2025: China’s Year

0:00David McWilliams: On today's podcast, it's all Chinese, John. It's all about China. We're going to be looking at China. We're also going to be looking at the fact that China has historically always valued internal stability over external expansion. And that's not going to change. China is the country that has actually come out of 2025 strongest. So it's all going to be on China. Coming up in a

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1:32David McWilliams: How are you doing there? It is... Christmas! Woohoo! It's Christmas time, as you can hear, John is very excited. He has his Santee hat on, and he is looking wistfully up the chimney of the HQ, wondering what he's going to get for Christmas. I'm zinging my eyebrows. First of all, happy Christmas, everybody. whether you are in Ireland, whether you are miles away in the States, Australia, over in the UK, whether you're on your walk, whether you're trying to get away from the madness of the house as Christmas descends upon us, whether you've just had a row with your loved one or not so loved one. What does that say about you, Mac, that Christmas, that's what it means for you?

2:17David McWilliams: Christmas is a wonderful time, John. It is. It's a very special time. It is. It's time for family. Yeah. It's a joyous time. But what I would just like to say is thank you to our listeners. We have just got numbers in about the extent of the podcast, the reach of the podcast this last year. It has expanded its reach. We are delighted. So we would say thank you very much for giving us your time. Because everyone's time is precious. And we know that listening twice a week, once a week is insufferable. Twice a week is a penance. but having travelled around a lot this year I have been amazed at the extent to which the podcast is listened in extraordinary places all over the world so again thank you all very much that's not to omit our base solid foundation of our Irish listeners we could go on for ages but I hope you have a lovely Christmas and thank you very much and if you fancy it fancy you can always join us next year on Patreon, where we're going to have a new economic course, a monetary economic course.

3:28David McWilliams: It's patreon.com forward slash Dave McWilliams. But enough of this, John. Yes, let me just echo all of that. Echo, echo. Happy Christmas, Christmas. Yeah. Anyway, so that's that. So again, thank you all very much. I hope you have a lovely time. We're going to have one podcast today, which is Tuesday the 23rd. We're not going to have a podcast in two days' time, which is Thursday, because it's actually Christmas Day. Yeah. Okay. Do you know what, Mac? Go on. That'll be the very, very first time that we've missed an episode. No way. Yeah. Really? Yeah. In, what is it, five and a half years? That level of consistency must come down to you because it's not come down to me.

4:06David McWilliams: Really? Yeah. That's amazing, isn't it? That is amazing. That is amazing. So you'll forgive us for not having a podcast on Christmas Day, but we will be back to you next Tuesday, which is the 30th, and we will be back and normal service will be resumed. More humdingers. Yeah, more humdingers. And so, John, today's podcast is going to be all about the nation that actually defined the last 12 months, which we've spent a lot of time in America. We've spent a lot of time in Russia, a lot of time on the European sense of who we are. We've obviously spent a lot of time on Ireland. Less time in the UK this year because the kind of Brexit-y stuff has waned, but I suspect it'll be back in the mix very much next year.

4:52But one country that seems to me to have really come away in 2025

4:59David McWilliams: as the country in the ascendancy is China. Yeah, absolutely. I mean, China has been building and repositioning itself for the past 30 years since they opened up. And now I think we're seeing that this year, for example, they solidified their position as when the United States imposed tariffs on the rest of the world and tried to bully everybody, in effect. And we all said, thanks very much. And of course, the Europeans said, thanks, thanks, really, give us more. Just give us more tariff, more tariff, right? Oh, just there. Oh, yeah, that's the spot. Okay. Oh, I'd like more. What's your safety word?

5:39Yeah, exactly.

5:41David McWilliams: Exactly, exactly. As we are down in the basement, aka the dungeon, John. But so as Europe prostrated itself to take everything America gave us and more, the Chinese said, no, we'll retire. We don't care. Yeah. We will actually, we're happy enough. We're strong enough. We're mature enough not to be bullied around. That's the first thing. Secondly, the rediversion of Chinese trade to Europe, which was the result of the tariffs. So they actually did have, tariffs did have a big impact on the direction of Chinese trade. They've redirected to Europe. And again, what you see is Chinese, not dominance, but Chinese products out.

6:22David McWilliams: We did a piece on this last week about Germany, out-competing, out-performing, out-pricing European efforts. We see geostrategically, the Chinese have now solidified their backing of Russia. They have, in effect, decided that the world is now a multipolar world. It is not a unipolar world. And it is no longer a world for the United States to set all the rules. It is a multipolar world of which the major power is China. And do you think that's them looking at the world and saying, it's there for us, it's there for the taking? Well, I'm going to give you a quote from the current head of China's powerful Ministry of State Security, which is essentially the CIA and the FBI all wrapped into one.

7:12David McWilliams: And he wrote recently in a thing called the Study Times, which is the official newspaper of the Central Party School of the Communist Party, right? So this is their internal document. And this is a quote. He said, the guy's name is Chen Xiyin. That's Y-I-X-I-N. If anybody is a Mandarin speaker, they might tell me exactly how that is. But he said, this is a quote, the international power configuration is moving from unipolarity to multipolarity. He describes, and again, it's a quote, Great power unipolar hegemony, aka the United States, as becoming increasingly unsustainable with accelerating democratic anomalies, economic decline, social fragmentation internally, and accelerating credit bankruptcy, hegemonic failure, and myth-shattering externality.

8:05Break that down for me. So what he says, right, he says the great unipolar hegemony, so the time when America ruled the world, has become increasingly unsustainable. So the reasons he said that, he says, because of increasingly accelerating democratic anomalies. Now that is a reference to the fact that the American democratic system is paralysed internally, right? That's the first thing. And is he only talking about America? It's the same as Europe as well, though. But all things Chinese are not, they're just kind of, it's vague, but it's absolutely pointed, right? He says economic decline. That's the second reason that unipolarity is gone.

8:45The American hegemon is gone. Interestingly, he says social fragmentation internally. So that is the idea that the Americans are at each other's throats. You're either right wing or left wing. Yeah, yeah, yeah. Red or blue. And the social fabric of the United States, he believes as a Chinese person, is fragmenting. So the social fabric is fragmenting. Now, this is also, he says, accelerating credit bankruptcy. Now, credit bankruptcy is his way of looking at the fact that the Americans are entirely in hock to each other. And so it's the financialization of the American system. It's the fact that Wall Street dominates in so many areas.

9:24And if it's not Wall Street, it's Silicon Valley. He's basically saying a billionaire class fueled by credit has taken over at the top. and that's totally compromising the American way of governing. But they're also in hock to China themselves. They're also in hock to China as well. Then he goes, hegemonic failure. So the hegemony, basically the big, big idea has failed. But this is the most interesting. He says, and myth shattering is over. Now that latest phrase is particularly interesting because he's talking about the collapse of the myth, which is American invincibility. Right. Apart from real hard power, lots of other power comes from the notion, the assumption, the understanding that you are actually invincible.

10:11Once that myth begins to shatter, then suddenly it's an emperor's no clothes moment. It's like, oh really? Yeah. Okay. So again, what I'm just saying is this is the official view coming from the most powerful ministry of state, the ministry of state security, which again, as I say, is the CIA and the FBI interne. So the guy at the top, he is not a spook. He's an uber spook. He's the spook spook. Okay. Yeah, yeah, yeah. So that's why I want to discuss today. It seems appropriate to discuss China. It's kind of a look back and look forward. It's a look back and look forward. It's also, I was really taken by Dan Wong's podcast with us a couple of weeks ago about engineers,

10:59David McWilliams: but also about social engineering as well as physical engineering. Yeah, yeah, yeah. That explanation. So to save you, dear listener, the effort, I've gone back and started reading two books I was given for Christmas last year by my mother-in-law. Yeah. She gave me two volumes of the history of China. What does she actually think of me? She's got the bargain bin. She's up there in Belfast thinking, this little southerner. What will we give him to shut him up? We're giving these books. But it's written by a guy called John Kay, great British historian, economic historian. He's a comedian as well.

11:30David McWilliams: He's also a comedian. He's also a comedian. But this is K-A-Y is the comedian. This guy is K-E-A-Y. Right, okay. But he is the preeminent. Very important, that. People would suggest he's one of the preeminent historians of the Raj, of the British Imperial Project in India. Yeah, but he's also written these two very, very detailed volumes of Chinese history. Yeah. And the extraordinary thing about China is we forget, and this is what I want to talk about to start here, John, that China has been a unitary state for 2 ,000 years. Yeah, yeah. Now, just to give listeners a sense of what that means, 2 ,000 years ago, more than 2 ,000 years ago, but 2 ,000 years ago, Cleopatra had just eloped with Mark Antony.

12:16David McWilliams: Right? Okay, these are the sort of moments that I like, right? Like Liz Taylor as Cleopatra. That's in my head, okay? Right? And Richard Burton as Mark Anthony. Yeah. Jesus is knocking around. Jesus was knocking around. All that sort of stuff. In fact, he's been born. He's born tomorrow. Right? Of course. Of course, right? The unitary state that is in China has been unified since then. And this system of government, which the Chinese are now under, is a direct descendant of the system of government which was established under what is called the Quinn Dynasty. So Q-I-N, you might have seen this dynasty, right?

12:56David McWilliams: So it's before Christ, it's about 200 years before Christ. I don't think it's pronounced Quinn. It's pronounced Chin. Yeah. Therefore, China. Yes. This comes from these geysers, right? Not the Quins from Cavan. The mighty Quinn, or Niall Quinn, One of the great goal scorers, whatever. Niall Chin, we could call him. Anyway, so the Qin dynasty, the Qin dynasty, right, began to establish what is China. And it is extraordinary statecraft that an area of the world, exactly like Europe, with extraordinary different cultures, races, ethnicities, languages, religions, As diverse, I mean, southern China is tropical, northern China is arid.

13:47They have the Gobi Desert up beside Mongolia. You know, you're talking about an extraordinary geographical, cultural and demographic phenomena, and it has been ruled centrally on and off, but continuously in one shape or another by an imperial system which has unified it and standardized it. And that's what we're dealing with. So, I mean, Europeans had, for the last 2 ,000 years, have scrapped each other. That's what we've done. Europeans have fought each other to a standstill. Chinese haven't. So China had as many different languages and ethnic groups as Europe has. Completely. Yeah. Completely, and still has.

14:32But had the ability to bring them all together.

14:35David McWilliams: So this gets back to our engineering idea. Yeah. So what Dan Wong was saying the other day was basically the engineering bent in China isn't just about building bridges. It's about top-down structural conformity. It's about standardization of things. and it's about, in a sense, forging, in the same way as you would forge metal, forging a cultural unified nation in something that is, in effect, an empire of many, many different... So not unlike what the Roman Empire tried to do, but it's still around. But I was going to say, it's almost a little bit like Charlemagne himself who brought Europe together for the first time or a large swathe of Europe together for the first time.

15:24David McWilliams: And then gave it away to his sons who were fucking Asians. Yeah, yeah, yeah, yeah. That always happens. It always happens. But it's this idea that what we're dealing with in China is the inheritor of a system which is extremely standardized, old. And as an exercise in statecraft, the Chinese elite have been phenomenally successful. in creating this entity. Now, when you start reading the history, what you realize is that our friend, Mr. Kin, Chin or Quinn, okay, he starts out in 221 BC. Right, yeah. Now, this is the time of the Greeks for us. Yeah. This is the time of the Persians for us. Yeah.

16:11So you think about what happened. In fact, many people say that the Chinese looked at the Persian Empire and the scattering, the atrophying of the Persian Empire and that changed their worldview. but we can't go into that at the moment, right? But what is amazing is the way in which the Chinese standardised things. So the first thing they did was the Chinese elite, understanding that all these people spoke different languages, had different accents, couldn't speak with each other, couldn't understand each other. In the same way as a Romanian can't speak to a Russian or a Russian can't speak to an English person or a French person can't speak to a Finn, So the first thing the Chinese did is they introduced a script which was non-phonetic, a non-phonetic alphabet.

16:59This is a fascinating thing. So our alphabet, as West Europeans, stems from the Phoenician culture in Lebanon. And the Phoenician culture in Lebanon came up with an alphabet.

17:14David McWilliams: And that alphabet, the reason we have the word phonetic is that phonetic is, from the Phoenicians, it's a letter sounds like A, I, F. We're making noises. And those noises then, which is again a phenomenally interesting linguistic idea, those noises are put together to create words and those words mean something. Yeah, yeah. The Chinese, and that's called an alphabetical system, the Chinese have a logographical system. The logographical system is that every symbol means something. It's not a sound, it means something. Right, okay. So, for example, a good way of looking at this is, you know when you see percentage, that little two dots and the line?

18:02Yeah. We know that that means a percent of one hundredth. We have learned that. Yeah. So Chinese linguistic symbolism is exactly the same. Emojis. which is, it is in effect emojis. It is in effect, you're absolutely right. It is emojis. It's a shortcut, but it's also a symbol. And what that does is if you learn that language and you learn to write that language and read that language, it means you don't have to speak the same language. Yes, yeah, yeah, yeah. It's not phonetic. Yeah, yeah. So if you were in actually a word taker of emojis to speak to our generation X, right? It's only a matter of time before emojis will sum up an entire sentence.

18:39Yeah, yeah, absolutely. You can say so much with that, whether it's a laughing emoji, crying emoji, whatever. So think about how sophisticated the Chinese elite's effort were to unify the country, that they came up with this logiographical system of reading and writing. Now, what that meant is if you learned this, every trader, every bureaucrat, every warrior, every priest of the Confucian religion, all these things, could actually read without having to speak to each other. They could read a common language without having to speak to each other. So this first of all standardized something. It standardized the elites.

19:23This is an amazing idea. Right, okay. Yeah, yeah, yeah. Because we think the alphabet phonetically

19:26David McWilliams: is a great sign of sophistication. And it kind of is because it's a kind of a mad idea, right? And I think, again, the alphabet emerged because of trading with foreigners. so how do you speak to a foreigner when you make noises and those noises represent something but again, linguistic scholars and you also end up kind of using lots of sign language and hands, gestures and all that kind of stuff. Face gestures, all that stuff yeah, trying to find that common ground. But our basic idea is that our language derives from sound not symbols their language derives from symbols not sound and what that does It's so interesting that.

20:05What that does is it allows very different cultures to communicate.

20:09David McWilliams: Number one, fascinating detail. So that was a strategic move then? Absolutely. So what we're talking about is the strategic way in which the Chinese elite have managed to unify this extraordinary country with all its linguistic, cultural, geographical factors. Because, I mean, geography determines culture, right? And if you're sitting in the balmy, tropical south of China, you are a completely different creature to somebody from the Gobi Desert. Yeah, of course. You know, your whole physical, mental, emotional, geographical area. So how do you get, you know, the fellow in the tropics to adopt a group of symbols that mean something?

20:54Great question. They also were the first nation, our first elite, to use something like the leave insert.

21:03David McWilliams: I know the leave insert is much besmirched, John. I know, as I said, I've always said, John and I love the leave insert so much, we did it twice. We did the leave insert four times between the pair of us, right? But, so how do you do it? You impose a structure, right? Right, okay. So the Chinese elite said, okay, how do we do this? We will have a state exam. and everybody who wants to be a member of our caste has to take the same state exam. And this has been the foundational tool of Chinese bureaucracy for thousands of years. Not hundreds of years, thousands of years. So everybody takes, in effect, a leave insert.

21:46I've always said the leave insert is the closest that Irish people have ever come to military conscription. It is the one experience that binds us all together.

21:56David McWilliams: we all do it. Poshies, not so poshies, dubs, tushies, la la la. We all do it, right? We all do this one exam and we all have a collective experience of it. So it is as close as anything we've come to military service. What happens if you fail though? If you fail the Chinese exam, you're gone. It's very, very absolutist. Right. Right. You don't get to repeat it. I don't think you get to repeat it. Are you, are you, I know younger listeners won't understand this. You can repeat two subjects. Yes, that's right. Yeah. And then add them all up. You add them all up. Yeah. You know, which involved in our Dun Laoghaire upbringing, copious amounts of stag being drunk for the whole winter and then a panic of two subjects at the end.

22:36David McWilliams: And Cliny Beach. Yeah, exactly. But think about what they were doing is they were putting in, in effect, an operating system. Right, okay. You know, in the same way as Windows is an operating system, right? Yeah, yeah, yeah. They were saying, if you want to participate in this great imperial adventure of ours, We don't give a damn if you actually speak a different language or a different culture. If you step up and learn this script, and we know you've learned it because you've passed the exam, you are beginning to become a part of Chinese culture. Wow, okay. And this is really thought about for ages.

23:15Yeah. And then they came up with the dominant idea, which is called the Han Chinese. So this is the dominant ethnicity in China, right? But the point is, Han is also an invented idea.

23:26David McWilliams: So the best way for Irish listeners to understand this is the notion of Britain. So when England, the overwhelmingly dominant ethnicity of this part of the world, decided that they were going to create an empire, they had to create a fictitious ethnicity, which Irish people, Welsh people, and Scottish people, who were ethnically different to English people, could buy into. Right. And they came up with this idea of Britain. Yeah. It's an entirely invented notion. There is no such thing as a British person. Yes. But there is now. Yeah, yeah. But it was invented, and it was invented around 1707. It was accelerated after the Act of Union with Scottish.

24:07But it evolved, though, as well. It evolved, exactly. So the Han Chinese are the same idea. It evolved into something. And that's why people in Northern Ireland would describe themselves legitimately as British. Yeah, of course. Which is an overarching identity that allows them think they're equal to the English in the great project that is Britain. So the Chinese did the same thing. Han Chinese, which were the dominant ethnicity, did the same thing. And they basically said, you can become Han Chinese if you learn the language, the script, not the language, you don't have to learn the language, and you pay taxes to us, and you do the exam.

24:42And why would they want to? Because they want to unify. So if this is what I'm... No, but why would I want to, if I was in the Gobi Desert, Why would I want to join these fellas who are sitting there in Beijing?

24:53David McWilliams: So it's the same reason that many Irish people emigrated to London. It's the same idea during the British Empire. Lots of people emigrated to London because we were poor, but an equal amount of people emigrated to London because that's where the action was. So it was an economic thing? Economic and social thing. So basically, if you look at why do people come from the countryside to Dublin? For opportunity, to get away. I've always said that moving home, whether it's from a village to Dublin or from Ireland to New York or from Ireland to London is an act of personal transformation. What you've actually said to yourself is I don't want to be limited by the village or the gang or the tribe or my family.

25:37I want to be my own self. So that feeling of personal emancipation I think is very deep in humanity. So the Gobi Desert guy you're talking about thinks, you know what? I can hang around

25:48David McWilliams: up here on me horse, right? Yeah. It's camel. It's camel, is it? In the Gobi, yeah. What are they? The bacterian camel? Not bacterian. The two hump camels. Okay. The two hump camels, you see. Right. Put me to rights, Johnny boy. No horse's camels. So you're sitting on your two hump camel, right? Which hump are you sitting? You sit in the middle. Between the humps? Yeah. It's kind of safe. It's kind of, you have a back, you have a front. Yeah, it's kind of comfy. sitting in an armchair yeah yeah yeah right and you can talk to the camel it's like one of those gaming chairs I love it playing asteroids I love it asteroids hitting your hyperspace remember that when you were kids excuse them to hit your hyperspace exactly that was the great threat when we were kids yeah somebody hit your hyperspace on asteroids it's a very very specific demographic we're talking to oh god right it's showing a rage go on so let's move on yeah so what they did was they standardized the language, the alphabet, the exam system, the tax system, and of course the money, standardize the money because the money was a great jelly nation.

26:57Yeah, yeah, yeah, yeah. And you do this progressively over time. And the aim is, this is the aim, is to create a nation out of an empire. Right. That's the key. So if you look at now the Chinese Communist Party, The Chinese Communist Party is the natural inheritor of the imperial elite system. Right, okay. And their objective, and this is why maybe we misunderstand them, their objective is to accelerate that process. So right now in China, they're standardizing the language that has been taught in schools everywhere is what they call standard Mandarin. And what this is saying to the people who speak the variety of other languages in China Look, to play the game, you now also have to speak this language, which is exactly what Britain did here with free education in the 1860s.

27:53Right. So Britain in the 1860s decided, for very altruistic reasons, to become one of the first literate states. So there was a huge Victorian increase in national schools.

28:07David McWilliams: national schools but here in Ireland they required kids in national schools to speak English not Irish right did the same thing in Wales as well see this is I find sorry to interrupt I just find that what you just said there really interesting turning an empire into a nation and that was one of the things that you know where I jumped straight away was the USSR Same idea. Yeah, but they didn't achieve the nationhood because all of the individual countries and ethnicities, you know, and the Czechs and the Poles and the Kazakhs and the Uzbeks and all the rest, their own culture and identity was still so strong that they didn't want to be independent the moment the USSR got into a bit of trouble.

28:53So that's fascinating, John, and leads us to the next idea. So maybe we'll come back to that after the point. Because a Russian example is interesting because it's a European way of projecting power. Right. So let's come back to us after the break.

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30:49So, Mike, tell me more about this. I love this idea of an empire turning into a nation. That seems to be almost the ultimate goal and how China did it and the USSR didn't. Okay, so let's come back to the idea that statecraft in China seems to me to have been for the last 2 ,000 years looking internally. Right. So internal stability is the goal. And the goal of success is internal stability. Yeah. Where the goal for Europeans was always external adventure. So when a country like Britain or France or Portugal or Spain, we'll talk about Russia in a second, got rich, became adventurous, what it did is it conferred status on those people who went out and conquered.

31:41Okay. Right? Yeah. So it conferred status. So in the British case, you have like Walter Raleigh and these sort of characters, right? They were given huge tracts. like we talked about William Petty giving huge tracts of Ireland. Yeah, yeah, yeah. So they went and they conquered. So the English mindset was to go and conquer and to reward and to emulate and to advance the interest of the conqueror. So the conquistadores in Spain, all the same thing, right? That you go out and you conquer and we will make you the boss man. Yeah. Chinese didn't think that way because the Chinese didn't conquer. They didn't conquer.

32:18They conquered internally though. They conquered internally. This is the whole idea. So for example, they did occupy Vietnam on and off. The Vietnamese don't like them at all. They did occupy Korea on and off. But for example, China never invaded Japan, which is a mad thing to think about. Never invaded Japan. So there wasn't that extraordinary urge to conquer other nations. They still regarded the other nations as barbarians and not as sophisticated. But they weren't... of the mindset that wanted to actually go out and conquer. So therefore the Chinese never had an empire in the way the British had an empire.

32:56Yeah. Or the Spanish had an empire. Can I just say, was that because they didn't have the same grow for wealth in that way? That kind of, you know, when the Spanish went to South America, it was about gold. Yeah. And it wasn't just about land and stuff. It was about gold and precious metals.

33:14David McWilliams: And God, and converting them to Christianity as well. There was this idea that our religion was superior, our way of life was superior. So you mentioned the Russians. So Russia has been, and we've done this a good few times in the podcast, an expansionist nation for a very long time. So Muscovy, which is the tribe or the, for example, structure out of which modern Russia comes from, which is the state around Moscow, was consistently, consistently expansionist. Now, why was this? Many people argue it was because of our friends, the Mongols, right? That the Russians experienced the fact that from Western Russia now, all the way to the Urals, there's nothing to stop an invader.

34:02Yeah. It's flat. Yeah. Then you have the Ural Mountains. There's a lot of forest, but... Yeah, but it's flat. There's the Ural Mountains, and then it's flat again. So people believe that the reasons the Russians were so expansionist in the beginning was this idea that you fight wars far away from you. Because if you lose a war, those guys are coming to get you. Yeah, yeah, yeah. So, but Russia has been a phenomenally successful expansionist power into Asia. But as you said, what it tried then in the Soviet Union to do was replace imperial Russia with a communist ideology. And the communist ideology would bind all these nations together in a supranational, non-nationalistic idea of socialist nirvana.

34:44Right. But that meant that the cadres who ran the various socialist republics had to buy into Leninism, or what they called Marxist Leninism, as decreed. Yeah. But it was very, very shallow and very thin. Yeah. And as you said, once that broke down, the ethnic sensibilities of the nations became much more powerful. The Chinese have been destroying ethnic sensibilities for thousands of years. The Chinese elite, not the Chinese people, the Chinese elite. They're marketers in many ways. Better marketers, but they're in for the long haul as well. Yeah. So the Russian market, I mean, actually as marketing goes, communism was a great piece of branding.

35:27Yeah. The logos were great. The tunes were great. Oh, fantastic. The tunes were great. The posters were outrageously good. It was like McDonald's for political science, right? But it was very thin. And at the end of the day, not many people subscribed to it. And the Russians have been profoundly racist towards many of the nations they conquered. Peter Frankopan spoke about that a couple of weeks ago on the podcast. In China, it has been a much more immersive project. It's been going on for much longer. And this is the fascinating thing, because it brings us up to now. Because one of the great questions in economic history, John, has always been, why in the 15th century did Europeans go to America?

36:18Why in the 15th century wasn't the conquering power that conquered the world Chinese? Yeah. Because they were much far ahead of us in civilization. They were much far ahead of us in military. They were a much more powerful state. So why do Brazilians speak Portuguese? Why does Latin America speak Spanish? Why did the whole world end up being conquered by this tiny little island called Britain? Or big parts of it. And why didn't the Chinese do it in the 15th century? Why didn't they break out of China and conquer the world? In the same way as Europeans did. And I think it's because they didn't want to.

36:52It's not because they couldn't. They had the technology. They had an amazing naval power. There was, I can't remember his name, with an admiral, I think it was Z-H-E-N-G, who had a navy five times bigger than anything Europe had. They could have done this, but they didn't. Why would they have that navy for then? Because they had this navy to patrol the trade routes around China. Okay. But then they decided, you know what? We don't want to, and they went home. The Chinese went home. That's one of the great imponderables of economic history. Why Europeans conquered and plundered the resources of the world The Chinese didn't.

37:31They had a much bigger population than us. Arguably, they had a reason to go abroad because it was quite crowded. All these things, but they didn't do it. But is that because it's imponderable because we're looking at it through European eyes? Yeah, I think. And we have a very different view of the world. And maybe there, I mean, this could be complete nonsense, but maybe there was a lot more respect they had for other people. Hence that they, you know, as we were talking about the Russians taking over and they look down, as Peter Frankopal was saying, they look down on the Uzbeks and the Kazakhs.

38:08David McWilliams: As the French looks down on the Africans and the British looks down on the Indians. The imperial power taking over where they were going, no, come on in, join us, join us. Well, it's interesting you say join us. So, or maybe they have the same racial superiority. Maybe they do have the same racial superiority, but they expressed that in a different way. So the Chinese, so the Europeans expressed racial, economic, political and social superiority through conquering weaker peoples. Yeah. Right? Yeah. And therefore the weaker peoples would look up to the Europeans having been conquered, which is a very large check to write for respect.

38:48David McWilliams: Okay? If you're going to write a large check, okay, right? Yeah, yeah, yeah. Maybe the Chinese said, look, we will perfect our own system internally so that the barbarians will know we're superior, but we don't have to conquer them for them to understand that. Right. So what we will do is we will create something extraordinary here in China. That's why they refer to themselves as the middle kingdom. Right. The middle of the earth. So basically, it's not that they don't think we're barbarians. This is what I'm reading from the history. Yeah, yeah. This is my own interpretation. and what could be wrong and whatever, but that the way in which the Chinese express their power and express their superiority and express their technological ability is that we look at them and say, wow, which is what's actually happening now.

39:39I was going to say, yeah, absolutely. Whereas the European way was what the Chinese would describe as imperial overreach. And basically what happened to Britain and France and Russia is they overreached. And the incredible cost of that was actually what undermined them. So the British Empire collapsed

40:01David McWilliams: because Britain just couldn't finance the thing anymore, right? The Russian Empire collapsed because Moscow couldn't finance the thing anymore. Likewise, French. And maybe the Chinese looked at that and said, well, what was the point of that? That was a pretty bizarre 200-year little adventure you had there. So, you know, in all the media and stuff, everyone's talking about China. And last year, as in 2025, was the year of the snake, actually. And next year is the year of the fire horse, believe it or not. But, you know, people are talking... It's when you're the double-humped camel. But what people are saying now is that this is going to be the decade of China.

40:45What will that look like?

40:46David McWilliams: Well, it would seem, and we'll end here, because I know it's Christmas, people are out for a walk, and you might have to have a pint, or you might have something even a bit stronger, John. Indeed. Even a bit stronger to deal. With a bag of crisps. Yes. You see, my way of the family has always been internal stability, not outward expansion. Internal stability. Focus inwards, right? So what I think could be the takeaway from this is that the Chinese have no interest in overseas expansion. They may have an interest in Taiwan because they see it as part of the nation, right? But they're also in Africa and building ports and railways and stuff.

41:29So go back to this idea of writing the check, right? So their idea would be, could you imagine anything worse than trying to occupy, subjugate and rule a billion people, right? Yeah. Outside of China. Yeah. What we will do is we will achieve internal stability in China by creating an economy that is so impressive. And how do we do this? We will create links with the resources of Africa, as you said, because that's what they need. Mm-hmm. And we won't bother conquering people. what we will do is we will keep internal stability as our number one objective. And so it would mean that the Chinese century or the coming Chinese century that everyone talks about will be one where the Chinese make the place safe for China, not for anybody else.

42:25And so all their deals are done through the lens of making the place safe for China. So, for example, I was talking in Australia to somebody about Australian uranium mining, etc. Because the Aussies have loads of uranium. And they were saying, you know, that the Chinese are investing enormously in Africa so that eventually they will not have to depend on Australia, which they see as a sort of a cuss of big power. Right. And they will basically undercut the Aussies by finding resources elsewhere in places where the governments aren't strong where Chinese money actually buys more. And that's what we're looking at.

43:09And so what that means then, John, in many cases, is that China will remain on the sidelines of all these scraps. Right. Between America and Russia, between Ukraine and Russia, between Europe and Russia, all these... Quiet strength. Yeah, just thinking, what does this do to advance the cause of internal stability? And that, I think, is the reason that most of us, either Americans or Europeans, who are the children and grandchildren of imperial projects and imperial mindsets of going abroad to acquire status. That's why I think we can't get them. That's why I think we're perplexed, we're flummoxed by it.

43:54Because they're not playing the same game. Because for 2 ,000 years, they've been playing a different game. And that game has never been about cultural, economic, social, financial expansion. But it's been all about cultural, economic, social, financial consolidation. Get things right internally. Create the middle kingdom. standardize the ethnicities, standardize everything so that we turn an empire into a nation. And that nation looks inward, not outward for power, but looks outward for economic heft. And it's the combination of those two that makes China unbelievably, almost unstoppable as a major global force.

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