Evan Osnos on China's Global Standing and Tech Advantage

TERRY GROSS, HOST: This is FRESH AIR. I'm Terry Gross. When it comes to the production of drones, electric vehicles, lithium-ion batteries, solar cells and clinical trials of pharmaceuticals, China is ahead of the U.S. Beijing might also be benefiting from the war in Iran and from President Donald Trump's tariffs. So does this mean the era of America's global leadership is over?

My guest, Evan Osnos, addresses these and other issues in his latest article in The New Yorker titled "The Future, Made in China." He's a staff writer at the magazine, where he's written extensively about China, as well as American politics and the tech world. Before that, he was the Beijing bureau chief for the Chicago Tribune and was part of teams that won the Pulitzer Prize in 2001 and 2008. Osnos is also a host of the New Yorker podcast "The Political Scene." His first book, "Age Of Ambition: Chasing Fortune, Truth, And Faith In The New China," won the 2014 National Book Award for nonfiction and was a finalist for the Pulitzer Prize. His latest book is "The Haves And Have-Yachts: Dispatches On The Ultrarich." We recorded our interview yesterday.

Evan Osnos, welcome back to FRESH AIR. So the way the Chinese leadership sees it, as you describe it, is that China is winning the war in Iran. Can you explain why China believes that?

EVAN OSNOS: Well, in some sense, it is from their perspective always to China's benefit to see the United States drawn back into the Middle East. You know, this has been the place that has consumed so much American attention and blood and treasure, as it's known, over the last generation. And here, all of a sudden, just a couple of years after it seemed as if perhaps the United States was trying to get out of that region, it's now pulled back in.

And in quite literal terms, it has meant also that the U.S. has had to draw on assets - things like aircraft carriers and missiles and munitions that would otherwise have been put in Asia and have had to bring those to the Middle East. And so as a result, it has shifted all of the center of gravity of American national security away from focusing on China and, in fact, now focused on Iran.

GROSS: So does China now have an open door to Taiwan if we don't have as many ships and weapons there?

OSNOS: Well, it certainly sets up conditions that would make it easier. I mean, just as a functional matter, there are many people in Washington now who are concerned that if the United States found itself having to defend Taiwan from a Chinese invasion or trying to repel a blockade, that it would be, frankly, just short of the kinds of munitions that it would need to do so. The Trump administration denies that. They're saying that reporting doesn't capture the full universe of American supplies.

But the question of whether China is prepared to go and attack Taiwan is a question that is partly based on their assessment of us, the United States, and partly based on their own perception of themselves, whether or not they can actually pull off an attack of that kind and succeed. And the core of that, Terry, is about deterrence, meaning, does the United States project the message that we are both a credible and serious deterrent from China attacking? And at the moment, the level of our - call it what it is - distraction, consumption, preoccupation in the Middle East reduces that sense of deterrence to China.

GROSS: So we've depleted a lot of our weapons in Iran. The military, apparently, is worried about that. The Pentagon's worried about it. Would building new weapons require materials from China?

OSNOS: Yeah. Unfortunately, the irony here is that we are, in some ways, beholden right now to the Chinese factory in order to produce the munitions that we need to defend American interests from China. That's the exquisite problem that we've found ourselves in after generations of building more and more reliance on Chinese supply.

There is an effort in the United States now to say, we need to figure out ways of processing our own rare earths. These are these, you know, really important vital minerals or rare earth magnets, but that is a years-away problem to solve, meaning it can't be done overnight. So right now, a lot of what you hear from Washington is efforts to try to beat back the perception that the United States is overstretched. But you're beginning to hear more and more concern from within American agencies, talking to reporters saying, we are finding ourselves with one hand tied behind our backs.

GROSS: Has China taken sides in the war in Iran? I know, like, Trump was hoping that China would help open up the strait. That hasn't happened.

OSNOS: No, that hasn't happened. China, historically, in the last, you know, many years, has been very close to Iran. It's been a big customer of Iranian oil. According to intelligence reports, they have been giving information to Iran to help it target some of its own drone and missile attacks. But it has - this is an important point. It has come up to the edge of getting involved without getting overtly involved, meaning that it has tried to avoid antagonizing the United States one on one.

It knows, in a sense, that if China came out and said, OK, we are a full security partner of Iran. We're going to join the fight against the U.S., that that would produce a confrontation between the world's two most powerful countries. And China stays just back from that because their perception in Beijing is that the United States is - as they would say, they believe we are declining but very dangerous. We have the unique capacity to fight them in a way that other countries don't. So that's why they've tried to have it both ways. On the one hand, they want to be challenging the U.S. but not overtly antagonizing it.

GROSS: So when you say that China sees the U.S. as dangerous, do you mean in terms of nuclear weapons, or do you mean in terms of something else?

OSNOS: It's partly nuclear weapons, but it's also an attitude. It's a sensibility. They look at the U.S. over the course of the last 10 years, especially, and they think, and I know that this will be a controversial idea for Americans - for us to hear, their belief is that we have entered a kind of deep decline, and there are a lot of people who disagree with them on that, but that's their view. And so they believe that as we begin to lose influence around the world, as we get into greater fights with our allies and partners, that we'll lash out. So partly, that could be nuclear weapons. But actually, on a more functional level, day to day, it also means that we can use things like tariffs and trade.

They point to the fact that Donald Trump's second term has been characterized by these enormous tariffs. They see that as the kind of techniques that a country uses when it is beginning to feel that it is losing power. I also think China has watched over the course of the last 18 months as the U.S. has used force in places like Venezuela, for instance, going in and removing a head of state in a way that a previous American administration would have been warier of doing. They look at that and they see that there is real military power there.

I spoke to a retired People's Liberation Army colonel, a guy named Zhou Bo, who's now an analyst at a university, and he said, look, we know that the U.S. has extraordinary military power. There's just no question about that. The underlying issue from China's perspective, is whether the U.S. is making rational, smart choices about how it uses that power.

GROSS: Trump made it seem when he started raising tariffs and really raised tariffs a lot initially in China - he made it seem like he really hammered China. He gave it to them. And Treasury Secretary Scott Bessent predicted Beijing would quickly submit. That has not happened. The Supreme Court struck down many of Trump's tariffs, but he's testing ways around that. I think from how you describe it, China's leadership thinks it's winning in the tariff war, too. How is China taking advantage of the tariffs?

OSNOS: Well, one of the things was that they were prepared for it, partly because of the first Trump term. They anticipated that he would probably try to introduce big tariffs, so they've spent the years in between the first Trump term and the second Trump term trying to make themselves more self-reliant. Basically, they don't want to have to sell into the American market any more than they do 'cause they know that tariffs would make their goods less attractive.

So one of the things they did was begin to build out these markets in other countries, particularly in Latin America, in Africa and in Europe. So they built their companies now to be able to export even in the face of tariffs by reducing the cost of production. This is an important fact. One of the things they did is they said, you know what? If we bring AI into our factories, we'll be able to cut down on the cost of producing goods. Therefore, they'll be cheaper. And if we sell them into Europe, for instance, we'll probably be able to undercut not only European companies but also American companies.

So the net effect of this is, even now, more than a year after Trump introduced these tariffs, China has actually built a larger trade deficit with the rest of the world. It is actually now selling more to other countries than it was before, despite these tariffs. So it actually has had the reverse effect that Trump projected.

GROSS: Are countries also wary of trading with the U.S. 'cause Trump has been so unpredictable in his tariff and trade policies, and they're reverting to trading with China instead?

OSNOS: Yeah. There's been a feeling among a number of places that they, frankly, don't trust either the United States or China right now. They don't feel as if either one of these countries is particularly looking out for their interests. But they feel - and I talked to analysts and political leaders in a variety of places in preparing this kind of report for The New Yorker. And one of the things I heard over and over again was, we're caught between these two giants - essentially, these two elephants. And when these elephants fight, the grass gets trampled.

And I think that at the moment, they are looking to China because they say, all right. We know essentially what China wants. They want to build their economic relationship with us. They're not going to involve themselves in our politics. And if you're an authoritarian leader in one of these countries, that's a particularly attractive deal. And most of all, they say, we don't know where the United States is going. It's become almost impossible for us to predict what your politics and what your people at the top are going to do. So there's a kind of - people are almost reluctantly putting themselves into China's embrace.

GROSS: Do you have any clues what the Chinese leadership thinks of Trump himself?

OSNOS: Yeah. There are some indications. There was a think tank report that came out earlier this year, which doesn't come out accidentally. Something like that in China is only issued with approval from the authorities at the top. And the name of the report was "Thank Trump," by which they meant - and they spelled this out - that, in their view, he is hastening the twilight of an empire, as they put it, because he's attacking things like the independent civil service and America's scientific institutions, its leading universities. He's alienating allies like NATO and elsewhere.

So from Chinese leaders' perspective, this has been an unanticipated, unexpected opportunity, and they actually sometimes now say that. Xi Jinping, who's the president, the leader of the Chinese Communist Party - he describes this moment as a moment, as he says, that has been unseen in centuries. And that's a Chinese euphemism, in effect, for an opportunity that they haven't had in a very long time to try to build China's place in the world.

It's a strange moment, frankly, Terry, because the Chinese thought that they understood what the United States was going to do over the course of the next, you know, five or 10 years. They thought the U.S. would steadily build up its military presence in the Asia-Pacific region to try to hold China back. They thought the U.S. would invest in things like basic science and life sciences, biotech, because this would prevent China from filling in that space. And in fact, the U.S. has done the opposite. I mean, the U.S. has cut funding for basic science. We've seen a whole host of ways in which the Trump administration has gone to battle stations against places like Harvard University, which have been involved in, you know, trying to find the cure for cancer.

And I spoke to scientists in Beijing who said - with some puzzlement, to be perfectly honest, as one put it to me - he said, you know, the current world order was essentially created by the United States by investing in science and technology and alliances, and it benefited you for eight decades. And they find it baffling that the United States has walked away from that over the course of the last 18 months.

GROSS: Well, we need to take a break here, so let me reintroduce you. My guest is Evan Osnos, a staff writer for The New Yorker. His latest article is titled "The Future, Made In China." We'll be right back. This is FRESH AIR.

GROSS: This is FRESH AIR. Let's get back to my interview with New Yorker staff writer Evan Osnos. His latest article is titled "The Future, Made In China."

Well, let's get to the tech war, 'cause China and the U.S. are competing for the position of No. 1 in tech. What is China ahead on?

OSNOS: China has built a large lead when it comes to manufacturing a lot of the hardware of our technological lives. So things that you mentioned earlier - things like electric vehicles, which China now builds more of than anywhere else. The - a Chinese company called BYD has surpassed Tesla, for instance, as the world's largest maker of electric vehicles. You know, they also make solar cells and lithium-ion batteries, and it's really essentially a dominant lead. They make more than 70% of all that worldwide.

And what they're focused on now, and we know this 'cause they say it explicitly and we see it in the data around production, is they're essentially trying to do for AI and biotechnology and robotics what they did for that previous generation of technology. Meaning, take something that was basically invented in the United States and surge resources into it and build up a lead that is so substantial that other countries have no choice but to be reliant on China, while China doesn't have to be reliant on them.

GROSS: And just as China is investing all these resources into research - tech research, pharmaceutical research - it's, as we were saying, simultaneous with the Trump administration...