Narration: The world was on edge for Hong Kong over the weekend when 1.7 million people demonstrated again in defiance of the Chinese Communist Party’s warnings of a military crackdown.
Steve Bannon: I think if they use the same force that they applied in Tiananmen 30 years ago, I believe it would be the beginning of the end of the CCP. I think the CCP would ultimately collapse.
Narration: The CCP backed down from its tough rhetoric around the time when American politicians rallied around the Hong Kong people, and one top Chinese diplomat visited the US.
Steve Bannon: What was reported coming out of the meeting is that. Secretary Pompeo took a very hard line that hey, this is about freedom and democracy.
Narration: The Hong Kong protest might have complicated the U.S.- China trade talks, but the fundamental challenges regarding the trade tensions between the two countries remain the same.
Simone: So my question is, do you think the CCP will really do the structural changes that the U S demands?
Steve Bannon: No.
Narration: Without structural changes, the CCP is hanging their hopes on a new U.S. president in 2020.
Steve Bannon: Biden will not win the Democratic primary because of China
Narration: And what about the rest of the Democratic camp?
Steve Bannon: Now in the political marketplace in the United States, stopping the CCP is going every day to be a bigger and bigger, bigger, bigger issue. I think the Chinese, Wang Qishan and Xi make a fundamental mistake if they believe that there’s gonna be some accommodation for them.
Narration: And what does that mean for the prospect of a trade deal?
Steve Bannon: I don’t think that we will have a deal before the 2020 election.
Simone: What about after?
Narration: At the height of the Hong Kong pro-democracy demonstration and the crossroads of the U.S.-China trade talks, my interview with former White House Chief Strategist Steve Bannon. We discuss Hong Kong’s future, what’s next for the U.S.-China trade war, the stakes for all parties, and above all, the nature of this grand conflict. I am Simone Gao and you are watching Zooming In.
Title: Steve Bannon: If There Is Another Tiananmen in Hong Kong, the CCP Will Collapse
Simone: All right, Mr. Bannon, thank you so much for being here with us today.
Steve Bannon: Well, thank you for coming to the Breitbart Embassy for your first interview here. It’s noon on a very hot August day, so thank you. It’s an older house, so thank you for bearing with us.
Simone: Thank you. Let’s talk about Hong Kong. 1.7 million people took to the streets in Hong Kong over the weekend again. The PLA, the Chinese military garrison, kept quiet. Meanwhile, one of the surrogates of the CCP in Hong Kong assured the world that martial law would not be declared in Hong Kong and the smearing of the national emblem by the protesters is just a small incident, not a big deal. So obviously the CCP is backing down from its tough rhetoric compared to just a few days ago. What happened?
Steve Bannon: I think the, I think the rhetoric from the West is getting increasingly tougher. I mean, last week, as I have said throughout that–we’re in Washington, D.C., and I’ve been telling the political elites in D.C.–the thing that pulls in a very divided country, because the United States, we’re very divided on many topics. The one topic that unites everybody is the Hong Kong protest. Everybody in this country has basically come together. The political elites and the people. Some of the business interests that are, that are in business with the CCP, no. But everybody else is coming together. Nancy Pelosi, Chuck Shumer, McCarthy, Marco Rubio, the president, they’re all united in saying and telling the CCP, putting them on notice that this is not acceptable, particularly the police brutality of last week, you know, highlighted by the young woman that had her eye put out by the rubber bullet.
You know, everybody is standing in solidarity, Boris Johnson, the Prime Minister of the UK. If you look at his statements from the moment he took over as UK, which were horrible, you know, we want to cut a deal with the CCP, I’m going to go to China to now he’s actually standing up and saying, hey, the 1984 agreement must be completely in place, just like we had in 1997. All those attributes have to be, you know, have to be upheld. You’ve seen a shifting in world opinion and that is because of the brutality of the police forces and also the arrogance of the Chinese Communist Party, putting soldiers on the border, having Carrie Lam say you’re on an abyss. So I think the height, it raised up to a level that the world came together, and I think the CCP is the one that’s back down. I think President Xi doesn’t have a–they don’t have a thought-through plan. They would clearly like to go in and do a brutal put down of this cause they don’t want this contagion to spread to mainland China.
Simone: That’s your estimation. They wanted, definitely wanted to move in for a bloody crackdown on the protest.
Steve Bannon: I think there’s aspects, not all. I think there, I think there are different factions in the CCP. There’s clear–just like in Tiananmen back in ’89, there are different factions. There’s certain factions…
Simone: What about Xi?
Steve Bannon: I think Xi is torn. I think Xi is torn. He leans more I think to the crackdown phase of the Wang Qishan and some of the hardliners who want to go in and show complete dominance of of–you remember, they’re the ones in back or the extradition treaty. The extradition treaty. This is why the CC, why the young kids in Hong Kong were so smart. The extradition treaty is just a final step in taking it back, all your rights. being able to send you to China to, to basically be put into prison. Not even have the rule of law. So the hardliners that were in back of pushing this extradition treaty are the same ones I think that want to go in and have a put-down of this to show the world they’re in charge.
Steve Bannon: And particularly show mainland China, they’re involved. One of the great tells in this entire thing is that normally the CCP will have protests in mainland China to show the support. They’ve had protests now in Europe, they’ve had protests in Australia, they’ve had protests in Canada. They will not allow a protest in a protest in mainland China. And the reason is I’m, I think they’re afraid of the contagion of freedom even spreading there. So I think there’s definitely a hardline faction. I don’t think that Xi has a thought-through strategy. I think President Trump continues to disrupt that. Trump said, hey, let’s have a personal meeting, you know, you know, and then he said the other night, I think on Saturday, why don’t you go to Hong Kong and sit down with the protesters? You could solve this in 15 minutes. Right. And, you know, and, and all this type of stuff of kind of goading Xi to take action to stop this. So I think that the West has played this very smartly. I think the protest yesterday, the 1.7 million people coming out and doing it peacefully also raises the bar because basically those people said in the streets on Sunday, we’re not backing down on this. Right. We may not have allowed any more violence, but this thing is going to continue on, and we want the five demands met.
Simone: You know, Yang Jiechi flew to the U.S. to meet with Secretary Pompeo a couple of days before the big demonstration in Hong Kong. And, you know, after the meeting, I mean, what do you expect they talked about during the meeting, and what might have come out of that meeting?
Steve Bannon: This is the power of the Epoch Times and I think why you’re one of the rising and most influential voices in the United States and the world on issues related to China. If you noticed, the mainstream media did not cover–that meeting is so important. To have him to have had. Yes. But I think this is why the Epoch Times–it’s one of the reasons I agreed to do this interview. I think you guys are–every day are becoming more and more as the standard–one of the standards in actually reporting news that’s out there on this entire conflict, and the mainstream media is playing catch up with you. You, you I think did a much better job than the mainstream media. What shocks me is that that was not a bigger story. In the middle of the August holiday, when all the leaders go to the beach and they have all those senior meetings. Yes. In the middle of that for him to fly to New York for one day for a meeting.
Simone: That was after the meeting, the Beidaihe meeting was over.
Steve Bannon: Yes, it was over, but even to go, but that he was clearly going on instructions for him to go and to break up a holiday to go and have a, literally have a sit-down, and not in Washington, D.C. To actually go to New York and meet with Secretary Pompeo, innings clearly–
Simone: What’s the point of going to New York instead of D.C.?
Steve Bannon: I think the fact that they–it would have been a more official visit if it had been, actually–remember he’s considered in the United States to be the senior diplomat of China. He, I met with, met with him many times. And I think going to D.C. would have been too much of an official visit. So it was unofficial. That’s why it was in a neutral, a neutral territory like New York, which is a world financial capital. But that meeting I think was very important and clearly, I think it was to send a message. One message was you know, you guys, if you guys come in and back the protesters, I think if you backed the protest is only going to get worse. I think at least what was reported coming out of the meeting is that secretary Pompeo took a very hard line that hey, this is about freedom and democracy.
Steve Bannon: I think the biggest issue, and this was one issue that I think needs to be on the table, is this an internal matter of China or is it broader? I argue it’s broader and here’s why it’s broader. The, the turnover agreement in the agreement that the Chinese and the Hong Kong people agreed to is an international accord between the United Kingdom and, uh, in, in China. But then we had a law passed here in the United States to support that in 1992. This is an international deal. I think Senator Marco Rubio in his tweets has laid it out the best. Well, he’s laid out why this is an international matter and not an internal matter of the CCP. I think that that was the central part of the conversation. The CCP wants, has to be looked at as an internal issue just dealing with China and its sovereignty. I think it’s beyond that.
Steve Bannon: I think that this is an international incident and I think at the international community’s got to come together and back, uh, the, the protesters in Hong Kong, you know, I have said, uh, to me this is, these young protesters are the closest thing I’ve ever seen to the patriots in the United States in 1776. I mean, these protesters are the incredible courage and sophistication and discipline remind in guts not to back down. Remind me of John Adams and Sam Adams and Patrick Henry and Thomas Jefferson, George Washington and Hamilton, all of those patriots in 1776 that, uh, that stood and, and really allowed us to get our independence. I think that that is, I think that the protesters in Hong Kong remind me of that.
Simone: The people in Hong Kong, and I think the people in China, mainland China are all watching for one thing: to what degree can the U.S. deter the CCP, you know, from using massive violence against protestors in Hong Kong, and how willing is the U.S. to do this?
Steve Bannon: The CCP is insidious. So they’re going to use every aspect to try to get control here. They’ve already sent in, you know, undercover police officers, right, as informers. They’ve already tried to infiltrate. You can see that in some of these protests. They’ve sent in people as agitators to try to create violence to try to create incidents. They will use every aspect. They’re on Twitter, you know, sending false messages on Twitter. They’re doing these phony protests throughout the world. The tools they have in the tool box to cause concern here is very high. I believe that the way the West has played this has raised the stakes. And I think this is why you see–and when I say back down, I don’t mean they’ve all backed down. Everything they’re doing is tactical right now. They’ve backed down, they’ve taken down the rhetoric for a minute and the protestors have also, you know, shown that they’re relentless and they’re not going to give up.
But there wasn’t any violence like there at some of these incidents that were started by the police in the Hong Kong airport, in the subways, et cetera. But I think that the CCP understands that they are on notice from the West that–in Japan and others that the world is not prepared to accept another Tiananmen Square. Tiananmen Square happened 30 years ago. And I think everybody in the West agrees that as they look back over that, you know, today we still don’t know how many people died in Tiananmen Square. Tiananmen Square is not even talked about. It’s verboten. Every time you meet with Chinese officials, the two things they never want to talk about is the Cultural Revolution and Tiananmen, right? It’s verboten. It’s forbidden. And also Falun Gong and the Christians and all this, all the religious things that they’re suppressing.
But I’m talking about of two historical incidents that are not to be discussed is: the Cultural Revolution. And Tiananmen. I believe they’d been put on notice. The President United States said today…compared what’s happening…and this is a president who, you know, four weeks ago or three weeks ago actually used the term rioters. Today, he was comparing it to potentially to Tiananmen. And so I think the CCP understands that Hong Kong is a jewel and people should remember Hong Kong is a jewel. I’ve had the great opportunity to go throughout the world. I believe it’s the greatest city in the world with the greatest people. It shows you Chinese people with English common law are unstoppable. They can…they can do with the rule of law, their hard work, the determination, they’re savvy, they’re smart, they’re relentless, their family attitude. They can accomplish so much.
And I think that front door into China, no matter how big the CCP tries to make Shanghai as an international capital market. Hong Kong is the third greatest capital market in the world, In back of New York and the city of London. And it has been the way that the CCP has gotten dollars, which the CCP is addicted to, the US dollar. It needs dollars. And so I think that they risk having the goose that laid the golden egg, be shut down. So it’s a…but I think so far, and I think that’s why demonstration…remember this demonstration is the front page of the Financial Times today. It’s the front page of Drudge it’s the front page of every newspaper in the world. So that demonstration yesterday, that protest got the world’s attention that the Hong Kong…the people in Hong Kong are not going to back down.
Simone Gao: Can you talk a little bit more specifically, like what the U.S. would do if the CCP used massive violence against protestors?
Steve Bannon: Look, I don’t want to speculate because it’s gotta be the decisions of the president, et Cetera. But I think that when raising the world’s awareness of this, the CCP would understand that it would be catastrophic for them if they did this. I believe that if they use massive force like was used in Tiananmen, that the freedom movement would spread throughout mainland China. The contagion of that to the CCP would ultimately bring down…I think if the CCP uses massive force against the innocent Hong Kong people who are freedom loving and have shown the world, right, how decent and hardworking and how terrific they are. I think if they use the same force that they applied in Tiananmen 30 years ago, I believe it would be the beginning of the end of the CCP.
I think the CCP would ultimately collapse. I think they will lose any type of ability to govern China. I think they will be pariahs throughout the world. I think capital markets would be shut off to them. I think their banking system would be shut off. I think it would be tremendous movement by the West to counter this and I think they know that. That’s why I think they’re taking down, I think they’re taking down the rhetoric. Now There’s not beyond hard line elements in the CCP because this is the most vicious dictatorship we have in the world today. As proven by what they’ve done to the Falun Gong, what they’ve done to the Tibetan Buddhist, what they’ve done to the Uighurs, what they’ve done to the underground Catholic Church and underground Christians. Anybody that believes in non-materialism and has a spiritual belief. They’ve been absolutely brutal in putting that down.
And so we know what they…we know what they’re capable of. That’s where the extradition treaty is such a big deal to Hong Kong Chinese, particularly many Hong Kong, Chinese who are quite secular. They understand that, that breaks the rule of law and leads them to have, you know, Chinese courts run by the CCP where they can be thrown in prison for, no reason at all. They understand what that means. So I believe the CCP understands the stakes on this couldn’t be higher and that if they try to do a Tiananmen type of a situation, you will be…They will be, you know, it will be a tough, tough, you know…the west will stand up very toughly. In fact, you look at Marco Rubio, you look at other people West are already sending out tweets and are already sending out…He’s putting a bill for it in front of the Senate, there’s already discussion. I sit on the committee on the present danger, right? We’re circulating a letter today to go to the president that calls for individual sanctions, personal sanctions against the leaders of the Hong Kong government.
Simone: Isn’t that part of the Hong Kong Human Rights and Democracy Act? Yes. Okay.
Steve Bannon: Yes. And Marco Rubio has been one of the leaders of this. So there’s so much, my point is there’s so much that’s building up now in the West as more and more attention got this. Remember 12 weeks ago, nobody was even talking about this, right? Three and four weeks ago they were barely talking about it. So today it’s the front page of, you know…the front page of every of every newspaper in the world.
Simone: I want to talk about the Hong Kong Human Rights…Human Rights and Democracy Act. So there’s some parts that aren’t controversial at all. The parts you talked about put sanctions on individuals. There’s one part that requires revealing Hong Kong special status. Yeah. By this rate status, special trade status by the state…State Department. Yes, about that part. Do you think if the Hong Kong Policy Act was revoked, Hong Kong special status was revoked…Do you think that’s punishing the CCP at the expense of the Hong Kong people?
Steve Bannon: I think it’s, I think it’s directly affecting the CCP. CCP needs a vibrant…CCP absolutely needs a vibrant Hong Kong. They need Hong Kong, vibrant as a capital market. They need Hong Kong as a trading…remember It’s one of the largest…that’s why the airport shutdown was so important. The airport shut down, literally shut down the freight ability coming out of Hong Kong. Hong Kong’s absolutely necessary for the CCP, particularly given where the economy is, where the trade, where our trade deal is, all of that. So I think that, yes, that is a big one. That’s a, that’s what we call the nuclear option on, on the review of the free trade agreement. The free trade, you know, proposal. If that was pulled, I think that’d be catastrophic to the CCP. I don’t know how the CCP would continue to govern because I think that the Chinese economy would go in…would basically go into a death spiral.
Right. And I don’t know how the CCP handles that. But that…remember those are the types of things that are being held in reserve, as potential bargaining chips to make sure that the protests here and the five demands are ultimately met.
Simone: Do you think that would trigger the collapse of the CCP?
Steve Bannon: I believe that the Chinese Communist party,…the CCP is a terror organization. I think it terrorizes the Chinese people. I think that’s the only reason that it’s in power is because has the ability to have…basically to have complete total…it’s a surveillance state. It’s a totalitarian surveillance state that gets worse every day. Right? And more paranoid every day. It’s control of the Chinese people is because of that. One thing they have for their legitimacy is the economy.
If the economy was to start to collapse, right? Because of their actions, not anybody else’s actions, I think they would lose any legitimacy they have. And I think the only people, and I’ve said this for a long time, the only people that can get rid of the CCP are the Chinese people, right? This is a matter for the Chinese people to deal with. And I think that’s why Hong Kong so important because you’ve seen for the first time really a consistent, since Tiananmen right? A consistent resistance, to their more totalitarian role. And I think that’s why it’s inspired the world. This inspired the world to pay attention to this. I believe that anything that’s done with their actions, counteractions that affect their ability to, you know, have a robust economy, ultimately hurts them. But it’s…that is why something that it’s…it is a controversial part of this.
It’s one of the reasons the president hasn’t, hasn’t talked about it or hasn’t used it. I mean, president Trump has been real stability here. If you’ve seen how, how the CCP has been, you know, from violence and sending in the riot police and sending an obviously people who are not Hong Kong police officers dressed up as riot police, have threatened the PLA, have done the exercises at the stadium and then you know, massed personnel carriers and others on the border. If you’d looked at how the CCP has handled this versus Trump, Trump’s been very steady. First off he’s been, I think over accommodating in the fact that to say, you know, there’s no black hand here for me of the US… He’s reached down, say Xi’s my friend, Xi could solve this in 15 minutes. All he has to do is listen to the protestors.
I will have a personal visit..I think Trump has been pretty…has basically signaled, He will fly. He would fly to China or fly to Hong Kong to meet with President Xi.
Simone: Do you think that’s a good idea?
Steve Bannon: I think whatever resolves this, for the good of the Hong Kong people is a good idea. I think the five demands have to be met. We have to go back to the 1997 turnover and to the 1984 agreement. I think the Hong Kong people cut a deal that the west basically negotiated through the United Kingdom and everybody agreed to it, that for 50 years there would be one country, two systems. And over the years the CCP has, you know, very smartly but surreptitiously pulled back on those freedoms. And I think that that’s what brought…I think that’s where the extradition treaty triggered this among people who are not radicals.
I mean this really brought out, to me what was so impressive was the middle class of Hong Kong. You know, having spent many years in Hong Kong and owned businesses in Hong Kong and know Hong Kong pretty well. You can’t get a more apolitical person in the world than in Hong Kong. It’s just not a very political place. People are there, it’s work oriented, it’s business oriented, it’s family oriented. And it’s you know, the focus is not politics. This whole situation has been politicized by the CCP. The middle class of Hong Kong are the ones that have come out and supported this. Yesterday, the 1.7 million people…that would be the equivalent in United States I think of something like 50 or 60 million people coming out for a protest. It’d be, you know, some extraordinary number of people percentage wise, percentage wise it’d be, this would be a massive, I mean, 1.7 million people on an island of 7 million is pretty… And people forget. Go look at the tape. This was like a monsoon type rain storm. I mean this was quite uncomfortable the entire time. It was a torrential rain. So a beautiful day. You could have had many, many more.
Simone: It seems like every like protest and major protest they have done is during the rainy season.
Steve Bannon: Well it’s a, it’s, it shows you the indefatigability of the Hong Kong people and why this is so important. So I think there’s…would Xi do that? Would it solve it? I don’t know. But here’s what I do know. I think that demands that the Hong Kong people have put forward, the five demands are not overreaches. I think they’ve put forth a very straightforward program of here’s what we must do to bring this to ahead. And nobody wants peace more, and nobody wants stability more than the Hong Kong people. They just want to go back to work. They want Hong Kong to be the way it was. And I don’t think that’s, I don’t think that’s a big demand.
Simone: Let’s go back to the Hong Kong Policy Act in a little bit. I just want to know how, I just want to know how the Hong Kong people really feel about this, you know, the revokation of the Hong Kong Special Trade status with the U.S., under what circumstance would the U.S. do that?
Steve Bannon: I think the US would do that in…look, obviously it would have massive economic implications for Hong Kong. I think it would only be done in a circumstance that you had to do something at that level. So, you know, I don’t want to speculate about what that would be, but to even have that on the table and have that with someone like Marco Rubio. Remember there’s certain senators here that focus on domestic policy. There’s certain senators that focus on international policy. Marco Rubio is known as one of those senators that focus on international affairs. His focus on China, which you really didn’t have much of a focus on up to two years ago. He is probably the leading voice on spending time and focus on China. But the one thing I would tell people in Hong Kong is that it’s definitely gotten both Democrats with Schumer, and Rubio, people are really looking at this. So it’s a real possibility and I think it is a tremendous warning to the CCP that the West and…if the United States does it, others will do it too. So yes, I don’t think this’ll just be an isolation. I think it would be others, but I think that puts…
Simone: That will mean, that will, that will be the death of Hong Kong. Basically, I mean what they have fought for freedom, you know all this special treatment and stuff, will be gone. So I don’t know how the Hong Kong people really feel about it.
Steve Bannon: Well that’s what I think it’s…it’s not aimed at the Hong Kong people. It’s aimed at the CCP.
Simone: But the Hong Kong people have to perceive, you know you are just one part of the big picture. Only the CCP–when the CCP has gone they can have a real future…
Steve Bannon: Oh, but I think that everything is contingent. This, this would not be a permanent pole. It would be about actions that the CCP take. Remember the the West wants Hong Kong to be robust. The West, if you ask any Western leader, any Western businessman, any western person in dealing in capital markets, whether the bond market or the stock market. They will tell you uniformly we just want Hong Kong to go back to the way it was, right? Hong Kong is…this is not about…this is not about taking any kind of status away from Hong Kong to make it less vibrant. A robust, vibrant Hong Kong is necessary for the world because of its centrality in Asia. The number of regional headquarters it has got for major companies, the robust capital market, the entrepreneurship of the people that live there. The growth…growth in Asia is very much driven by a free a Hong Kong.
So this is not about something to take it away to, to like, “oh, we want to divvy up to someplace else.” This is only in this bill. And it’s only even being talked about by other people as a warning to the CCP, not to the Hong Kong people. So this is…This is only, this is like a nuclear option to tell the CCP, you know, you can’t…If people understand this, the CCP can’t have the type of growth they’ve had in mainland China. They can’t have the type of access to capital markets. They can’t have the access to the dollar unless there’s a free and robust Hong Kong. I think leaders inside the CCP understand this. This is one of the reasons that, you know, the temperatures have decreased over the last few days. They understand that If it was continue on from a week ago, something cataclysmic might happen. And like I said, they, they would end up destroying the goose that laid the golden egg.
Simone: Let’s talk about US China trade war. You know, um, my notes. So what is your fundamental thinking on the US China trade war? Do you think it’s just about rebalancing the trade relationship between the two country or is it re calibration of the US China relations at large?
Steve Bannon: It’s an armistice and an economic war that the Chinese Communist Party has been running against the industrial democracies for 20 to 25 years in cahoots with the global financial and corporate elites. This is an armistice. This is why the original deal that was negotiated for over a year had these seven verticals, these verticals about the subsidies to state owned industries, about cyber intrusions, about forced technology transfers, all these very deep technical aspects. That’s why ambassador Lighthizer and Peter Navarro negotiate with Li He and others in the Chinese negotiating team for over a year. This document is over 200 pages long and highly technical about aspects that calls for full transparency, full accountability and full enforceability of this deal. It won’t be any more like the United States has done in the past or the West has done in the past, which is basically to agree to the lies. And let’s be brutally frank here.
The CCP, every time they open their mouth, they lie. Okay, they’ve lied on every deal that they’ve ever set up with the West. They tell you one thing and then they do what they want to do. Trump was the first president to say, we’re not going to do this, and Lighthizer is savvy enough. So you had an agreement and that agreement basically started to bring the Chinese economy into the world economy to get away from the slave labor. That’s really gone on in China and this oppression of Chinese workers. And so it was the beginning of a rapprochement and that’s why hardliners in, in China and particularly hardliners after this belt road initiative conference they had, where they think, you know, the Wan Xi Shans in the world think that, “hey, we’ve got the west where we want them.”
We got One belt, one road we have made in China 2025, and we have Huawei. The conversion of that’ll make us the dominant hegemon, economically throughout the world. And the worlds, you know…and the way they look at is very simple. The capitalist in the west have financed us, the corporate has given us their technology. They don’t care what we do to the Falun Gong,. They don’t care what they do to the underground Catholic church. They don’t care what we do to the Dalai Lama, the Tibetan Buddhist…These people are totally greedy, right? They give us everything we want and they’ll back down. Right? They will back down and then we’ll become the hegemon and the system will be our system. Trump is the first one to step up to that. And that’s why people have to look at the original deal that was negotiated. It was negotiated for over a year.
Xi and these people knew and the entire time what was going on. Li He Is one of the smartest individuals, I think in the world. He’s quite brilliant individual. It’s not like he didn’t keep anybody in the loop. This was agreed to, on and on and on. And finally, when they realize what they were signing up for hardline elements into the CCP said, “No way. We’d rather confront the West and confront them now.” And you’ve seen what’s happened to the Chinese economy. So this war, this economic war has three major aspects and trade is only one. You have both a technology piece and a currency piece. And just this morning, as we started this interview, president Trump had been talking about basically pulling the plug on Huawei across the board. The Commerce Department just announce they’re gonna give him another 90 day, another 90 day extension.
But Huawei the technology piece. The currency piece is another…and I said two weeks ago on CNBC, we’re passing a psychological barrier here with the Chinese Communist Party. Number one on September 1st before we pushed it back, 100% of the goods in China would be under tariff. That’s a huge psychological barrier. Okay? That is, we now raised that. The other was the Yuan to the dollar. And I said you before, it happened two days before it happened. They’re gonna pass the seven to one ratio, and that’s a psychological barrier of what their support is. So we’re now into, I believe, a beginning of a currency war. I believe that we’re in the beginning of a technology conflict, and I believe we’re in a trade war, and I’ve said this to the Chinese people, the CCP cannot win these, the CCP cannot win these, the only reason this situation has gotten as bad as it’s gotten is because the capitalist in the West, the Wall Street and the city of London and certain corporatist, certain elites, what I call the party of Davos, right, have basically financed the CCP and has allowed them to get technology.
Those days are over. people in the United States particularly, there’s going to be big restrictions. They’re already starting to talk about big restrictions on financing the CCP from the capital markets, right? They’re already talked about major restrictions on technology the day of the CCP, basically having it their way, which is…here’s what they’ve done…
Simone: I think you brought up a very important question, a aspect of the trade talk before CCP realize what they are agreeing to, they said “Oh this is okay”. Just like, uh, last year I think at the end of the year during G20 in Argentina, Xi Jinping almost agreed to everything the US has put on the table, even talked about the details, but you know, afterwards and they, they backed off. Right. So my question is, do you think the CCP will really do the structural changes that the US demands?
Steve Bannon: No. No, do not. And that’s why I said I, I’ve said this now for over a year and I said it specifically in interviews at the beginning of this year. I don’t think that we will have a deal before the 2020 election.
Simone: What about after?
Steve Bannon: Potentially after if the economic situation gets tough enough? I think that they understand with Trump and now with voices that are actually to the right of Trump, what has changed here politically is that you have Schumer as a Democrat, you have Rubio as a Republican, you have people like Tom Cotton and Ted Cruz. You have people actually getting to the right…President Trump is the….first off, he’s the hardest line president we’ve ever had about the CCP. But you actually have people getting to the right of him. And I think the political calculation, like I said, the one thing that has United the United States, we’re not United on any other topic except one.
And that’s the CCP and the CCPS brought it on themselves because the way that they’ve comported themselves,…the way that you can’t believe….people in China….remember one thing, it’s very important, President Obama and Biden, out of their way to accommodate the Chinese and try to get deal with, they came to a… Remember Biden went to Beijing in 2013 to try to accommodate them and we got the buildup of the islands in the South China Sea, right? Obama tried to get them to stop cyber intrusions and the stealing of of intellectual property. They came to the Rose Garden and had a huge signing ceremony. President Obama was very, you know, this was one of his big achievements. The state visit by Xi…All lies. We now know that shortly thereafter they actually increased, the PLA actually increased the cyber intrusions. It is, it is…
The the same thing in Hong Kong, right? It is the CCP’s action that has brought this on themselves. The world has…here’s the reason. The Chinese people particularly the diaspora, you know, there’s, there’s I think 15 million Chinese in the United States and that there’s like five to seven and a half million Chinese American citizens then another five or 10…Wherever the Chinese go throughout the world. The Chinese are beloved, right? They’re hardworking. They’re entrepreneurs. They start businesses they’re great community members, they’re very family oriented. So people in the United States from the time of the mission, in the early 20th century, there’s a great fondness and love for and affinity by the American people for the Chinese, right? Remember, we were allies in World War II. It would probably been very difficult to defeat imperial Japan, if it had not been for the Chinese and particularly the casualties the Chinese took in fighting the imperial Japanese army.
So we were allies. There’s always been a great fondness. Everything that’s occurred is because of the Chinese Communist Party…the CCP, the radical cadres that run them, that have turned China into a totalitarian, you know, surveillance state. People never envisioned this 20 years ago. Why have we actually accommodated them and even people in the West, I think we’re stupid and made bad decisions and accommodated…some of that was done in goodwill, that they will become more liberal, more open. They’ll have religious freedom, they have freedom of speech. It was all nonsense, right? This is a totalitarian dictatorship. Hong Kong shows that in high relief…Exactly what they’re prepared to do. And if you don’t think they wouldn’t take the young leaders, those great young kids had been out there every day. If you don’t think they wouldn’t take them and send them to a prison camp in China, we all know what they would do with them.
They torture them and then they’d kill him. Okay. People understand that. They understand the brutality of what the Chinese companies party’s prepared to do. And so they brought this on themselves and I think now the West is aware of that. So I think the free ride that they’ve had is over. So I don’t know if there’ll be a trade deal or not. I happen to think at the level of what we talked about before, which was to this armistice in the economic war that was negotiated for almost two years. That deal, I don’t see that deal getting done by 2020. The one miss…the one aspect that I think the Chinese company party is misplaying is that they happen to think…they want anybody but Trump now. They want a Democrat and outside of Biden, and I’ll say this on the show, and I’ve said before, Biden will not win the Democratic primary because of China. Biden’s accommodation with China, his family’s financial relationship with China, his failure to release all this and have an open conversation about it.
His son’s financing…taking the $1.5 billion from the Bank of China and actually spending some of that money on surveillance companies to surveil the innocent Chinese people in mainland China is outrageous. But if you look at the undercurrents now, you know Kyle Bass, one of the biggest members of the Committee on the Present Danger, A guy I have a lot of respect for, said he would actually support Elizabeth Warren today. Today he made the announcement, he was support Elizabeth Warren for the simple fact, he thinks she’s particularly, she’s tougher on China than Trump. Now. I don’t believe that. But my point is, is that now in the political marketplace in the United States, stopping the CCP is getting every day to be a bigger and bigger, issue. And I think the Chinese communist…Wan Xi Shan and Xi make a fundamental mistake if they believe that there’s gonna be some accommodation for them. Because I think the American people are now very focused on exactly what’s going on. And I think Hong Kong has been the thing that’s done that the event has done that.
Simone: Okay. You said you don’t know if there is going to be a trade deal in the end, but I think the people want to know. Bottom line for Mr. Trump, maybe we don’t have to know if we will have a deal in the end, but do you think Mr. Trump, president Trump will back down or soften his stance on the trade trade talks in terms of a structural changes [inaudible]
Steve Bannon: I don’t believe, I don’t believe it. I do not believe he will back down on these aspects of the structure changes. May there be some interim of things that takes care of some tariffs, some aspect of it? I don’t know about that. I think it’s very unlikely. But he’s clearly being forced in the Wall Street guys…I think the economy here is growing. I think the economy here is, it’s showing strong growth. I think this has been a smart thing to do what he’s done and the way he’s comported himself right now. The pressure on him to strike any type of deal is enormous. I think he hangs tough. I know that this is the central part of his presidency. The two things that are the two fundamental immigration and the wall in China, right, right. Those are the two foundational elements of his presidency. This is the thing he’ll be remembered for,
Simone: But the economy, the trade, I mean the other side of the trade war is economy. If the economy is hurting…
Steve Bannon: But i don’t think the economy is hurting. I think the economy, actually, I think all this nonsense from, from… “The sky is falling,” is not showing up in the data. I think that, I think the data shows that the economy is growing. I think we’re in fine shape. I think all the anti-Trump…all the replace Trump, you know, Wall Street faction is everyday talk about, “oh, the economy is going to slow down….” Going to slow down. not slowing down, but it’s going to slow down. They’re all projecting out. I don’t think, I don’t think that’s reality.
Simone: I talked with Steve Moore last week and he said, you know that the Fed needs to lower the interest rate. Again, not on September 1st, but this week. He, we talked to him that last week and he said, if we don’t do that, that teh economy, the world economy, including the US economy means risking entering into a recession. Um,
Steve Bannon: Well Steve Moore is an economist and I’m not, so you have to take that Steve Moore is an expert in this. I think the Fed has misplayed this, but simple reason that they’ve overvalued our currency right? In not cutting rates. But I think the underlying economy…remember we have Wall Street and then you have the real economy. I think the real economy is quite robust. I believe the Fed is looking at additional cuts to make our interest rates competitive. So I think that that’s something that’ll be, it’ll be looked at, but I think the underlying economy is strong and only going to get stronger.
Simone: So the bottom line is president Trump doesn’t need a trade deal for his reelection.
Steve Bannon: No. President Trump definitely does not need a trade deal for his reelection. If American people see president Trump standing up to the CCP and demanding the structural change that he wants and also start to bring back the supply chain, some of the supply chain and manufacturing or rebuilding our manufacturing base…That’s what the American people, the people that elected him in the upper Midwest, the working class and middle-class that elected him, want to see him stay the course and be strong. He promised he was going to do this. They’re sophisticated people. They understand it took US 30 years to get here, 25-30 years to get here. It’s not going to be solved overnight, But president Trump has begun the solution. The central thing people look at is, remember for 18 months, the Chinese Communist Party and the smartest guys in the room and the Chinese communist party negotiated what were fundamental structural changes to the Chinese economy to bring it more in line with capitalism and more in line with free markets and really more freedom for people, which it would have led to. When they realize what they had, they shut that down. That’s what president Trump was trying to drive. That’s why it’s so important. They shut that down and the reason they shut that down, the Chinese communist party can only rule as a dictatorship. If you had people….why did they have the firewall? Right? They treat the Chinese people as if they’re too stupid.
Simone: Yeah, The only thing they know, that’s the only way they know how to rule.
Steve Bannon: They rule with an iron fist. Right. Okay. We’re in an era of open information, of ability to people get information across borders. People have access to all information in the world. Look at Hong Kong. Hong Kong is as robust and vibrant…It is on a little island with no resources. It’s so vibrant because it’s the spirit, tenacity, family values and just plain grit of the Chinese people. Yeah. The Hong Kong people with English common law, with the rule of law, you add those two together and you can’t stop the Chinese people and the CCP understand that the moment they allow, not democracy, democracy could come later. The moment they allow the rule of law, they’re finished. Because they’re gangsters. It’s a gangster….they have a mentality like triads.
Simone: So do you think the CCP can change fundamentally?
Steve Bannon: Impossible.
Steve Bannon: It cannot change fundamentally. It’s a totalitarian dictatorship. They can try to do reforms, so it’ll be just like the Soviet Union. You can’t reform a gangster operation.
Simone: That said, what is the ultimate ultimate goal of the economic warfare?
Steve Bannon: I think the economic, the economic war is to have an accommodation and bring the Chinese economy into the world’s economy. Okay. After that, in doing that, it’s up to the Chinese people to determine what their fate and what their future’s going to be. If they, if they’re, if they’re happy and satisfied with the Chinese communist party, then that’s their decision, right? If they’re not happy as is in Hong Kong. And you’ve seen the results of what the CCP has tried to do in putting this down. Right? They’ve exposed themselves to the world. And you don’t see in the CCP…All the cheerleaders they had among the wealthy in New York and Washington and all the leaders, all the committee on 100 and you know, all the people that came after me, they’re all hiding right now. Right? They’re all in hiding because all the cheerleading they did for the Chinese Communist Party and the CCP, it’s been exposed as a lie. And Hong Kong Exposed that as a lie. Okay. And so that’s why…look, this is going to be a very long struggle, right? But I think at the beginning of it president Trump offered in this deal that really started the restructuring of the Chinese economy.
Simone: You know, talking about, I want to go back to Steve Moore. We talked about, the China, the US China trade war. One thing he mentioned was the Chinese leadership probably hasn’t realized how vulnerable the Chinese economy is because they hasn’t realized, you know, how much of their assets, their Chinese assets are dollar denominated. So he said the China call Chinese economy could face a free fall if the U s takes action. Do you agree?
Steve Bannon: The only thing I disagree with is I think the Chinese Communist Party understand that very well. The Chinese Communist party, the CCP…Wan Xi Shan and people like Xi are as smart as you get. It’s not about, “they don’t understand this”. I think they understand it very well. I think it’s become even more obvious as the days are going on. I think that’s why you’ve had the big downturn in the Chinese economy. So I think they understand this. it Is dollar denominated. They need, you know, they need dollars. I think it’s one of the reasons that you’ve seen the softly, soft talking that you’ve seen the last couple of days regarding Hong Kong. They understand that Hong Kong is the, is the conduit of how they do that, how they get access to capital markets to get them dollars.
Simone: What could a currency war, what could a currency war entail? What does that mean?
Steve Bannon: Well, I think it was, you know, competitive devaluations. I don’t want to, you know, we, we can’t…it’d be very unfortunate. I don’t think we should get into a currency war. It’s something that we gotta be very, very, very careful about, but you’re going to have to see how the CCP responds, right? How the CCP, I mean, they’ve just been designated as a currency manipulator. I remember part of this, and this is the audience in China ought to understand this, is that we promised to do it on day one. President Trump, and we had a big debate inside the White House that weekend with the secretary of Treasury back in January of 2017. President Trump and once again, trying to be the force of stability here in working with Xi, determined we’d have the meeting in Mar Lago and we would delay on doing that. And he accommodated them and worked with him on this until forced to do it, you know, a couple of weeks ago where he designated them a currency manipulator. But people should remember six weeks before that, Bernie Sanders came out in his campaign and he said, the first thing I will do, the first action I will take after taking the oath of office as president is designate China as a currency manipulator. So this situation about the currency wars one that we have to be very careful about, I think people really have to study. And the CCP should understand that, that if they get into, if they get into that, it could be the end of everything for them.
Simone: What do you think president Trump would do with Google? And Huawei, while the sanctions on Huawei is delayed for 90 days. Do you think it’s a good move for US?
Steve Bannon: I think it’s a terrible move. I think Huawei is, Huawei is the PLA. Everything they’ve told the West and everything they’ve said is a lie. Okay. I think that they are one of the most dangerous companies in the world. I think it ought to be shut down here in the United States immediately from a national security aspect. I’ve said in the South China Morning Post, I think eight weeks ago that it is 10 times more important for us to address Huawei, than even the trade aspect of this. And I think it ought to be done. I think once again, the Commerce Department, which I been a big critic of, the Commerce Department’s done a terrible job of managing this. I think that president Trump, I was very hopeful when I heard his discussions last night about Huawei, that all the licenses were actually pulled, today. And I don’t want to hear American companies and say that it would make their business tougher.
I understand that, but you’re going to have to…Capitalism’s about adapting. You’re going to have to adapt away from that. I think what Google…I’m a big supporter of what Peter Thiel has said. Peter Thiel, for your Chinese audience should understand, is not a…he’s not somebody that says things lightly. He’s one of the most sophisticated venture capitalists we have in Silicon Valley. He’s the first venture capitalist support president Trump and more importantly he’s one of the founders of paypal and one of the founders of Facebook. I mean he’s put money to work very early on and these operations that have had, you know, created hundreds of billions of dollars of wealth. He knows what he says. He’s accused Google and some of these other companies of actually being treasonous and traders for what they’re doing with the CCP and not doing with Western defense departments. I think that’s all going to come out in time, but I just heard today that I think Twitter was actually selling ads for the CCP against the Hong Kong protesters.
Whereas they’re cutting off some of the Hong Kong protests. That’s all going to be revealed. People have to understand this, a focus on technology and particularly the technology that is dealing with helping the CCP keep the firewall up. All of that’s going to be under a lot of scrutiny in the future. The day of the free ride of that or people looking the other way is over. So I think Huawei’s the first, but all these technology companies and their relationships with the Chinese Communist Party and what they’ve done in situations with the Uighurs,, with the underground evangelicals and Catholic Church with Falun Gong, with the Dalai Lama and the Tibetan Buddhists, I think is all gonna be revealed.
Simone: All right, great. Anything else you want to add?
Steve Bannon: No, I just, I think, uh, that, uh, there’s not a more important event happening in the world right now than Hong Kong. It is the focus of the world political, you know, in world politics and what happens over there the next days and weeks ahead, it’s going to be…have enormous impact on the world for the next 10, 20, 30, 40, 50 years. So it’s, it’s one that I’m very proud of the fact that we’ve been telling people this now for several months, that they have to focus on it. And now over the last two weeks, three weeks, the world is focused on it.
Simone: Right. Thank you.
Steve Bannon: Thanks. Thanks for coming by. Thank you.