Kyle Bass, Hayman Capital Management founder and CIO, talks about the trade war with China, He says the U.S. and China don’t trust each other. Bass speaks with David Westin on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)
Bass: Xi Lied To Us About Militarizing The South China Sea
Kyle you’ve said that the United States right now is making the right moves in this trade battle going on with China. To what end. What is the goal here. You’ve also said that really it’s almost impossible for the Chinese Communist Party to agree to the sort of agreement that President Trump is insisting upon. If we can never get to that agreement then what are we going to accomplish here. Is it mainly to just bring down the Chinese to slow down their economy.
No it’s clear that our goal is not to slow down the Chinese economy. Our goal is to protect U.S. national security. I mean they’ve stolen the 200 to 300 billion dollars worth of intellectual property from us every year for 10 years. They’ve done so many things to the United States because we’ve basically been a pacifist nation over many different administrations. And we’re finally standing up and saying listen this has to change. And you know a great example is you know look President Xi sat in a Rose Garden with President Obama and told us that he wasn’t militarizing the South China Sea that was never going to happen. And at the same time he was militarizing the South China Sea, he was lying. It was president to president. He lied to us. And so when you say to what end I think the U.S. needs to think about our own national security in the long run. And we need to think about how we’re going to trade with China how we’re going to have a relationship with China when we clearly we don’t trust one another. So we need to bring trust back into this situation and we need to set the ground rules for what the U.S. is willing to do in a trade relationship i.e. not be stolen from not to also face industrial policy that can actually as a state actor they can put various industries and the U.S. out of business simply by selling things below market prices that the Chinese Communist Party has a different idea of how it how it wants to rule the world i.e. whether you’re looking at China 20 25 or whether you’re looking at a 100 year marathon where that ends in 2049. China’s goal is simple China’s goal is to maintain their control of the Chinese Communist Party and their willingness to suffer to do so i.e. they don’t have economic well-being as their number one goal. Their main number one goal is is again to maintain rule and to maintain the legitimacy of rule by the Communist Party. Those are different things then the US looks at.