Episode 9: US/China power struggle, the global political balance, and your finances

Transcript: Season 3, Episode 9: US/China power struggle, the global political balance, and your finances

Disclosure: The opinions expressed by Eurasia Group analysts in this podcast episode are their own, and may differ from those of Citigroup Inc and its affiliates.

David Bailin: There's no doubt that the Chinese economy will become the largest in the world, whether it's five years from now or eight years from now. It's just a matter of the development of their own internal markets, their own consumers that will drive that alone.

Ian Bremmer: The last 50 years, China's ability to grow an unprecedented fashion came because they had really cheap labor, world changing amounts of it, and wealthy countries around the world were very happy, even at the expense of their own working classes to take advantage of that labor. Those two things are no longer true.

Shari Friedman: Welcome to Living Beyond Borders, a podcast from City Private Bank and GZERO Media. On this program, we examine global risks and opportunities from the angles of both politics and economics. I'm Shari Friedman, Managing Director of Climate and Sustainability at Eurasia Group.

From the great decoupling to China's Zero-COVID policy, and its impact on the global economy, the relationship between the US and China is often front and center here on Living Beyond Borders. As we enter the dog days of summer, we wanted to assess where that relationship stands, and what some recent developments like a Chinese banking crisis, knock on effects of Russia's war in Ukraine, and a renewed debate over tariffs, to name a few, mean for the world and for your money.

Joining me once again on this podcast are David Bailin, Chief Investment Officer and Global Head of Investments at City Global Wealth. Hi, David.

David Bailin: Thanks for having me.

Shari Friedman: And Ian Bremmer, President of Eurasia Group in GZERO Media. Welcome, Ian.

Ian Bremmer: Greetings to you both.

Shari Friedman: Ian, I wanted to start with you. What does the US-China relationship look like right now broadly?

Ian Bremmer: Well, it's obviously a relationship of zero trust, and it's also problematically a relationship of increasingly limited contact. The fact that Xi Jinping has only traveled to Hong Kong after two and a half years of pandemic, the fact that high level engagement between the United States and China is relatively infrequent, in fact, only the treasury department in the Biden Administration has standing high level conversations that go on every week or more frequently. That, of course, makes it harder to build a more functional relationship between the two most powerful countries in the world.

I'd say the areas that are most problematic are on the security front, and I'm sure we'll get into specifically the growing tensions that exist over Taiwan, and also the technology front, where the United States and China are both taking steps that will decouple that component of the US and the Chinese economies, both from each other, as well as creating technological blocks in the world that are much less efficient and much more oriented towards confrontation. But if you take away those two components of global relations, and instead talk about the broader economy, the trade relationship, the investment relationship, you talk about Chinese exposure to US treasuries, or you talk about big global confrontation over climate change, there I would say the US-Chinese relationship is comparatively interdependent, and despite everything I just said, reasonably stable.

Shari Friedman: David, where do you think the US and China stand economically? I mean, we're more than two years into the pandemic, and this war continues in Ukraine. Can you speak specifically about how this relationship is evolving, and if you could also touch upon those points that Ian made, particularly the dichotomy between the specific and the broad?

David Bailin: So let's talk about the tenor of how China is viewed from a US perspective, especially within the government, which is a largely divided government. One of the things that the government actually agrees on is that the relationship with China was or is unfair in some manner, shape, or form, and so the tariffs still exist, even though we're in the Biden Administration, and there is broad agreement that China has to be viewed skeptically when it comes to the development of technology, patent rights. All of those things that existed under the Trump Administration still exist, and so that's an area of agreement, and it has implications for policy. An example is that there's a bill before Congress to replace all of the Huawei equipment that's being utilized in Western installations.

So when we think about that relationship, it is fraught, but it is an agreement that we have to think about China differently. When we think about policy when it comes to stock listings in the US, we saw major changes into the requirements for those, and a decoupling of markets, including potentially the delisting of many Chinese companies that have been on the markets for quite some time. We've seen a little bit of a change in that regard with some companies actually getting listings done recently, and then performing reasonably well, but when we take a look at the biggest difference, in my mind, it's really the fact that China has actually meddled with its markets in terms of the way it actually is involved with policy associated with its technology companies, with its education companies, with gambling companies, and all of that has changed the dynamics of investing in China.

And so today, if you were to ask a typical institution in the United States as to whether or not they wanted to own Chinese shares as part of their portfolio, there are some people who would say, "It's uninvestible," which I think is a gross exaggeration, but there's a great degree of skepticism as to whether or not China should be in portfolios or play the role that it was going to. it was anticipated just two years ago that Chinese equities could be 6% to 9% of a portfolio. They had just been admitted to the MSCI indices, and now their probably position is around 3% with no expectation that it's going to go up, so that gives you some of the parameters around how things are viewed economically.

Shari Friedman: before COVID, as you noted, there were more favorable outlooks for the Chinese economy. It was poised to become the largest in the world within a matter of years, so how are these dynamics that you're talking about affecting this broader outlook today?

David Bailin: So by the way, there's no doubt that the Chinese economy will become the largest in the world, whether it's five years from now or eight years from now. It doesn't really matter. It's just a matter of the development of their own internal markets, their own consumers that will drive that alone. Right? And the regional development that's taking place as well. So really what's changed, I think, is this bifurcation of markets. Globalization was assumed to be the way things were going to go, certainly for the last 25 years. In the last few years, that's definitely been called into question, and the war in Russia has just simply made it clear that there's going to be two economies in a sense. One will be separated by technology in the sense that the competition between the two spheres, the Western and Eastern sphere, will not rely on the same technology.

And then the way that markets operate and the standards and values associated with them are going to change. Clearly, the war has caused a re aggregation of the Western Alliance, right? An acknowledgement of NATO's value, including potentially, and Ian has talked a lot about this, what NATO is going to be become is going to be probably more Pacific oriented, right? It's going to have a broader brief than it did before. At the same time, the economy itself is going to bifurcate, and there are going to be sub economies. And you're seeing that even in the way, oil is being traded right now, and you're seeing it in the way goods and services are flowing between China and Russia, and these are changing as a result of these dynamics.

Shari Friedman: Let's talk about the impacts of the COVID pandemic in China. Ian, what have the political impacts of the Zero-COVID Policy in China been, and what's this meant for Xi's standing in his party?

Ian Bremmer: Well, the political impact of Zero-COVID in China has been comparatively small. In Shanghai, there has been a lot of anger with their shutdown. It's by far the wealthiest, the most urban elite group of Chinese in the country, and they feel like the things that happen in the other parts of the country shouldn't happen to them, and so during initial lockdowns, where implementation was mixed across the city, where some children were separated from their families, depending on who tested positive for COVID, where pets were culled, there was a fair amount of anger on social media. The Chinese government did a better job and took on board, I would say, a lot of that criticism, and the rest of the country is dealing with it. The fact is that you have on the one hand, about 18% of Chinese GDP today under some form of lockdown, and that is significantly reducing the ability of the Chinese economy to grow. And we saw that in really underperforming second quarter numbers.

On the other hand, China has tiny numbers of cases across the country, less than a thousand cases most days, and total numbers of deaths in the low thousands compared to a million in the United States, a million in Europe, and what would surely be millions in China if they were to let COVID rip and overwhelm their hospitals, and I think that that narrative in China's leadership continues to be very strong, continues to be something, frankly, they're proud of, will not in any way change the ability of Xi Jinping to easily secure his unprecedented third term with the party Congress coming up this fall, and will not lead to significant political instability inside the country this year.

Shari Friedman: So Xi remains strong. And, David, the Zero-COVID policy in China has not been the only effect on their economy. There's also been the real estate crisis, and I'm wondering if you could talk about how this is affecting the Chinese economy, and what it might mean for the rest of the world?

David Bailin: One thing I wanted to add to Ian's insights is that really China has had two lockdowns, right? The initial lockdown, and then a subsequent one that we were just talking about, that covered I think 47 different provinces in a variety of different manner, shapes, and forms, but effectively they chose to have a second lockdown, very similar to the one that the west had in 2020 and elected not to have. So the economic consequences of that have been materially slower growth in China, low single digit growth, which is highly uncharacteristic. Typically, a 6% growth rate would've been considered normal. 5% would've been believable, but we're talking about growth rates that may have been 1% or 2%, and some have argued even less over the course of the last quarter.

So I think that it's been a very severe impact and a very severe price to pay, although the benefit is obviously what Ian had talked about, which is many fewer deaths and fewer hospitalizations. There is a bit of a somewhat less appreciated crisis, as you've mentioned, in real estate right now, and let me describe what that was, was first of all, China had a very aggressive policy of encouraging lending to developers. That lending led to the construction of literally millions of apartments across major cities, and there was lots of discussion about the fact that some of these were being built in areas where there wasn't a sufficient primary demand. That led to a change in Chinese policy to try to limit that amount of development, limit the amount of speculation, and ultimately that led to some of these developers having a problem, which is they had too few sales, and owned very large portfolios of to be developed property.

And that then subsequently caused some of those banks to begin to... Or not banks, but the actual debt of those real estate companies to become impaired, and that crisis has gotten materially worse over the course of the last year. the number of implicated real estate development companies is far greater now, something like 10 of the top 15 companies that develop property in China are now impaired in some way. The Chinese very much want those properties built, so they've encouraged now those construction products to reopen, and they were shut down, but now mortgage holders, the people buying those apartments, have decided they're not going to pay, and we don't know exactly how many of them there are, but the way that new construction got financed in China is through the fact that people would make installment payments on the apartments that they were going to purchase.

Well, as you can imagine in this type of crisis, real estate prices have fallen between 20 and 30% in China for lots of different kinds of residential real estate, and a bunch of people decided not to make their installment payments, not to pay their mortgages, and all of that is happening, and it reminds me, quite frankly, of a bit of the real estate crisis that happened in 2008 in the US. A very different kind, but it is based on speculation on over leveraged real estate companies and things like that. At the end of the day in China, the banks, obviously, have a direct relationship with the government, so it's not like there's going to be a bank failure, but the drag on the economy has not been adequately measured in my view, because 25% of the regional government budgets are based upon, have been historically based upon, land sales, right? Sales of land to develop future real estate.

And those are going to be very, very diminished in the environment to come in the next several years. So this is putting an overall strain on the Chinese economy. It's definitely going to put a strain on Chinese bank resources, and, of course, it takes the eye off of prospective development, productive development in the fact that they're going to have to deal with this crisis.

Ian Bremmer: I think the level of the broader China trajectory is most problematic not on the political front, but on the economic front, and we see this in part because, look, the last 50 years, China's ability to grow an unprecedented fashion came because they had really cheap labor, world changing amounts of it, and wealthy countries around the world were very happy to move capital, even at the expense of their own working classes to take advantage of that labor. Those two things are no longer true. The politics of the wealthy countries in the world no longer facilitate offshoring the way they used to, and China's labor is a lot more expensive. It's a lot more competitive, and China has strong domestic national champions.

At the same time, and we're talking about debt levels, we're talking about real estate crises, we're talking about Zero-COVID, all of which is creating challenges for China, there's also the most challenging demographic situation coming down the pike for China that we've seen in history, in modern history. There was just a month ago, a report that came out from the Shanghai Academy of Sciences. It was quickly suppressed by the Chinese Government, but experts I talked to in the field say that it's credible and serious. That shows that China does not hit maximum population levels in 2028, but instead last year. In other words, their population is already shrinking, and that indeed present trajectory of China population by the year 2100 is not 700 to 900 million population as had previously been projected, a very negative outlook, but instead 546 million, about a third of what the population is right now in China.

And if that's where China is going, then David is right, that they'll be the largest economy in the world at some point, but not for long. And you can't talk about China's Century anymore, and you certainly can't talk about the ability of Xi Jinping over the course of 10, 15, 20, more years of rule to be able to set the kind of legacy that clearly he and the communist Chinese party have been intending for his last 10 years, and so I am concerned. The same way that the United States has these structural political challenges, but a very strong baseline economy, china has a very strong baseline quality, but these increasingly unprecedented economic challenges that I think we're going to be spending a lot more time on.

David Bailin: Ian, I couldn't agree with you more that this is something that is also really underappreciated and will in my mind have many geopolitical impacts, because if you think about it, if China is right now at the apex of its population, and sees declining population growth, it's aspirations militarily, and politically, and globally are going to actually come under increasing acceleration, right? They're going to want to actually move up the timeline for some of the things that they'd like to achieve in terms of creating, whether it's the Belt Road or actually their military aspirations, which is now growing rapidly, and it may very well have implications for Taiwan.

But I also think that if you combine the demographic challenges that you've laid out so brilliantly with the bifurcation of the economy, with the fact that they're not going to have shared technology, that people are going to do offshoring and seek multiple sources to produce goods, the fact that their labor costs are, are as high as in other locations, all of that suggests that they're going to have plenty of economic headwinds that are going to cause people to reconsider their investment in China, but also China to reconsider its engagement with the world. I think it's going to accelerate some of their ambitions elsewhere.

Ian Bremmer: Yeah, I think that there is a danger longer term that China will become much more militarily assertive in their backyard. And I mean, they're not a global military power. They're not going to be a global military power anytime soon, but they are certainly a regional military power, and increasingly the regional military power, and there is a lot of escalation happening. That's why we see the Quad. It's why we see the Aukus agreement between with the Australians coming on board on these nuclear submarines. You remember that flap a few months ago, I think we talked about, and even when you talk about Japan and South Korea increasingly trying to mend what is a very acrimonious relationship, in part because they're worried about common and growing threat from China.

China is patient, China is politically stable, but as we think about 10, 20 years down the pike, it's easy to imagine that that's going to be harder for them to deal with, and, yes, they believe that they are being contained by the United States and allies in many analogous ways to how the Russians have felt they've been contained in Europe by the United States and allies, and as we saw with Russia's invasion in Ukraine a few months ago, taken to its natural conclusion, that creates a lot of geopolitical volatility.

Shari Friedman:: In this concept of containment and kind of economic containment, I'd like to go back over to the Trump era tariffs. It seems like there's a bit of a tricky situation for the Biden Administration, depending on what impact a reversal would have for the United States economy. So, David, let's start with you. What do you think are the pros and cons for removing these tariffs?

David Bailin: Well, the tariffs are largely attacks on the US consumer, and were designed to create a level playing field somehow between the pricing of goods between the countries, and at this point, they've all been built in. The pricing of the tariffs have been built in, and the economy has normalized around them, and so one of the considerations that the Biden Administration had was to remove those tariffs, to actually use it as a counter to today's current inflation, which is more of a political gambit than anything else. So to me, it is just that. It's a policy that was punishment initially on China, but actually paid for by the US. And now one could imagine them being rolled back under some larger agreement to change the nature of the relationship between the two countries, but there doesn't seem to be any urgency other than inflation around that right now.

And so when I look at tariffs as a punitive punishment, I don't think that they will have had much effect on trade in terms of the amount of actual trade, but it has provided in the areas where the tariffs have been placed opportunities for substitution, for companies in the US, in other Southeast Asian countries to actually substitute for Chinese goods, because it now created a different economic environment and different cost of manufacturing for those places, and you've actually seen, ironically, some Chinese companies move offshore, move their own companies offshore to be able to beat the tariffs. And so all of that has taken place. So I would just say that they've largely been integrated into way the economy is running.

Shari Friedman:: And, Ian, getting to David's point about this political gambit, what do you think that is? What do you think the political calculus on the Biden administration is as they figure out how to deal with this?

Ian Bremmer: Well, they do think they lost votes back in 2020 as being seen as soft on China, and you'll hear that directly from Ron Klain, the Chief of Staff, as he goes through places like Pennsylvania and Ohio. They did a lot of work on this. So they are reluctant to be seen as giving away the store to the Chinese. That's an area that has had broad bipartisan agreement. You look at the support for the Chips Act and building up semiconductor capabilities to compete more effectively with China. It's one of the few things you get broad bipartisan support for linked to the fact that no one can be soft on China.

Having said that, it was a few months ago that Biden asked Secretary Treasury Yellen to put together a study on how much inflation would go down, if they took all of the Trump era China tariffs off, and the response was about one percentage point, and that's meaningful, because inflation is the single issue that Biden is most vulnerable on with voters today, and he has record low levels of approval in the United States over the first year and a half of his presidency. Now, in the last few weeks, Biden and White House staffers have reached out to a number of American CEOs and asked them, "Can you say which goods and which tariffs would make the most difference to you? Give us the priority if they were to be taken off."

And those responses got back to the White House expeditiously, I'll tell you, but everything I hear from the White House is as David just said. There's not a lot of urgency around making this decision, because there's a lot of infighting in how much you should do. And I expect that though we will see a tariff reduction, the amount of tariffs we're talking about will be comparatively de minimus, and therefore, while you'll have some happy CEOs in certain areas, you're not going to have any major impact on inflation or on trade.

David Bailin: Yeah. I would be surprised if the removal of all of the tariffs in China, even if they happen simultaneously, would be a 1% decrease in inflation. That would be a pretty remarkably large impact, and it would certainly take a bunch of time to roll out.

Shari Friedman: Ian, let's look at the broader region for a moment. I wanted to ask you about the recent assassination of former Prime Minister of Japan, Shinzo Abe. You've posted a lot about this from a personal standpoint. Geo politically, what impact do you feel like this had vis-a-vis Japan's relationship with China and South Korea?

Ian Bremmer: I mean, I knew Prime Minister Abe pretty well, personally, and he was a pretty unique figure, a controversial figure as well, but he really wanted singularly to bring Japan back to the global stage, to normalize a country's politics and military posture in a way that had been stunted for very obvious reasons since World War II, and that meant increasing defense spending. It meant changing the constitution to allow the Japanese military to function as a normal military, and it meant a much more hawkish posture towards China, and that meant that Abe considered his security relationship with the United States to be absolutely critical. His death, and the fact that he's by far not only a very popular, but also an incredibly well known Japanese PM on the global stage, certainly hurts Japan's ability to continue forward with that, but there is a legacy.

I mean, frankly, it was Abe's Indo-Pacific democracy framework that formed the baseline for the Quad. It was Abe's personal relationship with Narendra Modi, even when Modi was governor of Gujarat, something that was very unusual for a prime minister to have a relationship like that, and to visit with him when he goes to India. The protocol would never speak to it, and yet Abe did precisely that, because he thought given China and it's rise, building a strong relationship with Asia's largest democracy, India, was incredibly important. So I do think the legacy matters, and I also think that Kishida, the prime minister who was able to build a solid majority in his parliamentary elections on the back of Abe's death, and they're both from the liberal democratic party, which is almost a single party democracy in Japan, that will tilt Kishida towards embracing more of Abe's own historic legacy and policies. And I do believe that means that Japan will have a more significant Asian role and global role diplomatically going forward.

Shari Friedman: And do you think also potentially militarily or not?

Ian Bremmer: I mean a bit, but I want to be clear that changing the constitution is still a pretty heavy lift inside Japan, and Kishida is going to be more cautious about that temperamentally than Abe had been, and Abe ultimately failed in that change. That means you're still talking about self-defense forces. You're still talking about a Japanese spend that is comparatively light in the context of not just the United States, but also most Europeans, Australia as a percentage of GDP. So I don't think in the next five, 10 years, we will start thinking about Japan as primarily a military power in Asia. No, not at all.

Shari Friedman: You know decoupling is still a big economic threat. Is it still as big a threat as we thought it would be a year or two ago? And just talk a little bit more about this US-China tech competition, and this interdependency, and how you see this playing out.

David Bailin: Well, a lot has been said about this idea that the world is... there won't be a global economy. That is completely not true. For many, many goods and services there'll be multiple suppliers of all things, whether it's a dishwasher, whether it's sunglasses, anything you could think of that can be produced that is not of a technologically important nature, but what is going to deglobalize is the reliance that we had on single sources for companies manufacturing, for example, or assembling technology equipment. Let's just use Apple. Apple is not going to be single sourced or single production of its phones and its computers in China any longer. There's no question it'll have multiple sources for that.

So anything where you've got technology, the assembly of it, or the creation of it, there's going to be multiple sources for that. When it comes to core technology, those things that are actually utilized in surveillance equipment and military equipment, the very, very highest value technology, that is not going to be shared at all between the US and China, and frankly, the US doesn't even want it manufactured in China or in any of their allies' areas. And so you're now seeing the Chinese need to actually build their own technology, develop their own technology, and as a result of that, that is a place where the world is going to bifurcate completely.

And anything related, quite frankly, to the sharing of information on the internet, the same exact thing. You have one closed and one open internet. All of that is going to cause a bifurcation, because the metaverse, this concept of an alternative economy, if you will, is clearly something that if you were in China, you would view as an existential threat to the actual country itself or its economy, because that it would exist extra territorially. So I think this is an area where there's going to be a clear bifurcation. That is in itself inflationary, because as soon as you have to have multiple sources for where things are manufactured, at the end of the day, that just adds to costs.

I would say that this is a very healthy kind of competition at the end. It is going to cause even more investment to go by China and by US private sources into the development of technologies that, of course, have transformed the world. So you could look upon that as a net positive, but I do think at the end of the day, it's going to be a source of friction, both economically with an economic inflationary cost, and politically, as Ian has already laid out.

Shari Friedman: So zooming out into the big picture again, Ian, your top geopolitical risk coming into 2022 was Zero-COVID in China. Has your view on that changed since January, and what do you see as a potential China related risk for the rest of the year?

Ian Bremmer: Look, I think everyone else's views on it has evolved. I wouldn't say mine have. Again, we really believed that this was going to be a major economic failing for China. They were complacent. They did such a great job tracking and tracing during the first lockdown, in 2020, that they felt like they didn't have to evolve their response as COVID evolved. COVID today is as transmissible as measles. We've never seen anything like that in a global pandemic, and China doesn't have the ability to track, trace, and lock down against a disease that has that level of transmissibility, which means they need to get their people vaccinated. And they're working on that, but it's not fast enough.

So I don't think that Zero-COVID going to be in the rear view mirror in China until, I mean, completely until 2024. I think it'll start to ease next year, but it's going to continue to play a significant dampening effect on Chinese economic growth, because they know that until they get those vaccines rolled out, they just can't allow the economy to truly open. Now, the important point here is that China's political stability gives them, affords them the ability to contain that challenge and kick their economic troubles down the road. Those economic troubles will get bigger as a consequence, but it's a very different kind of political response and prioritization than you'd see in the United States, or Japan, or anywhere across Europe.

So it is a risk, but frankly, in the near term, it's a much bigger risk for the rest of the world because of the impact and not having your supply chains functioning the way they should with China, than it is for China domestically. For China domestically, it's long term.

Shari Friedman: As always, we want to hear your perspective on what this means for investors and the average person in the economy. What would you like people to walk away with when it comes to the relationship between the US and China, and what it means for their money?

David Bailin: Well, We're at a very vulnerable moment in the global economy. You think about what's going on in the US with inflation and the Fed taking very aggressive posture on raising rates, and the intended impacts that'll have on growth. You think about the war in Ukraine, and the upcoming winter when Russia could theoretically or practically turn off the gas supplies to Germany, and we've already seen rationing begin in anticipation of that and storage activity in anticipation of that take place, all of which is economically depressing. The situation, as Ian has described it, with the COVID status in China, plus the real estate slow down in China already is going to create immediate and potentially lasting headwinds for China. And all of that suggests a slower global economy, one that is that much more at risk for a recession, even a minor recession. That could be multi-regional, and those are the most significant types of recessions that one can have.

So we are at that level of vulnerability right now. Now, China's market as a standalone has already priced in a lot of depressing facts. The market is off more than 50%. The share values there, they are at the lowest price earnings ratio that they've been in decades. The investor confidence in the market, as I said earlier in the program, is extremely low. The willingness to actually move equity market capital into China is low, and frankly, the debt markets in China actually are being invested in only by those that specialize in distress debt right now. So I would describe this as a great counter play. One of the things that we did at City Global Wealth is to increase by 1% our weighting to China from we're plus 2% right relative to our benchmark, which is a lot given that China is not that large a portion of portfolios.

So we believe that we are in a trough of that from an investment perspective, but what I would say is that China typically has been a countercyclical engine, where it goes up when others go down, and this would've been one of those times right now when it could have done that, because it would typically stimulate its economy to come out of COVID, and it would be very successful. It would create all sorts of things that would create greater consumer demand or greater industrial development. But as I said earlier, a lot of the money that's being spent now is on bolstering situations where capital is being deployed to deal with problems, deal with actual situations where the capital utilization doesn't generate excess growth, but rather generates the soundness of the banking system, right? The soundness of the financial system that allows the real estate development to finish, which is wasteful when you think of it in terms of growth.

And certainly, its COVID policies, which do require social support, because people are literally locked down and can't travel, all of that is really not stimulative. It's just supportive, and so for my perspective, that suggests that the climb out of the trough that China has got in front of it will just take longer. We're still optimistic that the trends that are taking place in China and Asia are unstoppable, but certainly the V, the bottom of that bounce off the bottom will not be as sharp as it has been in the last four periods when China has been counter cyclically stimulating.

Shari Friedman: David Bailin, Chief Investment Officer and Global Head of Investments at City Global Wealth and Ian Bremmer, President of Eurasia Group and GZERO Media, thanks to you both for joining us.

David Bailin: Great pleasure to be here.

Ian Bremmer: Happy to be with you.

Shari Friedman: And that's it for this episode of Living Beyond Borders. Listen to all the seasons and episodes by heading to Gzeromedia.com and click on the Living Beyond Borders tab, or you can find episodes in the GZERO World Podcast Feed, or wherever you get your podcasts. For GZERO, I'm Shari Friedman. Thanks for listening.