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Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.
Welcome to episode 262 of the Energy Talks podcast. I'm energy journalist, Markham Hislop. I wanna start this episode with a quote from a speech delivered 2 years ago by US Secretary of Commerce, Gina Raimondo. So, quote, China today poses a set of growing challenges to our national security. It is deploying its military in ways that undermine the security of our allies and partners and the free flow of global trade.
Markham:It dominates the manufacturing of many critical materials and goods and has exploited other economies' dependence on its market for political coercion. It also seeks to dominate certain advanced technology sectors, while using many of those technologies to advance its military modernization and undermine fundamental human rights at home and abroad. End quote. Many western citizens will be surprised to learn that China is arguably now on a par with the United States as a global superpower. In her new book, Upstart How China Became a Great Power, Orianna Schuyler Maestro, a center fellow at the Freeman Spogli Institute For International Studies and assistant professor of political science at Stanford, explains how China achieved that feat.
Markham:Welcome to Energy Talks, Oriana.
Oriana:Thank you for having me.
Markham:I am I have to say, China popped up on my radar in a big way 2 years ago, and I it really, I've I think I understand much better today than I did then the role that China plays in the transition to clean energy technologies. And I'm fascinated by this because like many westerners, I really didn't know much about China prior to my newfound interest. And I wanna get you to respond to an argument I make on this podcast all the time, which is that the very the fast or the very fast scenarios of the energy transition, you know, peak oil in 2030 decline, the rise of solar and and batteries and so on, will be driven by China. It's a strategic industry, it's a strategic approach that China has risen its industrial power to its current geopolitical power, and and that strategy will continue with a new set of technologies. And this is a key part of why the west has to respond, certainly why Biden part of why Biden put tariffs in place on EVs and batteries.
Markham:What what would do you make of that argument?
Oriana:Well, first and foremost, you know, my background is mainly on geopolitical competition, and so I will leave it to industry experts to say whether or not China has been successful in these areas, though in my book, I do talk about what what I think are considered basic metrics for this level of success. But if you're coming to me and you're sort of asking how important are these policies from the Chinese point of view for their geopolitical position, I think it has been very clear that the Chinese see industrial power, manufacturing power, innovation in key technological areas as critical to being a great power. Right? Chinese leaders have understood that innovation in particular, this general idea of innovation was necessary if China was going to become a great power. They spoke internally at length about how initially China's lack of technological innovation, you know, hampered their economic growth.
Oriana:And Xi Jinping, the current leader of China, has made numbers of speeches that in which he basically says a country cannot be strong when the science and technology component, you know, are not strong. That if they're going to be somewhat immune from the pressures of the outside or what Xi has said indestructible, that you have to have that innovation. So from the Chinese perspective, I think being at the forefront of key technological areas of being an innovative country, being a global science and technology innovation superpower, which is a term that they've used to achieve that by 2050, is absolutely a part of a broader grand strategy to, you know, be a great power, global power on the world stage.
Markham:Well, let's talk about the American response to that for a moment, and I'll another little anecdote. Economics blogger Noah Smith, tells the story about how when he used to go down to Washington and he'd go for parties and meetings and so on, he would everybody was talking about in 2017, they were talking about climate change. That was the big driver. And he says, today, that's not the case at all. All anybody can talk about is geopolitical competition with China.
Markham:And and I asked this of one of my guests, Leslie Chang, who was who helped write the inflation reduction act, and she said, absolutely. From my point of view, that's the case as well. Is that a big has has the ground shifted?
Oriana:I think so. Well, let me just say and and I am this is this is a nonpartisan statement, but, I think just yesterday, vice president, Harris gave a statement, which when she was asked what the greatest threat was to the United States, she replied, Hamas, which, you know, led me into a spiral of despair of, like, okay. You know, I thought the ground had shifted. I thought we were all on the same page, you know, after decades decades of, you know, being one, obviously, very small part of an effort to move the the needle to pay attention to the rise of China. I just say that as a caveat that it what it is my understanding that there has been a shift, but a lot of this is leadership and personality dependent.
Oriana:You know? So who knows if if things if the pendulum is is about to swing in the other direction? But as far as, you know, the different positions and experiences I've had, China is definitely much more of a focus now in how to manage the rise of China than it was, you know, 10, 15 years ago.
Markham:Well, the first, with the introduction to your book is is about the the rise, China's rise to the great power club. Maybe you could, you could tell us about that.
Oriana:Yeah. And this actually goes to your previous point about innovation too. Right? That there's a general expectation that China shouldn't be good at certain things. And if you go back, like, 20, 30 years, there was a lot of dismissing of China.
Oriana:Like, nowadays, we look at China's political, economic, and military power, and it seems like it was inevitable that China was going to be this this dominant player. But in the mid 19 nineties, you know, the pages of foreign affairs were discussing whether the next great power was going to be Brazil or India or the European Union. You know, China was one in a line of other countries. We had seen this amazing economic growth, but just like today, 30 years ago, people were debating, well, you know, can they really keep this up? You know, as they entered the WTO, there was gonna be some loosening of certain restrictions in China.
Oriana:Foreign banks were allowed in China. Surely then, the whole system was was going to collapse. And China hadn't yet made the decision to translate that economic power into other forms of power. So during, you know, seventies, eighties, nineties, they had this economic reform. And even in the mid nineties, their economy was, you know, smaller than France's.
Oriana:You flash forward, like, 25 years, and they have the 2nd largest economy in the world. And it wasn't just that aspect of economic power, but they were very deliberate, not only about their economic growth, but then investing in their military forces. So that's why I just had a conversation today with a woman who was like, well, why would they take Taiwan by force? They could have always done it. They never did it.
Oriana:And my response was, no. They never could do it. It was never an option. It still isn't an option. They're still a couple years out, but it's not surprising to me.
Oriana:They didn't have the modern equipment. They didn't have the number equipment. They didn't have the organization training, anything to be able to conduct that type of operation. Now they have you know, soon to have all of those components. And then in the political realm, China was relatively isolated from the international system right after the end of the Cold War.
Oriana:They didn't have major relations with some countries like South Korea, so they started joining a lot more international institutions and becoming active participants, in those international institutions. And so all of that has happened, you know, pretty quickly, actually, right, the past 25 25 years or so. And now we're dealing with a much, you know, different China than we were in the 19 nineties.
Markham:You'll find that there still is a a a lingering, perception of China as well, people are dismissive of it. And I run into this all the time in the oil and gas industry. You know, they talk they they dismiss China because, they steal technology, or because their stuff is cheap and poorly made, or human rights abuses, or there's a long list of reasons why that they, the incumbents in the industries that are being disrupted by Chinese technology, are dismissive of that threat. It's almost like blockbuster. You see the threat coming, but you're not able to respond adequately, to the threat.
Markham:And, eventually, you know, you're disrupted and you fail. I don't know. What what's your take on that?
Oriana:So, you know, that's one of the main themes of this book that I've written, you know, about how China became a great power. There's sort of 2 components that are very important. The first is that the fact that we cannot recognize the threat is not an accident. There's a lot of research in behavioral economics more broad that's not just about geopolitics. It says that when people try to achieve a goal in a way that's different than you, it takes you longer to recognize what they're doing, and then you tend to underestimate it.
Oriana:You know? And we see this all the time. Like, well, you know, if that was gonna work, I would have done that. Right? And so we have this thing with China in which we're constantly like, sure.
Oriana:I mean, they think they can have innovation while having that degree of, you know, political control, though. You know? People are not gonna be inspired to innovate under those circumstances. So what I try to say in the book is, you know, maybe it is true, for example, in industry. Would China be more innovative if they pursued a laissez faire approach like the United States does, if it was all kind of free market, you know, freedom of speech and all of that stuff?
Oriana:Maybe. That's a hypothetical we could talk about. But I do think given that party control is crucial, the way that they pursue this with top down industrial policies, we have to admit that they have been more innovative and competitive than we thought they could be given the constraints that they have. So that kind of dismissal, I think, is very problematic. I I don't like to say that we overestimate or underestimate the China's threat.
Oriana:That seems to be kind of like a normative or a judgmental statement. I usually just say we mischaracterize it. You know? Because those people, what they would you know, they're not gonna say, for example, that China's not a problem in any way. They would just say, okay.
Oriana:They're not gonna be disruptive in this industrial area, but I surely don't like them stealing my IPR, for example. So it's not like they don't see these things happening. They just discount what the overall impact is is going to be. And we can have a debate about the future. A lot of people want to debate, you know, okay.
Oriana:Sure. Sure. Sure, Orianna. Like, this is how it's been in the past 25 years, but what about the future? But I think at the very least, we have to understand that China has been successful with these policies so far, and that does give us some insight into the conditions under which they'll be successful in the future.
Markham:Well, let's talk about, how China rose to a great power become a great power because you have a theory about it. You call it the upstart strategy. Could you explain that, please?
Oriana:Well, you know, going to industry, this book and this theory was actually inspired by the business literature and startups, and in particular, new companies that are coming into a market that is dominated by some sort of existing, you know, large company that has a lot of resources, has a loyal consumer base. Like, how do these startups actually, you know, gain market share? And so the theory of the upstart strategy says that there are 3 components. The first one is emulation. So political scientists, my field, think that this is the only thing that matters.
Oriana:That basically, to become a great power, you emulate the successes of other great powers. So the expectation is that China would act exactly like the United States. In the book, I lay out a variety of reasons that doesn't make a lot of sense. You know? And I when I say to business people, for example, if you're starting a new business, do you wanna produce the same product in the same way and, like, expect to be competitive?
Oriana:Like, it common sense, you know, reigns here. It doesn't make a lot of sense, but that's what political scientists think. So it is one component. Right? China doesn't do everything differently.
Oriana:They still have, like, a navy and diplomats. Right? So the question is the first component of the strategy is when they take the US strategy and they implement it in the exact same area of competition. I call it emulation. Sometimes they take the US strategy, but they implement it in areas where the United States is not competing.
Oriana:You know? Either blind spots where the United States has decided it's not worth it, what have you. The United States is absent. So China does not have to directly compete with the United States in the implementation of the strategy. I call that exploitation.
Oriana:And then the third e is when China takes on a whole new strategy, and I call that entrepreneurship. Right? So something like the Belt and Road Initiative, which we label it development assistance, but it's not really development assistance because it's not about development, and it's not really assistance. It's more, you know, loans and things and and the building of infrastructure. That's very different than how USAID or something in the United States thinks about development assistance.
Oriana:And so the whole book is about how China decides about the mixing of these three Es. When do they emulate, when do they exploit, and when are they entrepreneurial?
Markham:One of the, issues that comes up in the energy field is, arguments about China's role in, emerging economies. And the, the OPEC crowd, believes that, you know, Africa, Latin America, parts big parts of Asia will stick with fossil fuels because they have the infrastructure, it's what they know, in the case of Africa, they've got some they've got significant oil and gas resources. And then on the other side, there are those who argue that, China has built enormous overcapacity in things like solar panels and and batteries. Well, where is that capacity going to find an outlet? It's going to find an outlet in those very same markets, and we already see China exporting in a big way, but the belt and road initiative play plays here because they're building some of the infrastructure like power grids, and and solar farms and what have you that those countries will need.
Markham:I I I thought I'd get your view on on that. What what role how does China view emerging economies like Africa?
Oriana:So this is part of the debate about what success means. Right? When people bring up the belt and road initiative, for example, they would say, well, this is not very successful because, you know, what is the degree to which this has really helped countries develop? Now to be clear, my standard of success is different. It's a very self self interested from China's perspective.
Oriana:Like, are they able to co opt and influence countries to accommodate their preferences and to think about China first. Right? So maybe and and, again, I'm not an economist, so I can't independently assess some of these arguments about about industry or where those economies are going. But looking at what other people say, there are downsides to the Chinese approach in terms of how it impacts the development of certain countries and the development path of certain countries. And then you also have to think, like, what is that relative to?
Oriana:Is that relative to where they would be with US support? But if that US support isn't there if international support, you know, isn't there, is is China better than nothing? So you can have those debates. But, really, from China's perspective, a policy is successful when, you know, they pick up the phone and they're like, listen, be our right country. You know, we need this vote from you in the UN, or we need to put, you know, ground station for our new space infrastructure in your country, or we need you to settle your trade in renminbi because we're trying to be the reserve currency, whatever that request is.
Oriana:Is that request granted? And for the most part, it is. So, in that perspective, the belted road has has been a very successful sort of geopolitical play.
Markham:So if I understand correctly, you would argue that the belt and road initiative and other similar kinds of programs that China might undertake, spread China's geopolitical influence. It has military, implications obviously, and from my point of view, it has energy transition implications. What, have you got any examples of where China uses its geopolitical influence, its military influence, to extend its reach into those emerging economies where maybe the US, is is not dominant?
Oriana:Yeah. So to be clear, I mean, one of the things that I talk about a lot is, you know, China wants to dominate Asia militarily. This is in my mind, you look at capabilities, behavior, discourse, this this is, like, no longer debate. You know, maybe we were debating it 15 years ago, but I think we kind of all have come come to the same conclusion about their military ambitions. But I don't think China has military ambitions beyond Asia.
Oriana:So even with, like, Belt and Road, when it was first announced and people were like, oh, you know, once they start building military bases along Belt and Road, then we know it's a geopolitical challenge. My mind was like, it's already a challenge, and they're not gonna do that because, you know, I talk about this extensively in the book. China doesn't is not interested in projecting military power in the Middle East, in Africa. They think they can rely primarily on economic and political power to protect their overseas interests, and then they also have these programs in which they train law enforcement police forces of these countries, right, to protect their interests. Interests.
Oriana:So it's not really it's not really a middle military question. It's more of, like, a political one. And in these cases, you know, you you can see tons of examples, whether it's rhetorical. You know, I was at the forum of meeting of defense ministers about a year ago, and, you know, maybe in the United States, we're like, who's Biden China's message of, like, noninterference and sovereignty or whatever? And it's like, well, you know, a lot of Latin Latin American countries have had bad experiences with the United States.
Oriana:I mean, the United States, the problem is that we don't really have a strategy towards emerging markets or the developing world in terms of power. We just assume that everyone agrees we're the better partner. But in practice, I mean, that's a very complex statement to make. A lot of countries have shown that they like China's regime agnosticism, for example. They like that, you know, there's no maybe there's a China model or Washington consensus, but China could care less if you follow that model.
Oriana:So for a lot of leaders, the fact that China is hands off is very appealing, and has led to everything from the alignment of voting behavior in international institutions to agenda setting that certain international institutions are supporting goals and definitions and priorities of of the Communist Party over maybe what US and allied preferences or what we call the international, you know, liberal world order, which is a big broad term. But, I mean, if we're honest with ourself, what that means is the United States and its allies. There's a lot of people who are there's a lot of countries who are left out of that. And and China has been catering to the developing world during its rise in a way that United States hasn't. So a lot of the policies of exploitation, right, using the US strategy, but in areas where, the United States isn't present.
Oriana:Where is the United States not present? A lot of that is the developing world. So for example, high level visits. You know, Xi Jinping, senior leaders in China, and US presidents make about the same number of high level visits every year. But where is US going?
Oriana:They're going to Germany, the UK, like, a 1000000 times, and no US president has been to Central Asia. No US president has been to most of Africa. 70% of the poorest countries in Africa, like, no US president has ever gone to, and Xi Jinping has visited all of them. Right? So I do think the Chinese are much more deliberate at trying to make themselves a leader of the developing world.
Oriana:And like you were saying in your previous question, we're too dismissive of how effective that's gonna be.
Markham:Is that part of their what you would term entrepreneurship?
Oriana:So in this case, it really depends on what area we're talking about. If if they're basically using the US strategy, so, like, those elite visits I referred to or mediation diplomacy, for example. So trying to mediate global conflicts. This is something that the United States does do, and so because of that, I don't really say that it's entrepreneurial because it's not a whole new strategy. It's not something that they kind of thought of.
Oriana:They got to look at the United States doing it and think like, okay. This works for the United States, but for a wide variety of reasons, we wouldn't be competitive directly. Right? Like, Xi Jinping could go to the UK as many times as he wanted. Is the UK gonna flip and be closer to China than the United States?
Oriana:Like, probably not. So that's really the difference between entrepreneurial and and exploitation.
Markham:Looking ahead to the next 5 to 10 years, what's your take on China's geopolitical influence? Stay the same, it's now settled into competition with the US as, you know, the 2 great powers. Will it grow? Will it eclipse the US? What's your take?
Oriana:So I think this framing of kind of, like, relative to US powers is problematic. And this is one of the aspects of the bulk is just to talk about how the international system has changed, and so the nature of power has changed. You'll see some senior people say, for example, oh, well, the United States has more overseas bases or we have more allies, so we're more powerful. And I often worry that it's like you know? Then this analogy is maybe more useful in the United States where, like, we no longer have taxis.
Oriana:We only have Ubers. But, which is not the case in a lot of other places that try to protect themselves, you know, from that. But it's kind of like taxi companies looking at Uber and saying, well, we physically own more cars. Right? The company Uber doesn't have any cars.
Oriana:But is that really the metric of power? Right? I would say not. So when you've asked me, like, are they gonna overcome the United States? I mean, we could we could pick some metrics of, like, economic power.
Oriana:But even then, like, during the Cold War, the Soviet Union's GDP was half of that of the United States. So there's always gonna be this balance of, like, okay. This area, yes. In this area, no. For me, the big important question is, is China gonna continue to constrain US choices in the future?
Oriana:And even if they don't have any economic growth, right, if their economy stops growing, they're still gonna have the 2nd largest economy in the world, you know, for at least my, like, adult life. And so I just don't see a situation which all of a sudden China doesn't like, influence does not grow over over time. So I don't think they've reached the the peak of that. They might have reached, you know, the peak of how close they're gonna get to the United States in economic power, but that's only one metric of many different types of power.
Markham:If you were looking into the future, 5 years, 10 years, 20 years, maybe out to 2050, which is often, you know, in the energy world, that's kind of a benchmark. And I know the future is fraught. We you know, whatever we say is gonna be wrong. Nevertheless, what how might the future look different than it than the present?
Oriana:So and this isn't gonna be a very useful answer for you, but I think the trends the trends suggest very little change. Right? Like, what I see, like, also as a defense planner, like, I'm I think also, like, decades ahead of time. Given what we know now, the information that we have now to make assessments, you don't see anything that's gonna be, like, fundamentally different. So what that means but that doesn't mean that the world isn't gonna be different.
Oriana:I'm just being very honest about the fact that I think it's gonna be something inconceivable, right, that we haven't even sort of come up with, like, complete you know, and, you know, some sort of technological breakthrough that leads to not having any reliance on fuel. And that's not even and and climate change thing and the econ thing as a military planner, if I can fly my airplanes, like, from the United States to China without refueling, like, that is a military game changer. So, you you know, even when COVID happened, right, the pandemic, you're like, I never would have thought of the pandemic. So there's all these things that come up, and you're like, I would never would have thought about that. And so in my mind, I'm always kind of thinking of those black swan events.
Oriana:Those are gonna be the things that really take us in a different direction. It's not going to be the type of stuff that we see every day. I mean, even AI, for example. I know everyone says, like, this is gonna, like, change the course of whatever, but I am I've never met an expert in AI that could give me a solid answer of, like, how warfare is gonna change. I'm like, describe to me.
Oriana:Okay. I have, you know, I have a a you know, I'm very simple. Like, I have a bomber that's taking a bomb from this place to this place. Tell me what AI changes about that. You know, we have our precision already.
Oriana:Like, maybe, you know, maybe we can disseminate we can process more information so we are better at targeting or something, but it doesn't seem to me to be like a fundamental change in the future. So it's really gonna be something totally, totally unpredictable, and I, you know, don't wanna be too hubristic to to think that I would be the one to come up with the answer to that question.
Markham:But we won't try to pin you down in it. Look. This has been a fascinating insight into the rise of China, and thank you very much for this. Really appreciate it.
Oriana:Yeah. Thank you for having me.