Arthur Kroeber

140 countries trade more with China than they do with the United States, which is not true during the Cold War.

So if you go to Southeast Asia, you go to Latin America, and you say, how would you like to join our anti-China alliance?

They will say, no way.

This makes no sense for me.

I import a lot of my industrial inputs from China.

A lot of my consumer goods, this is really a critical relationship.

I might have some concerns about the trade balance and blah, blah, blah, but I am not going to go up against this country that is now either my number one or my number two economic partner, certainly on the trade side and increasingly on the investment side.

That is a non-viable strategy.

It will never work.

China has integrated itself into the global economy very successfully.

And this is just like a fact that we need to live with.

So we need to have a strategy that recognizes this is a reality, that there are a lot of strengths that the U.S.

has to bear if it's willing to play them, and that we have the advantages of a dynamic system and, frankly, a lot more

sort of creativity and flexibility in our financial system than the Chinese do.

So it's perfectly possible to come up with a coexistence scenario in which we do really well.

We have domestic policies that sort out our own imbalances, both economic and social.

And we have a significant degree of engagement with China that is competitive but hopefully can be bounded so that we don't wind up in a hot conflict situation, which would be the worst of all possible worlds.

Great.

Thanks so much.

I really enjoyed it.