The Peking order: Xi meets Putin after Trump

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1:12Rosie Blau:Hello and welcome to The Intelligence from The Economist. I'm Rosie Bloor. And I'm Jason Palmer.

1:21Rosie Blau:Today on the show, how did the Premier League become so successful? And why people choose holidays that are terrifying?

1:36Rosie Blau:First up though

1:46Rosie Blau:It's definitely summit season Last week, fanfare for Donald Trump's visit to China Only days later, Vladimir Putin got in there too And once again, the red carpet was rolled out in Beijing.

2:06Rosie Blau:It's good business for the Chinese marching bands, all those singing children, and of course, the sumptuous banquets.

2:18Rosie Blau:Putin was waved off yesterday with smiles, handshakes, and waving flags. But this isn't just about pomp for China. There's politics too. The timing of Putin's visit to Beijing really sends an unmistakable signal that China is not going to sacrifice its close relationship with Russia just for the sake of better ties with the US. Jeremy Page is a host of Drum Tower, our China podcast, and our chief China correspondent. But it also shows how China is now moving much closer to the role Xi Jinping has always craved as the fulcrum of global geopolitics. Let's fill in some context, Jeremy. Tell me about the relationship between Xi Jinping and Vladimir Putin.

3:08Yeah, it's a remarkably close relationship. They've known each other for more than 13 years now. They've met something like 40 times. And in the past, we've seen some unusual displays of camaraderie. They've swigged vodka together. They've made pancakes. They watched a hockey game. and I think there's a genuine personal connection. They have similar views on a lot of things. I think similar views on history, the collapse of the Soviet Union. They've definitely got a similar leadership style. They're both very strong nationalist leaders but they also have this deep hostility towards Western liberal democracy and a determination to challenge the US-led global order that was established after the end of World War II to basically give their countries greater say in world affairs, but also to allow them to survive as autocratic regimes.

4:00That said, I think the balance of power and the relationship has really shifted dramatically since Russia's full-scale invasion of Ukraine in 2022, because Russia is now increasingly reliant on Chinese economic support, as well as dual-use materials that are needed for that war in Ukraine.

4:19Rosie Blau:So it's still something of a bromance. What do you think Putin specifically wanted from this visit? I think one of his main goals was probably to get a readout on the Trump visit to make sure that China and America aren't planning anything that might jeopardise Russian interests, especially in Ukraine. He definitely wanted to ensure that China would continue to provide that economic support and its dual-use items like drones, electronics, engine parts that are needed for the war in Ukraine. He probably wanted to coordinate positions on the war in the Middle East and American policy in Latin America and Asia.

4:55And he got most of that. But the other big priority for Putin, which he doesn't seem to have made progress on, was trying to get a deal to launch this long-delayed project to build a new gas pipeline between Russia and China. They've been wrangling over that for years. Basically, China's been driving a hard bargain over price and volume and other terms. and the Russians were hoping that China might show a bit more flexibility since the closure of the Strait of Hormuz showed the vulnerability of China's seaborne energy imports. But it looks like Xi Jinping stood firm on that issue and his demands for better terms and that's a real demonstration of the power dynamics in the relationship.

5:37Basically, Russia needs China far more than China needs Russia.

5:40Rosie Blau:So if China very much has the upper hand then, What did Xi Jinping want out of Putin's visit? So Xi Jinping, I think, wanted to demonstrate that he still has a powerful partner in opposing American leadership in the world. Chen has often tried to hide behind Russia in international affairs. So it's useful for him not to be on his own in criticizing American policy in other parts of the world. I think he also wanted to coordinate positions on Iran, Venezuela, North Korea, and other issues. These are countries that China and Russia both have very close ties to, and they've both been unnerved by America's military action against both Venezuela and Iran.

6:25Xi Jinping definitely would have wanted Russia to reiterate its support over Taiwan and to join China in criticizing Japan over its rearmament. But China was also almost certainly seeking more high-end military assistance in areas like nuclear submarine propulsion, ballistic missile defence. China's also very keen to get access to drone data and tactical lessons from the frontline in Ukraine because it doesn't have any combat experience of its own, having not actually fought a war since 1979.

6:58Rosie Blau:Now, Jeremy, you're an expert in the semiotics of the Chinese Communist Party and indeed of Russia. I'm interested in your thoughts on how China's treatment of Trump and Putin differed. It was very interesting to watch the choreography of the two summits. On the surface, the treatment was quite similar. They had very similar welcomes. They were both met by senior officials at the airport. They had welcoming ceremonies on Tiananmen Square with military honor guards, small military parade, waving children, a 21-gun salute. and then they both had formal talks in the Great Hall of the People next to Tiananmen Square.

7:38But for Putin, there was no equivalent of the private tours that Trump got of the Temple of Heaven and the Chinese leadership compound Zhongnanhai, where Trump was shown one of the gardens there, which is considered a rare privilege. And there were none of the personal touches between Xi Jinping and Putin that we've seen in their previous meetings. I think that's partly because China wanted to avoid upsetting Trump, who puts a lot of emphasis on the pageantry of these meetings and probably would have been disappointed if it'd seen Putin getting exactly the same thing a few days later. And China and Russia were probably also trying to show that their relationship is a bit more mature and less superficial, more based on substance.

8:21So there wasn't a joint statement from the Trump visit, but there was an extremely lengthy one that came out of the Putin visit, which detailed cooperation in an extraordinary range of areas, everything from artificial intelligence and space to border infrastructure and even the protection of tigers and leopards.

8:42Rosie Blau:So a joint statement, but no vodka swigging then? Exactly. What do you think then that these consecutive visits say about how China is positioning itself geopolitically? Xi Jinping, I think, is trying to show that he can improve relations with America without sacrificing his so-called no-limits partnership with Russia. And that's important to him partly because he's aware that some Trump advisors advocate rebuilding ties with the Kremlin to try to isolate and weaken China in what they call a reverse Nixon strategy, you know, the reverse of what the US did in isolating the Soviet Union by building closer ties with China from the early 1970s onwards.

9:25At the same time, he wants to demonstrate that China is now the central power, the pivotal power in the strategic triangle of relations between Beijing, Moscow and Washington, which really shaped those geopolitics in the Cold War. He demonstrated in these two summits that he now has better relations with Putin and with Trump than they have with each other. So that puts him in a very strong position. And more broadly, Xi Jinping has always aspired to put China at the center of global affairs. So having the American and Russian leaders coming to Beijing in quick succession, both seeking business deals and help with their foreign wars, I think that would have really boosted Xi Jinping's standing at home and abroad and essentially moved him closer to his dream of a more Sino-centric global order.

10:16Rosie Blau:Jeremy, thank you very much for talking to me. Thank you, Rosie. And you can hear more about Trump's visit to China on this week's episode of Drum Tower, our China podcast, in which Jeremy goes deep into the significance of that summit and what it achieved. You'll need to be a subscriber.

10:51rather than fear of downside. More at SIBO.com slash VIX Insight. Review important risk disclosures and disclaimers at SIBO.com slash US underscore disclaimers. Amazon Health AI presents Painful Thoughts. Why did I search the internet for answers to my cold sore problem? Now I'm stuck down a rabbit hole filled with images of alarmingly graphic sores in various stages of ooze. I can clear my search history, but I can never unsee that. Don't go down the rabbit hole. Amazon Health AI gets you the right care fast. Healthcare just got less painful.

11:36Sonny Loughran:There aren't many things that work in Britain. One thing that does is football.

11:43Rosie Blau:Sonny Loughran writes about Britain.

11:47Sonny Loughran:The Premier League is broadcast to all but two of the UN's 193 member states. North Koreans might not get to tune in, but a big game can reach more than 700 million people. That's about three times the Super Bowl's viewership. Arsenal are champions of England for the first time in 22 years. And if you look at Google's worldwide trends data, you can really see how much of a cultural superpower the Premier League is. Last year, more people searched for Manchester United, one of the Premier League's most famous teams, than for Taylor Swift and the Harry Potter book series combined. And if you want a more recent indicator, the government of Botswana has issued a statement debunking a fake government press release granting all Arsenal supporters a day off work to celebrate them winning the Premier League.

12:36Rosie Blau:Sunny, very few people are talking about anything other than football right now. Take us back a bit. remind us how the Premier League changed football in Britain.

12:45Sonny Loughran:So English football wasn't always the powerhouse that it is today. In the 1980s, it was known for all of the wrong things. Hooliganism, dangerously run down stadiums and racism. Around the 1990s, English football started to clean up its act. They clamped down on racism in the stands. They banned drinking in the stands. And the Premier League was created in 1992. And it's just been on the up ever since then.

13:07Rosie Blau:And why is it so much more successful or so much more popular than other international leagues?

13:14Sonny Loughran:So it really comes down to three things, imports, exports and competition. On the exports front, for the first eight years of the league's existence, it made basically no profit on international broadcast rights. The Premier League is quite unique in that about half of its broadcast revenue comes from overseas. If you look at the NFL, for example, about 98 % is domestic. And the Premier League was really a first mover on that. By the time that a lot of other European leagues realised that there was a buoyant overseas market for live football, the Premier League had already established itself as the dominant football league in the world.

13:45Sonny Loughran:So the Premier League is quite unique in that about half of its revenue comes from TV rights and about half of that comes from overseas. So a lot of it comes down to first mover advantage.

13:55Rosie Blau:And you mentioned also imports and competition.

13:58Sonny Loughran:Yes, so the Premier League is unusually open to foreign capital coaches and players. 14 of the league's 20 managers are foreign-born an Englishman has never won the Premier League and 75 % of the league's minutes this season were racked up by foreign-born players compared to 62 % in Germany and 44 % in Spain in total 128 countries have been represented in the Premier League from Iceland to Togo and Suriname to Venezuela and when you have big-name foreign players who might be the star of their national team they bring with them fans from those countries Mo Salah, who's been one of Liverpool's most successful players over the last few years, is called the Egyptian king.

14:36Sonny Loughran:And he's a superstar in that part of the world.

14:38Rosie Blau:And you mentioned competition, which I would think is the very point of the Premier League.

14:43Sonny Loughran:Yes, the Premier League is especially competitive. It's a bit of a cliche that anyone can beat anyone in the Premier League. And the reason for that is that the Premier League distributes its TV money more equitably than a lot of foreign leagues. In a lot of European leagues, the money tends to get funneled to just a few top clubs. But in England, it's spread out much more evenly. I think the least broadcast revenue that any team got last season was£100 million. And what that means is that even mid-tier teams in England can spend a lot more money than they can in Spain, for example. If you look at Sunderland, they were promoted from the championship last season.

15:15Sonny Loughran:They spent more than£200 million in the summer, whereas Spain's three promoted teams spent just€15 million between them.

15:22Rosie Blau:So you said that the Premier League makes about half of its money from TV rights. Where does the other half come from?

15:30Sonny Loughran:Partly it's tickets. The Premier League is the most well-attended league in Europe and tickets are notoriously expensive. And it's merchandising and sponsorships. They're global businesses with global audiences.

15:41Rosie Blau:So are all clubs making just as much money as each other?

15:46Sonny Loughran:Definitely not. No, there is a big range. Liverpool, I think, became the first Premier League team to make 700 million pounds worth of revenue last year. Not all clubs are making that. And to be honest, most clubs bring in a lot of revenue, but they don't make much profit. Last year, only four of the league's 20 teams made a pre-tax profit. And the reason for that is that they spend a lot of money on player wages. Last season, clubs spent an average of 65 % of their revenue on wages. And if you look outside of the big six, which is sort of the elite clubs, that rises to 76%. So a lot of that money is coming in and going straight back on players.