China Decode: Why We’re Living in a Labubu Economy

In this episode of China Decode, hosts Alice Han and James Kynge explore whether China’s stock market rally marks the start of a true bull market—or just another round of state-driven froth. They then turn to Ethiopia’s $5 billion Grand Renaissance Dam, built with Chinese expertise and financing, and ask what it reveals about Beijing’s expanding influence in the Global South—and how tensions with Egypt could put that influence to the test. Finally, they look at the global rise of Labubu, the sharp-toothed plush toy embraced by celebrities from Rihanna to Naomi Osaka, and what this craze says about China’s growing role as a cultural exporter. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Scott Galloway?

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• 1:18Alice Han?

  Economists like to talk about the lipstick economy. When we're getting into recession territory or people can't afford high-ticket luxury items, they want to go for something that's a bit more affordable but also prestigious and high-status. And it seems like the boo-boos filled that mix. So we're really living in a boo-boo economy.

• 1:40Alice Han?

  Welcome to China Decode. I'm Alice Han.

• 1:43James Kynge?

  And I'm James King.

• 1:44Alice Han?

  In today's episode of China Decode, we're discussing whether or not China is in a bull market, what Ethiopia's new mega dam says about China's growing footprint in the global south, and how the boo-boos might be a perfect example of China's cultural exports.

• 2:00James Kynge?

  Alice, you're just back from China, I think. How's the jet lag? Is the vibe okay?

• 2:06Alice Han?

  Well, now that I'm in my 30s, James, I'm not bouncing back like I did in my 20s. So I'm definitely feeling the jet lag, but I'm also feeling a vibe shift in China. It's been interesting on the ground since my last trip in April. Consumers, businesses, I think even the policymakers and regulators are feeling more optimistic about China.

• 2:24James Kynge?

  And the stock market in China looks like it's really going. Well, I don't know about gangbusters, but tell us about it, really. I'm fascinated to hear. Is it a bull market over there or how do you see it?

• 2:37Alice Han?

  All right, let's get into it. We're seeing 30% year-to-date increases in both mainland and Hong Kong stocks. And at the same time, Chinese insurers are boosting their equity holdings by nearly $90 billion in the first half of the year. And that's the strongest vote of confidence in more than three years. Beijing, for its part, says it wants a slow and steady rally to restore domestic confidence without triggering another bubble. In the last week that I was in China, talking to some of the entrepreneurs, policymakers, as well as economists, the main theme that I saw from my conversations was this idea of a slow bull run or a quiet bull run.

• 3:15James Kynge?

  Fascinating.

• 3:16Alice Han?

  What was interesting, James, is that no one is talking about tariffs or trade. Everyone's talking about the stock market. For the first time, a lot of my friends are opening up their investment accounts and seeing it flash and green as opposed to red. So they're feeling like they're finally making money and not losing money. And certainly, we're seeing that reflected in share prices. So even on the mainland, we've seen 30% up year-to-date. Notable among them are the big tech platforms that are doing extremely well. But what's been interesting to me is the fact that we're seeing margin trading return to about 2015 levels, even although that as a total size of market cap as a percentage is not as high as 2015. But it's an important metric to add because it's showing the level at which both domestic

• 4:00Alice Han?

  and foreign investors are applying back into Chinese stocks. And I think this is an important story about China setting up an alternative AI ecosystem seeming to do better on the trade front, much better than people had expected back in April, and China feeling more confident about its economic plan moving forward. There's a lot of structural issues I noted, but I think the stock market has been one of the biggest examples of consumer and business confidence bouncing back.

• 4:27James Kynge?

  And I just did a little bit of a back of the envelope calculation because it turns out that the total value of the A-share markets in China, that's the domestic share markets, is about 14 trillion US dollars right now. And if you look since the beginning of this year, that value has gone up by more than 2 trillion US dollars. So if you compare that to the GDP of a country like the UK, we're getting on for about half the value of the total UK economy that's gone into Chinese stocks. So I mean, are we seeing a real shift here? Is this a whole new departure for China, do you think?

• 5:09Alice Han?

  Well, I'm a little bit more skeptical about a big bull market happening. I think what struck me when I talked to investors and even some of the regulators in Beijing is that ultimately, the government wants to see a bull market, but what they call a quiet bull market or a slow bull market, meaning that they, you know, want to see more upside in equities because they think this is a good sign of China being back in business. It's also a great way to create a positive wealth effect for households that have been really squeezed by the macro slowdown and real estate bubble bursting. And then, last but not least, I would say that what has become apparent is that regulators are trying to be as more pro-market and pro-business. That, I think, vibe shift happened late last

• 5:53Alice Han?

  year in September, and I think it's carried through to basically this year. But what's been interesting to me is, and I was talking to an investor just earlier today in London, is the fact that we're starting to see a big shift in the way that the Chinese market is being composed. What I mean is that traditionally, you know, you had about as much as 90% of daily trading dominated by retail investors, not institutional, whereas, say, in the New York Stock Exchange, that percentage is only 20 to 25% of daily trade volume dominated by retail investors. We're starting to see a shift whereby we're seeing more institutional players coming in. Insurance companies have been allowed to increase their equity exposure to as much as 30% of total assets. And even everyday Chinese people now, I think, more

• 6:38Alice Han?

  savvy about investing. Instead of investing in single stocks as they did in the past, they're investing through ETFs on financial platforms offered by, say, Alipay. So we're starting to see, I think, a more intelligent, educated Uh I would say capital market system. It's still a long way away from Europe and America. But I think certainly that has been a big shift and I'm probably not covered well enough in in the media.

• 7:01James Kynge?

  Um I I remember some of these bull runs in the past. I was in China in two thousand and seven and two thousand and fifteen for the bull runs and those did get pretty crazy. I remember almost every taxi you got into, the driver was either asking you for a stock tip or or giving you a stock tip. And there was a strange spectacle in two thousand and fifteen of the People's Daily, which is the very staid newspaper that acts as the mouthpiece of the Communist Party of China, urging people to do the most capitalist thing imaginable and buy stocks. I remember in April two thousand and fifteen, the People's Daily declared that

• 7:42James Kynge?

  four thousand points is just the beginning and the market did actually go on to exceed six thousand points that year. So there are a lot of crazy things happening. I I wonder what it's like now. Just one more remembrance from them. I remember covering as a reporter, an investor who, for the Valentine's Day of two thousand and fifteen, gave his wife ninety nine stocks as presents. And that's because the Chinese for ninety nine sounds like for a long time or for eternity. Um I don't know whether his love lasted that long, but sadly, the stock market bubble didn't last that long. Just four months later, it crashed. So

• 8:24James Kynge?

  Alice, what do you think? I mean, I'm not going to ask you to look into your crystal ball, but do you think this stock market rally has more solid foundations?

• 8:33Alice Han?

  Well, I I think, given how cheap the forward P ratios are and valuations still are by historical and comparative standards, uh when you say, look at the US market, I I think that the bull run has a bit more to go. I do caution against a massive bull run because I think ultimately the government prioritizes control and stability. So if they see that we're going north of 5,000 in the next few months, things seem to be going out of hand on the upwards. I could foresee potential intervention through some of the state-owned players to try to cool the market down a little bit. But certainly, I think in the next few months, we'll see more positive stories coming out of China, potentially with the new five-year plan, which I think will prioritize AI and potentially

• 9:18Alice Han?

  a Xi-Trump summit at the end of October in Korea as well. But again, I do not think that we're going to see a massive bull run. I think that ultimately they want to see a slow bull run or a quiet bull run.

• 9:30James Kynge?

  And are the foreign investors getting really excited now?

• 9:33Alice Han?

  I think that we saw the nadir late last year before the September pivot by the PBOC. On the margin, we're starting to see hedge funds get back in. We're starting to see even pension funds that have been reluctant for China, you know, exposed reasons to get back into China. I think COVID was a bad time for China and certainly after that, it was difficult for many of these endowments and pension funds to justify to their boards increased China exposure. I start to see that the rhetoric is starting to shift because there is more upward momentum and because ultimately, you know, they feel as though China is going to be the main competitor with the US

• 10:14Alice Han?

  in this broader technological AI-driven race. And so if you look at the MAG7 valuations seem very stretched, why not get some exposure to China and hedge some of that overexposure to the US? So I think on the margin to your question, James, is we're starting to see more interest? I don't think we're going back to 2015, you know, pre-COVID levels of interest anytime soon, but certainly marginally, we're seeing more interest.

• 10:39James Kynge?

  Am I wrong to be picking on this aspect of it, Alice? I mean, when I looked at the most popular sectors for Chinese investors in their stock market, it seemed to me that these sectors are almost exclusively the very same as the US has been targeting to prevent China's progress in. In other words, semiconductors, artificial intelligence and some others like that. Am I being too simplistic about this?

• 11:07Alice Han?

  No, I think, James, you've hit the nail on the head in some respect because what has happened since Trump 1.0 is that China, through its state apparatus, but also through bottom-up initiatives, has plowed trillions of dollars in the case of semiconductors, of fixed asset investment to try to build a resilient China supply chain. Because it sees, it has seen since Trump 1.0 that the US can easily cut off certain choke point industries like semiconductors and AI. So I think, given the investment in those areas, as well as, I would say, a preferencing amongst some of these companies for China alternatives, I think that ultimately these sectors have seen a lot of upside and growth,

• 11:51Alice Han?

  and I think that will remain the case. I think it was interesting that Alibaba was announcing that they are sourcing their own chips. I think it's also interesting that there's been more focus on not going fully into Nvidia's H20 chips and trying to cultivate an op for Chinese alternatives. I think this is all part of a broader strategy, which is to say, create an ecosystem which is a China-driven ecosystem for these technologies. And again, it was sparked by Trump 1.0. I think in addition to what you've said, James, another region that hasn't gotten that much attention yet, I think, is biotech, where there has been massive upswings in valuations as well. Okay, let's take a quick break. Stay with us.

• 12:42Scott Galloway?

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• 13:48Alice Han?

  Welcome back. Ethiopia has just switched on Africa's largest hydroelectric dam, a $5 billion project years in the making that Addis Ababa says will transform its economy and electrify the region. The Grand Ethiopian Renaissance Dam now generates over 5,000 megawatts, putting it among the world's biggest dams. It's also a symbol, built largely with Chinese expertise and financing, and the dam shows how Beijing is reshaping infrastructure and influence across the global south. But not everyone is celebrating. Egypt, for instance, depends on the Nile for nearly all of its freshwater and says that the project threatens its survival and violates international law. Ethiopia insists that the dam will not harm its neighbors

• 14:32Alice Han?

  and instead will provide power, stability, and even pride for a nation long plagued by conflict. Now, James, I didn't know much about this dam. I was fixated on the Tibetan Dam, but you brought my attention to this. What does this mega dam in Ethiopia say about China's growing role in the global south and in Africa?

• 14:50James Kynge?

  Well, I mean, it really is a big event, this. First of all, the size of the dam is just huge. It could be the type of infrastructure that might change the destiny of a whole country. And Ethiopia is a large country with about one hundred and twenty two million people. Only about twenty percent of those people currently have access to electricity. So if this dam comes to generate at full capacity, it could mean that many millions more are connected to the grid. But you asked about what does this mean in terms of China's outreach to the global south? And what I mean by the global south is really the developing world. These are countries that are less economically powerful,

• 15:33James Kynge?

  but much more numerous than the countries that populate the West. And I really think that this is a key point. Because China is building infrastructure all over the global south. In the case of this dam, Chinese companies were central to the construction of it. Eleven of the dam's thirteen generation turbines were supplied by Chinese companies. And China lent about one point two billion US dollars to help finance the dam. This is happening all over the developing world, or the global south, as it were. And that's really important because I think when you visit countries in the global south,

• 16:15James Kynge?

  they have a very different conception of China from perhaps the perception that we tend to have in the West. They see it as a bringer of infrastructure, a bringer of development. I very much had this experience last year when I went to Nigeria, which is a country of more than two hundred million people. And I had no idea before I got there that virtually all of the telecoms network is laid by Chinese companies, that the mobile phone market in Nigeria is completely dominated by Chinese companies, including one called Tranchan, which has close to a fifty percent market share, not just in Nigeria.

• 17:00James Kynge?

  But in the entire African continent. And then when you look on your mobile phone in Nigeria, you get two mega apps. One is called Palm Pay and the other is called O Pay. And virtually all of the Nigerian middle class, so upwards of thirty five million people, use these apps for their daily life. They use them to transfer money, to pay their utility bills, to borrow money, to invest money, uh, to do all kinds of things. So really, from the telecoms cables in the ground to the Nigerian consumer using a smartphone for just about all of his transactions every day, it's all supplied by China.

• 17:44James Kynge?

  And I think that this creates an economic engagement between China and the Global South that really is transforming the Global South. And just one final thought, um, China exports more than fifty percent more to the countries of the Global South than it exports to the United States and Western Europe combined. So this is really a tectonic shift in how the world works. It's almost as if, uh, there's a world beyond the West that is, you know, growing faster, becoming more vibrant, uh, than the West itself.

• 18:24James Kynge?

  And to a large extent, that activity is promoted or led by China.

• 18:30Alice Han?

  Um, and this is a great story, James, because what struck me, I think, at the S E O in Tianjin is China's focus on maintaining good relations with the Global South. Um, not just the African nations, as you mentioned, but also nations in Southeast Asia, where we have seen a massive amount of investing going into the region. The four largest trading partners, Indonesia, Malaysia, Thailand and Vietnam, have seen a quadrupling of Chinese investment over the past decade, averaging about eight point eight billion dollars a year. So China, I think, is putting a lot of its eggs in, in the basket, so to speak, of the Global South. But, but this makes me think, James, why is it that, uh, we in the West are not really getting that much media coverage of, of this issue?

• 19:14James Kynge?

  That's a great question. I mean, as a former journalist, I just think it takes a while before newspapers in the West really kind of catch up with this idea, before it really comes onto their radar. A lot of these countries seem rather far away. They're not historically, you know, the animators of global activity, but these days, they really are growing into that role. I mean collectively, there are so many of these countries, of course, but as you just said, some of the figures are really stark. I mean, because of the trade problems and friction between the US and China this year, in August, China's exports to the United

• 19:55James Kynge?

  States declined thirty-three percent, but in the same month, China's exports to Africa grew by twenty-six percent. So, so we can see very clearly, there's a kind of switchback in the world at the moment. China's embrace of these developing countries is growing extremely rapidly, and China's trade relationship with the United States obviously is, is declining sharply, and with Europe, it's sort of level pegging. So, big changes are underway.

• 20:27Alice Han?

  Yeah, I, just to take a step back, I'm, you know, if we look at China's relationship with the developed markets, I think we're going to see more trade tensions, because China is committed to increase its manufacturing share of GDP in order to meet its growth targets. I think, given China's excess capacity in many sectors and its deflationary pressures on global prices, we're only going to see more, I think, trade tensions, sanctions, pushback from the developed markets. You know, how will China be able to fill the hole, so to speak, with the global south? You know, I, I struggle to see how that gets solved, but certainly, what struck me in the last year or so is the focus on trying

• 21:12Alice Han?

  to maintain good ties and even trade relations with some of these global south countries. I think it wasn't a surprise that China announced at the beginning of the year that it was going to have a zero tariff trading with what they call least developed economies. I mean, this is all part of a, of a PR strategy, right, from Beijing, but does it help meet its economic goals?

• 21:32James Kynge?

  Well, I mean, of course, when China exports to these countries in the Global South, the profit margins are significantly lower than when China exports to the US or Europe. That's simply because in the US and Europe, people can afford to pay more. So there is that. But certainly, overall, if we look at what the Global South accounted for in terms of China's total exports last year, it was about forty-four percent. So that's almost half of China's total exports last year was to the Global South. So, so really, I think we are already in a world in which the Global South is almost

• 22:15James Kynge?

  holding up half the sky, as Chairman Mao used to say.

• 22:18Alice Han?

  Yeah.

• 22:19James Kynge?

  But perhaps in the future, this will only grow. In fact, my projection is that this year, it will become even more pronounced.

• 22:26Alice Han?

  Hmm.

• 22:26James Kynge?

  And we may well get to Chinese exports to the Global South being more than half of China's total exports to the world.

• 22:35Alice Han?

  Yeah. My, my hunch, James, with that figure is that a lot of it is China rerouting or doing final assembly through, say, Malaysia, Thailand, Indonesia, to get back to the developed world. So I think a lot of that number is going to be pushed up by China creating alternative supply chains to obviate some of these tariff pushback from the developed markets, say, in the EU or the US.

• 22:58James Kynge?

  Absolutely. Well said. Yeah, that, that's a very important part of this whole picture. Yes, absolutely.

• 23:03Alice Han?

  When we spoke about this, you, you quoted Larry Summers to me, which is always great.

• 23:09James Kynge?

  Well, that's right. I mean, Larry Summers, the former US Treasury Secretary, I think, really summed up the difference to what the US offers to the developing world and what China offers to the developing world. He said that when you engage with the US, you get a lecture, and when you engage with China, you get an airport. So, I mean, obviously, that was tongue in cheek, but there is a certain resonance on that kind of thinking as you travel through the Global South and you ask people in these developing countries what they think about China.

• 23:42Alice Han?

  Great. James, let's take a quick break and stay with us.

• 23:52Scott Galloway?

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• 25:01Alice Han?

  Well, welcome back. This, I think, was probably going to be the most fun topic today, James. It's about Labubus. China's youngest top 10 billionaire isn't just a tech founder or a property tycoon. No, he's the founder of an ugly, cute plushie called a Labubu. And the rise of Labubu, I think, is a great example of how China is now not just exporting cheap goods, it's also exporting pop culture. So, Labubu is a toy from Pop Marts, the Munsters franchise. And basically, it's this, I had to look it up, actually. It's this Nordic mythological creature.

• 25:40Alice Han?

  That got adapted by a Hong Kong artist and that was then packaged by Wang Ning, who is the founder of Popmart, into these cute, collectible items that have graced the bags of Rihanna to Dua Lipa to even David Beckham. So it's really, I think, caught the the attention of mainstream, but also as a great example, as I mentioned, of how China isn't just doing cheap goods, it's doing culture. And we're seeing that not just in Le Booboo's, but also with TikTok, with Shein, for instance. So the bigger question is, is this part of Beijing's soft power push? Or is it really just an example of China's entrepreneurship and ability to scale and move really quickly in the contemporary

• 26:24Alice Han?

  culture? Anyway, do you know anything about Le Booboo's, James?

• 26:29James Kynge?

  Well, as you guessed, you're stretching a little bit from my age group here, Alice. I did pop into a Le Booboo shop in London to do a little bit of field research, but I'd really like you to tell me, what is the great mystique about Le Booboo? I mean, why are people interested in them? What is it about them? I mean, to me, they look rather like cuddly toys. I mean, they look quite cute, but why has this become a mania?

• 26:54Alice Han?

  Well, a couple of reasons. Number one, it's the collectible nature of it. You know, if you go back to people's obsession with baseball cards or Nike Airs, people love to collect things. And this has become part of the new collectible craze. There's also a mystery element to it, because a lot of these boxes are quote unquote blind boxes. So apparently Wang Ning, he used the Japanese vending machine model of these blind boxes in which you didn't know what you were getting. And people love this. And I was watching some videos as I was doing research on this from TikTok of people doing these blind unboxings and squealing when they get a particular, you know, limited edition Le Booboo.

• 27:42Alice Han?

  So there's that element. And then, you know, economists like to talk about the lipstick economy, you know, when we're getting into recession territory or people can't afford high-ticket luxury items, they want to go for something that's a bit more affordable, but also prestigious and high status. And it seems like Labubu has filled that mix. So we're really living in a Labubu economy. But what struck me when I was in China, compared to April, is that you're seeing these vending, pop mart vending machines everywhere, in every airport, train station. I think that goes to show you how when China scales something, it scales it rapidly. And to your point, James, this is just a pop mart down the corner from my office here in Malibu. So it's a couple of things all happening at the same time.

• 28:24Alice Han?

  But it's a great example of how China's manufacturing machine can scale so rapidly and at a global scale.

• 28:32James Kynge?

  And it's a great example of Chinese cultural exports, isn't it? I mean, we all know about TikTok. That's become a sensation. There are more than 170 million users of TikTok in the United States. But I was doing a little bit of research on the history of this, Alice, and this is by no means China's first cultural export. Way back in the 18th century, China was famous for exporting porcelain around the world. And one of the most colorful rulers in Europe at that time was a man called Augustus the Strong. He was the legendary king of Saxony and Poland.

• 29:13James Kynge?

  And he said, amongst other things, to have fathered about 356 children. But one of his other great appetites was for, as I said, Chinese porcelain, which in those days used to cost as much as gold, ounce for ounce. And this devotion, which he called his maladie de porcelain, almost bankrupted his kingdom. So you can see that in the past, there were manias that spread from China to our markets. But Labubu, to me, is the first big craze that's come out of China involving something physical. I mean, TikTok obviously is online. But, you know, this is a very interesting cultural development itself.

• 29:58James Kynge?

  I mean, what do you think of Labubu? Do you have Labubus?

• 30:01Alice Han?

  I'm not a fan personally, so if anyone out there likes Labubus, I apologize for offending your sensibilities. But I can appreciate that people find them cute and want to collect them. What has been interesting to me, actually, and I wonder if you've also noticed this, James, is when I talk to people about Labubus, I would say more than half of them do not assume that it's Chinese. They, for whatever reason, don't think of it as a Chinese company or that's made in China. So it's one of those examples, you know, going back to TikTok, where, you know, China may be developing these companies that are no longer seen as Chinese. And I think that that is going to be a phenomenon moving forward. We've

• 30:42Alice Han?

  just started to see, for instance, companies move to Singapore. I think notable among them is Manus, the agentic AI, is trying to de-sinocize and move out of China and the headquarter in Singapore. I think that's an important trend moving forward. And again, I was looking at Popmart's stocks, which is listed in the Hong Kong Stock Exchange. It is the best performing stock in the Hong Kong Stock Exchange Index, and it's up 470% year-on-year. That's absolutely crazy. The market cap is around 47 billion US dollars.

• 31:13James Kynge?

  Yes, absolutely. That's the aspect of this story that really amazed me, too. I mean, I was looking at the net worth estimates of Wang Ning, the CEO of Popmart, and it turns out that he's not just a billionaire, he's a multi-multi-billionaire. And it seems that most of that wealth has come from this idea, which is essentially creating cuddly toys and creating a kind of a mystique around them and marketing them brilliantly in China and abroad. I mean, it's amazing what you can do with some imagination. It's amazing how much money you can make. Is that another aspect of this story that, you know, we just don't know what the next big cultural export from China is going to be?

• 31:58Alice Han?

  Yeah, 100%, James, and I think we should continue to watch this space. Because China has a unique ecosystem of this manufacturing at scale and relatively cheaply by global comparisons, but it also has, I think, a pretty dynamic entrepreneurial spirit, which we've seen reflected in some of the biggest tech companies in the world. You know, I think the Libby craze will ultimately end, but I think Popmart will continue to have new products that may be the new craze to come.

• 32:27James Kynge?

  Yeah, so we've got to keep our eyes open for the next craze and then get in early and buy the stock, is that it?

• 32:32Alice Han?

  Yeah, yeah, I'm not giving you stock recommendations, but certainly I think that Popmart is doing some interesting things and it's already pivoting to other products as well. And I think that the toy market, I mean, the margins must be insane, given how cheaply they can manufacture them in China.

• 32:49James Kynge?

  Yeah, absolutely.

• 32:51Alice Han?

  All right, James, it's now time for prediction time. I thought you might go first, if that's okay with you. What's your prediction in the next few months or even beyond for China?

• 33:02James Kynge?

  Well, actually, I'm afraid I think I've already mentioned my prediction. I'm predicting that China's exports to the global south will form more than half of China's exports to the whole world this year for the first time ever. And the reason that I'm highlighting this is because I think it shows a fascinating global trend, and that is that the West is being de-centered from the world that we live in. Chinese engagement with the global south is creating much more growth and vibrancy, certainly in the area of trade.

• 33:43James Kynge?

  And so if my prediction comes true, it will be the first time in history that China has traded more with the global south than it's traded with the West. And that speaks to me to a much larger trend.

• 33:57Alice Han?

  That's really interesting. I would agree with that. I have a more controversial one, and so if I lose this bet, I might owe you a bottle of whiskey, James. I think that Trump will go to Beijing very soon, maybe after.

• 34:11Alice Han?

  The Korea APEC Summit. I'm starting to hear whispers and I think the Chinese will roll out the red carpet.

• 34:18James Kynge?

  Oh, wow.

• 34:19Alice Han?

  I don't know the exact date, but I think that that my bet would be in the next few months.

• 34:24James Kynge?

  Oh, wow. Well, I mean, that will be a big change. Presumably, he wouldn't go to Beijing unless he was going to get some kind of a trade deal. If he does get some kind of a trade deal, that could put the relationship between China and the US onto a different footing, a more conducive footing. Would that be right?

• 34:42Alice Han?

  I think so. I think so. What I've been struck by is to borrow a Chinese analogy to the US system, how imperial Washington has become. You've got known hawks like Elbridge Colby and even Marco Rubio, known China hawks, who are very silent. Now, it remains to be seen if they're silent because they're waiting to be able to push their agenda later on in the administration. But I've been struck by the fact that Trump is really owning the portfolio, owning the show when it comes to the China relationship. And I think his propensity and proclivity is to be more dovish than some of his peers in the administration. And again, when I was in Beijing, what struck me, maybe wrong or maybe right here,

• 35:26Alice Han?

  is that the Chinese feel as though they know how to play him by offering him symbolic gestures. There may be a deal on the currency, some agreement to increase purchases of agricultural products. And there's a huge willingness to onshore some of the supply in America because of the tariff uncertainties and the tariff risk. So, you know, I was talking to some EV component suppliers, automobile component suppliers, and they really want to build capacity in America. So I could see that as being part of a broader package. But again, if I'm wrong, I'll owe you a bottle of whiskey.

• 36:01James Kynge?

  Well, even if you are wrong, I mean, I'll happily take the bottle of whiskey. But even if you are wrong, I think what you point to is a fascinating set of possible developments. And if that does happen, then obviously it really will change a lot.

• 36:15Alice Han?

  Definitely. So we'll have to see what happens in a month's time. We'll leave that there for now, James. That's all for this episode. Thank you very much for listening to China Decode. This is a production of Prof G Media. Our producer is David Toledo. Our associate producer is Eric Janikas. And our research associate is Dan Shalan. Our technical director is Drew Burrows, our engineer is William Flynn, and our executive producer is Catherine Dillon. Make sure to follow us wherever you get your podcasts so you don't miss an episode. Talk to you again next week.

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