YouSaid · the spoken record

Paul Tucker

lines on the record: 98
first: 2023-03-27
most recent: 2023-03-27
sittings or episodes: 1
sources: podcast

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“Would be in the 99. Very few people have heard of it. It's an extraordinary document which absolutely everybody should read. Document 9 contains the seven no's. Five of them are It's a very well constructed document. Five of them are the Saying no to constitutional democracy, to freedom of the press, to a free market, to a total free market, to universal rights, to basically liberal values in the European sense of liberal. Whenever I use the word liberal, I mean the European sense of liberal, not the American sense. Of left wing. You really ought to return to the European use of the word. It's probably too late.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And it remains a Leninist party in a very important way and in ways the Lider G has made play over recent years. But there's one document that I think sums up what they're against. Which I think is quite useful, which I discuss in chapter nine. In 2013, a document was leaked from the Central Committee of the party called Document NI, which contains the seven no's. And my book came out just before Christmas. And I've had the... Wonderful opportunity and privilege of being able to present it in various places. And I often do a hands up. I say, how many people here have heard of Document 9 and the Seven No's? And the answer is typically around one in a hundred. And without much variance around that at all.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Whereas between Britain and France before that, it was ideological. Now the brewing conflicts between the United States and China is ideological in nature. It is everywhere at once. What is the ideology of the Chinese Communist Party right now? You said the People's Republic, the People's Republic of China. Chairman Mao, that is communism. It is based on Marxism, familiar with that, but the revolution of Deng Xiaoping, we're introducing markets. It's okay to be rich. What is the philosophy now? How do people think about that? I mean, they're not reading Karl Marx every day. I don't think.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“It's not just that they're very rich, which they're going to be, and very powerful, which they're going to be. And it's not just that they're the world's biggest trading in goods, biggest trading country, and doing so all over the world. It's that their ideology, the deep values of norms, of their domestic governance and their ideas about international government are fundamentally adults with ours and therefore it's not unreasonable to see for us to worry about whether this is a threat to our way of life. And I think that's what was going on between Britain and France at various moments.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“But there's something else about it too, which doesn't count, which, for example, the Second Reich British problem, which destroyed Europe, for goodness sake, doesn't quite reflect. And that is it was also an ideological struggle. That from the perspective of London, as a French perspective, of course, as well, which at this distance is equally valid, but the perspective of London, At the beginning of the 18th century, London's concern was with France's aspirations to universalist absolutist monarchy. And at the end of the 18th century, it was a British concern was the French universalist revolutionary project. And during that period, the Irish British politician writer Edmund Burke said, The problem with France isn't its power it's that it's the wrong kind of power And that's how we feel about Beijing.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“People's Republic and the West is. In everything, and it is everywhere. And I think a better, or certainly as good a source of illumination for that is the long struggle between my country, Britain, and France in the long 18th century, basically from 1689 to 1850. It was in the United States, you can see your revolutionary war of independence as part of that great struggle, the French blockade. So on the coasts of India, Africa, Southeast Asia, it was just, of course, all over Europe. It was everywhere. And it was in everything. It included commerce as well. And it went on for so long that there were periods of rapprochement. Paris and London agreed something like a free trade treaty in the middle of the 18th century and then fell into war again. And that moment wasn't recaptured until the 1860s.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Stalin Soviet Union have participated in the preparations for the Bretton Woods institutions, the IMF, World Bank, the GATT, and then walked the Soviet bloc out of them in the late 1940s, mainly early 1950s. I can't remember. But what that meant was that the world basically had two completely distinct, self-contained economic blocks. We were part of the bigger one, I guess. But the Soviet Union bloc was technically innovative for a long time. That's why we were so worried, a kind of small tube for oil to pass them one direction, dollars in the other. But basically it was a security and foreign policy thing. We're very unpleasant proxy wars fought all over the world and obviously lots of espionage and so on, but not fought out. In terms of commerce or in universities and media and so on, not much anyway. Whereas the contest between”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Ends up challenging an established state. An established state seeing that coming anticipates it and tries to contain the rise of the rising state. The rising state doesn't like that or even anticipates the containment policy and seeks to, et cetera, et cetera. So it ratchets up. And a classic example of this is the second German Reich in my country at the end of the 19th century, beginning of the 20th century. And I think all of this, and I think Graham Allison's book, Harvard Scholar on this, is all very illuminating. But I think there's illumination elsewhere in that if you take the second German Reich, British contest, it wasn't very ideological. It's just about power away or relative fow. Nor in a different register is the old Cold War terribly illuminating.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“When people talk about the Thucydides trap, they often make war sound inevitable. Actually, a good deal of Thucydides' rather extraordinary book is about contingency and about, oh, then they fell into doing this and then they fell into doing that. Actually, they could have avoided this in some way. But anyway, this has become the standard model, a rising state.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Thucydides was an ancient Greek. He was an Athenian, I think. I can't quite remember where he was born. And he wrote a book, an extraordinary book, about the Peloponnesian War between Sparta, which was the established power and Athens, which was the rising power. And towards the beginning, he says. Sentence, I can't remember the exact quote, and in any case, he wrote it in ancient Greek says, well, this all happened because But Otto was jealous of Athens' rise and nervous about it. And Athens was jealous of Sparta's extant power, and so they ended up fighting each other.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“I don't think this was cross people's minds because the very people that are contemplating a default are probably among the people most worried about the challenge presented to the United States by Beijing. My point isn't to make criticisms of individuals in Congress or elsewhere, let alone of their party platform. But everybody's just kind of raised their game in a way that my generational policymakers didn't need to. Straw and rechallenge of the times that our political leaders need to be bigger just during a period where for a while probably in many places they've been smaller. And we just have to hope that the attractions of office become greater during a period of enormous challenge.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Relationship already that when you go through the door, the person doesn't think I've never met this person before. Who the hell are they? So this is kind of metaphorical. And I just think that matters enormously. I'll give you an example now of how a live one in the United States. So the debt ceiling debate is we're at that part of the political cycle again. And it's important to put it like that because this has happened before and it's a hard knuckle. Combat within the beltway when the stakes are pretty high in terms of domestic politics. I wanted to say this has come up since my book was published, but there's a similar example in the book. But this is a better one. I want to say, no, no, it's not like before. Vote default, vote Beijing. That if the net ceiling isn't lifted and the United States defaults, that's a gift to Beijing.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Too high. And that doesn't mean that everybody should be doing everybody else's job, which would be appalling. But I think you need to know enough or that they need the incumbent. Today's incumbents need to know enough about other parts of government to, as it were, enough on the door and say, I've got this thing that's going to sound really techie, but I think it really matters to you. And the person who you're visiting says, And then he was just monetary financial, mumbo, jumbo. And they say, no, no, no, this is going to make, in this case, Delhi really fed up. And I'm not going to do it because it doesn't fit with my mandate. But you need to think about this. And you need to have sufficient knowledge, literacy, I would call it, to be able to knock on those doors and then you can't.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Specialized areas need to be sensitive to the wider interests. Let me put it this way. And I think I talk about this in the introduction, that for most of my time in office, frankly, I was a staffer for 20-odd years and I was a policymaker for a dozen years or something. And for most of that time, you could be a specialist in monetary financial policy, which is for animals, without knowing anything about trade policy. You had to know some trade economics, for God's sake, but you didn't need to know the stuff that trade negotiators know and even if somebody marvelously knew about monetary financial and trade policy, they didn't need to know about the laws of the sea and peace or health policy or environmental policy. So we all lived in our little specialist silos, if you like. And I think that's over. I think the stakes are...”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Of my thought, it's a mistake to alienate Delhi because in the 21st century, the West is going to need to have a friendly relationship with Delhi. And so I thought the decision was above the pay grade of the Federal Reserve. I was not arguing if French, which would be against my previous book, had Alexei Bowell, that the Federal Reserve should itself be weighing geopolitics and deciding what to do. But I did think it should have gone to the White House or the State Department. And if the United States saw foreign policy reasons providing a line, well, then the U.S. Treasury could do that and the Fed couldn't finance the Treasury. I don't think the chair of the Fed should sit around doing geopolitics. But I do think they, I think this is true beyond self-working. I think that the holders of power in particular”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Somebody walked into my office and they, I think I was Deputy Governor at the time, and they said the Fed is just refused India a swap line. And my response was, don't they realize India is going to be a power?”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Honor its liabilities to other countries that are denominated in dollars. That makes sense. What about other countries that have liabilities that are denominated in dollars? They owe they have liabilities of which they're not the monetary sovereign. They can't print their way out. A certain country in its own currency if it wanted to borrow its 20%. But oh, I can borrow 5% in dollars. So in the same way there's a proliferation of dollar dynamic assets, there's been a proliferation of dollar denominated liabilities.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And that continued for much of the 20th century. People always find it remarkable that Stirling continued to be used even after so widely internationally, even after the United States was so much bigger. But the answer is the value of inertia and the network effects and our security relationships around the world. Just a pass layer. So that's what was going on in the mid-1970s. But it does have, it's another reason why this leads to the same so-called Triffin problem. Well, the United States needs to be able to sustain. People need to be able to believe that it can honor all of those dollar liabilities around the world.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“The first thing, and that, in a sense, that is Paul Volcker's contribution to modernity, to prove that it could be done. And Alan Greenspan's contribution was to show that this wasn't idiosyncratic to Paul, that actually it was possible for an organization to do this. Slightly forgotten out, which we may come back to a bit later. And then the question is also geopolitics. Well, you want your currency to be widely used when sterling was there, when the UK was, if you like, the heck of parts of the 19th century, it had security relationships all over the world that evolved the use of sterling.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Purely geopolitics, which is if I hold a reserve currency and I've been involved in the past of advising on and managing the UK's foreign exchange reserves, when you decide, well, we're mainly going to hold dollars, which is what everybody does around the world, it's really important that the dollar is going to be stable. And in particular, not have its value collapse. Say by domestic inflation in the United States. So the end of the Bretton Woods, the question it posed was, will the United States, will the Federal Reserve be able to preserve the value of the dollar externally? Not by managing its external value, but by maintaining its internal value.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“For how everybody lives. Because undermining the dollar since international use would reduce the capacity of America to provide the security umbrella that it is provided us all with in the free world over the past 50 years.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And it took the best part of 15, 20 years for all the central banks to figure out how to run a fiat monetary system. And so why would people want to hold the dollar? So here's the geopolitics. So, in the mid 1970s, there is a deputation from Washington to Saudi Arabia, the State Department, and I think the Treasury Department as well, but I'm not sure about the composition of the groups. And they go to Saudi Arabia and they do a kind of grown-up version of, here's the deal. We will expand and extend our security services to you on sales, et cetera, training, et cetera, et cetera. And you in return, please commit to carry on invoicing oil in dollars. And lo and behold, 50 years on, we hear stories of, well, maybe Saudi Arabia is thinking about invoicing some oil in Renminbio.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Bank of longer than that. But actually, the significance of the Bretton Woods regime unraveling was that under the Bretton Woods regime, the dollar was linked to gold. Started to unravel when President de Gaulle of France asked, said, I'm going to give you back some of the dollars I'm holding. I want you to give me gold. And America, under the pressure of the war and under pressure of the welfare state it was building, couldn't really afford to hold its peg against gold. And that eventually wet this splendidly funny moment about Nixon and the Smithsonian Agreement during that, which we can counter if you like. The real significance is this was the first time for 250 years that the world's monetary system hadn't been attached to a commodity.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“around the world is partly tied to American security relationships. There's an extraordinary moment in the mid-1970s. This was after this must have been an extraordinary time. Vietnam, which didn't go well and was just split American society in ways that I suspect the world is still living with, Watergate and the collapse of a presidency and concerns about the integrity of Washington. And then on top of that, the Bretton Woods fixed exchange rate regime unravels. And when people just say, people like me say, well, the Bretton Woods regime unraveled, that makes it sound as though something that had been going on between 1944 and 1972 or whatever it was, roughly 30 years unraveled. 30 years isn't a very long time.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Important something we all this will bridge to the Thucydides trap perhaps we all take for granted things like peaceful coexistence which sounds rather abstract but very concrete things like the sea lanes being open the malacca straits being open so who does that the great navies have done that my country's navy and then your country's navy And so it's not so easy to detach these military things from economic things. And another way they can't so easily be detached is the use of the dollar.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“In strategic places, which you can see, there's an observational equivalence between their economic utility in terms of providing the Silk Road again of modern Silk Road and some latent or incipient security capability. I mean, China now has a military base in Djibouti, roughly in the Gulf. And I think we will probably see more of that as the years pass, because rather like with my country in the 18th century, and 19th, where we started off with coastal military bases to kind of protect the interests of our trade, China will want to protect the interests of our trade. And it's trade. This is incredible.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Okay, there's a lot there. That's fine. I want to break it into two bits. I want to say something for, first of all, about China's net external investment because your audience is kind of financing people. And then when I've done that, perhaps you could remind me to come back through Cydes Trap and I'll broaden it out. So China's got this massive surplus, no longer running a kind of adding to it greatly each year, but cumulatively it's gigantic. That's represented by the vast external reserves. So they have to employ that somewhere. And one of the ways they've employed it is through the Belt and Road Strategy. And one of the interesting things about the Belt and Road Strategy is that it has concentrated to a large degree on key infrastructural goods. So ports, ports at the end of the Great Canals.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Export led growth. Hamilton pursued this policy for the United States. Britain pursued it for a little while in the 18th century. But I guess in many respects, Britain is the ideological home of free trade, certainly from the 19th century onwards”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Anything. And I discuss why in the book. But, I mean, what I would say is that people always say mechanism is bad for people. It's pretty good for the mechanists, actually. I mean, I used to have this debate with Bank of England staff and they'd say, mercantilism is crazy. Why are they doing it? And I'd say, well, mercantilism isn't crazy for the mercantilists. Travel around part of the British countryside and evil still see families living in splendid houses on the back of mercantilist policies in the 18, in the first part of the 18th century.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“At the moment, and we've seen over the last week again a kind of rush into Treasury bills during stress market conditions. But it is important always to remember that just as governments can't run deficits beyond their capacity to repay one day, so countries can't either. And so these imbalances in the world economy during the 1990s and 2000s were problematic. The IMF, the G20, all sorts of fora tried to get back to a better position, which essentially involved China consuming more at home. And America and the UK and others consuming less at home. And none of it ever came to”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“To the China surplus, which isn't so big anymore, was cumulative external deficits in the United States and my own country, the United Kingdom. And that can't go on forever. There is a point at which that would become unsustainable and where that would, and suddenly people would flipping flip from thinking the dollar's the world's safest and most liquid asset to maybe the United States isn't going to be able to service its debts. We're nowhere near that point.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And if the country is very big as it is, what that does is it pushes down the world real interest rate, which pushes up asset prices, which helps to create the kind of sense of froth that we've had at times over the past twenty-five years. You know, one of the great mysteries in it's not a kind of luxury mystery. It's a burning mystery is why have world interest rates been so low. And one of the explanations is that China and after the 1990s crises other East Asian countries have become massive net savers. And so the world real interest rate needed to fall to bring them into balance. The other part of it, of course, is”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Of subsidized impulse The monetary side of this is very interesting in that Another part of this, so now completely switching to the monetary and financial things, which is, so if you're subsidizing exports, you can think of this as a mcantalist policy in which you, in this case, China becomes a net saver.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“On cheaper imports, and what economists call comparative advantage. Now, this isn't always wonderful. In aggregates, it can be wonderful, but it can be costly to particular industries and particular localities. And the United States, I mean, there's now research that shows that some local areas did suffer because of cheaper imports from China. And that of itself doesn't make trade a bad thing because America is a very rich country. and it could have done more to redistribute resources in the United States and help retrain people and things like that. But if China continues to grow at an absolutely vast rate, say it becomes four times as big as the United States, well then the United States and it continued to subsidize exports. The United States would not be able to afford to offset the costs, the social costs”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“It's a really great question, of course. So, I think the place to start is, well, China's subsidizing and America's getting cheaper imports. That's good for consumers because it means that whatever their real disposable income is, they've now got more of it and they can spend a bit more on other things. I mean, everyone always defends not everyone. A lot of people tend, particularly business people, tend to defend and think of free trade in terms of exports. Free trade is all about the benefits of imports.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“That is inherent in the WTO treaty and in the gas before that, which is not true. I mean, China's not. I mean, China wants to use its great might, which is to subsidize its exports. And in a sense, I don't think that makes them bad or anything like that. I think the treaty was deeply flawed because it gave everybody a veto as though the world was lovely and you'd never need profound change. Well, actually, we can't even bargain our way out of a big dispute.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And then you think, and the purpose of the story, well, this is chapter 17 of the book, will become apparent, I own. So you didn't think, so what was going on when they agreed this WTO treaty? So here are two images to have in mind. The first is crazy and the second is irresponsible. The first would be we are writing the perfect treaty. It will never need changing. For all time I mean, I've been a bureaucrat in knotted trade, but in other things. No one thinks that. That's just not professional. The other thing you could be thinking is, well, but nothing very rock bad can go wrong because, yes, the world will change and new countries will rise and they'll become powers, but they're never going to challenge the basic liberal trade order. They're basically going to buy into the vision.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“I say, wow, that's quite something. I mean, we can never change it. But we better get rid of the VJ. Well, you can't because everybody's got a veto over everything.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Is it so much easier for Parliament to fix the forward looking law? So that's the model that one has one accepts the determination of the judges, and if one needs to one fixes the law going forward. So that basically... Bargaining session and negotiation, diplomacy between Beijing and Washington say with Brussels they're the other great trade power conceivably with Tokyo as well. And they'd come up with some kind of agreement where Washington would make good some of its losses, Europe too, and Beijing would give up some of its gains but not entirely. And then somebody clever at that kind of thing would translate that into words that could be put into the treaty and things would be much better than otherwise except that's not possible. Because under the WTO, everybody, every member has a veto.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“What we should pause, and then that's all true. And Washington was very annoyed and it was all very bad. And this is part of the background to the United States not continuing to appoint judges to the appellate board in the WTO and partly why the WTO is now sclerotic. But that's not the really big problem. So judges decide things in constitutional democracies all the time in ways that we don't like. But we let the decision stand as a backward-looking matter. It's part of the rule of law. And we say, but as a forward-looking matter, we need to change the law. That's quite hard sometimes in the United States, given the system that it happens. And in Westminster-style democracy like Britain, it's quite easy. And one of the reasons our judges are so independent, so unpublished book compared to American judges.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“So it goes to dispute resolution and it goes through the hierarchy of bodies and ends up in the appellate board. And the appellate board finds in favor of China. And it finds in favor of China because it says that within the meaning of the treaty, state-owned enterprises aren't, I think the term is public bodies. There's a sense in which your viewers and listeners will think this is plainly crazy because it's in some party led state and of course they were carrying out the wishes of the of the state.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Subsidies, export subsidies from Chinese state-owned enterprises. So China was using its state-owned enterprises to subsidize exports. Its exports were cheaper than they would otherwise have been. And the United States said, oh, you can't do that. Such subsidies are illegal under the WTO treaty. And in the jargon, you must either stop doing it or we will put in place what are called countervailing measures, which just means imposing tariffs. So China, if you think of it very simply, China reduces the price and America then pushes up the price by charging a tariff. And Beijing responded to Washington by saying, oh no, you can't do that. You can't employ those countervailing measures because our subsidies are not subsidies within the meaning of the treaty.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“So I think the best way of explaining this is to tell a story of a particular case. And the sting comes at the end. So going back just about a decade, there was a case concerning that went to the WTO concerning”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“I thought that at the time. I thought, why are we conducting ourselves in ways where we're effectively relying on China, liberalizing politically? Because in a sense, why should the party want to liberalize? Just being realistic about it, the party has ruled China since 1949. And presumably quite likes ruling China. And so why should it give up ruling China? Now, to be fair to the 1990s, the Washington did Pursue closer security ties with Tokyo and South Korea, and that was a sensible thing. But in the economic sphere, I think that policy from the West was China's going to become like us And if nowhere else that completely blew up in the trade sphere and in the World Trade Organization which we could talk about, I think it's rather more severe than that. But just in the economic sphere alone, the optimism turned out to be ungrounded.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“It's played out very poorly, and I don't think that's very surprising, but I think there's another point to be made about it. This goes back to the 1990s, really, where the view was that Deng Xiaoping's economic liberalizations would inevitably lead to political liberalization in China. Now, I didn't think that was very likely as it happens, but I don't think it was unreasonable for people to think, well, actually, it really might lead to political liberalization, that I think it was reasonable for people to put a higher probability on that than I did. I think it was crazy for people to put all that chips on it.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“And I thought that the rise of China had the potential to change the world because its governing ideology is so completely different to the ideology in a way our ideology, our way of life that is so dominated the world over the last 70 years. And I thought this would have profound implications for international cooperation, international regimes, international organizations. And I wanted to write a book that addressed that at a high level, a level, if you like, of international political theory, but also at ground level in terms of what it means for policy in various fields. High road and the books low road.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“Yes. Well, from, oh, gracious, the mid zeros really. So before the financial crisis, and very much after the financial crisis, I just thought the world was changing in profound ways through the rise of China. The miracle of compound growth.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT
“I'm very well, and I'm very glad to be here. And you should use the Surbit only once, not again, please. I'm very proud and honored to have been knighted by my country. But Americans are almost too polite. So call me Paul from now on.”
2023-03-27 · Forward Guidance · Former Central Banker on China, Global Discord, and Financial Stability | Sir Paul Tucker · IDENTIFIED FROM THE TRANSCRIPT