China Resource Expert: Unmasking the Geopolitical Chess Game

Summary

• Geopolitical Shifts: The podcast discusses the gradual shift in global power dynamics, with China and the Shanghai Cooperation Organization (SCO) playing a pivotal role in reshaping alliances and economic strategies, particularly in the Eurasian region.
• Infrastructure and Development: The SCO is expanding its focus from security to economic collaboration, with significant investments in infrastructure and the establishment of a development bank, drawing parallels to China's Belt and Road Initiative.
• Financial Systems: There is a move towards creating financial systems that operate outside the US dollar, with China and other countries developing alternative infrastructures for currency swaps and financial messaging, potentially leading to a new global financial architecture.
• Resource Strategy: The podcast highlights Indonesia's strategic use of Chinese investment to dominate the global nickel market, showcasing how countries can leverage foreign capital to enhance their resource industries.
• Australia's Position: Australia's geopolitical strategy is examined, focusing on its balancing act between the US and China, with potential future shifts towards greater regional integration with Asian neighbors.
• Japan's Energy Dependency: Japan's energy dependency and its potential future alignment with regional powers like China and Russia are discussed, emphasizing the strategic importance of energy security.
• China-Taiwan Relations: The likelihood of China-Taiwan reunification is deemed low in the near term, with current geopolitical tensions influencing public sentiment and political strategies on the island.
• Cultural and Economic Differences: The podcast contrasts the engineering-driven approach of Chinese governance with the legalistic framework of the US, impacting the speed and nature of infrastructure development and social policies.

Transcript

How will the United States lose its superpower status? My guest today says slowly, slowly, and then all at once. Now, while most people today are focused on today's headlines, what Trump did or what President Xi said, my guest today argues that the outcome of this conflict was decided long before either opponent entered the ring. His name is Warwick Powell. He's a veteran geopolitical analyst with a focus on China who spent years advising governments on how geopolitics affects their natural resource strategy. You're going to enjoy this episode. Here is Warwick Powell. This is Jay Martin. I'm excited to have you back on, Warwick. It's good to see you again. And there's like five, 10 different directions I want to go today. So, we're going to jam a lot in, but I'm looking forward to this. Let's go. So, here's where I want to start. I know you just got back from Beijing on the heels of the Shanghai Cooperation Organization Summit. This is the fifth summit they've hosted and by far the biggest I think over 20 nations participated this year and there was a lot of I almost want to call it performative uh pieces to this summit. Um, obviously lots of uh candid photos of Modi, Putin, and Gi shaking hands and holding hands and laughing together. Um, an official from South Korea shaking hands with Kim Jong-un on stage. And it struck me as a demonstration by President Xi that this is the role we now play in the world. Uh, we're the home to the disenfranchised. We're the home to the forgotten. Now, this has been a long time coming, but you just got back from Beijing. Before I hit record, you were talking about the sort of global response to that summit. I want to let's start there. What has been the global response? What's been valid? What's been sensationalized? Look, I think the response has been a bit of a mixed bag. There's a tendency to want to dismiss what's going on in the global south, so to speak. Um, and that has been the case for quite a number of years. And that in large part I think reflects a process of adjustment to new realities. So displacement anxiety amongst um former global hedgeimons leads um commentators and and politicians to in a sense not want to confront the changing world. The Shanghai Corporation Organization meaning the SCAI summit in part reflects and consolidates the nature of the changes and the direction of the changes. The nature of the changes is one that sees the global south and in this particular case the countries across the Eurasian continent um extending their uh their collaborative relationships and the institutions that they've been building over the last 20 odd years around mainly security questions to do with terrorism and extremism to now extending from that uh to build economic and financial collaborative institutions. So the there's a very important shift that is taking place in terms of the substance of the change. uh we see out of the SCA summit uh the ongoing commitments around infrastructure collaborations in transport and energy as well as in information and communication systems much of which was not properly or well reported or widely reported in the western English language mainstream media much to the disadvantage of people I think who are needing to understand the dynamics of the world and the other thing that is happening at a financial level uh with The SEO is the announcements of an SEO development bank and that uh these two things combined infrastructure development and financial services infrastructure development really says that the SEO is migrating from an organization focused around coordinating responses to terrorism risks and extremism risks and separatist risks to one that is far deeper and which sees the future longrun security and prosperity of its member states as being in a sense a full stack proposition. The optics um look increasingly the these sorts of global events are run with with half an eye to the optics. If you think back 20 odd years ago, I don't think anybody really paid that much attention to the optics uh other than the nicities of diplomatic protocol. But these days with the eyes of the world through social media, real time broadcasting, uh, commentators everywhere, these events become as much about message projection as they are about the substance of things. And you're absolutely right that some of the key imagery in particular that um was curated at the event was aimed at sending some important messages. uh now how those messages are are received and interpreted I think does vary a bit but I think from an SEO point of view the message is that the countries of the member states the Eurasian countries are willing and able to find common ground notwithstanding differences that they may have and so that was really the Modi um she daunt and um and being able to do that the uh the shaking of the hands of the two careers was really a message in a sense to say look uh once again these are the kind of formats that enable parties who have been engaged in long-standing disputes to begin to find ways of engaging and without engaging you actually don't have a way of navigating hopefully towards a long-term peaceful resolution of whatever the conflicts were about. So I think that they're the real main messages. Now from a western media perspective, um the SEO was in part again dismissed. There was a lot of concern nonetheless um with uh the the the signals that um came out of uh Mod's outreach to uh to China and the context that that happened which of course was within the sort of week week and a half of the uh US announcements of additional tariffs on Indian products uh and President Trump's description of India as a as a what a dead economy or something along ong those lines. So um so I think the SEO partly through coincidence of timing but also partly through an increasing sensibility amongst the people involved, the parties, the individuals and of course their their teams to with an eye to the optics. um was really announcing to the world that uh the global south or at least the northern hemisphere Eurasian part of the global south um was here and was here to stay. So thank you for that. Now a few things that I I want to pull on there. First I want to understand the Shanghai Cooperation Organization Development Bank a little bit better. you referenced the SEO development bank and you mentioned security and sort of counterterrorist um activities as part of their initiatives and I was curious is this some kind of of a version two of the belt and road initiative you know since 2013 via the Chinese Development Bank and and another bank I'm failing on the name um in China they've delivered around a trillion dollars in infrastructure loans to 103 countries around the world and this has been sort of their bridge to the future. We're going to elevate the next generation of consumers by building the ports, the bridges, the roads, the mines, the refineries, the water treatment plants, whatever you need to elevate up in society so that you can purchase Chinese goods. I mean that was one angle on it because the BRRI the belt and road initiative was from my understanding launched after China suffered greatly in 2008 when Europe and America stopped buying their goods in such quantity. So they look to secure future consumer bases. I always looked at the Barri as a parallel to the Americans weapons diplomacy. So if if the BRRI is delivering infrastructure loans to 103 countries around the world, well the US sells weapons to 97 countries around the world. So it's kind of like a you know they're securing alliance with weaponry. We're securing alliance they're securing alliance with infrastructure, but it's it's sort of two strategies run at the same with the same goal in mind. Um future alliances in the event of a global conflict. Um h how does that mature does that mature into the SEO development bank and how do things change and am I completely off base by saying this is the next version of the BARRI? Look, I think it adds another layer to the Barri. Let's not forget that the BarRi was launched in Central Asia in 2013 and um and it built on the historic idea of the Silk Road which connected China with um with Europe and uh and then there was a maritime silk road silk road as well. So the BRRI really was as you say an an infrastructured driven initiative from China that uh served a broad range of objectives. One was that it enabled the laying out of the infrastructure needed to support trade because without that you're never going to be able to move things. So you need ports, you need railroads, you need roads, you need airports because without those you're not going to be able to move things from A to B. Once those things are built, you're able then to intensify the trading relationships and that creates a secondary market then for uh Chinese materials and goods and products. But it also enables the developing countries to move things at greater scale to China. One of the challenges for many countries in dealing with China is that the Chinese market is huge. China is about 17% of the world's population and for most other countries well actually bar one India which is slightly larger than China that is a an an immense um undertaking to be able to service that many organizations companies enterprises in particularly the developing world simply don't have the scale capabilities somewhere in their supply chains to meet the kinds of demands that come from servicing a market like China's. And so rolling out this kind of infrastructure was a necessary precondition for China to be able to tap into these economies and access to things that they've got that the Chinese economy itself doesn't have or doesn't have in sufficient volume, whether it's in the arena of natural resources or in things like uh food, fruits, um grains, etc., etc. So that was layer number one. With that layer kind of being largely built out, um we are now moving into a second era, if you will, and that is to create the capabilities for this infrastructure to be exploited. And that means building up enterprises and creating systems that enable production and goods and services to flow smoothly. And this means information systems. And so one of the things that came out of the SEA summit was actually um some joint commitments around information technologies, communication systems. And secondly uh the the the the embedding of that information system into supply chain networks. Overlaying all of this is the finance layer. So the finance layer is needed to continue to support some infrastructure development particularly in the energy arena because that is one area that will require continued augmentation as these uh developing economies continue to develop. underpinning development is actually energy. So without expanding energy systems, you don't actually get development. So that comes first in a sense. So we're going to see financial support geared towards energy systems development. And again, it's a very diverse array of energy capabilities from nuclear capabilities all the way through to micro grids, renewable energies, batteries, um large scale wind turbines and those sorts of things. We're then going to see financing of the enterprises themselves. So as enterprises expand, they need to have capital, working capital to procure inputs and to pay for their resourcing, the staff and the energy that they're going to use to satisfy the growing demands. the infrastructure bank, which is what the SEO bank's going to focus upon, will really help leverage the existing infrastructure that's been put into place and support the ongoing expansion of other economies um in part so that they can take better advantage of the Chinese marketplace. So when China says it is seeking to open up more and to uh play the role of a of of a buyer in the global marketplace for that to happen the supply side actually needs to be boosted at the same time and that's what I think this sort of financing is really focused upon. Okay. Now, could I tr could I call in a real world example where some of this has already played out? And I'll I'm in Indonesia right now. Can I use Indonesia and the nickel industry? Uh Indonesia's been a major player in the nickel sector for a long time, but for the majority of that time, they were just exporting cheap raw nickel ore because they didn't have the refining capability in country. And I think it was President Wodo who tried to create uh sort of like a an OPEC style nickel association which would have been Indonesia, Canada and Australia where most of the world's nickel comes from. But the idea fell flat. Nobody would participate. Uh instead what ended up happening is China financed to the tune of $65 billion um Indonesia's nickel refining industry. And as of today, Indonesia supplies about 65% of the world's refined nickel. Now, for context, OPEC at its peak in 1973 supplied 55% of the world's oil. So 65 is a lot. And if anybody wants to pull up a chart of the nickel price, you'll see what's happened here. Indonesia has flooded the the world with cheap nickel, cheaper than Australia or Canada produce because of Indonesian labor prices. um dropping the price below what is sustainable for Canada or Australia, putting many of those mines now on care and maintenance. And Indonesia is eating up a larger piece of the pie in response. They're projected to hit like 75% plus of the refined nickel sector uh by like the by 2029, like not very far. And it looks like they'll hit it. Once you've cornered the market to the tune of 75%, guess what you do to prices, right? You move them in your favor. Uh and so is this an example? And because all of that infrastructure was built with Chinese money, um the uh the refineries are in play, the product is being moved, the the structure is there. Um this is an act this is a sort of um uh a real this is an example of exactly what you're discussing, Warick, is that correct? In part it is because and and the nickel case I think is really interesting Jay because when the attempts to create this um raw materials nickel OPEC um floundered the Indonesian government did not give up on its own ambitions to secure the long-term prosperity of its nickel sector and it introduced uh policies that um significantly encouraged Chinese investment as it turned out to uh contribute to the development of value adding capability in Indonesia. And that really tilted the market into the favor of Indonesian-based mines and of course Indonesian-based processes. the the lesson learned out of all of this um is and this is perhaps the lesson to be learned by Australia and um and Canada uh is that when opportunities arise to essentially collaborate and to strengthen uh one's bargaining position if you will in global markets then these are things that probably should be looked at a lot more seriously number one and number two um is to recog recognize that China as one of the biggest customers in the world for raw materials is also likely to be one of the uh the most obvious investors in value adding development right and Indonesia grabbed that opportunity with two hands and um and all credit to them. Now obviously uh people in the west in particular raise or continue to raise issues around environmental standards and work standards in Indonesia. But um uh but you know those those considerations aside, it it is quite clear that the Indonesian raw materials and now downstream value adding capabilities uh has put these resources in Indonesia in in the box seat to service Chinese supply chains um further downstream. And I could guess well I could guess why Canada slept on that opportunity. It's not lost on me. It's country's been lost for 12 years from my opinion. And I'm less familiar with Australian politics, but I I imagine they might be sort of comparable. Um shunning the extraction industries and uh projecting virtues of you know our you know renewable future. Um well the other issue there I think is look the Australian metals industry uh has actually pockets of downstream value adding but uh for decades upon decades there's always been talk about trying to develop more downstream value adding out of the metaliferous sector in Australia but it's never come to fruition in large part because the capital commitments required are substantial as you understand and there have been few corporations in Australia willing to commit to that. Those who own the rights to the resources are just as happy mining them and selling them. Um they've got no reason in and of themselves to take on what they would see as additional risk and burden to develop downstream value adding capabilities. You put all of these things together and you can see why those who mine um are not that committed to doing anything else beyond mining. And um and without substantial what I think becomes very clear anyway is that without substantial public support in one shape or another around things like transport infrastructure, energy infrastructure and things like that, the business case is very very difficult. when you are trying to explain to shareholders on quarterly cycles why you're making these massive capex commitments, right? And so it doesn't happen. Um and 10 years later, um you know, nations live with a bunch of regret. Yeah. Yeah. You know, what do you do about that? Um we've seen in Australia um downstream copper um refineries um come to the end of their economic life u and uh and and close down. Interestingly, we do have in Australia a very viable zinc refinery um in North Queensland which over the last 10 years actually transitioned to renewable energy driven which is very interesting because zinc is an electricity intensive processing activity. So uh I think it is a horses for courses question as to how it is that a business case can be made for downstream metals value adding in advanced economies like Australia and Canada. Um it depends on topography and where you are in the world and the nature of the the resources that you've got available. Um but I think the structure of economies and the particularly the fact that many of the mining companies are have zero interest in downstream value adding just makes it very very hard and um and insteps you know countries like Indonesia plenty of natural resources seeking capital and downstream users of that natural resource are your obvious investment partners. Yes. Yes. Yes. And I think Australia has done a much better job than Canada over the last decade. Actually, I'll be at the um uh international mining and resources conference IMAR in Sydney October 21st through 23rd. So, if anyone's going to be there, drop me a note in the comments. Love to love to chat. So, if I were to think forward in these layers, as you've explained, you know, we've we've locked up some uh key trade infrastructure. Um effectively, we've built um the infrastructure to create the supply and receive the demand. um where is the layer that allows transactions to occur outside of the US dollar system and how was that discussed in any sincerity at the SEO summit 2025 and could you bridge this for us Warwick between the infrastructure and the transactions? Look, one of the things to think a way of visualizing I guess what's happening is the creation of the infrastructure that enables value to flow. Now what do I mean by that? Well, value in essence takes two forms and these two forms coexist. One is things that are useful and that get consumed in other production processes or in end consumption and those things obviously move physically from one place to another and get added and subtracted and transformed. What enables that movement is both physical infrastructure but also financial infrastructure because as things move in one direction, payments move in the other. So that's just circuits of value flow. The infrastructure and the economic integrations that are emerging along the Belton road for example and across the Eurasian continent through initiatives such as the SEO is really accelerating the circuits of value flow. the infrastructure that enables the money side to to work uh is is built on a number of layers. Again, one is a number of um currency swap agreements between the people's bank of China um which is the central bank of China and other central banks in other countries. That's that really deals with the issue of liquidity. Banks need to have sufficient liquidity at the end of each day to set all the accounts and um and sometimes swaps are necessary to enable that to happen. On top of that, we then have to have information infrastructure that enables the sending of messages because without secure messaging uh to give instructions for banks to make ledger adjustments, it's pretty hard for those ledger adjustments to be made. So independent uh information infrastructure is then the next layer. For a long long time those messages have been delivered from banks to banks via the swift infrastructure. Now the swift infrastructure runs via the the internet these days. It used to be on Telix of course before the internet days but with the internet the data flows into the data centers in Europe. Um but also there is a backup or a redundant data center that operates in Virginia in North America and that's really where the problems have emerged over the last 20 years. Off the back of the Iraq war, the American intelligence agencies uh ultimately prevailed in seeking access to transactions data from Swift uh to better understand and have visibility to uh the the financing of um of the activities of Iraq in the first place. And then not long thereafter um the American state was able to impose its will on Swift to um block the transmission of messages um from sanctioned banks and that was the beginning in a sense of the weaponization of messaging infrastructure. It's important to remember that Swift is really a way in which in instructions are passed from one bank to another. It's actually not payments per se. It's it's an instructions carrying platform with standardized um information, secure codes and things like that. But once you can intervene in that process and see what the instructions are, who's telling whom to add what and minus what from ledgers and then ultimately stopping messages from being passed, you're obviously stopping the the processes of value flow from happening. So an alternative infrastructure has had to be built for that. China itself developed SIPs CIP um uh Russia also developed it own Iran's developed its own all from about 2013 2014 onwards and these messaging infrastructures um have now connected up a vast swave of banks across the world who are able to communicate with each other outside of the swift communications channels. So we now have agreements for currency swaps. We have communications infrastructure that uh bypasses the swift infrastructure. In other words, it bypasses data centers in Virginia and it enables participating banks to communicate directly with each other. We're now adding in the next layer which is the institutional layer through things like the SEO but not just the SEO bank, the new development bank but also the new development bank that was created 10 years ago from bricks. So another piece of a jigsaw puzzle is being put into place now enabling participating countries and their commercial banks and central banks to interact with each other in environments um where their common purposes and their standards and um and concerns are able to to be uh activated um again outside of an environment that the United States in particular can intervene in. So as the layers get built up um uh participating banks and the countries that obviously these banks come from are able to in in a sense do their own thing. So these are just new circuits um that are beyond the reach of the uh the the powers of western states. The last layer is going to come um when digital currencies in their various forms come out of trial and into the wild. And once that happens, um I think we're going to see a a fast tracking or an acceleration of the circuits by which the the the real world supply chains can be activated and real resources get mobilized. And that will boost the integration and the economic alignment of the participating nation states. It will enable them to trade more effectively with each other with much less friction, fewer transaction costs, and reduced um time lags in between settlements. Now that's important not only because everybody wants to get paid quicker but it actually means that the amount of or the stock of money that is required to lubricate this economic system the amount the stock of liquidity needed is substantially lower. And from an enterprises point of view, because payments are settled quicker, there is much less dormant capital the cost of which enterprises are having to carry. Um, and they are able to mobilize money capital for productive purposes. So, um, you know, as I'm sure you and your audience would understand, um, money capital sitting still isn't really doing much good for you. Um and if you can transact and have that money capital moving quickly because we're settling crossber trade accounts quickly, we're enabling um investment projects to move quickly with less um money capital sitting still. Um we're able to turn that money capital that liquidity in effect into meaningful and impactful value creation. So let me ask you a question about the um I guess the impact that digital trading currency whatever form that ends up taking uh will have. As you walk through this it strikes me that change could come very rapidly once a digital currency is agreed upon enough because it works. And you look at the sort of leader um the regional hedgeimon in the east being China and it's actually over 150 countries that uh took BRRI money not 103 as I said it's like 80% of the world it's a huge number is that leverage for adoption of a Chinese-led global currency and is this forwardthinking engineering which I want to get into with you in a minute on China's part since 2013 Is is this just getting slightly ahead of the game? So when the time comes to roll out an alternative, highly functional global trading currency, the supply and demand rails are long in place. Look, this is about laying out the real economy dimensions that ultimately give purpose to currencies. Okay, the without real economy flow at the end of the day, we live in a world of premisy notes, you know, currencies are literally a form of premisery note. Um they're largely unconditional um as opposed to other kinds of premisy notes. Um but without a real economy or a real economy value foundation, um what what good is a promisary note? whelmed. It allows you to buy more promises about something in the future, but if you can't convert that into things that deliver um tangible goods or services, then there really is not much value at all. And I think what we're seeing in part is the reassertion of the real economy. So over the last 30 years with intensive financialization, particularly in the transatlantic world, um we have an explosion in uh in fictitious capital, you know. So this idea of fictitious capital is premisery notes that provide rights to claims on future value. But if the real economy of goods and services actually can't come to the party then what good is th those particular rights? Well then of not much use at all. So that's the first thing. So we're looking at laying real economy foundations. The second thing though is whether or not China has a strategic intent on enabling its own economy to uh to in effect act as security for a a new global reserve currency. I suspect not actually China has consistently made it clear that it has no interest in replacing the United States. What it means by that is not just the idea of being another global hegeimon. Um, partly because it has a different view of how I think how China thinks the world's unfolding anyway, but partly because I think China sees the experience of the United States as global hedgeimon as a double-edged sword. It comes with significant costs um which are not necessarily costs that China itself thinks are worth um paying whether it's from a military cost point of view or from the point of view of being put in a position where in effect it's running a um global trade deficits so that it can issue more um R&B into the world to keep the world ticking over. Mhm. It does want to um improve and increase the use of R&B in the global system but not in a way that it becomes another USD reserve currency. I say that in part because the politics of multipolarity means that I think China needs to to navigate this uh with quite a little bit bit of sensibility to the other economies that are part of the global south and they're not insubstantial economies and they're not in insubstantial countries with a strong sense of who they are and their willingness to sort of swap out of um subordination to un in you know hedgeimon into you know from the you know frying pan into the fire if you will. So I think China is sensitive to the politics of all of this as well. What I suspect is probably more likely and I think these are the kinds of discussions that have been taken place at both the BRICS level and now at the SEO level is the creation of what is in effect an interbank settlements um unit of currency but one which is only used as an interbank settlements instrument. So this goes back to some of the ideas that for instance John Maynight Kanes proposed in the early 1940s as the United States and the UK at the time were debating the structures of the post-war financial architecture and Kanes proposed the idea of a of a numer which is a settlements instrument that was not a national currency and this was the idea of the bank um the United states at the time uh proposed and sought the United States dollar as the principal settlements currency of the world postwar and by the time the arrangements were bedded down at Breton Woods the United States won the argument. The United States of course at the time towards the end of the war was uh was likely to be one of the few industrial powers left standing. it was going to be a significant surplus country and was in a very very strong position to impose its own will onto the UK and others and that's what happened. But I get the sense um when you look at the commentary from say the governor of the people's bank of China um in some recent speeches that he's given that they're really looking at a global architecture that has something that looks a little bit more like the bank proposition than simply replacing the US dollar with another national currency. Okay. Okay. Thank you for that. Now, um, you know, there's there's two directions that I want to go here, uh, from this. Maybe I'll start with this. At the SEO summit 2025, um, two countries were not there. Well, many countries were not there, but two that I was thinking about might be there one day. And one is Australia. Now, I know you're based in Brisbane, and I want to get your take on this. Australia I feel like has been doing um an efficient job at threading the needle between the US China conflict. Um and I think a statement that came out I don't know few months ago was the United States is our friend, China is our customer. But to me it's like what does that even mean? Nothing. Right? From a proximity standpoint they're an Indo-Pacific country. Um and proximity matters. 30% of their exports go to China. their biggest customer, your biggest client always matters, right? Um, if you were to project forward maybe 10 years into the future, is Australia participating in summits like the SEO? Um, are they realigning with their closer proximity neighbors who have been a bit more forward thinking over the last couple decades? What's your take, Warick? Whoa, you put me on the spot. Um u the look as you say Australia has um threaded the needle um with uh quite a little bit of um diplomatic dexterity over the over the course of the last um well let's let's call it 15 years um sometimes probably a little bit more dextrous than at other times. And I think right now uh on balance um it's probably fair to say that Australia is managing to thread that needle reasonably well. Um there will be people who will have slightly different views of emphasis in terms of what it should or shouldn't do. But I think um if we take as a starting point that Australia um views itself and I mean by that the the political elite um that drive public policy in Australia, the government and the sort of bureaucracy in the security and foreign affairs world. Um their general view of the world is that Australia has an alliance in place with the United States, the ANZIS alliance. Um, Australia has a security dependency on the United States which has actually been uh increasing over the course of the last 15 years rather than decreasing. Um, and but but at the same time, as a result of China's rise, the modernization of China's military, Australia's ongoing economic relationships with the People's Republic of China and the markets of Asia more broadly, and perhaps even uh to some extent a recognition that the United States is reconfiguring to some extent its role in the Western Pacific. And I'll come back to that because I think how Australia understands that is going to affect how Australia navigates the next little while. All of these things coming together um is is impacting on the way that um Australia positions itself. For the time being um Australia will continue to seek to um straddle this fence. Um, I described it once not so long ago as having um one foot on either side of a barb wire fence and one careless step um could lead to some injury. Um, so far uh I think uh over the last say 10 years or so there have been a couple of moments where there have been some missteps that has caused some injury. Not huge injury but some scratches. Um but um but so far Australia has survived that. The issue is it is actually what what others do far more so than what Australia does because in some respects how Australia positions itself is going to be dependent upon where the United States ends up in 10 to 20 years time in this region and how the rest of the region also responds to all of that. So it's a a multi-actor game if you will. See, Australia um not only deals with China in the region, but it also has to deal with the rest of Asia and the rest of Southeast Asia uh has actually a relatively mature approach to the emergence of China in part because it's got centuries of experience, arguably millennia of experience, uh in dealing with a very very big China. Um, we've discussed the Philippines in the past in terms of its its current sort of positioning, but the Philippines aside, the other members of Azan actually have uh, interestingly, I think far more relaxed attitudes about how to deal with a growing China than say Australia does. And Australia is a lot further away. The issue then boils down to where the United States is going to be. Now the United States has been I think engaging in a process of restructuring the way that it postures towards Asia and part of that restructuring involves a certain kind of retrenchment. Now this retrenchment is not a full-scale backing out of Asia. Far from it in fact it's a reconfiguration of responsibilities and firstline responsibilities. And it's done that by progressively reforming a posture which has been a hubs and spokes relationship that it's had in bilateral terms with a bunch of security partners to creating a series of miniaterals where it can seek to have um its allied partners working closely with each other with the United States being able to take one step back, push the others to the front to take primary responsibility um both in terms of finance financing. So, Australia's um up for financing uh substantial American requirements in Australia. So, there's substantial um developments of um naval port facilities in Western Australia, for example, to accommodate American nuclear submarines. um whe whether or not Australia ever gets nuclear submarines um American nuclear submarines will be able to use those facilities in essence as a permanent base. So the allied countries are being pushed to do a lot more. Allied countries also particularly ones closer to China um in particular the Philippines and to some extent Japan are also being pushed to take on a lot more frontline responsibility and with that responsibility comes substantial frontline exposure and risk. So the US in some respects I think is taking that step back. Interestingly, I think in the last 10 days or so, um we've seen reports in Politico, I think from memory, talking about a draft, um defense policy being circulated in the Pentagon that is indicating that certainly there's a debate happening in the Pentagon that perhaps the United States really needs to commit far more resources than it even thought it would have to 5 years ago to the Western Hemisphere. and the ambitions that it may have had in relation to the Western Pacific um are even going to have to take a further backwards take a back seat. Let's see where this all ends up. I don't know where um the the well I've called him defense secretary, but he's actually the war secretary now, isn't he? Um the um the where where the war secretary ends up on all of this. So you you'll recall that um 2011 we had the Obama pivot to Asia um which never really took root because of the continual demands from other parts of the world um putting pressure on American resources and ultimately the outbreak of war in um in in Europe and also in West Asia uh has really I think shown some of the material limitations s and constraints that are now impinging on American ambitions of global primacy. So it's never in a sense been able to fully execute this pivot. Because of that, it has been putting more pressure on its regional partners and allies to step up. Um, both from a financing point of view, though, as we were discussing before, you know, you can finance all you want, but if um if the production systems can only do so much, they can only do so much. And all that will happen then is the prices will rise. Um, and uh and and that has been what's happening. So, military-industrial um uh enterprises, particularly those listed on the stock exchange, are reaping the benefits of all of this. Um their productive capacity really isn't increasing dramatically. Um but, you know, their uh their ability to take forward orders and use forward orders to um to undertake structured finance is is benefiting their financial bottom lines. So, that's where I think Australia's at. Um, in some regards the the issue will come to the extent to which in 10 to 20 years time the United States really is a less prominent part of this region. And if the United States is a less prominent part of this region, which I believe it that is likely to be the case, then uh then it Australia will quietly I suspect um adjust its posture. So, a prominent Australian analyst, Hugh White, Professor Hugh White, actually makes a strong case that this is an inevitability that the United States um will not be uh or in fact is not an Asian hedgeimon today that Australia is going to have to simply come to grips with living in an Asia in which China is the dominant power. End of story. That's where it's going to be. I suspect he's right. Um, and so the debate that's unfolding at the moment in part is between some who want to deny that that possibility or at best defer it, trying to hold the US in the region as long as they can. Um, hoping that maybe something will change. Um, others are actually saying and and it's not just Hu White. There are others now saying, look, um, China's a long way away. Um the burden of proof sits with those who keep talking about or implying that China is a threat to Australia militarily. No one's actually explicitly argued why that's the case. Um and um and and as a consequence of all of this, the entire defense posture is going to need a a a comprehensive overhaul um once these realities set in. Um so uh so rather than 10 years perhaps Jay if we look 20 years ahead the the entire environment will be quite different and um and I'm reasonably confident that Australia will at that moment in time um dextrously as it's always done modify its position. Yeah. Yeah. Okay. So, and just for anybody who who caught that uh when Warwick mentioned the um Secretary of War, Pete Hgse, the uh Ministry of Defense has been rebranded the Ministry of War, which some people might find dystopian or pessimistic. You could also just call it being honest. You know, it is what it is. Um but that that was that reference. Um, you you mentioned some potential conversations happening in the Pentagon encouraging American military policy to double down on the Western Hemisphere and maybe retract a little bit from the Eastern Hemisphere. And so we'd be looking through North America, South America, Europe, um to sort of protect our regional hedgemen status because maybe that's at risk right now instead of spreading ourselves too thin trying to dismantle another regional hedgeim in the east which is China. Um and and so where Australia would land in that because from a proximity standpoint they are in the Indoacific and Hugh White's stance if I have it correct is that Australia will be able to stay neutral. And is that correct that that they could find themselves in a position of neutrality if they play their cards right? They're strong enough to do so and won't have to align with east or west but instead just align with Australia. Is that accurate? Yeah. Look, I mean, I I I'd hate to speak on behalf of someone as preeminent as um as Hugh White, but my understanding of his position is essentially that Australia won't be able to and in fact can't depend upon the US um anymore even today. And therefore, it is going to need to develop a more independent posture. And by doing so, an effect of that is a kind of neutrality. I think that there's a lot going for the idea of Australia um uh reshaping itself and forming a foreign policy that sees itself more explicitly in neutral terms. You know, neutrality isn't simply a question of not picking side A or side B. Neutrality, I think, is actually a very legitimate position. Um it's called picking side C. Um and side C is one that's that can advance a whole bunch of other um active interventions in a region that seeks to contribute to the building of institutions that consolidate uh peaceful relationships between states and which can act in ways that contribute to um if not mitigating tensions and conflicts can certainly help ease tensions and conflicts where tensions and conflicts arise. Australia's challenge now and many in Southeast Asia uh are very mindful of this is that even though geographically it's fair fairly and squarely within the the the Asian region, it's not seen by the countries of Asia and the peoples of Asia as being particularly Asian at all. And that does I think at a certain level affect the extent to which Australia can play that kind of constructive role which I think a country like Australia with its economic solidity um its wealth and its ability to contribute in lots of different ways economically and socially in the region. um it could play, I think, a a a more constructive role from a position of neutrality, but because it's seen and is in effect um an American ally, there is a little bit of weariness about whether or not Australia is speaking for Australia or whether Australia is speaking for um Australia as a subimperial, right, nation. Okay. And there's there's an excellent debate recently between Hugh White and John Mshimer just if you want to hear more about this specific topic. It's a great 25minute conversation. Uh the second country I wanted to ask you about and then I'll move on to the next subject here Warwick is Japan. uh very similar scenario uh from a proximity standpoint, incredibly energy dependent and whenever a country is energy dependent to the extent that Japan is uh like think Sri Lanka uh in 2021 everything can fall apart very very quickly uh especially with a currency as um vulnerable as Japan's um and the majority of their energy comes from the Middle East and coincidentally Australia um same question with Japan where do they find themselves today. Is this a country we should expect to see at the SEO in the coming decade? Yeah, I think it's a great question. I mean, we've touched on it in one of our last discussions in terms of what's going on in North Asia. And um uh the more I've thought about it, the more I think that uh the the potential for Japan to in a sense become the far eastern anchor of an SEO or an SEO plus um is actually quite real um certainly not tomorrow but in 20 years time and the principal reasons revolve around uh the material conditions of Japan. it's uh it's food import dependent uh and it's also energy dependent. Now that part of the world, Northeast Asia has tremendous food and energy resources that can alleviate a lot of the issues that Japan has um particularly going forward. Uh I think that there are also tremendous opportunities for Japan to exploit a better relationship with China particularly in the area of renewables. not for renewable energy's sake but to actually consolidate and accelerate Japanese capabilities in downstream energy um technologies such as hydrogen. Uh the uh the Japanese have developed some very advanced capabilities in this arena. But what really makes hydrogen work um is cheap upstream energy and uh and once you can get marginal costs um down to net almost zero then you've transformed hydrogen and if you can do that that will then lead to I think a very substantial transformation in Japan's own sense of security right so um so again looking forward not tomorrow but 10 20 years time uh it wouldn't surprise me if strategic thinkers in Japan are starting to uh think about how uh it can be more energy sovereign. Uh and part of that is going to be finding a pathway to reconnecting both economically but in the end institutionally with um its northeast Asian neighbors. Now today that's difficult and I don't mean China per se because Japan interestingly like other countries in Asia uh have the ability and demonstrated a capacity to have a very pragmatic relationship with China. It's not to say that there are some in the Japanese security establishment who don't hold um fears about China but um but nonetheless there is a pragmatism that is evident as well. Not excessively ideological capacity to work together. they're talking about um getting the the the tripartite free trade agreement including Korea back on track for example and um and so I think you know that the the Japanese um people and the Japanese political establishment are wise to the fact that where things have been historically meaning the postwar history are highly unlikely to be what the future looks like and again this is going to come down to the the medium-term outlook for American military presence in the region. You know, American troops are on Japan, of course, which creates a distinct uh constraint on uh Japanese maneuverability, and that needs to be something that that gets resolved at some point in time, and that's not going to get resolved tomorrow. It's a bit like the the role of America in NATO. um you know that's not going to get resolved tomorrow because unraveling all of that without something else in place creates risks for countries um and they'll be very reluctant to um uh expose themselves to those sorts of risks. But throw yourself forward 20 years, what does a sovereign secure Japan look like? Well, the sovereign secure Japan is going to look potentially look like a country that um is deeply connected into Northeast Asia and that includes Siberia, Russia, Korean Peninsula and China with a with an energy security that comes from um enhanced hydrogen possibly also um safer and better next generation nuclear power as well. We covered the China Taiwan Taiwan dynamic in depth in our last conversation. So we don't need to revisit the history uh of that. Uh aside from saying as we summarized or as you summarized, it's effectively um legally a stalemate civil war between the Republic of China and the People's Republic of China. And that's sort of the legal grounds for what Taiwan is. I think out of 197 countries in the world, 11 recognize Taiwan's independence. Maybe a couple more sit on the fence, but it's a small minority and it's shrinking. Um, can I ask you a pointed question? Uh, very similar question to mine about Japan and Australia. Uh, do we see the reunification of China, Taiwan, um, this decade in the 2020s? Probably not. Um, now these 11 countries, by the way, don't recognize Taiwan's independence. They recognize the Republic of China. Um, so thank you for that. Being the island of Taiwan, no, being the Republic of China that happens to be doiciled on the island of Taiwan, but which has a claim over the rest of China. So they still recognize one China, right? Just a different just a different one, China. Yes. Thank you for that. So So there isn't actually a country in the world that recognizes Taiwan as an independent country in and of its own right. Um so um they've just landed on a different side of the civil war basically. Look I I I don't think that there will be uh reunification in the next 5 years. Um though stranger things can happen. In large part, I think the the course of the last 12 months in particular, um, a combination of what's been unfolding in Ukraine and what's happening in Washington has, uh, shaken uh, Taiwanese sensibilities and there is a discernable shift in public attitudes, not one that clamors for reunification. but one that has I think taken a backward step from any considerations of what independ of of moving towards independence. The political forces that are pro-independents have experienced a couple of significant defeats in the last few months both in terms of the recall referendum that um that they initiated and also interestingly on the the the voluntary and non-binding referendum on the nuclear power question. uh and both of those uh referenda or votes um went very badly against the independence forces. Now, unsurprisingly, those forces have spun quite hard to say that these weren't related to the question of mainland China itself. Um but no one believes that because during the campaign for the recall, the pro-recall um campaign explicitly said that this was what the question was about. So there has been a strong rebuff. One of the reasons for that I think is uh well it's the combination of reasons. One is actually a realization that perhaps the United States has its own priorities. It's got its own things to deal with and the fate of the Republic of China or the fate of Taiwan is possibly not high on that list. Push, come to shove. And so that's the lesson that's coming out of observing the events in Ukraine. Many observers have sort of talked about, you know, how Beijing might view, you know, what's happening in Ukraine, whether it's that it will become encouraged by it or if the West isn't strong in backing Ukraine, Beijing will then feel it can do X, Y, and Zed. I think the more interesting reaction is actually what's happened on the island itself which is again a realization that perhaps the big protector that that people thought was going to be there and able to come and um you know defend them uh actually is in no position to do any of that. So one is that Washington itself has its own problems and its own priorities but secondly it's just straight material wherewithal. uh the capability of the American military to defend the island um is actually just not real. Um the the air defense systems that supposedly, you know, were going to, you know, keep the Russians at bay have simply failed. uh the long range missiles that were somehow going to you know be able to fight back um simply aren't there in sufficient number one can't be replaced when used and um and aren't effective anyway you know so the these are some of the realities that I think are really starting to dawn on people and as I said look I don't think that this read leads to a clamoring of people suddenly wanting re reunification but I think it has shifted the politics on the island away from um independence. And if things get shakier uh continue to get shakier, then I wouldn't be surprised if there are more activated calls from uh people on the island for a re-engagement with Beijing, right? Uh you know, those engagements haven't taken place for quite some time. uh Beijing refuses to engage with the current administration on the basis that the current administration uh refuses to agree to the 1992 consensus which is that there is one China um and so there are no talks but I wouldn't be surprised if at some point over the next 5 years the the demand for talks grows number one that there are more crossstrait interactions um we're seeing that with um you know former presidents, national presidents, the ROC visiting um the mainland. We've seen that with um social media influencers visiting the mainland. And the other part of the discussion that I would expect to take place, but much quieter is going to be at a military to military level. I mean, I think as as we've discussed before and as I'm sure you know, uh most military people are actually the ones most reluctant to engage in war. It's the armchair warriors who seem to be the ones who who want to throw everyone else's children always into warfare always always but but the the people who are actually the professionals try to do everything that they can to avoid this and I wouldn't be surprised if um if we have a lot more militaryto military back channel discussions because that's got to lay the groundwork cuz if you think about what a possible reunification discussion needs to deal with well the question of how the militaries resolve of their standoff number one and then eventually integrate needs to be dealt with and foreign policy national defense they are the big ones and um and the militaries will need to talk to each other around that so that's that's where I think it's at no re unlikely highly unlikely for there to be reunification per se in the next 5 years but um I wouldn't be surprised if there's actually much more talk about um engaging today rather than leaving things too late okay for For my last question, I want to actually just put a concept in front of you. It's a conversation that I've noticed online over the last couple of weeks, and I'm failing to remember the name of the analyst who I first heard it from, but he's been on Navaro Media. Interesting times. Um, anyways, we were having this discussion internally at VRIC Media. I kind of framed it in simple terms. I just want to get your thoughts on this. when we compare the the cultures of I'd say the east and the west but really I'm talking about the United States and China and you know the question comes down to infrastructure why can China build nationwide highspeed rail as an example um in less than a decade well California can't build a single route in over 20 years and this might come down to culture China operates like a state of engineers the United States operates like a state of lawyers And in China, leaders are trained to think like engineers. And the majority of provincial leaders, I believe, are trained in engineering or the natural sciences. And as a result, problems are viewed as technical puzzles to be solved with big projects and executed quickly. And that's why they churn out bridges, rail, factories at breakneck speed. Um, we've all read stories about the dozens of uninhabited ghost cities in China. Um, and I joke that the US government prints money. the Chinese government prints condos, it's a different take on the same kind of stimulus. But if the if China is a nation of engineers, the United States is dominated by lawyers and every single Democratic vice president and president since 1980 with the only exception of Al Gore went to law school and as a consequence every big project in the US faces a gauntlet of reviews, lawsuits and regulations. This slows everything down and kills ambitious ideas. But it also prevents catastrophic overreach and protects individual rights. And this is important. So let me explain why. The engineering mindset that seems to be very prevalent in Chinese politics is carried into so social engineering as well. And when you approach social issues like engineering problems, you might end up with disastrous outcomes like the one child policy or zero COVID. Um people are more than economic inputs and overlooking that tends to lead to an abundance of uh unintended harm. So while China dazzles with speed and scale um but they risk engineering their society into somewhat of a uh well predicaments America frustrates with delays but avoids the self-inflicted wounds of social engineering. Um do you think this is a what do you think of this summary of Chinese political culture and American political culture and why these two economies are moving at vastly different speeds? one excels towards building solutions and one excels towards saying no, which is what lawyers are really really good at is blocking things from happening. What's what's your take, Warwick? Yeah, this is the Dan Wong argument, right? So, um that's right. That's his name. Thank you for that. Yeah. Um I don't buy it at all. Okay. Um in part because Wong himself uh talks about um the Roosevelt administration as being full of lawyers who are capable of building things, right? So the idea of this reductive um dualist framework that somehow you can reduce national competency to essentially the uh the occupational types of a group of leaders I think is is way too um well arguably simplistic but I think probably more importantly a little bit um misleading in the way that it frames the institutional environment in which different things are prioritized and different kinds problems uh addressed um and and there are other examples so I'll try and just tackle them one by one. China uh is a country that emerged from a 100 years of war with devastated infrastructure, very very low living standards um and uh uh life expectancy of less than 40 years of age. Right? So this was 80 years ago. um in that environment uh it sought to find ways of solving um you know social and economic problems in the context of a and of an ambitious revolution at the same time and it did that uh through drawing on all sorts of um frameworks of dealing with the world. Some of those came from, I guess you'd say, the socialist uh connections that it had, particularly with the Soviet Union. And the Soviet Union, of course, had a strong background in science, technology, infrastructure, engineering. Now, China had to build build things. You know, it didn't have many power stations. It didn't have many roads. Its railway network was of course in place, but it needed to be expanded. Um, so it had to learn how to build things anyway. um the the um the social aspects I think are kind of interesting, right? Because this idea of social engineering as as a phrase comes with a lot of baggage, right? Um, but part of the political reactions in the United States today seems to me to be a reaction to a whole bunch of social engineering that a certain political perspective has reacted to. Um, and I'm talking about um, you know, views concerning equity um, and those sorts of things, right? Equity, accessibility or whatever. Um, so the idea that the US somehow hasn't been involved in social engineering in its own way seems a little bit far-fetched. And in fact, um, I think you could argue that those who, um, have a sensibility to the law are actually well equipped to describe and segment and categorize people um, in all sorts of ways that lends itself to various forms of um, classifications. and from that um supports ways in which um societies seek to engineer outcomes. For the past 300 years actually um governments around the world particularly in Europe to start off with and in more recent times uh China has sought to view the population as a resource. All right. So um and it has done that through the interventions of providing things like education um Sunday schools. Why were Sunday schools introduced? Um well, partly to ensure that working-class people could read and write, working-class kids. Why did that have to happen? Well, because they needed to have them work in factories. Um uh why was there the emergence of um public health initiatives? Well, not because there was anything particularly kind about the world, but because there was an attempt to engineer a capable and healthy workforce to go and work in the um to go and work in industry. So, there has always been an attempt to um engineer outcomes concerning populations. Sometimes they've been explicit. So, if you took the one child policy um which is the one that Dan Wong uses in in the book, um he describes it as his favorite chapter. Um the one child policy was implemented for about 30 odd years and was it a case of social engineering? Let's put the pajority rhetoric aside and let's understand the context I guess of this policy response. That policy emerged in an environment where there were concerns about adequacy of food to feed people, concerns about the adequacy of medicine to deal with people as they got sick. So there was some genuine concerns at the time that China did not have the ability to actually deal with a rapidly growing population. Number one in bringing population growth in check at that time at remember it was dealing with certain kinds of problems at that time. It created the foundations demographically that enabled it to then experience the last 40 years of economic growth that it did. There are of course consequences to that and we all know what they are which is an imbalance gender imbalance in society. Um and and also there's no doubt that in parts of the country zealous implementation of policies led to some very bad experiences for for many women. Okay. So, all of that's also true. Um but uh what um Wang kind of doesn't really mention is the fact that um up until um the the 1970s the United States um actually sanctioned eugenics based um uh programs that um were based on race which was to um sterilize um people um on racial terms. So you know who was social engineering whom and why? My point really is is that I think these dualisms don't help us understand places that well. Uh China has been compelled through its circumstances and its way of thinking about its economic development and social development problems and challenges to address this issue of infrastructure deficit. In Chinese thinking, there has long been a saying that if you want a place to get rich, you need to build roads first. Um because if you can't connect places to other markets, you're never going to be able to create wealth, right? So isolated villages in the middle of the of nowhere in the mountains um don't get wealthy because you can't get things to them and they can't get their things to market. So, it's a big complicated country. Complicated meaning that it's geographically and topographically really complicated. Deserts, mountains, big rivers, gorges. It's a a and low lands. Um, it has plenty of earthquakes, it floods, does all of this stuff. So, it invariably if it has an ambition to develop, it has to become good at certain things. The fact that the leadership, the Cadre, um, have engineering and science backgrounds, um, I think speaks a lot more to a a sensibility, particularly in that 1950s, 1960s period, which was we're a poor country. We got to build stuff. We need to know stuff. We've got um a a population that dies on average at the age of 39, right? So, we need to actually get our heads around medicine. We need to get our heads around roads, rails, bridges. We need to get our heads around energy. And um I I suspect that it's got a lot more to do with that than just some idea that um you know, China's a bunch of engineers and and America's not. I guess the last thing I'll say on this, Jay, is that I think this has a lot more to do with um well, two things. Uh firstly I think it has a lot to do with the ways in which national leaders now frame problems and what their priorities are. So China is still very much geared to a political framework that revolves around the idea of economic development. Mhm. It remains a relatively poor country once you get away from the larger cities and there are still massive challenges as far as servicing and creating opportunities for um hundreds of millions of its um people. When China says that it's raised 800 million people out of um extreme poverty in the last 30 to 40 years, we have to remember that that's from a population of 1.4 billion people. we're talking about 600 other million people um as well, right? But bringing 800 million people out of extreme poverty um does not mean yet that we have 800 million middle class, right? So I think there's a frame of a set of problems. The United States has, I think, a very different political culture. Um, and it's not one that's pro or anti-building things, but it's one that, um, ultimately has been framed largely around um, selling a dream, right? So, the United States sells a dream a lot more. um it has become a nation that's been a lot more um particularly in the last 30 years focused around its standing in the world um and how it can impose its values right um and um and building a military around that at a structural level and I think that this is probably the other thing to remember about China and the United States is that one of the key differentiating points between the Chinese economic system institutionally is the fact that finance is publicly controlled in the United States it's not so public finance and I don't mean the central bank I mean the policy banks are able to provide substantial liquidity support to certain kinds of activities and objectives and take a long view so infrastructure requires a long view um whereas in the United States finance has evolved in a way that is a lot more focused around quarterly reports um and um well and profiting through trading of um of of promisory notes, right? So the financialization of the United States actually I think has a lot more to do with the fact that it doesn't build things um you know finance needs a finance dancers to a different tune in the United States um compared to finance in China. I'm really glad that I asked you that. Uh, so thank you for adding context because yes, Dan Wong is his name and uh, he's been making the rounds on the podcast uh, tour and I've been listening to some of his interviews. A couple quick um, points to recall from that is that it's it's easy to reflect on maybe zero COVID or the one child policy. Um but that's cherry-picking your indignation when you consider that over the last 30 years 800 million people have been raised out of poverty and no country has become prosperous to that extent so quickly ever I believe in in the history of the world. Um and you know other evidence like the participation at the SEO just recently over 20 members uh China's influence is still growing and rapidly and any um idea that the United States does not participate in so participate in social engineering is just false. You can find a recent examples like DEI or more historic examples like eugenics uh much more troubling example and both very real. Um thank you for that. I'm really glad that I asked you that question and I appreciate your thoughtful response. Um, Warick, it's so good chatting with you. Uh, whenever I have you on the podcast, my head's just buzzing. Um, I learn a lot. I really appreciate your perspective. Um, thanks so much for making the time today. It's a pleasure as always, Joe. You asked the best questions. I appreciate that. I appreciate it. Well, until next time, enjoy Brisbane and I know you're off to Africa uh very shortly, so safe travels and we'll catch up soon. Great.