From Asia Society Switzerland, this is State of Asia. I'm Remco Daanis. I hope if you were lucky enough to have had a break over the past few days it was a good one. And right here at the start of 2025 I'd like to say: well, it's gonna be a year.
But as long as we're still in this post-holiday mood, we thought we'd kick off the year with an easy podcast. A conversation on the state of the world. Yeah, that sounds big. It is impossibly big. But we've got great minds to riff on it. Asia Society President and CEO Kyung Hwa Kang
and renowned economic historian and professor at Columbia University in New York, Adam Tooze. And their conversation was recorded at the third edition of Asia Society Switzerland's flagship conference, State of Asia, last November in Zurich. It was held just two days after the 2024 US election that paved the way for Donald Trump to return to the White House later this month.
Asian Society's Kyung-Hwa Kang starts the conversation by referring to a survey of the conference audience, which asked how Europe should respond to the ever-increasing importance of Asia. Just accept it, push back against it, or, the option favored by a large majority of the audience, take a flexible position and see what's possible as a new world order comes around.
Here we go, over to Adam Tooze and Kyung-Hwa Kang. You know, I think I spent last night just mulling over the firecracker points that you presented at your speech, but
but also combining that with the results of the election and what Asian capitals might be thinking of the current situation. First of all, I think the questions reflect a very Europe-centered mindset. I think if you were to take a survey of Asian countries, you wouldn't frame it like that. The idea that you almost come up with an immediate idea of a resistance pushback
I think Asian mindsets have worked exactly the other way, except if there's a need for pushback and be very flexible. So the options would have been the other way around, but that you give this option in this order to me is an indication of what I call the habit of the heart.
that lays deep inside the European mindset, which is very Western-centered, which is very focused on the transatlantic alliance and relationship. And now faced with this reality that is shifting, what this requires is a shift in the mindset as well. And I'm rather happy to see the results ultimately saying, yes, we need to be flexible. And that's a very pragmatic approach.
But I think the election results yesterday, what was shocking to everybody, I think, was how not close it was. We expected it to be very close. All the polls indicated that it was a toss-up. But the result is so clear who lost and who won. So all the expectations build on that idea of a close election, that it will be contested by the losing side.
There might even be some political violence by some extremist elements on the losing side. There will be turmoil. White House would be distracted by this turmoil, and so there will be this continuation of an agonizing period for the rest of the world as we watch. And that has now completely put to rest, right? And the expectation now, a day later, is the second Trump administration issue
It's going to come out roaring, even during the transition period. All the expectations, all the protocols reserved for the outgoing presidency and the summitry decorum, it's just going to go out the window. We saw some of that.
during the first Trump presidency, and I think it's going to be even more so. So the reality has hit us without any buffer, without any of that transition period. And so, you know, I was looking at how this was accepting in my country, South Korea, security ally countries,
in the middle of negotiating a very important cost-sharing deal, finalized with the Biden administration. And I think the expectation was that we would get this through the National Assembly, whoever wins during the transition. That scenario no longer applies. There's almost an immediate expectation that the Trump camp will collapse.
will demand that we renegotiate this. So it's an urgent set of issues that we need to deal with the United States. But I think in Europe, it's also this sense of an urgency added to the sense of America is withdrawing. America cares less.
it would care far less about its ties with the transatlantic alliance and withdrawing. So you have to think of the world with America less engaged, in the Europe, the transatlantic alliance, and where does that leave Europe? Does it prompt Europe to be more united?
to really switch its mindset towards other parts of the world, the growing part of the world that is Asia, and that therefore this forces Europe to become even more closer with Asia in its, you know, as you say, it's diverse, there's pockets of vulnerability, there are pockets of growth, there are pockets of westernized Asia that is
you know, Korea and Japan and other countries. So this is the world that we are facing. And I think in the end, I think all countries have to be practical. I thought the poll was very fascinating, in part because there seems to be near unanimity in this room. I mean, there's obviously selection bias at work because it's a bunch of well-heeled Swiss people who've signed up to come to a conference on Asia.
But 87% in favor of the flexibility option is nevertheless a really resounding vote when the position in Washington, at least insofar as Asia can be read as synonymous with China, is in fact the bottom option, perhaps the least, is it still up there? No, it's not up there anymore. One of the less popular options, the resistance option. And so the kind of, the choice of flexibility option
is consensual in this room. And obviously, as Dr. Kang is saying, it makes a great deal of sense to practically minded people, not just in Asia, I think, but around the world, that it isn't necessarily the prevailing view in one of the main centers of power. Or I think the idea that you should somehow muscle up and confront this force of history and react to it in a powerful way is...
almost second nature. I don't actually think that tendency is all that pronounced in Europe, per se. So I would differentiate very strongly between...
the instincts, the relatively hardwired instincts of the Washington, D.C. and the position in many of the European capitals. In Brussels, I think we've seen a more a tendency on the von der Leyen commission. We've seen a tendency to align itself quite strongly with the American position. But I don't think that proclivity is necessarily deeply shared in Berlin. France can swing either way. London might line up with an American position. But it's it's a complicated it's a complicated picture.
And as for the US election, I mean, don't let this is a first past the post system. So it's just done its job. It's translated a very narrow national majority into something clear outcomes, clear outcomes at every level. That's what the first past the post system is designed to do. And it's done its job.
America remains a society divided at a first approximation 50/50 between two camps which are profoundly unreconciled with each other and the reason it's as smooth as it is in this particular case is that the Republicans won and if it had been the other way around regardless of the size of the Democratic Party's majority we would have been in a state of contested elections for weeks if not months to come like just so that we're clear
And amongst folks like yourselves in American meetings just like this, the reassuring line on that was, well, this time the Democrats are the incumbents, so they control the levers of power. But don't kid yourselves about how this would go four years from now if the Democrats eventually rally because the Trump will not be able to run for a third term.
And the real questions about the American Constitution will arise if the Democrats do finally come up with a plausible candidate and do finally run an intelligent campaign and might actually win in four years' time, whether then, in the face of an entrenched Republican campaign,
incumbency whether they will actually be allowed to or will be able to rely on the rule of law and the Constitution of the United States operating. So though I agree with you, we have a kind of eerie calm in the current moment. I think the question marks about America's polity and its constitution remain. I think it would be extremely unwise to consider those questions closed. And that then should also orientate, if we're asking these questions from the point of view of Europe,
I do indeed think that suggests from a European point of view that Europe needs to be balancing. Europe needs to be hedging. It isn't just the Indias of this world that need to be hedging at this point. That, of course, has a European tradition. It will be called Gaulism. It's not a it's not a sudden new script. It's a familiar position now.
It's one I think at this point the Americans might actually welcome. Certainly the Trump folks are not keen on the kind of relatively slavish adherence that we've seen reinforced by the war in Ukraine, very much welcomed by a character like Blinken who appeared in the opening video here. I don't think that's what Washington wants anymore. And yes, that does open up the possibility of Asian partners. And I think there are two options there, right? Or three maybe at least.
There is the revived Atlanticism, which is an alliance of values with the great East Asian democracies, South Korea, Japan. There is the Indo-Pacific, the allure of the Indo-Pacific, which is a strange allagement with the great democracy of India, whose characteristics are obviously very different from those of South Korea and Japan.
And then there's the flat-out pragmatism, which is quite popular in Berlin in some circles, which is just trying to do deals with China about key issues.
And the struggle there within the European camp is going to be to use the Germans as our foil here for thinking about this between a SPD pragmatic business position, which says BASF, Siemens, VW, Mercedes have no future VW outside some relationship with China, as difficult as that may be. And a Green Party position, which is closer to an American neoconservative position, which says Taiwan, Taiwan, Taiwan, Taiwan.
Why? Because democracy. And that I think those that's kind of the map of the options crudely put that, you know, the general umbrella is a kind of Gaullism. And then within, in other words, a balancing. And then within that, the questions are these difficult ones then of where do you balance with whom do you balance? What are the criteria that you use for organizing that balancing? So I think those are the.
If we're going to go for this flexibility thing, that is the kind of range of options that lies ahead of us. Flexibility sounds easy, but it's surely what we should be setting ourselves up to do. But that's where all of them, I think, the interesting questions start. And for the Europeans as well as for Europe.
And to a degree, also, this question is posed for the US as well. Those then become some of the stakes. I think we get that flexibility response because this is a very practical-minded crowd of people wanting to do with Asia, with China, with India. But if we have a crowd of academicians or professors
public servants, it could be very different. I think. But I think... Do you think that seems a crucial point to me? Do you really think that? Because I had this, I did this op-ed in the FT where I said the thing that really terrified me about U.S. relations to China right now is it isn't the peace interest that is governing that axis anymore. Hmm.
Once upon a time, we could hand off foreign policy towards China to folks like Robert Rubin and Paulson. And there was a clear sense that what was going to drive policy was going to be business, pragmatism. Also, huge curiosity. Paulson and Paulson's fascinated by China and all things Chinese. This isn't just monetary. It's also a cultural engagement. But then if you've got Nelbridge Colby or Jake Sullivan even calling the shots on policy towards China...
Yeah, we're definitely in the category three option. We're pushing back because it's the historic mission of the United States to stand up for the great project of democracy and freedom. And so this is a moment of historic challenge and it's time to giddy up. Right. And that creates a very profound tension, I think. Well, this is the political agenda. But I think the businesses, if you talk to key people in business who still do work in China, they're as equally important.
practical-minded and flexible. As are wonderful people here this morning, yes. But I think the political mindset, as indicated by Mr. Sullivan and the political leadership, also indicates a sense of a loss of control, a loss of dominance. And I don't think that's a healthy way to drive policy because the emotional content...
blurries the real national interest at stake here. And I think once in power, I mean, the campaign rhetoric is one thing, but once in power, if you really coolly, cool-headed calculation of your national interest,
You come to the question, is it rational, is it in your self-interest to continue to push for dominance when you're doing everything you can to undermine the credibility of that dominance? And so I think that there will be a significant amount of that thinking. Okay, so if you want, America says, we want to withdraw. We don't want to take care of Europe anymore, and you do it.
You can't square that with this idea, but we still want to dominate. Well, two different versions. One would be a hegemonic coalition style leadership dominance. And another one, which I think the Trump folks, or at least Trump himself, wants is a more kind of capricious dominance.
So the difference between a well-managed family with clear structures of emotional alignment and the nightmare patriarchal dad or uncle that comes home drunk on a Friday night and beats people up. And they're both two types of dominance. But one has a stable structure and the other one is this violent, impulsive, kind of lashing out. I was really struck, though, by your theme about confidence because I think so much of the time...
by way of Asia and relations with Asia, especially on the US side, folks are actually processing internal struggles inside the United States. So Sullivan's famous line was, it's not my job as national security advisor to clear a market access for Goldman Sachs. My job is to defend American workers against Chinese breaches of international trade conventions. So
So what is he really saying? Is he saying anything about China at all? Or is he actually saying something about America? It seems to me he's actually talking about America. If you think about the radicalization of the Trump administration, thoughts going back to that hard right now, summer of 2020, you have Attorney General Barr waging a campaign against Hollywood.
Because notionally they're running their scripts past CCP censors because they want the Chinese market but really Bar is a lifelong radical conservative who is waging a campaign against liberal Hollywood and the fact that liberals in Hollywood are also in bed with the CCP is like Perfect for him as a stick with which to beat liberal Hollywood So there's a way in which by way of external relations and this goes to your point about confidence a self-confident hegemon has
has all of their domestic ducks in a row, has the coalitions in place that secure power at home, which is why I would go back to the first point I made about the American elections. The really worrying thing about it is it still remains profoundly balanced, actually. Like the first-past-the-post system has produced a solid majority here, but the underlying reality of American society is it doesn't know which way to go. It actually doesn't have a clear vision of future. And that means it's
Exactly to your point. It's that lack of confidence really. It's that lack of clarity of vision. Lack of clarity. That is then reflected in relations with others. Whose complexity and difference gives you every, you know, you can then have your reaction to it. Okay. Well, that's a huge cold water on this idea of America at the end being able to self-renew. Is that applicable still?
It's honestly a very serious question. I agree. And it's not a new question. It's a repeated question in American history. And so for conservatives, the last moment was Reagan. For liberals, the last moment was probably the Civil Rights Revolution. I do think at this point there is some sense about the possibility of that. But that too is a question which is, after all, posed of...
Asian societies as well thinking about I mean No, you must be very familiar with these surveys of like South Korea is the unhappiest country in the world, but you know as a the lying flat Yeah, you know protests in China the sense that there too. There is a growth model that was spectacularly world transforming Lee transcendingly successful and yet
also has paid, you know, people have paid a huge price. Two generations of the people who made this growth have paid an enormous price. And there is a sense there, too, of the need for a kind of, just as an outsider, one gets the impression that there might be an analogy here, where also there is a need for renewal and then the question of what that renewal might look like. Yes, I think you're absolutely right. South Korea is disappearing. Our population is
It's 0.68. Some projections say by the end of this century, 95% of the Korean population will have disappeared. So this is a really existential challenge. But I think...
The nature of the challenge is different. America, it's internal turmoil for the identity of the country. This is more of a sociological issue that is the result of, in fact, these decades of fast-paced growths.
You talked about the democratic challenge in many of these Asian countries, and it's ironical that what drove that growth was this desire for a better life. Mm-hmm.
to educate your kids so that they could have a better life than yourself. But it is also this drive for education that is preventing young couples from having kids because it is so competitive. It is so draining for career women to have a family and a kid at the same time. So it's not just a...
You know, dropping fertility, it's across the board. It's everywhere except for sub-Sahara and some of these fragile countries in Asia. But overall, somehow it's dropping everywhere. And I think because women now have choices, right? We certainly don't want to take away that choice, but you have to find somehow to make life easier.
much easier to have children, to turn that around in any sense. I think that's a very difficult proposition. I think what we should do is to get the most of the people that we have. That's also not going to address this challenge. But
So what drove it, it's not some internal division that is the problem for renewal in the East Asian countries, but a consequence of, in fact, these decades of growth that is now hitting the societies with a population challenge. So how much, the question maybe ought to be, how much more rising can Asia take?
How much more of this rising can we cope with? Like, it's hard work doing all this rising. It's hard work lifting the world economy. If they're wise and open up much more to immigration, that should be a big part of the solution. It is truly astonishing. You visit the big Asian cities coming from the outside, and obviously Western eyes are not well attuned to subtle ethnic differences within Asian society. But nevertheless, Seoul is the most uniform, homogenous city.
Mega city. I've ever been in, in my entire life. It is astonishingly homogenous. You come from New York or London or Paris or Hong Kong even, but even Hong Kong is a relatively homogenous city. It's an overwhelmingly Chinese town now. But that sense of just the massive homogeneity is extraordinary. But I think...
There's a little bit of diversity under the looks because there are a significant number of workers from Southeast Asia. And if you go to the rural regions, some villages are entirely multicultural. Yes, because of marriages with women from the Southeast countries and their children. Some of their children are the only kids in school these days. So it's moving in that direction whether you like it or not, but I think there has to be a huge shift
to really open up to that migration flow. And that's the one thing, that's a necessary thing. I'm not sure that's going to solve the problem, but that's certainly one thing that countries like Korea and Japan should do.
You've been listening to Asia Society President and CEO Kyung Hwa Kang and economic historian Adam Tooze in conversation about the state of the world at our State of Asia conference last November in Zurich. Over the next couple of weeks, we'll be back with a few more episodes recorded at that conference. Expect insightful discussions from frontline experts on the relevant issues we'll see playing out in Asia, Europe, the US and elsewhere.
You'll find all the information on the conference and the speakers on the Asia Society Switzerland website. The link is in the show notes. And be sure to subscribe to our weekly newsletter to be the first to learn about the 2025 edition of State of Asia and the many other events and activities we organize. The link to sign up, as you guessed it, in the show notes. For now, I'm Rem Kotanis. Have a solid new year and thanks very much for listening.