approach in 2012 at Scarborough Shoal has just opened the door to more Chinese aggression across the region. That approach doesn’t work. We are going to have to be more robust. And yes, this is incredibly dangerous. But that’s because through choices we’ve made in the past, we have left ourselves with only incredibly dangerous options at this point.

Let’s talk about Xi Jinping and his approach. Of course, he’s taken this more Maoist approach to governance in communist China. But at the same time, his leadership is increasingly fraught . And this is something we’ve been following at The Epoch Times quite a bit. But I would love to hear what you think about it.

Just recently, there are examples of people being removed on the one hand in the military, then in the Central Commission as well. There’s someone that seems to be basically out of favor all of a sudden on the Xi Jinping side. How does that all look? How does this internal turmoil play out right now within the Chinese Communist Party, and what does it mean for us?

I think that Xi Jinping has lost control of the Chinese military, and I think that he has lost some influence among civilian CCP leaders. Start with the military. His number one guy in the military, his number one loyalist, his hatchet man, General He Weidong, has not been seen in public since March 11th, after the two sessions. And the New York Times article three or four days ago, and just about everybody says, well, Xi Jinping has been sacking his own loyalists. And that’s possible.

But I don’t think that it is right. And the reason is that from July 9th of last year, there have been a series of articles in PLA Daily, the main propaganda organ of the Chinese military, that have praised collective leadership, quote unquote. That’s a direct challenge to Xi Jinping’s one-man rule style. And so these articles were written by people who are aligned with General Zhang Youxia, who is the number one uniformed officer in the military, who is known to not be on particularly good terms with Xi Jinping.

Now, General Zhang, he’s the number one vice chairman of the Communist Party’s Central Military Commission. And I believe that he was responsible for getting rid of General He Weidong and some other Xi Jinping loyalists recently. This indicates the balance of information that we have. And by the way, we’re guessing here, of course. But the balance of information is that Xi Jinping no longer controls the Chinese military because General Zhang does.

On the civilian side of things, it’s less clear. For basically five weeks, Xi Jinping just dropped out of propaganda. He dropped out of sight for the most part. During those times, he had a prominent role in media. We also saw the disappearance of a senior Chinese diplomat, Liu Jianchao, and we don’t know what’s going on there. This follows, of course, the disappearances of other civilian leaders.

Again, this is really murky. Not all of it points to Xi Jinping losing influence, but some of it does. We will know a lot more after the fourth plenum in October because I think we will see a number of things occur, so it’s sort of like stay tuned. But I think that there is intense infighting in this regime, and that has all sorts of consequences for our dealing with China and how we can work with Beijing. In other words, I think we can’t because the regime is not in a position to deal constructively with anybody at this point.

Going back to this incident at Scarborough Shoal near the Philippines, does this impact how that situation will be viewed? Because, of course, as you mentioned, this is extremely embarrassing to the Chinese regime; their own Navy ship basically destroyed one of their Coast Guard cutters. And they’re going to be looking for someone to blame, presumably, as they do, because the Communist Party can never be wrong or in error.

Yes. I have not been worried about the Chinese starting hostilities by launching an invasion of the main island of Taiwan. And that is for a number of internal Communist Party reasons. I just don’t think it’s in the cards. But that’s not to say that Taiwan is safe or that the region is safe, because we have seen belligerent Chinese activity on a continual basis from South Korea to Japan, to Taiwan, to the Philippines, to faraway Australia. And I’ve always worried that one of those incidents can spiral out of control. And if they do, the regime cannot de-escalate because of what we’ve just been talking about, the political problems.

There’s something else that could cause problems, and that is somebody in the regime, could be Xi Jinping, could be General Zhang Youxia, could very well decide that it’s in his interest to let an event spiral out of control or to pour fuel on the fire. And it’s not because they want to start a war, but because I think that a political figure could decide that a conflict would be in his political interest.

Because, for instance, with Xi Jinping, it could prevent others from moving against him, from challenging or deposing him if there is a conflict with, for instance, the Philippines or the United States. And that’s why I’m really concerned about what’s happening at Scarborough Shoal right now, because the Chinese, in general, even if things were calm in Beijing, would be looking for blood, somebody else’s blood. And now things are much worse because of the political turmoil. So I think that this is exceedingly, this is a very dangerous time right now.

Given this reality, there are a number of people in this current administration who understand these various elements. Also, just in general, in America, there’s been a shift where people understand the realities of the Chinese Communist Party and its ambitions at a greater level. Why are our giant investment banks funding IPOs like CATL [Contemporary Amperex Technology Co., Limited], a giant, extremely successful battery manufacturer? Their batteries are used in Chinese military submarines. This is a military company. Why are we funding them?

This is where I get really angry. It is strategically wrong for us to deal with these Chinese companies for the reasons you suggest, but it’s morally wrong. It’s morally wrong to help an enemy. China has declared the United States to be its enemy. They did that in May 2019, for instance, when the People’s Daily newspaper ran a landmark editorial that declared a “people’s war” on us. The PLA Daily, in March of 2023, defined people’s war.

We didn’t need a definition of people’s war. We know what that phrase means. It goes back to the Maoist era. It carries great resonance in Communist Party thought. But in case anybody needed clarification, in March 2023, PLA Daily defined people’s war as total war. So we know what’s going on here, and yet we maintain relations with Beijing.

Gordon, this is unrestricted war, basically using all means to wage warfare to diminish the enemy in all sorts of ways.

Yes, you’re absolutely right about that. Unrestricted Warfare is the title of that slim 1999 book by two Chinese Air Force colonels that argued that China could use any tactic to take down the U.S. And two years before 9/11, they even wrote about bin Laden attacking the United States, Bin Laden, who China had a relationship with in 1999. So let’s understand what the stakes are here. We should have no business, no commercial, no investment ties with China. This is wrong. And future generations are going to look back at us and say, who were these Americans? So yes, this is just morally wrong.

It’s just bizarre because I was just listening to Roger Robinson speaking about this CATL corporation IPO that was in Hong Kong. And the reality is that it’s actually paving the way for several other, maybe even in the teens, IPOs of this nature. It’s just bizarre because Hong Kong’s financial independence has been shattered by the CCP’s encroachment. Again, it’s just something that boggles my mind.

Since June 2020, when China imposed its national security law on Hong Kong, Hong Kong no longer is the one country, two systems, high degree of autonomy that was promised in the Sino-British Joint Declaration for 50 years, starting from July 1st, 1997. So we know what’s going on.

And here is where I also get angry. We’ve given Hong Kong special treatment, for instance, on our sanctions and stuff like that, on the assumption that it’s autonomous. Of course, it’s not, and it hasn’t been since 1997. So we just fail to understand.

And it’s sort of like we’re determined to fail to understand. But we’re going to lose people. We have lost people because of this. We’ve lost Americans, you know, tens of thousands of American lives from fentanyl, 1.7 million American lives from COVID. How many Americans does China have to kill before we finally wake up?

So again, it’s kind of a bizarre development with the ascendance of the current Intel CEO. Of course, President Trump has been advocating for him to remove himself because of his involvement with a number of Chinese Communist Party-related entities. I just want to get you to speak on that a little bit for me here.

Yes. Li-Bu Tan is one of the most capable American executives. He’s got the right vision for Intel. And he’s also got the strength to take on Intel’s chairman, Frank Yeary, who has misguided ideas about what Intel should be doing. But I believe Intel must fire Li-Bu Tan. And President Trump was right two Thursdays ago when he demanded that Tan be removed.

The reason is that Tan was chief executive of Cadence from the period 2008 to 2021. And from 2015 to 2021, Cadence engaged in 56 sales of design, software, hardware, and other tech products to a Chinese defense university, the National University of Defense Technology, which is essentially the Chinese military. These sales were illegal because that university was on the Commerce Department’s entity list.

So Cadence, two weeks ago, pled guilty to one count of conspiracy to violate U.S. export controls and agreed to pay a fine of more than $140 million. But that’s not where the matter should drop. Cadence’s CEO, Li-Bu Tan, should be investigated for his role in this. I don’t care how capable Li-Bu Tan is. He put the life of every American at risk.

This is one of the basically very difficult realities we have in, frankly, every Western liberal democracy that works with China, that has been doing engagement with China. In Canada, this is maybe even a level up from here in the U.S. But there’s been this deep engagement, and there are a lot of people that have been touched by it, some in very, very serious ways, compromised ways. And this is just something we have to deal with as a society in general. Do you have thoughts on how to approach that? Because a lot of people entered with presumably good intentions and just ended up in this situation. Or do you view it differently?

We’re a democracy, and democracies are very bad at defending themselves until a lot of people get killed. So let’s go back and look at al-Qaeda, which I think sets the pattern. Actually, if you want to look at the pattern, you go back to Tocqueville in the 1800s. But let’s look at something recent, something that Americans still may remember.

And that is, in 1993, al-Qaeda killed six Americans with the bombing of the North Tower of the World Trade Center, and we couldn’t care less. We couldn’t care less until one day when Osama bin Laden reached out and killed 2,977 Americans. Then we said, how did that happen? Well, it happened because we were determined not to look at what was going on with al-Qaeda and what Osama bin Laden was saying. We had a feeble response from President Clinton to al-Qaeda. We had Republicans who were criticizing Clinton for being too tough on al-Qaeda.

So this was a bipartisan failure. Now China is so much more powerful than al-Qaeda ever was. And so we could very well lose our country over this. And so this is a time when we Americans are going to decide whether we are just going to surrender to China or whether we’re going to fight for our society because we’re going to have to fight for it if we want to keep it.

One way this is manifesting, come to think of it, is the State Department recently released its human rights report, in which China features very prominently, especially in this realm of transnational repression. The Chinese Communist Party is targeting Americans and targeting people on American soil. And of course, this is a pattern that happens elsewhere. So I guess I’m just trying. to add a little bit of color. Maybe you can speak to that a little bit. This isn’t something that’s isolated. There’s basically direct action on people here.

In our country right now, there are networks of Chinese agents, operatives, and soldiers. We know this for a number of different indications, and we can run through all of them. But just to give you one example, it was great that the FBI closed that secret Chinese police station in Chinatown, New York City. But according to the Daily Caller and the New York Post, there are at least seven to nine more of them spread throughout this country. And no administration, either the Biden administration or the current Trump administration, has taken the effort to close these down.

I think that the number one priority of Tom Holman, the border czar, shouldn’t be people at Home Depots in Los Angeles. It should be these Chinese networks. We know that they are extremely dangerous. With the increase in the flood of Chinese migrants during the Biden years, we saw a change in the composition of those Chinese migrants. So if you go to the beginning of the flood, we were seeing primarily family groups coming. In other words, people who were desperate to live in a free society.

Towards the last year of the Biden administration, the composition had changed. At least two-thirds, and in some border crossings, 85 percent of the Chinese migrants were single males of military age, traveling without family members, often pretending not to speak English. The Border Patrol knew that some of them had links to the Chinese military.

And by the way, towards the end of the Biden years, we saw these packs of males come across with identical kits. This occurred while there was an increase in the tempo of Chinese nationals trying to gain entry into our military bases, either by sneaking in, barging in, or by attempting to enter under false pretenses. There’s been illicit surveillance of our bases and our infrastructure by the Chinese. They’re preparing for an attack. They’re looking at our patterns. They’re studying our vulnerabilities.

And the only reason why we have not been attacked on our own soil is that Xi Jinping or whoever is in charge of China right now thinks it is not in China’s interest to give the go signal. But once they give the go signal, we will be fighting a foreign enemy on our soil for the first time since the year of 1812.

It’s an incredibly good point. And it’s something I think we don’t cover enough. This is an actual reality. And it’s even unclear how many were in this gotaways group, people that weren’t even assessed at all, known to have come in in the first place.

Yes. To give you an example, in February of last year, we always talked about our southern border, but the northern border has been a problem as well. Because in February of last year, we had CNN reporting that the Border Patrol apprehended three Chinese migrants who were trying to sneak into Maine under cover of darkness. What made this ominous was that there was a fourth Chinese migrant on our side of the border who was there, obviously by prearrangement, helping the other three to get in.

Now, if you’re coming into our country because you want to live in a free society, I mean, the first thing you would do is surrender to Border Patrol to put yourself into the asylum queue and to get generous benefits from cities like New York. If you’re coming in here trying to sneak in, you’re coming in for some nefarious purpose. I don’t know what it is. Maybe it’s to attack the United States. Maybe it’s just to be a criminal. I don’t know. But the point is, you’re here for no good.

And let’s remember what we have seen in the no-good category. Let’s talk about that secret Chinese biological weapons lab in Reedley, California, which had at least 20 pathogens, including the one for Ebola, and almost a thousand mice that have been genetically engineered to spread disease. I talk about Ebola because we know that the Wuhan Institute of Virology, they are now studying Ebola. In other words, they’re studying to make it more lethal or, even worse, more transmissible. Ebola in nature has a 50 percent fatality rate.

I keep thinking about a HongKonger who is an asylee in America who has a bounty, a literal bounty on her head for being in protest movements in Hong Kong. We have Chinese agents sitting in jail for trying to bribe IRS agents to remove the Shen Yun Dance Performance Group’s 501(c)(3) status to prevent them from being able to function. We have all these examples of the long arm of the CCP coming into America, including, for example, the organ harvesting survivor trying to threaten him, trying to lure him back into China to shut him up. There are all these examples of this whole phenomenon of, let’s say, these Chinese police stations and that type of work that the people in those might be doing.

Yes, the Chinese are malicious. But I say my greatest anger is for Americans, American officials, because look, we know what the Chinese are doing. We know what their networks are doing. We know what their consular officials are doing. This is our country. So, for instance, the Chinese students who’ve gotten so much attention, we know that Chinese consular officials and Ministry of State Security agents monitor, surveil, and coerce them. They’ve been doing that for more than a decade in the United States. And yet we have permitted this to occur. This is our country.

So yes, the Chinese are going to do all these things because we let them do it. And we have got to start saying, no, this is impermissible. We need to roll up these networks. We need to send these people to prison or expel them if they’re diplomats, but in any way, get them out of our society.

So what can I say, Jan? This is on us. This is a failure of the United States to defend itself from a known threat. I think the American people should be outraged at China, but they should be even more angry at the people that they elected to defend them and protect them because those officials and those leaders haven’t been doing that.

Gordon, when we last interviewed, it was just the beginning of these trade, U.S. trade policies that looked, I think we discussed this—that looked to us like they were specifically looking at countering the Chinese Communist Party. Of course, other countries as well, but with a particular interest. We talked about transshipment and trying to stop that phenomenon. Now we’re many months into this policy. I think the CCP has just been given an extension on coming up with a deal before those tariff numbers will increase.

Where do you think things stand right now? And by the way, I just might mention, this is at the same time when Apple, for example, is promising to invest massively in U.S. manufacturing and start building iPhones here. That’s interesting. So anyway, there are all these dimensions. How do you see that element?

The Trump administration this month has given China a second 90-day extension on those elevated tariffs. Normally, delay helps China because it gives them more time to steal our intellectual property and engage in predatory trade practices. Also, this 90-day extension covers both the Halloween and Christmas shipments. So, you know, normally this would help China. This time might be a little bit different, Jan, and the reason is twofold.

First of all, our general tariff rate is 30 percent. Their general tariff rate is 10. So that’s somewhat advantageous. And the 20 percent difference is because Trump is signing up these framework trade deals with other countries. And these deals tend to redirect trade away from China.

So, for instance, the UK deal in May actually has provisions which say that the reduced tariff rates for British goods coming into the U.S. apply only if they don’t have components from countries of concern, which is China. So that redirects British trade away from China. But also, you know, we’re seeing the EU deal, which was incredibly important, a big defeat for China. And, you know, then there are Japan, South Korea, and Indonesia. So these things are moving in the right direction.

But the problem here, though, is a propaganda one. The propaganda is important. China is making the case that it holds the whip hand over the United States, that they’re winning the trade war. And from an objective point of view, one could argue that they’re right. But that view is now predominant not only in the United States, but around the world.

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These Are the Signs Xi Is Losing Power in China | Gordon Chang