AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Nermeen Shaikh, with Part 2 of our interview with Orville Schell.

NERMEEN SHAIKH: Donald Trump is hosting Chinese President Xi Jinping today at his Florida resort Mar-a-Lago. It’s the first meeting between the leaders of the world’s two largest economic powers. Still with us is Orville Schell, director of the Center on U.S.-China Relations at the Asia Society and the co-author of Wealth and Power: China’s Long March to the Twenty-First Century.

Orville, can you say a little about how China has responded to Trump’s election, and what their concerns might be?

ORVILLE SCHELL: Well, the first thing to be said is that the Chinese did not like Hillary Clinton. And the reason why they didn’t like her was because they identified her as somebody who really was going to highlight the difference in our political systems and values—namely, a democratic system versus a sort of an authoritarian capitalist system. So, when Donald Trump came around, they were quite tempted by his—his advent, I think because they recognized—you know, they recognize a good thug. And so, there was a certain hopefulness, I think, that maybe they could do business with this guy. Then, as things advanced, I think they became increasingly alarmed that—and didn’t quite know what to make of him. But—

AMY GOODMAN: I mean, even on the campaign trail, he kept saying—I mean, China was the number one villain for our country, I mean, said he raped the U.S.—that China raped the U.S. over and over.

ORVILLE SCHELL: This was quite alarming to the leadership in China. And then they—but they did kind of reserve public judgment. They didn’t react, which was quite amazing, in any sort of overt way. They didn’t react the way Donald Trump would have reacted.

AMY GOODMAN: Well, let’s go to some of Donald Trump’s quotes, what he said about China on the campaign trail.

DONALD TRUMP: I’m going to instruct the United States trade representative to bring trade cases against China both in this country and at the WTO, World Trade Organization. China’s unfair subsidy and its behavior is prohibited by the terms of its entrance into the WTO. And I intend to enforce our rules. … I’m going to instruct my treasury secretary to label China a currency manipulator, which should have been done years ago.

AMY GOODMAN: So that’s Donald Trump on the campaign trail. In fact, is possibly North Korea a welcome diversion for China, because they don’t want to deal with these issues of trade policies, Taiwan, South China Sea, etc.?

ORVILLE SCHELL: Well, I think, actually, on trade and investment, that’s an area where Trump actually has gotten the attention of the Chinese and might make some progress. I think they are beginning to recognize, too, that if they want to get along with the U.S.—and I think they really do, because we are the other big country in the world they have to reconcile with—then they’ve got to have—we need a more level playing field. And the playing field has increasingly come out of level in many other ways, as well. For instance, all American media outlets of significance are blocked in China.

AMY GOODMAN: Why?

ORVILLE SCHELL: Well, because they don’t want to have The New York Times, The Washington Post, The Wall Street Journal spreading seditious information and news in China.

AMY GOODMAN: And what’s the response of the population?

ORVILLE SCHELL: Well, they don’t get to read it. And that’s the Great China Firewall.

AMY GOODMAN: And is there growing grassroots activism in any way, or insurgency?

ORVILLE SCHELL: I would say that China has been fairly successful in sort of—in the wager that if you just do business, take care of your own life, don’t worry about politics, we’ll govern, things will be fine. But the tradition we spoke of in the earlier segment of democracy in China is one that keeps erupting, sort of a subterranean force, and has throughout the century. Now, I don’t think those tendencies are particularly powerful right now, but they’re certainly not erased for all time. And I think, in a certain very critical way, the whole future of China depends on its economy, because if it starts having real problems—and it is on the precipice of having some serious problems—then I think people are going to start to look to the party for someone to blame.

NERMEEN SHAIKH: Well, very early after he was elected, in fact just days after, Trump took a call from Taiwan’s president, reportedly the first time a U.S. president or president-elect has spoken to his counterpart in Taiwan, breaking with the One China policy, which has long governed U.S. relations with China. Trump subsequently affirmed his commitment to the One China policy. But could you talk about why you think Trump did that, and what the response to that was in China?

ORVILLE SCHELL: Well, Trump called up Tsai Ing-wen, the new president of Taiwan, and had a cordial conversation. And then word came back from Beijing that unless he did reaffirm the One China policy, which is sort of the operating system of the U.S.-China relationship, we wouldn’t really have a relationship, and, moreover, President Xi wouldn’t even speak to him. So, then he sort of belatedly did reaffirm it. And then they had a phone call, and now they’re having the summit in Mar-a-Lago.

AMY GOODMAN: So talk about why that Taiwan call happened. Who lobbied for it? Who made it happen?

ORVILLE SCHELL: Well, Bob Dole, former senator from Kansas, was the person who—

AMY GOODMAN: Former majority leader.

ORVILLE SCHELL: Yes—who seemed to have brought it about. And on the face of it, one could logically say, “Why shouldn’t the president talk to Taiwan?” They’ve been a longtime ally. They’re a democracy. They’re—

AMY GOODMAN: Bob Dole, now a paid lobbyist—

ORVILLE SCHELL: A lobbyist for Taiwan.

AMY GOODMAN: —for Taiwan?

ORVILLE SCHELL: So, I think, in Trump’s rather, you know, simple mind, coming into the complexities of the whole China puzzle, thought, “Why shouldn’t I talk to her?” And he did. And then I think he realized that this is like throwing a bomb into the middle of the whole relationship, so he had to backtrack. And this is the pattern that we see over and over again. He’ll say something outrageous, like currency manipulation, but actually the currency problem is not such a severe problem now, and so he’s done nothing about it. And I think that we’ll see more of this, which doesn’t mean that the U.S.-China relationship is going to come up roses. It just means that he’s going to have to trim his jib a bit in order to get along. And there is no alternative but to try to get along with China.

NERMEEN SHAIKH: Why is it so significant, his emphasis on currency manipulation? Like, what does that mean, practically?

ORVILLE SCHELL: I think that’s sort of an expression of his paranoid personality, that we are being taken advantage of. And, in fact, in many ways, the U.S. is being taken advantage of by China. And that’s the problem. That’s what needs to be corrected.

AMY GOODMAN: How?

ORVILLE SCHELL: Well, certainly, in trade and investment, there are many sectors of the Chinese economy we can’t invest in. They have the run of the pen here. They have hundreds and hundreds of reporters here in America. They have Chinese—Central Chinese Television, Radio International, China Daily, People’s Daily. They’re all here circulating in America. We have none of that in China.

AMY GOODMAN: A TV network?

ORVILLE SCHELL: Oh, TV, radio, newspaper, magazine—nothing. So there’s a great sort of inequity there. And we see questions of scholars being unable to get visas from America to go to study in China. That’s not a problem the Chinese have coming here. But there’s a whole host of areas where things have fallen, I think, into a state of imbalance. And in this regard, Trump is not wrong to say that something is not sort of in equipoise. But his statements have been sort of so outrageous and destabilizing, one wonders how the two leaders are going to sit down calmly and talk about these things.

AMY GOODMAN: And then you have Jared Kushner, who seems to have an ever-expanding portfolio, this 36-year-old real estate mogul who is married to Donald Trump’s daughter Ivanka. He went to Iraq before Rex Tillerson, the secretary of state, raced back so he could be there in time for this meeting at Mar-a-Lago with Xi, and has been dealing with the Chinese government another way—with his real estate business, building 666, hoping that Anbang perhaps would buy it.

ORVILLE SCHELL: Right.

AMY GOODMAN: What about those relationships?

ORVILLE SCHELL: Well, it’s very complex. You have Jared Kushner talking with the Chinese ambassador and really being a go-between for this summit. You have Steve Bannon, Peter Navarro, sort of throwing bombs from the sideline. You have Secretary of Defense Mattis and Tillerson trying to kind of keep the ship steady on its course, to some degree. And, I mean, this is sort of the—kind of the boiling pot of the White House right now. And you have a State Department that has no assistant secretaries of state, no number two, number three person. So you have a very thin sort of professional staff for this summit.

AMY GOODMAN: Can China play a role in Syria? As, certainly, Russia can, but Russia is deeply involved.

ORVILLE SCHELL: China has been, I think, quite properly rather hands-off in the Middle East, not wanting to get caught into this sort of desert quagmire. I mean, China, when it recognizes its national interests, can be quite prudent.

NERMEEN SHAIKH: Well, you mentioned earlier—I want to go back to the point that you said, which is that the U.S. has been taken advantage of, of China, that you said is partially true. But who is—I mean, some claim that the U.S. is the principal beneficiary of trade and capital flows between the two countries. Is that the case?

ORVILLE SCHELL: Well, I think it’s benefited both countries. But China, I think, has benefited immensely by being in the World Trade Organization and being integrated into the whole global trade system, because, remember, it once was an autarchy, completely separate and cut off. So, it has—in this regard, I think the United States has done a great service to China. It integrated them into the global trade system. But now its very increasingly sort of protectionist measures make the relationship more and more out of kilter.

AMY GOODMAN: Can you give us some context for the South China Sea? NBC News just reporting, according to internal military reports reviewed by NBC News, almost every week brings another display of U.S. hardware in the waters off China. What is the U.S. role and China’s role there?

ORVILLE SCHELL: This South China Sea—and the East China Sea, where Japan is involved—is very dangerous. What China has basically done, through what it calls the Nine-Dash Line, is ascribe the whole of the South China Sea as basically its own territory. And it’s built seven islands and military bases on those islands, and it’s sort of projected its new forward military force out into that region. That’s also a region where the 7th Fleet in the U.S. has traditionally sort of patrolled and preserved freedom of navigation. So there’s a real collision building. And Vietnam, Malaysia, Philippines, Brunei—those countries are not powerful enough to oppose China. So, if there is a clash, it could be very dangerous.

And then you have the East China Sea, the Senkaku Islands, the Diaoyudao. Japan is no minor power. If it gets in a scrap with China, that could be very, very nasty. So this is a real powder keg, that we don’t have any solution for, because China has declared it as its core interest. That means it cannot and will not back off.

NERMEEN SHAIKH: Well, White House chief strategist, Bannon, said, on Breitbart, on his Breitbart News radio show last year, “We’re going to war in the South China Sea in five to 10 years, aren’t we? There’s no doubt about that. They’re taking their sandbars and making basically stationary aircraft carriers and putting missiles on those.”

ORVILLE SCHELL: Well, he’s absolutely right about what the Chinese have done. And here’s where diplomacy is utterly critical, if you want to avoid a war. And Peter Navarro has also done a film called, you know, War with China. So, these two have a rather jaundiced view about the future prospects for the U.S. and China to get along. My own view is I’m not particularly optimistic. But I do think we have to make every effort possible to sort of come to some sort of terms with China.

AMY GOODMAN: Do you think the ouster of Bannon on the National Security Council was some kind of peace offering to China, given it was the day before? I mean, it’s a very public shake-up.

ORVILLE SCHELL: I mean, I do think it is a good sign, and China will appreciate it, because Bannon was a very hard-liner. But you never know what that means for Trump. I mean, he’s capable of operating out of both sides of many different contradictions.

AMY GOODMAN: Orville Schell, before you go, I just wanted to ask—and I know you have to leave very quickly—what got you interested in China?

ORVILLE SCHELL: Well, it was a long time ago, and I think it was the utter sort of impenetrability of the place. We couldn’t go there. It was really behind the veil. It seemed to be engaged in this monumental revolutionary experiment. And at that point, it was unclear whether it was going to succeed or fail. And it was sort of sitting astride the whole sort of Asian world. So, that sort of—it was provocative in its sort of unreceptiveness to Americans. And that, I think, was quite alluring to me.

AMY GOODMAN: Do you think it will take over as the number one power in the world?

ORVILLE SCHELL: I think China’s future, whether it’s going to be the ascendant power or not, completely depends on whether the United States is capable of undergoing its own kind of rejuvenation, not only of our own political system, our economy, but our stature in the world as a moral, trusted and temperate power.

AMY GOODMAN: We’re going to leave it there. We thank you so much for being with us, Orville Schell, director of the Center on U.S.-China Relations at the Asia Society, co-author of Wealth and Power: China’s Long March to the Twenty-First Century. And we’ll link to his piece in The Wall Street Journal, “China’s Once and Future Democracy.”

This is Democracy Now! I’m Amy Goodman, with Nermeen Shaikh. For Part 1 of our conversation with Orville Schell, go to democracynow.org. Thanks so much for joining us.