Jeff Rittener (00:00)
This is Jeff Rittner, and you're listening to episode 37 of Ritner Reflections, a forum for making sense of the dynamic and complex world of cross-border trade. And a space to explore the cultural forces and personal experiences that shape how we live and lead in uncertain times. Today I am kicking off a discussion on a topic.

That drives headlines, stirs strong emotions, and remains deeply misunderstood here in the United States. And that is the US-China relationship. Over the course of my career, I've taken many trips to China. And I've had the great fortune of experiencing this fascinating country firsthand.

Meeting extraordinary people, learning from business leaders, and sitting down with the Chinese government officials at various levels. Those experiences have shaped how I see China, and they've shaped how I think about this relationship. Over the next two episodes, I want to bring you perspectives that are rarely heard. Perspectives grounded in lived experience. In this episode 37,

Today I'm with Keir Gibbs. He is the author of The Fragile Dragon, and he spent a decades living and working in China. He's led major companies there and served as president of Amcham, Shanghai. Keir brings a bicultural lens and a deep understanding of how China sees itself. And then in episode 38, I'll be joined by Matt Bell.

Who served as Deputy Chief Compliance Officer and Chief Export Compliance Officer at ZTE, one of China's largest telecom companies? And it was during one of the largest US enforcement actions in history. Matt brings the enforcement lens. You know what happens inside a Chinese company when the US applies pressure?

Together, Kier and Matt offer a rare and complimentary view into life, business, and geopolitics in this US China relationship.

Today is October 6, 2026, and I am recording from the beautiful city of San Francisco. There's no better time to be here than on a warm, clear October

day. I am sitting in the beautiful home of Keir Gibbs. He lives here on Lombard Street. You know, the iconic street, you know, that's known around the world for its crooked and winding turns. Keir just pointed out to me that.

Sam Altman, the AI guru, lives in direct view of Keir's window here. It is an absolutely stunning view of San Francisco.

We just finished having a very nice lunch in a very nice neighborhood restaurant on a corner here in a place called North Beach, which is really really the the Italian portion of San Francisco. And now we're sitting in Keir's home ready for what promises to be a fascinating conversation. But first, you know, I want to say I met Kier at a book signing at San Francisco University. A friend suggested I attend, and after hearing Keir speak, we

connected immediately. And we've stayed in touch through a few events since then and I've been really looking forward to having this conversation with Keir today. So Keir, welcome to Written Reflections and thank you for hosting me in your beautiful home.

Keir Gibbs (04:09)
Great to be here, Jeff. It's always a pleasure and you are most welcome. Sam actually lives on the rich side of of of Lombard. I'm I'm actually on the the straight part, so so we're we're we have pretty pretty good distance between us.

Jeff Rittener (04:22)
But are you saying you're on the straight and narrow? I'm on the straight and narrow.

Keir Gibbs (04:25)
I'm

not saying he's living a crooked life, but he is on the crooked part of Lombard.

Jeff Rittener (04:28)
okay.

That's fantastic. Well, Kira, it's so good to have you. Like I said, I've been really waiting to get a chance to talk with you on this podcast. And what's really of driven me to you is just your background and just the years you spent in China and your your whole family history and so on. And it'd be great if you could just introduce yourself to our audience, your background, your experiences in China.

Keir Gibbs (04:49)
Sure, happy to kind of kick things off there. so yeah, I went to China first in 1985. I was a fresh graduate from UCLA. And my mother, who is actually from China, she was born in China, and so I grew up Eurasian. she felt it was a good time to to go and do the roots trip, if you will. And so in 1985, fresh college grad, I went over there basically as a student and taught English for a little while in in Beijing.

And just loved it. And was just so fascinated by I was in that time of life where I was really kind of trying to explore the world. And China just, it could not be more different. It was it was so

different from everything else I had seen before and thought I understood. And so that kind of started the exploration. You know, it I think I always felt the gravitational pull.

of of of China throughout my career. I didn't set out to to have a China-based career, but that's just kind of how it how it happened. I went to business school at Berkeley and then coming out of business school I went to work for the Boston Consulting Group. And this is a whole chapter in my book. I tell the whole story of how I ended up getting on a team to go over to Shanghai and do a bunch of work for BCG. And that is a key point because early

90s was a very specific time in China. There were very specific things going on. And I mean, I think just to just to kind of juctapose one, there's another book that that's kind of an old book that also describes that period. But Jeff, I'm sure you've read Mr. China, this guy, Tim Clissle. Good book.

describes that period of time but he was over there trying to make money and invested in a bunch of companies and and lost his shirt, you know, and and it made for a great book and so good for him. I I was doing something very different and

BCG and a lot of other companies were doing in the 90s were frankly kind of getting China ready for what was about to happen, which was this great growth period and this great period of figuring out how to integrate with the West. And so, in a way, we've here we come, we've come full circle, haven't we, Jeff? I mean, it's it's there was that period where China was learning from us and and trying to become

Integrated and now here we are, you know, what would it be 35-40 years later, and we're trying to figure out how to decouple. And that's not going so well. Yeah. So we kind of come full circle. But but just again, you know, fill out the rest of the you know, 30 years or so of my career in China. Again, I I've sort of had this gravitational pull from from China. I've had a basically a Silicon Valley career. My my career has been basically the intersection of Silicon Valley tech, finance.

and Asia. So that so I've had that kind of career and then ended up

ended up doing some things more in the sort of corporate development sphere and eventually got into banking and finance and so that got me to to HSBC where I was a coverage banker doing tech and media and doing deals calling on companies like Baidu and and and Alibaba, things like that. Right.

Jeff Rittener (08:11)
Right. And then you you became president of Amchan in Shanghai.

Keir Gibbs (08:16)
I did. It was a great

honor to to serve. it very interesting community there. at our peak we had about three thousand members, which makes it a pretty large ham cham. it so so the American Chamber

is something I I'd kind of always been involved in, when I was based in Shanghai and over time just kind of got involved in committee work and then the board and then eventually was elected chairman of of the board and then

Karen Jarrett stepped down.

Jeff Rittener (08:48)
Yeah,

Keir Gibbs (08:49)
The opportunity

came to to become president of the the American Chamber. Wonderful opportunity. I really believe in the mission. I think I think the American Chamber of Commerce plays a key role being non-government, nonprofit, sort of representing the interests of American companies like Intel, representing the the interests of American companies in China. And and that's a very specific constituency as we think about business, US China business.

There are American businesses that have not done well with with the re as the relationship evolved with China. I'm talking about the manufacturing companies that that have gotten hollowed out, frankly. But but American Chamber represents the companies that are in c in China, and many of them done quite well.

Jeff Rittener (09:41)
I'm sure you've seen multitudes of stories of companies and how they've how they've managed at in China. I had a chance, as I said earlier in my introduction, I had a chance to go to China often. In fact, my first trip was in two thousand three. Mm-hmm. And I only went to Shanghai at that time. But two thousand three till today, I I di I've seen amazing changes just in that amount of time. In fact I'll tell a funny story if you if you will. When I arrived my first time

In China, I was so excited to go to China, and I was with this colleague, and he went to China a lot, and he was very suspicious, very I don't want to say anti-China, but he you know it was almost like you know, just be careful, you know. And so we got there and it was a pouring rain, and we were in Shang, we we were in the Pudong side, I believe, and we needed to get we he wanted his goal was when he arrived, he wanted to go to Tony Roma's, which was on the

I think it was on the Pushi side. And so we got in this car, the driver, and it took us, I'm not kidding, it it took us almost two hours. I couldn't stay awake. I'm just sitting in the back. We went all the way across town, finally got over there, got to Tony Roma's, and I'm sitting there my first night in China, and I'm eating a steak at Tony Roman. You talk about anti-climatic. That was like anyway, that was my first trip. But you know, one of the things, Kira, that I'm really look forward to is getting into your book, The Fragile Draft.

And because I met you when you were at a book and you spoke about it, so I immediately got it, you signed it, and I read it. And what I found fascinating when I read it was it just so many of the experiences that you share and the perceptions

that you gained and the and the things that you discuss in there, I lived, I they they resonated with me, and so it was just really great, and that's why I'm so glad we could talk. But why don't you let's let's talk about your book because it is I think it's just a wonderful read. And if you can just kind of help us you know understand why did you

you name it or why did you write it and why did you name it the fragile dragon? Just some insights on on that would be great.

Keir Gibbs (11:44)
Yeah, I'd love to talk to about that. And and actually just to segue into the story that you just told about a you know, you you were over there with a colleague that had this view of China. And it went from what you said, it sounds like it was an extreme view.

Jeff Rittener (11:56)
Yeah.

Keir Gibbs (11:57)
And that's kind of why I wrote the book, because I kind of feel like people are getting into extreme views on the on on both sides. You know, so extreme positive views, and we get into this thing called China maxing, you know, and this kind of stuff. And then there's others that and I talked

To them all the time. People who say, no, China, no, don't trust them, don't want to integrate with that.

what their businesses. And so and you know, again, I I think there's truth on both sides. And and so I wrote a book that was trying to trying to debunk some some misconceptions and and tell just a more balanced and and nuanced story of of China. But but to answer your question directly, you know w so so that's part of, you know, the why I I I wrote it. And it was also because

I as I was stepping down from my role at the American Chamber, that seemed like a good time to sort of step back and ponder and sort of think about what had just happened in the last thirty years between the US and China and and just consider what I what I thought about that. So it was good good time to to to do it. The second thing that came up I I had just published another book called called Selling to China, which was much more of a operational book describing kind of the challenges of of of

large American companies operating in China. And so I was touring, I was doing the book tour on that and talking to groups. And again, like we like we just said, you know, I was running into some extreme views. I was also speaking to people who had misconceptions about about China. And so those conversations informed me as to what the reading public, the American frankly

primarily what do people know about China, what do they not know? What are they curious about? What do they think they know but don't? and so in some sense I wrote a book to fill in those gaps. And so that's that's one one one motivation to to to write the book. The other thing came from

Thinking hard about my family. So again, as I was stepping down from the chamber, again, my mother kind of stepped in and said,

you know, it's time for for you to to visit our ancestral home, you know, which is which is a tiny little village in Hubei province. But and so I did that. my mother wanted wanted me to do that. And

through exploring my family history and learning more about my grandfather, who was apparently a pretty big deal in in Shanghai in the 1920s and 30s, he was a lawyer. And as I kind of uncovered the stories of my mother's side of the family, I came to realize that the story of China, the story of US and China, was really wrapped up in the story of my family. And

my family again I have a Chinese mother, American father, so my family in a way is the embodiment of of US-China relations. so I end up writing a story about that, about what's happened in China, what's happened with American companies in China, but but taking sort of a a broad perspective on that.

Jeff Rittener (15:28)
one of the things I really enjoyed in the book you wrote was just how prominent your family story is. it really paints a great picture of the journey, right? And I happen happened to have met your mother. I was at one of the book events and your mother was there and I met a wonderful woman. And so it was funny meeting her and then reading the book and so on. It kind of brought things to life. But you mentioned this bicultural.

how does that you think shape your view of the China US relationship?

Keir Gibbs (15:56)
Yeah, for sure, for sure. Yeah, I d i to be honest, growing up I didn't think about it a whole lot. I grew up in a a fairly typical American experience. But but at home, yeah, I being from a a Chinese speaking family, my my experiences were very similar to an American born Chinese family. And and so I th but at at this point when I think about the US and China, yeah, having having a foot on both sides.

Of the ocean, if you will. It's really key to helping me understand. And you know, you get wrapped up in this whole we us thing. And it's like, what do we mean by we, right? And who's the we here? And throughout my career, I've actually gotten into a lot of situations where I've been challenged. You know, it's like, whose side are you on? And there are a few anecdotes in that in the book about

about some fairly serious topics, you know, in terms of, you know, whose side are you on? And we had we've had some some some fairly difficult conversations in Washington, DC, frankly, where where the administration kind of pushes back

on us as the business people and r really wants us to be aligned with with US policy. And frankly sometimes we're not. You know, business people are business people. They're out for their own they have their own constituency, put it that way, right? We've got our own shareholders and staff.

and and we're we're out to do what's right for our businesses. But yeah, I think being being of of both cultures, both countries is is really key to how I how I analyze things and how I strive to try and understand if we don't agree, and I don't, frankly, a lot of things that come out of Beijing, I don't agree, but at least I'm trying to understand what's the most

motivation there, why are they doing and saying the things that they are? And and I think that's been really helpful to me in in my career.

Jeff Rittener (17:57)
Yeah, and it's it's really fascinating because you don't often meet people well, there's a lot of people that are like like you bicultural, but to have the experiences you had you know, it almost feels like listening to you, it's almost like it must be really hard at times. I mean you almost probably have to become Switzerland. The

Keir Gibbs (18:13)
Right.

Jeff Rittener (18:14)
the neutral party in the middle, right? I mean I would think that would just be

Keir Gibbs (18:17)
Natural.

Yeah, yeah, yeah. But I'm not neutral, you know, I am American in the way the way I think about things. But but no, I am Chinese in the in that sense and and and I love being able to speak Chinese. It's really cool to be able to be in China and and talk to people and and try and kind of understand their background and where they're coming from. But yeah, it's fun.

Jeff Rittener (18:38)
a curious

mm question. It so obviously you learned to speak Chinese at home. You but when you went to China did people know you were American by how you spoke or did or or were you pretty pretty natural?

Keir Gibbs (18:50)
Yeah, no, frankly,

two things. One is I look American. I when I was a kid I could show you some baby pictures here as soon as we're in my home. Yeah. And and I looked a hundred percent Chinese, actually. Yeah, and that th this is a common thing actually for us. Yeah. We call it Wasians is the is the key is the new word to talk about people who are white and Asians or Way Asians.

Jeff Rittener (19:10)
Okay.

Keir Gibbs (19:10)
But but we're sans tend to look very Asian when they're young. Yeah. And as they grow older for whatever reason, don't ask me about the biology of that. But

So no, I I land there and they see me as as American, but then we speak in Chinese and then they they get it that I'm that I'm of the tribe. Put

Jeff Rittener (19:30)
Okay.

Keir Gibbs (19:31)
it that way. And so I am in the tribe, but not entirely. They they obviously know I didn't grow up there. Right. And so I'll never really be you know of that, yeah, of that country. You have to have those experiences.

and especially from a young age. But I find it very cool. I like I like being the tweener.

Jeff Rittener (19:55)
Yeah, it's a

it's a it is a unique situation that you're in. So going back to the book for a second, you know, the fragile dragon, w why? What what is that?

Keir Gibbs (20:05)
Yeah,

the fragile dragon part. Yeah, that's a key question that comes up. you know, and obviously we we picked it, you know, the publisher and and I settled on this as a as an attention grabber. but the the dragon part is obvious, you know, the metaphor, and and and China is a very large, powerful country like a dragon. So that part is a given. But the fragile part is what throws people and you know, a am I with this book, am I predicting the imminent demise or the collapse?

of China. no, that is not what I mean by fragile. What I mean by fragile is that like any

significant country, it has strengths and weaknesses. And and I think what we've got now is again, especially in Washington DC, where we have people who've just got this image of China as one an enemy, and and that's a problem. I I do believe that if you think of someone as an enemy and treat someone like an enemy, they will surely become an enemy if they're not one already. So there's that. And I think they they sort of imagine

Imagine China as this as as an enemy and it's ten feet tall and and it's gonna take over the world.

And I just don't think that's the case. China is good at a lot of things. They're not good at everything. There are significant weaknesses in in in the in the economy, in the political system, it kind of how it approaches the its integration with the world. And so that's that's what I'm trying to do is is I do believe that US policymakers have have overestimated China's capabilities.

and ambitions. Right. So that's what I'm what I'm talking about when I say the fragile dragon.

Jeff Rittener (21:58)
Yeah, okay. Well that makes sense. And you know it's interesting, something that's fragile, you you oftentimes you have to treat it with care. Yeah. And careful. True. And if if people understood that better, this relationship might be different. Be careful.

Keir Gibbs (22:12)
I think we do need to be careful

with with with China. Not that we're gonna break it, but but there but we could break that relationship. So I agree. It it it this relationship has to be handled with great care.

Jeff Rittener (22:23)
Yeah, exactly. Yeah, that's fascinating. So let's kinda dive into some of the themes. When I read the book, Kerr, I there were so many things in there that just jumped out at me. And so l let's kind of dump jump into some of those. But you know, you talk about the fragile nature and you mentioned vulnerabilities. What do you think is is the main vulnerability

Keir Gibbs (22:43)
Yeah, the the fragilities and and vulnerabilities, I mean these are these are key themes throughout the book and and and it it just keeps popping up but but basically I think of them as almost in two buckets. One is is weaknesses that China cannot do anything about. And then the second bucket is things that are choices or policies or ways of going about things. In the first bucket you have things what what I point to is geography and this is something

That especially a lot of people in America underappreciate is a the significance of geography and how geography shapes outcomes. Today we're living through this conflict in Iran, so we're learning a lot about the Strait of Hormuz.

Jeff Rittener (23:27)
Yeah.

Keir Gibbs (23:29)
But but China has its own geography. So if you think about the United States and our geography, we are blessed.

We have exactly two land borders, both with countries that are that are reasonably friendly to the United States or or or have been. and we have two big oceans. We are very, very unlikely to be attacked by sea. So there's that. And and I think that gives Americans a certain complacency that that we're somewhat invulnerable. And and we kind of are from that perspective.

China is the exact opposite. They've got land borders, and this surprises people when I tell them, they have land borders with 14 countries, many of which they have had hostilities with over the last 100, 200, 300 years. And two of them, think about the which countries we're talking about. I mean, some of them are tiny little countries like Laos and others,

They've got Russia. they've got India.

Jeff Rittener (24:33)
India?

Keir Gibbs (24:34)
Who wants North Korea as their as as their neighbor? You know, so so so they've got on land borders, they've got reason to to be somewhat defensive. And and again, coming from the West, you know, we look at China and often we think about China as overly sensitive. We're all familiar with with situations where somebody insults China or threatens China in some way, or it's interpreted as a threat. And and here from the US, we look at it and go,

China, such a big powerful country. What are you worried about? But they come out with these statements, you've insulted the Chinese people and this and that. And and and we would have thought they'd be tougher than that. But their geography, I think, it that does impact kind of how they think about the world. And and they they have had to defend th those borders over time. And that's not even starting to talk about the sea borders. And so, and again, I go into

that more detail in the book how there's a lot of American military bases along this First Island chain and this makes China very uncomfortable. those are things I mean China's never gonna be able to do anything about its own geography, right? That's that's fixed.

But on the other side, on in terms of policies and choices, you look at at trade as an example. I mean, trade is it's a double-edged sword. It's it's it's a source of their strength. They make a lot of really great stuff that the rest of the world wants to buy. China has made good use of that in the last 30-40 years. On the other hand, as a result of China's trade policies,

They have not made many friends. They have very difficult trade relationships, frankly, with almost everyone. And they've got this massive, massive trade surplus. And so there is this perception out there, right or wrong, that that China is, you know, an unfair trader. And so I think their their China's trade relationships is a is a significant weakness. That again looking at

their growth trajectory they really need to do something about that.

Jeff Rittener (26:48)
And and why do you think they have such difficulty with the training partners? I mean, what is making it so difficult for trade

Keir Gibbs (26:58)
Yeah, that's a good question. And you know, and why you know, getting that balance does not seem to be an objective. And they talk a lot about this, you know, Xuang Ying, right? The the win win situation. They they talk a good game, but if you look at how trade policy and their trading relationships actually evolved, it it's hard to see the the the win win. And and so they're gonna have to do do something about that. Right now,

they're in a very difficult situation with with the the excess capacity that's gotten a lot of attention. And again, there's another weakness that that the system and we can talk about that, it's it's it's been China has sort of evolved between having a very centralized system to decentralized and and then back w

Now we're back to much a much more centralized system. But in a decentralized world, you had a lot of the provinces kind of competing against each other. And that's part of why they have so much overcapacity, is that each province wanted to outdo the other and build their own auto industry or solar panels or you know, fill in the blank. So this has given China this massive excess capacity. And they're trying to export stuff and especially

in Southeast Asia right now, a lot of these Southeast Asian countries are saying, wait a minute, you're dumping all this stuff. Well wait a minute, we make that. You know, right? And and or we'd like to. And and so there's there's tension right there. Yeah.

Jeff Rittener (28:36)
Yeah,

no, I can see that. it it is a problem. in your book, there was one point you made, I wanna kinda unpack that a little bit. You talked about how the the word or the words China for China or in China for China, how that's kind of evolving and changing. How help us understand that? I I asked that because I worked at Intel and we were in the middle of that. we built factories in China, we saw China market and so on, but then we started to

shift like maybe we need to be making things in China for China but help me understand that point that you you made.

Keir Gibbs (29:09)
Yeah, that's an interesting one. I and the the in China for China became sort of the bumper sticker and and to to describe the the the reasons and motivations and structure of of what companies were doing. So so it came out of the early days when when you know everything was quote unquote made in China, right? It was taking advantage of cheap labor, frankly, at that time. We're talking about sort of the you know, the mid nineties, you know, sort of pre WTO. And and then that quickly post WTO as

As China's middle class started growing so quickly and the consumer economy evolved, then then people started looking at China much more as a market. And and in order to take advantage of that market, they had to be present in that market. So that that that gave us this term in China for China. What was interesting is and I I don't know if I can put an actual

date on it, but at some point that vocabulary became kind of awkward because it sounded like we had changed teams.

And that that again was as we were visiting Washington D C and explaining our businesses and you know, they said, Well, you know

You're in you're in China for China? Like which team are you on? And and and so we had to be careful about how we talked about that. What's interesting right now is the in China for China has now evolved into something a little bit different. And what people are talking about it now is in China for the rest of the world, meaning they're manufacturing stuff in China for for export. Yeah. And and it's on

Almost kind of back to the future. I mean it's it has it has some similarities with the made in China era, but today you take Tesla as an example, right? So Tesla, about half of their global volume is manufactured in China. So they're a perfect example of this in China for the rest of the world. So they're making Tesla cars mostly in Shanghai and exporting them. But it's not because of cheap labor. And I think Tesla is a

Example because it it's much more because of the manufacturing infrastructure that exists in China, the ecosystem. So Tesla's cost basis is much more attractive in China than it is in the United States. And again, it's not labor. You walk into these factories and they actually have very little labor. I don't know if you want to call it

know, in China for China Prime or or or or whether it's plus or whatever. But then there's there is a a subset of in China in China for the rest of the world minus the US.

Jeff Rittener (32:03)
Yeah.

Keir Gibbs (32:04)
Meaning that you're making stuff in China, you're an American company, you're making stuff in China, but it's very awkward to actually re export that back to the US. Why? This is your world. Yes.

And so they s they take that stuff and sell it everywhere in the world except the US. And and this has kind of given rise to what I'm what I'm calling

Again, you know, you and I w lived through COVID when we started talking about, you know, the supply chain needs a China plus strategy, right? You know, we're where yeah, you're your most of your supply chain was gonna stay in China, but you need an option. That's the plus. Right. And I think what we're getting right now is we're seeing a situation where we're talking about

Rest of world global, minus one. Minus one. Minus one being the United States. We are we are really isolating ourselves. And so it will be

interesting to see how this new model, the new new model evolves and what kind of role the United States ends up playing and and how these multinational corporations organize themselves given the new dynamics.

Jeff Rittener (33:18)
Yeah, and that's a fascinating point that I've thought a fair amount about because the exact same thing is happening on the US side. In some industries, they're cutting China out. You can't sell AI chips. You can't sell semiconductor equipment. So you're you can sell it everywhere else in the world minus China. So you almost have the same model in reverse. So in China it's make in China for the rest of the world minus US. The goal in US is you know make make products manufactured in the United States forever in the world.

world but China. So you have this this similar situation across both sides. And where does that lead?

Keir Gibbs (33:54)
Where indeed? Where indeed? Where does the what does the global economy look like in the next three, five, ten years? And I don't think anybody knows. And and again, this is part of the frustration that that people have is we don't see the blueprint. We don't see the the the the the the model. And to be fair, to be fair, there is a model and and I often point to this book, which I'm sure you've read, Jeff, is a

Is the the Robert Leitheiser book, No Trade is Free. Interesting book. I do not agree with the conclusions, but it is a good analysis of global trade. And it is, it is, he he's the architect of as you well know, he he was the architect of Trump 1.0. He was the US trade representative under 1.0.

And and his book I think lays out the science of of what this is supposed to look like. But now here in Trump 2.0 it's nothing like that. So so the president has really deviated a lot from what Bob Leitheiser laid out. And so what which leaves us basically navigating the globe without a map.

Jeff Rittener (35:11)
Yeah, yeah. no, it's amazing you brought that up because I did a whole episode early on in my written reflections on Robert H Weidheiser's book and trying to help people understand what is really going on. And it's interesting, Kurt, I'll just say in in one way I think I think Trump is still on the Weidheiser plan. The plan basically says that we need to move to a balanced trade. And all of these tariffs, I think, were thrown out there to get people to the table.

so that we could negotiate and because it's it's more than just tariffs, there's also non-tariff barriers. And it's to negotiate all these things out so at the end of the day we have a balance trade. The problem is it's not going well. And so I think this is where there you see some deviations and various things happening because it's not kind of going to plan. But I do think that's I think that's still the roadmap to to try to achieve that. But it's a it's not easy.

Keir Gibbs (36:04)
I think you're right. There's there's strategy and then there's execution. And as as as the great boxer said, right, everybody's got a plan when they go into the ring until they get punched in the face. And and and maybe the United States got punched in the face. And and President Trump is now pivoting to something a little different.

Jeff Rittener (36:22)
I think that happened on February when the Supreme Court said that he does not have the authority under AIPA to issue tariffs. And so now you're right, got hit in the face. Now I gotta figure a different shape. But anyway, that's a whole nother topic, One one more thing on the things that I want to move on. there there's so much we could talk about in your book, and I really, recommend to our listeners you need to get this book and read it. There's just so much in here. there were three things that you you took a lot of time to really describe, and

that is this concept.

So I don't know if there's a lot there, but if there's a briefly kinda jump into some of that wherever you think that might

Keir Gibbs (37:01)
Sure,

and and control is a is a recurring theme, right? I mean I think all of us as China watchers, you know, we look at look at the system, the CCP, the you know, the Marxist-Leninist system that that is is really obsessed with with control. Yet at the same time, people like you and me who've lived in China and we see we identify the strengths, the strengths in of Chinese society and e in the economy is is goes back to the entrepreneurs.

These are people that are completely out of control. They make all kinds of things and they do all kinds of crazy things in the business world that end up with great products like BYD. So that part of it cannot be controlled. And that's the strength of China.

Yet from a political system point of view they they try to to to control everything. And it right now one of the examples of that is is this demographic problem, which again back to our discussion about weaknesses and fragilities and the two buckets. I think I think the CCP is trying to put I would put demographics in the first bucket, which is like something you can't do anything about. This is what the sun comes up on, and and birth rates are what they are. You can change everything else.

but you can't do CCP would would disagree, you know, and they're they're trying to use propaganda, frankly, to to try and control how many babies women have. Right. And I don't think it's going well. And and so that's that's kind of that explains kind of that addresses you know how how China you know the systems is is really built around control

And obedience. it's also built around that and I I go into that in in my book in some detail about about the education system and how the education system again, it's China's strengths are its weaknesses. And the education system is a good example. Education system on on one level, it's awesome. Kids can do math. Yeah.

And and the kids have mastered this incredible writing system that drives people like us crazy. So

It's hard to argue that that their educational system is failing. It's not. But it's producing a certain type of graduate, and that type of graduate is, frankly, obedient. They're taught to do things in a certain way at a certain time. And it's a very fixed output.

It produces amazing entrepreneurs, amazing innovation, amazing creativity. How that happens, I have no idea. But I am convinced my daughter went through the school system in China. And so I've seen how it operates and I've had these arguments with the teachers about homework and how it's supposed to be done. And so again, it's just it's just one of the many contradictions that that that make up modern China.

Jeff Rittener (40:12)
And for those of you listening, please get the book. There's many more stories of the contradictions and the control and so on. But let's let's move on, Kir. you I recently I saw I follow you on LinkedIn and I saw you were all over Asia, China, you know, doing book tours and ha talking to people about your book, and I'm really, really interested in getting your your insights of of how that went and what what did you discover?

I can imagine

if I'm in China and I read your book, I might have being an obedient Chinese person, I might have a different view of your book versus somebody that may be sitting in Hong Kong or Malaysia or even here in the US for that matter. So I'm just curious to get your what you saw what you heard and what you saw.

Keir Gibbs (40:54)
Yeah,

I I just came back from a a book tour, went to Tokyo, Shanghai, Hong Kong and did a bunch of bunch of bunch of talks. And honestly Jeff, I I I I couldn't be happier. The the reaction to the book has has been fantastic. I'm super happy. I gotta be honest with you though, the the first draft of this book was not good. It was not good. And and I was quite fortunate to to actually have the kind of friends who were willing to read the

Draft and tell me honestly that that that it wasn't the right book. And I really have to give sincere thanks to a person who's well known to you and I think a lot of your listeners is Ken Jarrett, who's a legend in China and a very former diplomat, and he was my predecessor at the American Chamber. He read the first draft, and and he told me basically to tear it up. And and what happened there was

I was determined to not write a memoir. I

One, I'm I'm not old enough, and I'm not famous enough. I did not want to write a book about me. And and so in that process I ended up sanitizing the book. And Ken pointed that out. And he said, wait a minute, you know, what you've written is is a book about China and a book about the US. But where were you in all this? And and what what were you doing? And so that's what people and so to my surprise, I so I took his advice, rewrote the whole book and and gave it much more of a personal touch.

And to my surprise, that that is what people are interested in. They want a personal story. They want to know exactly what did that look like, who was in the room, you know, that kind of thing. So this is very much, you know, sort of version two. I also wanted my editor from Earnshaw Books, the publisher, he actually made a lot of changes that also made the book good.

I'll be honest with you, the the editing experience i i it's not pleasant. It's not pleasant.

Jeff Rittener (43:00)
The dentist?

Keir Gibbs (43:01)
It's like going to the It's very much like going to the dentist, you know, pulling tooth after tooth with no Novakane. but but he definitely made the made the book better. He he he fixed some errors, but and also challenged me on many points which which which made me really I did you know on certain things I I believe I was right, but he made me defend it more in the book. but also there were there were places in the book that he just wouldn't let go until we

had found balance in the book. And so I'm very happy that that that word comes up when people say what their reaction is to the book. The word balance comes up a lot. And that was that was the goal for for for both myself and for for Earnshaw books.

the Chinese audiences were

interesting you know meaning sort of people who are china born but maybe in a in a global role or or have a little bit more of an international outlook and so they're fascinated by the book because because they see it as you know in writing about themselves you know and so so they're they're learning what people outside China because frankly I am American and so they're curious to know how their own country is perceived. One of the other

things that they're interested in, they're learning from my book.

about how their own government operates. Because that is something that they have no visibility in. And so again, I was in this unique role is as in the American Chamber of Commerce where I was meeting people in Chinese government at a at a very high level. And and so I mean I wasn't that's different from really getting inside the machine. That part is, you know, a foreigner is not going to be able to get anywhere near that. But but they're fascinated.

So Chinese audiences are are very interested. The part Jeff you're you're probably most interested in is is is the government.

Jeff Rittener (45:04)
Yes.

Keir Gibbs (45:07)
What's their reaction? I gotta be honest, th th they don't love it. They do not love they do not love the title. there's a lot in the book that they do not love. but but and especially

some Chinese diplomats that I'm fairly close to have read the book and they've read the book cover to cover and given me some some feedback, some and they're pushing back on certain things that the Netnet I think they they're they're saying that that it's a f it's fair and it's constructive. They do say that that that they do believe that this book lands in a place where that stimulates

analytical conversation about what's going on between US and China. So in that sense they they see it as helpful. But it does not align entirely with their positions. That's that's clear. And so they've they've said basically, look, read the book, I agree with certain things, I don't agree on others. And so that's I think that's that's basically where it like where it's landed.

Jeff Rittener (46:16)
Well, in our final segment here. I'd like to kind of talk a bit about today as we think about this US-China relationship. I I'm I'm

sitting here right now for the audience, and I'm looking at Kier, and right behind Kier is I'm looking directly across to Lombard Street. And there's as famous as you all know, the the crooked street that has sharp turns and goes downhill and so on. it makes me think.

of the US China relationship. It's full of twists and turns and it's you never know what's around the next corner. But here we are today and I just wanted to get your view on where where do you think the relationship is and and where do you think it's going.

Keir Gibbs (46:54)
Yeah, I see where you're going there with the twists and turns and and and or or ups and downs, if you if you will. And right now, at this moment, I would say we're we're in a period of of happy peace and tranquility. dare I say harmony. we've had the two summits, and overall, you know, Trump

President Trump has has shown genuine respect and humility. And frankly, that's something that China, you know, official China, they've been desperate for. They want to be treated as an equal. And you know, I'm not saying that Obama or or Biden disrespected China, but but Trump truly, if you look at the body language and and kind of how he how he interacts with

with President Xi, you really feel that. having said that we've solved nothing. If you look at what is underlying

beneath the tension, what's under this competition, nothing's been addressed structurally. I mean, all of the you know, the the system in China is what it is. It's you know, the state-owned enterprises, the exporting the ac excess capacity that we've talked about, the trade relationships, none of that has changed. If you look at, you know, sort of market access, China's not gonna make any changes. I mean Facebook is never gonna be available in China. That's just not gonna happen.

So a lot of those things, and also to say nothing of the national security issues that plague this relationship, none of that has even been addressed. On the AI front, we were kind of laughing at coming come coming up here. I think the extent to which the two leaders did discuss AI, I think where they're at, they are actually in violent agreement to do exactly nothing. Right? So they

Jeff Rittener (48:55)
Okay.

Keir Gibbs (48:56)
they have different

different reasons for wanting to do nothing, but they're gonna do nothing. Right. And so that's that's not gonna be addressed. So short term happy, long term uncertain. I think we've got more twists and turns in the road going forward. Right. so we'll see what happens.

Jeff Rittener (49:13)
what do you tell that CEO to do about China? Invest, decouple, sit tight. What would be your based on your your perception of what's happening?

Keir Gibbs (49:24)
Yeah, no, that's a great question. And and I do have a a little consulting company of my own that and and so I'm advising some companies that are that either have operations in China or considering. And number one, I would say do not ignore China. that that would be a mistake. I think from the the the large global companies are are are are on board with that. You if you look at at at even the companies that are that are struggling in China and I would put GM in that category, they can't abandon China because that's where

w one is China is i i as a market it's so big so important that if if you're a global company and you're not in China, you're not a global company. Right? So so there's that. There's also

Clearly, especially in automotive, you know, this is where the next generation of of innovation is coming. So you have to be there to see what your competitors are doing. And if you don't go there to see what it they're gonna come to you. And and so it's better to better to see it upstream. Having said that, what I'm advising companies now is I guess

In in years past, we've always talked about committing to the to the market. You've got really show a a solid commitment to the market. I don't think that's changed. But what you need to do now is is manage for optionality. You've got to be ready to pivot. We've seen so many twists and turns. You're you're in the trade space and the tariffs. I mean you you you've got to be able to adjust your supply chain given given the given the circumstances. There's also, you know,

risk management, balance sheet risk. And what I'm talking about there is I'm advising companies to at least consider

Within a risk management perspective, consider the joint ventures and licensees. Now for years, you and I have been in this market for long long enough where in the early days we hated the joint ventures. And we felt forced into these JVs because it gave the Chinese government that control, right? Back to this theme of control. Right. And and so we came to think of the JV as as being a dirty word or something to avoid.

Some sentences it still is, but not always. And you're you're seeing, in fact, some companies that have been in China and decided to exit and have have satisfied themselves with with owning part of the business. So Uber is is is kind of a good example of that. They went in, guns blazing, wholly owned subsidiary, they owned everything and struggled.

And decided that that their best option was to not own a a wholly owned subsidiary and not operate their own business, but instead they swapped that business into a moin minority position in in in their biggest competitor over there, D D Chushing. And so you're seeing those kinds of things. You're also seeing companies that again, that balance sheet risk, i if if if

You know, God forbid we have a catastrophic incident or something that really decouples, you know, China and the US in a big way, and and they have to abandon their business. And I'm I'm the reference here is to what happened with when when Russia launched their full scale invasion of Ukraine. Then then Pepsi, McDonald's, and I mean they had to write off billions off their balance sheet because they owned their own business. So

Companies do want to consider that if they own their own business, have hard assets that they can't move, they may want to consider a a joint venture which just moves part of the balance sheet risk. And I I have talked to companies that are going full full Monty, if you will, and going into a licensee structure where where they sell all of their assets to to a local company and then and then have a straight license kind of business, in which case they don't have any balance sheet risk.

risk if if if there's a catastrophic incident then then they simply walk away. Now I'm not predicting a a a catastrophic incident. In fact right now that's probably you know fairly low. I am as we just talked about I am anticipating some difficult twists and turns. I don't think we've solved the problems between the US and China. But hopefully we'll have some period of of peace and tranquility.

Jeff Rittener (54:02)
Yeah, and I think what you're describing is something that I lived firsthand in my career. is this need to find the balance. And a lot of times it's like when I went in my second trip to China, somebody told me you gotta go walk the Great Wall. And there's a couple places you can get to it's it's all paved and brand new bricks and it's pristine and wonderful. And they No, don't go there, you gotta go to this one. It was a two-hour drive out of

Beijing. So I went to there because I wanted to get the natural, and we there were these towers, and you had to hit each tower, the path was this really narrow little, and it was all stones, and you could see yourself tripping and falling over the edge. And I kind of feel like what you were describing for companies, it's almost like that. you want to walk it, you want to do it, but you gotta you gotta find that very narrow path so that you don't.

fall over on either side. And I I I just it just came to me that's just a picture of how companies I think have to navigate. They can't just let's not go to the wall. Right? Or let's just go to the easy one where it's all paved and we don't we don't do anything. It doesn't solve anything. But maybe we just need to go to this one and and it is going to take a balancing act to do it right.

Keir Gibbs (55:15)
I

think that's a great metaphor. You're right. I mean, and there's some parts of, you know, business in China that's smooth sailing, you know, nice white path.

Well well warned, but then yeah, there's there's that that path is gonna narrow. It's gonna narrow, it's gonna get steep, it's gonna get dangerous. Yeah. So so yeah, I you've gotta be you've gotta be flexible, you've you've gotta be and again manage for optionality, be ready to pivot. Yeah. there all those things I think are are go into the modern approach to to business in China.

Jeff Rittener (55:47)
Yeah. Yeah, no, that's super,

super sound wisdom, Kier. Thank you for sharing that. I I think that's that's a great way to kind of end here. And before I do though, I want to ask you one more question. So this is an important one. Why should listeners read the fragile dragon?

Keir Gibbs (56:06)
from your perspective. From my perspective. Why why I bought the book.

Jeff Rittener (56:10)
What

do you think they're hoping to walk away with?

Keir Gibbs (56:12)
Because I am begging you read my book. no, it's you know, hopefully hopefully it's entertaining, hopefully it's in enjoyable and it and it is written to be easily accessible. It's not this is not an academ it's not a textbook, it's not something like that. But you know, I think that that people who who read it will come away looking at the US and China a little bit differently.

And even even people who who know quite a lot about China, and and s I've talked to people who who do know a lot about China, read the book and and said they still came away i it helped them sort of see familiar things a little bit differently. And so I I think that's that's kind of the main takeaway on the book.

Jeff Rittener (56:57)
Okay, great. Well thank you so much for inviting me into your beautiful home and the beautiful view of Lombard Street. And just this great conversation we've had. I've loved it. It's been been so much, so rich. And before I close, any last word.

Keir Gibbs (57:13)
No, thank you, Jeff. It's been great to be with you. it's it's just a terrific conversation. I've enjoyed it lot.

Jeff Rittener (57:18)
Kerr, thank you for sharing your experience and perspective today. Having read The Fragile Dragon myself, I can say it's one of the clearest explanations of China's strengths, vulnerabilities, and self perception that I've come across. In our next episode, we'll continue this conversation from a very different vantage point. I'll be speaking with Matt Bell.

Who led compliance at ZTE during one of the largest US enforcement actions in history? His story complements today's discussion in a powerful way. I really hope you'll join me for episode thirty eight. Thank you so much for listening.

I'll be talking to you again real soon.