Adam Posen

Absolutely, and I think, Chai, that the president is right to be emphasizing foreign direct investment.

It was foolishness to say they didn't want that.

I mean, if the Chinese are going to quote-unquote steal technology, which to some degree their officials do, it's done through computer means, through surreptitious means, through active bribing and spying in the U.S.,

Meanwhile, if we actually get foreign direct investment into the U.S., we actually get some technology transfer from them inherently.

And we win over some of these potential spies.

Same thing with getting Chinese students into the U.S.

It's a win-win.

But you're right on the facts.

It's down like 90% since before COVID.

Well, what's key about the Thucydides Trap, which is, as you say, Kai, it's about having a rising power get into a conflict with established power, in part because the established power is worried that if they let the rising power continue to rise, they'll lose.

And there is that sense in some parts of Washington.

But in the economic sphere, for all the rhetoric –

Chinese ability to inflict threats on the U.S.

economically can be pushed back against if, A, we provide more value to the Chinese so they have more dependence on us, more incentive to play along, and, B, as long as we're collaborating with the whole world economy to

to discipline China.

And this is not what we've been doing.

And I think what President Xi is indicating is not peaceful intentions, not nice and kind words, but I think a realistic view that the world is a worse place if U.S.

and China are in economic conflict.

And ultimately that if he thinks time is on his side, he doesn't have to do anything right now.

And that's the other key point about economics.