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00:00Hello, Telesur English presents a new episode of China Now, a Wave Media's production that
00:15showcases the culture, technology and politics of the Asian giant.
00:19In this first segment, China Currents dives into the top stories of the week, including
00:24China's plan for a wealthier world and its latest development against cancer.
00:29Stay tuned to see.
00:34China Currents is a weekly news talk show from China to the world.
00:38We cover viral news about China every week and also give you the newest updates on China's
00:43cutting-edge technologies.
00:45Let's get started.
00:55Welcome to China Currents, your weekly news report on the latest developments in China.
00:59I'm Chris, and in this episode, China's bold plan to make the whole world wealthier, and
01:06China's military drill to make the U.S. calm down, China's new technology to kill cancers.
01:11First, let's understand Beijing's 2025 ambition.
01:15On March 5th, China released its 2025 Government Work Report, proposing an ambitious economic
01:22target, achieving GDP growth of around 5%.
01:26At first glance, the 5% figure might not seem particularly striking.
01:30However, for China, whose total economic output reached over US$18.8 trillion in 2024, the
01:385% increase goal means to make US$940 billion, equivalent to an entire Saudi Arabia, a nation
01:47renowned for its wealth and extravagance.
01:50Its 2024 GDP stood at approximately US$1 trillion.
01:54To grasp just how bold China's 5% target is, one need only look at the projections
02:00from Western policymakers.
02:01The World Bank estimates global GDP growth in 2025 will average just 2.7%.
02:08The U.S. Congressional Budget Office forecasts a 2025 GDP growth rate of about 1.8% for America.
02:16The Organization for Economic Cooperation and Development predicts the U.K.'s growth
02:20this year at a mere 1.7%, while Germany's Industrial Association anticipates a 0.1%
02:27contraction for the German economy in 2024, marking its third consecutive year of decline.
02:33In contrast, 2025 will be China's third year maintaining around 5% GDP growth.
02:40The Government Work Report for both 2023 and 2024 explicitly set a target of around 5%
02:46growth in gross domestic product, with actual growth rate of 5.2% and 5% achieved in those
02:53years respectively.
02:55So amid World Bank's prediction of a global economic gloom in 2025, why is China so confident?
03:01Two other figures from Work Report reveal the solid foundations of this audacity.
03:06First, China's high-tech manufacturing sector expanded by 8.9% over the past year.
03:13High-tech manufacturing encompasses industries such as electric vehicles, smartphones, aerospace
03:20and computer hardware.
03:21Growth in these sectors generates substantial trade surpluses.
03:25In the 1960s, the U.S. sustained GDP growth above 4% for years by leading the Third Industrial
03:31Revolution.
03:32Today, China is driving economic growth through a new technological revolution.
03:37For instance, in 2024, China produced 13 million EVs.
03:43According to The Guardian, China's EVs now account for 76% of the global market.
03:48Japanese media Nikkei reported that China's trade surplus hit a historic high of around
03:53$1 trillion in 2024, up 21% from 2023, with automotive exports rising 16% as a key growth
04:02driver.
04:03Notably, while EVs have become a pillar of China's industrial strategy, the country
04:07has refrained from using technology embargoes for unfair competition.
04:13According to China Automotive Daily, China exported 3.6 billion lithium battery units
04:18in 2024, a 7.3% year-on-year increase.
04:22Lithium batteries, the core component of EV power systems, determine critical metrics
04:27such as range, output, safety and lifespan.
04:31The success of China's EVs stems largely from advanced battery technology.
04:36Yet China has not restricted battery exports, unlike the U.S. chip export controls.
04:41In fact, CATL, China's leading battery manufacturer, has built two battery plants in Germany and
04:47Hungary, and building one in Spain, too.
04:50In October 2024, Volkswagen announced plans to shut down at least three factories and
04:55lay off tens of thousands of workers.
04:58CATL's investments have become vital for the EU workers.
05:02Second, China's per capita disposable income grew by 5.1% in real terms in 2024.
05:09This figure, nearly matching GDP growth, indicates that the vast majority of Chinese
05:14citizens are sharing in the nation's wealth accumulation.
05:18China has not only grown richer, but also narrowing its wealth gap, ensuring that high-tech
05:23products meet genuine demand, thereby sustaining market vitality.
05:27The beneficiaries of this common prosperity extend beyond Chinese companies.
05:32Take Tesla.
05:33Despite a decline in global sales in 2024 and a drop in its Chinese market share from
05:377.8% in 2023 to 6%, Tesla's sales in China hit a record of 657,000 vehicles, generating
05:46a $20.9 billion in revenue.
05:50In China, the absolute growth in market demand enables Tesla to offset its relative competitive
05:55decline.
05:57Beyond EVs, advancements in Chinese AI technologies, such as DeepSeek and Manos, have bolstered
06:03global investor confidence.
06:05Jeff Winograd, WisdomTree's head of equity and strategy, coined the term Terrific Ten
06:10to describe China's ten high-tech leaders, mirroring the U.S.'s Magnificent Seven.
06:15This concept has become an investment benchmark, as Magnificent Seven once symbolized guaranteed
06:21returns in U.S. markets.
06:23However, Chinese strategist Professor Wang Xiangsui points out that China's high-tech
06:28industries fundamentally differ from America's Magnificent Seven.
06:32U.S. tech giants heavily rely on hyping AI bubbles and monopolizing computing power to
06:38attract investment, while companies like NVIDIA and OpenAI, once led in software and hardware,
06:44the closed-source strategies and exclusionary small-yard, high-fence competition have prevented
06:49cutting-edge AI from integrating with real-world applications, making GPT-4, once the most
06:55advanced AI in the world, can only be used as a whip to intimidate workers.
07:00In contrast, DeepSeek's open-source model democratizes AI, transforming it into a productivity
07:06tool that benefits all humanity.
07:09The results speak for themselves.
07:11OpenAI reported a $5 billion loss in 2024, while DeepSeek announced a staggering 545%
07:19profit margin.
07:20This may seem counterintuitive, but across sectors, from NEVs to AI to photovoltaics,
07:26China's high-tech industries prioritize accessibility over premium pricing and never try to maintain
07:32dominance through tariff and discrimination policies.
07:36Rooted in the Eastern wisdom of the highest good is like water.
07:40The Chinese understand the only way to ensure a single drop of water never dries up is when
07:44it merges into the sea.
07:46Thus, when China sets a 5% growth target, Beijing aims not to shame Western nations
07:51nor exclude competitors for its vibrant market.
07:55As the world's largest exporter of industrial goods, China seeks not only to improve the
07:59lives of its citizens, but also to propel the world towards shared prosperity.
08:05Next up, let's see how China shares security with its neighbors.
08:08From March 9th to 13th, the Chinese, Iranian, and Russian navies conducted a joint military
08:14exercise, Security Belt 2025.
08:17This marks the fifth such maritime drills between the three nations since it began in
08:222019.
08:24This exercise took place near Iran's Chabahar port, focusing on maritime target strikes,
08:29inspection and seizure operations, damage control, and joint search and rescue missions.
08:34Additionally, countries such as South Africa, Pakistan, and Oman will also send observers
08:40to participate in this exercise.
08:42Why drill now?
08:44On March 7th, the Tehran Times reported that Trump's threatened possible military action
08:48against Iran.
08:50Last month, the U.S. announced a fresh round of sanctions against Tehran, aiming to drive
08:55Iran's export of oil to zero.
08:57Apparently, the severity of this threat has now been reduced to 0%.
09:03The U.S. seems to have forgotten its failures in the Red Sea.
09:06Over the last year, U.S. drones and aircraft carriers have repeatedly come under attack
09:11by the Houthis, whose missile technologies that Washington insists are provided by Iran.
09:16In December last year, the Houthis struck a U.S. Nimitz-class aircraft carrier and its
09:21escorting destroyer using just eight cruise missiles and 17 drones.
09:27With the U.S. military struggling abroad and China, Russia, and Iran tightening their military
09:32cooperation, Trump might want to rethink his art of the deal.
09:37Moving on, China brings hope to the world's cancer patients.
09:40On March 4th, the China Academy of Sciences announced a breakthrough in cancer therapy.
09:46Using synthetic biology, they trained a synthetic bacterium capable of precisely targeting and
09:51destroying tumors, and effectively alleviating the side effects.
09:55Traditional treatments like chemotherapy, while effective in killing cancer cells, often
10:00causes significant harm to the human body.
10:03This is because chemotherapy drugs act throughout the entire body, attacking not only cancerous
10:08cells but also healthy cells, leading to various side effects.
10:12Moreover, long-term use may lead to drug resistance.
10:16However, the synthetic bacteria can proliferate extensively within tumor tissues while being
10:22rapidly eliminated in normal tissues.
10:25These bacteria activate immune cells in the body, which in turn attack and destroy cancer
10:30cells.
10:31This mechanism enables synthetic bacteria to combat tumors effectively without relying
10:36on traditional chemotherapy drugs.
10:38Actually, these cancer killers were naturally occurring bacteria.
10:42In fact, in the last century, scientists discovered that certain bacteria could inhibit
10:47cancer cells.
10:48However, due to technological limitations at the time, their safety and efficacy could
10:53not be guaranteed.
10:54However, this latest Chinese study not only validates past hypotheses, but also enhances
11:00bacterial targeting and safety.
11:03As research advances, bacterial therapy is expected to emerge as a safer alternative
11:08to current cancer treatments.
11:11Experts believe that these breakthroughs from China could provide cancer patients with a
11:15safer and more effective treatment option, especially for melanoma, colorectal cancer
11:21and bladder cancer.
11:23That's all for today.
11:24Thank you for watching this episode of China Current.
11:26If you have any thoughts or comments, please reach us at the email address below.
11:30See you next time.
11:31Now, we have a short break, but we'll be right back, so stay with us.
11:53Welcome back to China Now.
11:55This week, Thinker Forums hosts a webinar together with China Academy on Africa and
11:59Asia, and also welcomes Dr. Enrique Dussel Peters, author of Latin America, China and
12:05Great Power Competition.
12:07Let's have a look.
12:08Given the rise of AI and the incorporation of, well, not specifically AI, but modern
12:19technologies and the incorporation of AI and its downstream application, even into manufacturing,
12:26is it going to be harder for Africa's future development path, for Africa to attract the
12:32labor intensive manufacturing industries that supported Asia's rise over the past century?
12:39Maybe I start with that very question.
12:43For the continent, the principal position has been whether you're talking about choices
12:50between regions, whether you are talking about types of industry that it should use
12:55to rise to the top, whether you are talking about forms of political systems that Africa
13:00would underwrite Africa's rise to the top, whether democracies or non-democracies, democratic
13:06ones, whether you're talking about a developmental state and a non-developmental state.
13:11For Africa, it's not either or.
13:13For Africa, it's a bit of both, to different measure.
13:19Now, that principle applies to the area of digital transformation, this fast rise of
13:25digital technologies that promise to help Africa leapfrog many stages of development,
13:32a ride to the top.
13:34It has shown it with regards to the adoption of the mobile phone and how the mobile phone
13:41has improved access to food and food distribution in the Horn of Africa, for example, and how
13:48the mobile phones are helping people cope with a conflict situation, especially in the
13:52Sahel, and they're able to ping each other and able to move and avoid the movements of
13:58these armed groups, often most of them are financed by big countries.
14:03And how the mobile phone is enabling financial inclusion in ways that's never been seen before.
14:12If you look at e-money, it rises most sharply in Africa before it rises elsewhere.
14:18It rises elsewhere as a point of convenience, but it rises in Africa as a matter of necessity.
14:26When there are no bank systems because of the war in Somalia, the Horn of Africa is
14:32a problem.
14:34They have now to figure out how do they harness the indigenous systems of transferring money
14:39without physically transferring money, and how do they harness that but now use technology.
14:45Then you have e-money, and the first one was called M-Pesa, and there are many others that
14:50are now all over the world are there.
14:52So Africa has used digital technology already, first to solve problems, two, to accelerate
15:02technological innovation, three, to drive economic growth and entrepreneurship and financial
15:10transfers and so on.
15:13And Africa can also use it in many other areas.
15:16Of course, it comes with risks, and the risks, as you indicate, may be that it pushes up
15:22economic growth that is based on less labor-intensive basis, and therefore Africa may have to find
15:32answers for all this huge labor reserve that it has for all of that.
15:38Fortunately, digital transformation is not replacing the older industrial system.
15:46We're still going to have mining for ages to come.
15:49We're still going to have manufacturing in a normal way for a long period of time.
15:53We're still going to have physical markets, not just digital markets, in Accra, in Abidjan,
16:02in Addis Ababa, in Johannesburg or any other places.
16:05We're still going to have labor-intensive elements all the time, coexisting with digital
16:11elements and all of that.
16:13That is why it's so useful to see how the African Common Free Trade Area conceptualizes it.
16:20And it released two years ago what is called digital trade value chains, and it talks about how
16:28they coexist with other value chains.
16:30And so there's an opportunity in respect of that.
16:33Now, moving to the issue of self-confidence, I put in the chat that really for Asia, Ghana
16:43and South Korea are independent around the same time and at the same level of development.
16:49And South Korea is going to take off.
16:51It's going to have the boom in the 1960s and the 1970s, and then it'll become a developed
16:56country by the 1990s.
16:58And everybody asks the question, why is it so?
17:02Besides the fact that colonialism doesn't actually leave Africa completely, so it lives,
17:09but it's still there.
17:10So what is called neo-colonialism continues, and it limits Ghana's rise and stuff like that.
17:17And South Korea does not have that.
17:19Instead, what it has is a former imperial power playing a supportive role in order to
17:27support that and its other wing, Japan and others, and it helps it to move.
17:33Even when China arises in the 1970s, the West continues to support that.
17:39On the African continent, it doesn't actually support that growth.
17:43But the real big differentiator between Ghana and South Korea is that the South Koreans
17:49belong to a civilization they have not forgotten.
17:53The colonial oppression was only a temporary disruption, not a permanent dislocation.
18:02And therefore, the Korean, for example, in agriculture, use a civilizational logic called
18:11Samer Undong, which is very similar to Ubuntu in Africa and stuff like that.
18:17But they use that to drive their agricultural revival in the 1970s already.
18:23So they borrow from the West, but they nest it on their own cultural innovations in order
18:28to grow.
18:31And so their civilizational basis is not gone because that becomes the source of confidence.
18:37And the Chinese civilization is the civilization.
18:41The Vietnamese belong to a greater civilization of Southeast Asia.
18:45So they have not lost their civilization.
18:48They might have been delayed, they might have been humiliated, as Professor Ngawen was saying
18:53earlier on.
18:54They might have been dead, but their civilization was not killed.
18:58That's a different story for Africa.
19:00You're now having a mop-up with what African-Americans were trying to copy out of pieces of things
19:05that were completely destroyed.
19:09That even a country like Ethiopia, which was not fully colonized, finds that quite a lot
19:14of that was also still lost.
19:17Because even without direct colonization, the colonial influence was total over Africa.
19:23The cultural confidence among Asians in different parts of Asia was also important for that
19:32self-confidence.
19:33And lastly, the Asians did not lose confidence in their potential, even after their power
19:42was broken.
19:43But their potential remained an inborn driver for them to rise.
19:48And as they made a small step forward, they replenished their confidence all the time.
19:55And Africa does not have those conditions.
19:57It has to find a way around that.
20:00How do you regain your confidence without your civilization, without your self-belief,
20:07and without your heritage, using it to prepare the future?
20:12And that's part of the things that we should all sit down and think, what are the creative
20:16ways we could do now, under current conditions, to enable that rise?
20:22But Africa would then have to rise in spite of lack of self-confidence, and in spite of
20:31low confidence in Africa by others.
20:35And it would have to rise.
20:36It may have to rise through non-psychological means.
20:40But as Africa makes progress in material terms, that will build confidence in itself, in what
20:48it is able to achieve.
20:49And that's a huge fact.
20:50That is why leadership, leadership, leadership is absolutely critical for Africa, because
20:56that's what's going to join, that's going to bridge the gap between lack of confidence
21:01and a dream to become a greater continent going forward.
21:05Thank you very much.
21:06Yes, Ms. Muleta?
21:08In regards to your question about manufacturing and labor intents, I think Africa still has
21:17a huge opportunity to the field of manufacturing.
21:24For instance, Ethiopia is still single digits in GDP for manufacturing.
21:35I believe it's somewhere like 6% or so.
21:40So we have a lot of materials being imported.
21:46And with a population of over 120 million people, it's very clear that the potential
21:57for manufacturing growth is there.
22:00And we do have, over the years, we have increased investments coming from Asia.
22:08And it's, you know, it definitely has the potential of increasing.
22:17Agriculture seems to be the, you know, what has been very big in Africa in general and
22:25even in Ethiopia.
22:27Agriculture employs about 70% of the population in the workforce.
22:34And the GDP that it contributes to is significant from agriculture.
22:41About 35% to 40% of the GDP comes from agriculture.
22:45So it shows you that there is a huge room for growth.
22:50Obviously, there needs to be manpower training and skills and so forth and labor intents.
22:58Manufacturing is more labor intense.
23:00So we have to have this shift.
23:02And also, urbanization is also going to create that when regions are becoming more urbanized,
23:09lifestyles are changing, and so manufacturing will have a huge potential.
23:15So the fact that there is the need and the manpower makes Africa and Ethiopia in general
23:26a place good for investment for manufacturing.
23:31Overall, I believe that in every section, in every area, Africa has a room for growth.
23:40I believe since the population also is predominantly young, I believe that technology is going to be very key.
23:49Like Dr. Sipmando just also mentioned that.
23:55So digital technology area is going to be a huge potential.
24:02So that answers that question and to conclude about our conference in general,
24:09I think the fact that the century is Asia for Asia is definitely a great potential and opportunity for Africa.
24:22Like I said before, to learn, because we have a lot of things in common.
24:28And the fact that the historically, the history of Asia is somewhat similar with Africa,
24:36and it's more attainable because it's, I believe Professor Kisham also mentioned how it could be very hard
24:47or it could be a bit difficult to visualize the growth of Western countries like Europe and the US
24:55because it's been so long since they have reached the development.
25:00But with Asia, we can actually learn from the challenges and we can also learn because of the diverse cultures and ethnicities that the continent has.
25:13And even migration and conflicts and so forth, all those things in combination makes it an ideal continent to learn from for Africa.
25:25So I think this conference in general opens up even more ways that we can collaborate for African countries with Asian countries.
25:39Before we close, maybe let's ask you, Shauli, just to make some comments.
25:45As a media practitioner in China, you are in a think tank space, you are engaging with people from all over the world.
25:56What is the feeling, what is the mood about what's happening in Africa and in the global South in general?
26:03What's the running commentary?
26:05Is it positive or in fact, there is still lack of understanding of some of the things that Professor Zonde was talking about just now?
26:14There's been a huge change.
26:16So what China has lived through over the past 30 to 40 years is essentially centuries in many other parts of the world.
26:25Well, as Professor Zonde and Ms. Mileta were saying that Asia was never really colonized the way Africa was.
26:33But the memory of colonization of imperialism is very much alive.
26:37We've been criticized by Western media about how that remains the state narrative to sort of brainwash the young kids about how they've been victimized.
26:48It's not so much.
26:49It is very much alive in the, we spoke of a civilization before from Professor Zonde.
26:56It is very much alive in the spirit of everybody who live here in China, being a great civilizational state, that how you've lived through that humiliation about a century ago.
27:08So it is a very much a living thing.
27:09It's not a brainwashed propaganda.
27:11So that is what I think from the discussion that we had before is what drives the confidence, the confidence deriving from the drive to be successful, to grow.
27:24And then I think things, where things begin to diverge about where people stand in terms of their worldview, how they think about our regions from the rest of the world, where it starts to diverge.
27:36You look at the different age groups.
27:39I think the older generation and the younger generation is very much different.
27:42And we'll focus maybe a little bit more on the younger generation today.
27:47The younger generation is very much outward looking.
27:50Now, I think in general, and I'm not saying this in a bad way, Chinese people are very inward looking.
27:55And it's not a sort of like a xenophobic way, but it's a very nice way that I put it is that the Chinese people are very inward looking in the sense that we don't think about expansions.
28:07And I think a lot of the excellent thinkers of our time that we've all spoken to over the past few months, we've spoken to Professor Sachs about a month ago.
28:17And I've spoken to Professor Wang Xiangshui, a great strategist from Beijing, very recently.
28:23It's not a rhetoric that China does not seek military expansion.
28:29And that if you don't believe in it as a diplomatic rhetoric, believe it in the history, in the culture, in the civilization.
28:37Most Chinese people are very pragmatic.
28:39And that is what I mean by inward looking.
28:42Now, the younger generation still inherits that spirit of inward looking.
28:47We are very much focused on, not we, but the younger generation of Chinese people or Chinese people are very inward looking in the sense that they're looking at what is pragmatic, what is in front of me, what serves the society, this population and the growth of the Chinese people.
29:03But not only that, the younger generation, where they differ a little bit slightly from the older generations, that they are very much keen to learn about the rest of the world.
29:15They are forming not just a narrative of the civilization, of this nation, but a worldwide narrative.
29:21This is why, I mean, it was a bit out there when I made a comment about Nezha.
29:27But it is very much reflective of why this particular animation, this film came out of China at this particular time.
29:36Because the generation of people is looking at how do we solve the problems of the world today?
29:42Not just China. China is a part of the world.
29:45So when you say that, how do Chinese people think about the rest of the world?
29:49I would say increasingly concerned, interested.
29:52And that is a very, very good thing.
29:55I mean, take our content, for example.
29:57So we are completely independent media, a think tank, intellectual content based media outlet here in China.
30:04And increasingly we are producing for the rest of the world because we want to share with the rest of the world what is the sentiment on the ground for Chinese people?
30:14How do Chinese people view the rest of the world?
30:17That is what we wish to do through Wave Media and the ChinaAcademy.org.
30:21But in China, the success of our content, we have made multiple videos from speakers like Professor Bassani here, from Africa, from Kishore here, from Southeast Asia.
30:37And all of these speakers, their videos receive multi-million trending status here among the Chinese youth.
30:44People are interested, concerned about how do the rest of the world,
30:50how do people in the rest of the world think, how we together, how we come together to form a new world narrative?
30:56I think that is a very, very strong underlining drive with the new generation of Chinese people today.
31:03That is a little bit different than at the onset of the Chinese reform and opening up about 40 years ago.
31:12Back then, I think it was Professor Kishore just said that when he was growing up, he thought about how Asians are inferior.
31:21And I would say that sentiment somehow was alive back then in China too, but not anymore with the younger generation of Chinese people.
31:29So the communication, but having said that, this is why I think communication and webinar like this is so important, is that the Chinese youth are very eager to learn about Africa.
31:41And to learn about Africa through genuine African voices, not through the mediation of Western media and Western cultural products.
31:51And I think that it would be a wonderful, wonderful century if we can just come together directly.
31:56And I stress directly.
31:58Felix, thank you very much for joining this.
32:01We thought we should have this conversation about whose century is it anyway.
32:07Kishore has written two books that this is Asian century.
32:11The World Bank and former President Tamu Mpege and others, when they were pivoting the African Renaissance agenda, were arguing that the 21st century is Africa's century.
32:23And of course, in the interventions by Zonde, Muleta and Kishore, we've heard what people feel about the mood, the trends, as well as possibilities for claiming the 21st century.
32:37One important thing from their intervention that I have learned and I've seen in many other books is that it is not necessarily a negation of Africa's Renaissance or say this is the Africa's century.
32:52If you argue that the 21st century is Asia's century and therefore it does not sound like a threat to Africa or the rest of the global South.
33:02If you make an argument that this is Asia's century.
33:05In fact, in both his books, Kishore is very careful not to argue that the rise of Asia will mean the decline of the African continent or the global South.
33:18Thank you so much. We wish to see you in South Africa very soon or maybe sometime have you visit China.
33:24Thank you. See you.
33:25See you soon.
33:28Bye.
33:36There is an ongoing discussion in the United States and particularly in Washington, I would say, an ongoing political discussion with insufficient, I say very politely, with insufficient economic knowledge of how trade in North America and related to China is going on.
34:01So the political argument in Washington since Biden, but also with Trump, is Mexico is becoming the backdoor of Chinese exports to the United States.
34:16So the United States and China are having a trade conflict or a trade war.
34:23Since 2018, President Trump initiated this trade war with China in 2018.
34:31And you know what?
34:33This is the argument.
34:34Mexico is not having a trade war, neither with China nor with the US.
34:40And Mexico has a big sign.
34:43When you come in Mexico, welcome China.
34:46Mexico is importing massively Chinese goods and exporting them to the United States.
34:55This is not the case.
34:57Now, again, the political discussion might be ideologically very appealing.
35:04But again, I highlight new triangular relationships.
35:09China is the second largest trading partner of Mexico since 2003.
35:16For more than 20 years.
35:18So this is not a weekend happening, but this has been going on all over the 21st century.
35:27The problem is that the so-called think tanks in Washington, D.C., they are neither think nor tanks regarding Latin America, China and the United States.
35:39These so-called think tanks, they have not been doing their homework.
35:44They have not been informing the Washington audience adequately and correctly.
35:52This profound integration between Latin America and Mexico with China has been going on for 30 years.
36:01And again, suddenly it has become fashionable to blame.
36:06Again, the Washington, this political discussion always requires to blame someone.
36:15I blame China, I blame Mexico, I blame Panama, I blame...
36:19Of course, you never like to see yourself in front of a mirror and say, you know what?
36:26The king or the queen is naked.
36:28You know what?
36:30The United States has profound economic problems in terms of fiscal deficit, in terms of innovation, of competitiveness, etc.
36:41So the Washington audience, their respective parties, politicians have been ill-informed.
36:52They are not aware of the massive presence of China for 30 years.
36:58And suddenly in 2024, they say, how is it possible that China has such an important presence in our backyard?
37:09They wish that the problem goes away in a weekend.
37:13This will not happen.
37:16We are speaking of very complex industrial structures.
37:21I have been, for example, examining and working with business organizations in Mexico regarding footwear.
37:31Not auto parts, not automobiles, but footwear.
37:3430 years ago, 85% of Mexican inputs for the footwear in global value chain came from the United States.
37:44Today, 90% of Mexican footwear industry inputs come from China and Vietnam.
37:54The supply of United States firms to Mexico in the footwear global value chain has disappeared.
38:05Promoted, by the way, also by U.S. firms.
38:09U.S. firms that export from Mexico to the United States require, please use this supplier, which is in Chongqing.
38:19This other one, which is in Shenzhen.
38:21Don't forget this supplier.
38:24They have good prices, good quality in Chengdu, etc., etc.
38:29They require Mexican firms use the suppliers I have been working on for decades.
38:38And it is very interesting that in the last years, around 7.5% of Mexican exports to the U.S. is Chinese value added.
38:49So, yes, Chinese value added.
38:51You have a car that says made in Mexico.
38:54But you know what?
38:55Wheels, chassis, windshields and other parts are coming from China.
39:01The final good says etched on Mexico.
39:05But who is importing massively goods in Mexico from China?
39:1170% of Mexican imports are imported by foreign firms.
39:1670%.
39:18So the main importers in Mexico of Chinese goods, the name of these firms are General Motors, Stellantis, Ford, IBM and many others.
39:31There is not one single Chinese car that is being produced in Mexico and exported to the United States.
39:40No, this is one of the main accusations.
39:44Chinese firms will export electric vehicles, BYD, to the United States.
39:51This will not happen.
39:52BYD, they are not stupid.
39:55They know that if they export one car, they will fire it.
40:00I don't know, in Washington Square.
40:02And I told you so.
40:03This is the demonstration that Mexico is a backdoor for Chinese firms.
40:10They have not done this and they will not do this in the short and medium run.
40:17Surprise, I am not blaming anyone.
40:19I'm simply saying, you know what?
40:22We have a very mature and difficult and complex relationship between the United States,
40:29China and Mexico, and it is not as easy as the discussion in Washington to say I'm going to blame Mexico or I'm going to blame China.
40:40You know what?
40:41Your tariffs are going to affect mainly U.S.
40:45firms established in Mexico.
40:47Surprise.
40:49No, again, I'm not blaming anyone.
40:52I'm simply explaining how trade, industry, fabrication, global value, global value chains have changed drastically in 30 years.
41:04And this will not change in a weekend.
41:07No, if you want to substitute for imports from tires from China for a car, this will not be easy.
41:17The Vatican does not produce any tires.
41:21Switzerland, they do not produce tires.
41:24So where will I get 20, 30 million tires that today are being supplied by Chinese imports?
41:35So very complex process that have been going on for decades.
41:41As a matter of fact, we have a monitor of Chinese outbound foreign direct investment that we publish every year since 2017.
41:51Brief reports, annual reports in Chinese, in Spanish and in English.
41:57No.
41:58So for Latin America, including, of course, Mexico.
42:03No.
42:04So Chinese investments in Mexico have been going on in the last 15 years.
42:11Again, Washington was not aware of this.
42:16They were in their own discussions, but they were not aware what was going on in their backyard.
42:24And suddenly they found, you know what?
42:27China has been investing accumulatively until 2023 for 22.5 billion U.S. dollars.
42:38So what we are witnessing is the Chinese investment slowly.
42:42It's not that suddenly in 2023 we have massive investments.
42:47No, since 2010, 2015, 2020, Chinese investment and very surprisingly different than in most of Latin America.
42:59Chinese investments in Mexico were A, mainly by private firms, not public firms.
43:07And B, the main sector of interest of Chinese investment in Mexico were manufacturing.
43:15So very interestingly, Chinese firms in Mexico practically do not export directly to the United States or to other countries.
43:28Investments are oriented to the domestic market in Mexico, from shoes to underwear, to telecommunications, to electronics, to whatever.
43:40So it's a very interesting specialization of Chinese investments in Mexico, very differently than, for example, in Argentina, Chile or Brazil.
43:51In South America, where Chinese investments have specialized in raw materials, in oil, in gas, in minerals, meat, soya, etc.
44:03Mexico does not have these raw materials such as Chile or Brazil.
44:09So Chinese investments, intelligently, I would highlight, they have learned a lot in the last 20 years and they have understood that the strength of Mexico is not soya and not oil, but mainly manufacturing.
44:27Just a few weeks ago, at the end of December, we published the third report on aspects for a national strategy vis-à-vis China.
44:40The subheading is not irrelevant, New Triangular Relationships.
44:46This is a document of 35 pages, 27 proposals, and the subheading is fundamental.
44:55Mexico, as Brazil, Argentina and other countries need an agenda, a working program vis-à-vis the United States, of course, but also and, not or, and China.
45:11The blackmailing from Washington increasingly insists, are you going to marry me or China?
45:19You cannot marry both, no?
45:22But the New Triangular Relationship concept invites to say it is the United States and China.
45:31We have more than 130 years of diplomatic relations with China, with the People's Republic of China, since 1972, for 53 years.
45:46And so we have a very profound, rich and mature relationship.
45:52It's not a matter of saying, shall we continue or shall we not continue?
45:58We have a very rich cultural, economic, political, technological exchange.
46:05And you know what?
46:07In some cases, in the last 100 years, we have had discussions, difficulties, and in some cases, we have had different opinions.
46:16This might happen in 2025.
46:19But this does not mean I'm going to put on hold my full relationship with my second most important trading partner.
46:29I would say very humbly, but very realistically, China is the new rich guy in town, in the global village, no?
46:42And so China has lots of money to be spent on innovation, on education, on infrastructure, etc.
46:51Contrary to the old rich guy in town, who finds out my infrastructure is old, my education is not working out, I'm not competitive in many industries that I used to be the leader.
47:10You know what?
47:10You are not anymore.
47:12But the old rich guy in town is still rich.
47:18They still have the US dollar.
47:20They have a credit system, a financial system.
47:23They have nuclear weapons, etc.
47:26And also, it's going to be a very difficult negotiation in terms of the confrontation between the US and China and for third countries.
47:37I would always say Latin America, Mexico, but also Vietnam and Germany.
47:43They will have to deal very pragmatically regarding this new triangular relationship.
47:51It will be a very difficult time, even regarding military issues in Asia and other parts of the world, unfortunately.
48:02And this was another episode of China Now, a show that opens a window to the present and future of the Asian giant.
48:09Hope you enjoyed it.
48:10See you next time.