Wilbur Ross: China's sanctions won't change Biden's trade policy

Wilbur Ross UP FOLKS LIKE MYSELF NONE OF US HAVE BEEN FINGERED. DON’T KNOW WHY. BUT BY FAR THE MOST PROMINENT NAME IN CHINA’S LATEST BATCH OF SANCTIONS IS MY GOOD FRIEND AND FORMER COMMERCE SECRETARY WILBUR ROSS, WHO JUST HAPPENS TO BE OUR VERY NEXT GUEST. SO, WILBUR, THANK YOU FOR COMING ON. I DON’T THINK YOU ARE AS THRILLED ABOUT IT AS I WOULD LIKE TO BE. I DON’T KNOW, I’M VERY JEALOUS OF BUT WHY DO YOU THINK THEY WENT AFTER YOU? NOW YOU WERE INVOLVED WITH THE CHINA NEGOTIATIONS IN A NUMBER OF PLACES. >> SURE. LARRY: BUT IT IS KIND OF LATE TO THE PARTY, YOU KNOW WHAT I MEAN? MOST EVERYBODY GOT FINGERED LAST WINTER. SO WHAT DO YOU THINK THEY WERE DOING HERE? >> WELL, LARRY, I THINK THAT VIEWING THIS IN LARGE MEASURE AS A PR EVENT AND A LOT OF THE PEOPLE THAT THEY NAMED THIS TIME ARE NOT HOUSEHOLD NAMES. SO I THINK THEY WANTED SOMEBODY ON THE LIST THAT MIGHT DRAW SOME PUBLIC ATTENTION TO IT AND I THINK THAT’S PROBABLY THE REASON WHY THEY PUT ME ON. CERTAINLY THERE IS NO SPECIAL REASON TO THINK THAT SANCTIONING ME IS GOING TO CHANGE PRESIDENT BIDEN’S TRADE POLICY. IT IS TRUE THAT PRESIDENT BIDEN’S ATTITUDE TOWARD CHINA AND THAT OF MY SUCCESSOR AT COMMERCE TOWARD CHINA ARE VERY, VERY SIMILAR TO MY IDEAS, YOUR IDEAS, AND ALL THE IDEAS OF OUR ADMINISTRATION. SO MAYBE IT IS GUILT BY THOUGHT ASSOCIATION. LARRY: WELL, YEAH. LOOK IT, LET’S PURSUE THAT. IT DOES APPEAR, AND YOU KNOW MIKE POMPEO SUGGESTED THAT ALTHOUGH MIKE IS VERY, VERY CRITICAL OF THE WUHAN LAB LEAK ARGUMENTS BUT OTHER THAN THAT HE AGREES WITH O’BRIEN AND LIGHTHIZER AND MYSELF THAT IT LOOKS LIKE THE BIDENS, WILBUR, ARE CONTINUING FORMER PRESIDENT TRUMP’S TOUGH POLICIES WITH CHINA. DO YOU AGREE WITH THAT? IS THAT GENERALLY RIGHT IN YOUR JUDGMENT? >> YES, I THINK IT IS. I HAVE SEEN SOME EXPORT CONTROL ACTIONS COMMERCE HAS TAKEN RECENTLY AND THEY’RE VERY CONSISTENT WITH WHAT WE WERE DOING. I ALSO THINK THAT THE RHETORIC FROM PRESIDENT BIDEN HAS BEEN PRETTY STRONG ON CHINA. AND SEW, I WOULD SAY THAT IT IS MUCH MORE OF A CONTINUATION OF OUR POLICY THAN IT IS ANYTHING NEW AND DIFFERENT. WE DON’T REALLY KNOW YET IS HOW STRONG WILL HE BE ON TAIWAN. LARRY: YES, THAT IS GOING TO BE A KEY TEST. I WAS GOING TO CHIME IN HE IS A LOT TOUGHER ON CHINA THAN HE IS China ON RUSSIA BUT THAT IS NEITHER HERE NOR THERE. WILBUR ROSS, CHINA IS TIGHTENING UP EVERYTHING, NOT JUST WITH RESPECT TO HONG KONG AND MAYBE TAIWAN. WE’VE ALWAYS KNOWN ABOUT THE UYGHURS AND SO FORTH BUT IN TERMS OF THEIR ECONOMY IT JUST SEEMS LIKE THE STATE WANTS TO CONTROL EVERYTHING INCLUDING THE ENTREPRENEURS THAT THEY’RE FAVORING THESE BIG STATE-OWNED ENTERPRISES RATHER THAN THE ENTREPRENEURIAL COMPANIES. YOU’VE DONE BUSINESS IN CHINA. HAVE YOU NOTICED THIS? >> OH, YES, VERY MUCH SO AND I THINK IT REALLY STARTED WITH JACK MA WHEN EVEN MISINTERPRETED OR PERHAPS DECIDED TO FLOUT SOME EDICTS THEY HAD GIVEN HIM AT ALIBABA. THAT SEEMS TO ME TO HAVE TOUCHED OFF A VERY, VERY STRONG REACTION AGAINST WEALTHY CHINESE ENTREPRENEURS, ESPECIALLY IN THE TECH SPACE. I THINK THEY ARE CONCERNED THAT ONCE THESE FELLOWS GET TO BE WEALTHY AND PARTICULARLY IF THE WEALTH IS DOMICILED OUTSIDE, THAT THEY’RE VERY HARD TO CONTROL AND IF THERE IS ONE THING THAT CHINA ALWAYS SEEMS INTERESTED IN ALMOST OBSESSED WITH IT’S CONTROL. SO I THINK A LOT OF THIS GETS TO THE CONTROL ISSUE. AND YOU SAW WHAT THEY DID TO DIDI. WITH DIDI COULD JUST AS WELL HAVE THEM PULL THE IPO AND THEN DONE WHATEVER THEY WERE GOING TO DO. INSTEAD THEY LET THE IPO GO FORWARD AND THEN PULLED THE RUG OUT FROM UNDER THEM. WELL THAT HAD TO BE INTENDED TO BE DIRECTLY HURTFUL TO THEM AND A BIG WARNING SHOT TO INVESTORS, BE VERY CAREFUL OF BUYING THESE HIGH FLYING, HIGH VALUE TECH COMPANIES THAT ARE COMING TO THE MARKET IN CHINA. IT IS THE ONLY WAY I CAN EXPLAIN IT BECAUSE THEY OBVIOUSLY KNEW THE IPO WAS COMING. THEY HAD TO KNOW THEY’RE TAKING THE ACTIONS THAT THEY DID IMMEDIATELY AFTER THE IPO WOULD BE VERY DESTRUCTIVE TO THE PRICE. SO I CAN ONLY ASSUME THEY DID IT AS A VERY CALCULATED, VERY DELIBERATE MOVE TO SEND A MESSAGE TO THE ENTREPRENEURS, DON’T FOOL AROUND WITH US OR YOU WILL WISH YOU HADN’T. LARRY: REALLY. THEY WENT AFTER BYTEDANCE AND THEIR HOPED FOR PUBLIC OFFERINGS. JUST TODAY THEY’RE IN THE NEWS WITH TENCENT, GOING AFTER THEM. THE STOCK JUST ABOUT COLLAPSED. THE STOCK JUST ABOUT COLLAPSED. I MEAN BASICALLY I I SEE XI, POLITBURO THEY’RE CLAMPING DOWN ON FREEDOMS, THEY’RE CLAMPING Economy DOWN ON ECONOMIC FREEDOMS. THEY’RE LEAVING THE DONG XIAOPING MODEL THAT OPENED MARKET FORCES AND TAKING DOWN MARKET FORCES. I GUESS MY QUESTION TO YOU, DOES THIS AT SOME POINT REALLY DAMAGE THE CHINESE ECONOMY? >> I THINK IT PROBABLY WILL. IT ALREADY HAS HURT THE ECONOMY IN HONG KONG AND THE REAL SHINING LIGHTS IN CHINA HAVE BEEN SOME OF THESE TECH ENTREPRENEURS, PARTICULARLY THE SOCIAL MEDIA GUYS AND THE E-COMMERCE GUYS. SO THOSE HAVE BEEN VERY SHINING LIGHTS FOR THE ECONOMY. THE BIG STATE-OWNED CONGLOMERATES AREN’T DOING ANYTHING ALL THAT EXCITING. THEY’RE FINE. THEY MAKE STEEL. THEY MAKE ALUMINUM. THEY DO THE KIND OF OLD ECONOMY THINGS BUT I HAVEN’T SEEN AN AWFUL LOT OF INNOVATION COME OUT OF THEM. ONE AREA THAT THEY REALLY TRYING TO PUSH IS SEMICONDUCTORS. LARRY: WILBUR, IN A WORD, AS FORMER COMMERCE SECRETARY, YOU AND I WERE ON THE SAME ECONOMIC PANELS IN THE ADMINISTRATION, QUICKLY HOW DO YOU SEE THE U.S. ECONOMY RIGHT NOW? >> WELL THE ECONOMY IS VERY STRONG. FRANKLY IT IS A BIT TOO STRONG. SELECTED INDUSTRIES ARE HAVING A TERRIBLE TIME HIRING. RESTAURANT INDUSTRIES IS A MESS. THEY CAN’T HIRE PEOPLE BECAUSE THEY ARE STILL BETTER OFF NOT TAKING A JOB, JUST TAKING THE CHECKS FROM THE GOVERNMENT. INSTEAD OF CREATING JOBS A LOT OF THESE EFFORTS THAT THEY HAVE MADE HAVE BEEN QUITE COUNTERPRODUCTIVE AND IT IS FINE TO TALK ABOUT, WELL, WE WANT THEM TO HAVE BETTER NEGOTIATING POWER, THAT WILL JUST DRIVE INFLATION. I DON’T KNOW OF A SINGLE RESTAURANT THAT HASN’T MADE A MATERIAL INCREASE IN THE PRICES ITS CHARGING BETWEEN COMMODITY PRICES GOING UP AND LABOR BECOMING BOTH HARDER TO FIND AND MORE EXPENSIVE. THAT IS NOT A GREAT FORMULA. A LOT OF THESE PEOPLE ONLY HAVE ENTRY LEVEL SKILLS. IT ISN’T LIKELY THEY ARE SUDDENLY GOING TO BECOME COMPUTER PROGRAMMERS OR CHIP DESIGNERS OR SOMETHING LIKE THAT. THEY DON’T HAVE THE SKILLS. THEY NEED THE ENTRY LEVEL JOBS. I THINK AT THE END OF THE DAY IT IS MAINLY CREATING MORE DEPENDENCY ON THE FEDERAL GOVERNMENT. LARRY: RIGHT. >> AND NOT PARTICULARLY HEALTHY. LARRY: WILBUR ROSS, RECENT RECIPIENT OF A CHINESE SANCTION. ALSO FORMER COMMERCE SECRETARY AND GREAT FRIEND.