>> We believed in globalization.

We believed that it would make the world better, but I think now we're in a situation where instead of moving toward one global world, we're actually moving more and more toward two or perhaps three new power blocs.

♪♪ >> Hello, and welcome to "GZERO World."

I'm Ian Bremmer from our nation's capital, Washington D.C., and today we are looking at China's leader for life, Xi Jinping, and what that means for all the rest of us.

In just a couple of decades, China went from being an emerging market -- that is a country transitioning into becoming a developed economy -- to the second largest economy on the planet.

What does the world look like as Xi Jinping cements an unprecedented third term in office?

How much will the future of China determine the future of the world?

I'm talking with a man who coined the term "emerging markets."

He's investor and expert Antoine van Agtmael.

Later we take a look back at the Cuban Missile Crisis, 60 years ago this October.

Don't worry, I've also got your "Puppet Regime."

>> Hi, hello.

Welcome to "Putin' It Out There," your pipeline to self-realization.

Today's first caller is Jim.

>> But first, a word from the folks who help us keep the lights on.

>> Major corporate funding provided by founding sponsor First Republic.

At First Republic, our clients come first.

Taking the time to listen helps us provide customized banking and wealth-management solutions.

More on our clients at firstrepublic.com.

Additional funding provided by... ...and by... >> Meet the most powerful person on the planet, Chinese leader Xi Jinping.

No one else is close.

He cemented his spot in the pantheon of power in October, positioning himself as General Secretary of China's Communist Party for a precedent-defying third term.

For the first time since the rule of Mao Zedong, the Communist Party and its leader have become one and the same.

And to ensure his power is absolute, Xi rolled out a new standing committee, the top leaders of the party, six men alongside him, all deeply loyal to his agenda.

But in a country where political events are highly controlled, it was odd to see this moment, former General Secretary Hu Jintao being escorted out of the Communist Party Congress.

He clearly wasn't happy about it.

Maybe he was ill, more likely he disagreed with what was about to happen.

I'm not sure we'll ever know specifics, the point is a staggering display of power by China's new leader for life.

Still, Xi has plenty of problems to contend with as he begins his next term in office.

China's zero-COVID policy meant to shield his nation from the pandemic and literally isolate the Chinese population from the virus has created ongoing lockdowns that have been met with protests.

The policy also has created major economic challenges.

In October, youth unemployment stood at a staggering 18.7%.

This comes as China's economy slows overall and Xi Jinping's government faces ongoing global tensions over its sometimes coercive approach to foreign relations, its unwillingness to condemn Russian invasion of Ukraine, and its human-rights abuses, including the treatment of the Muslim Uyghur population.

So is it going to be the Chinese century?

Well, no, we don't do centuries anymore; the world works too fast for that.

And plus, where do so-called emerging economies, especially the group known as the BRICS -- that's China, alongside Brazil, Russia, India, and South Africa -- stand in this changing world order?

That's what I'm asking investor, author, and expert Antoine van Agtmael.

Here's our conversation.

Antoine van Agtmael, it's nice to see you.

>> It's nice to see you.

Long time.

>> So, so much to talk about.

I guess I want to start with this idea, because I first encountered you, it was a couple decades ago as the guy that coined the term "emerging market."

>> Yep.

>> 2022, can we still call these countries emerging markets?

Is that the direction they're heading?

>> They're emerging in the sense that they have a long way to go.

Some people even say, after the recent experience, they have been submerging, which is kind of a nasty wordplay.

But of course they have evolved enormously.

I mean, when I started my business in 1987, what did we have?

Brazil -- If you take the four BRICS, which by the way, at that point weren't even investable.

>> Didn't exist, yeah, yeah.

>> So India was a bureaucratic nightmare, Russia was behind the Iron Curtain, China had just come out of the cultural revolution and Brazil was a mess.

So a lot has happened since with countries evolving enormously and in some cases becoming middle-class countries.

So to some extent they have emerged, but they're still different.

>> One thing that we can say that has been consistent over the nearly 40 years since you started on this journey is that we were moving towards globalization.

We were creating a global middle class.

>> We were.

>> You think we aren't anymore?

>> No.

>> Why?

>> We believed in globalization.

We believed that it would make the world better.

And we found out that that was to some extent true; it lifted a whole group of countries, my emerging markets, out of poverty, but it also created all kinds of problems, particularly in the developed countries.

And I think now we're in a situation where instead of moving toward one global world, we're actually moving more and more toward two or perhaps three new power blocs -- Asian/Chinese power bloc, basically Chinese/Russian power bloc, and an American/European power bloc with some of the other countries having to make up their mind where they're going.

And by the way, the elites in many of the emerging markets are asking themselves that question.

>> So when I think about globalization, I think about goods and services and people and data and capital moving faster and faster across borders around the world.

When I talk to the CEOs of big multinational corporations, there are exceptions.

But generally speaking, I find that those CEOs are still committed to those principles.

And I'm saying that not about American or Canadian or even European CEOs, I'm talking about global CEOs.

It doesn't matter what company I'm talking about.

>> I think that's absolutely true.

They would like to believe that we're still moving toward globalization, whereas in their everyday life, they realize that it's not always the case.

I mean, take for example China, the way an American businessman now thinks about China as opposed to the way they thought about China 20, 30 years ago.

At that point in China, people were very open, they were very eager, they wanted to learn.

China today is much more closed and China has also developed to have a real sense of itself as a world power, and that's very different from the way it was in the past.

So while we may hope and would like to see globalization, in fact, I think we're moving in a different direction.

>> When you're saying China was more open, of course, that was at a time there was very little American investment, Western investment in China.

>> Right.

>> Today there's a massive amount of investment into China.

>> Right, absolutely.

>> There's a massive amount of interdependence.

>> Absolutely.

>> Frankly, a lot of the low hanging fruit has been picked.

China's a much more competitive field to be in.

Their labor is more expensive.

Is this really sort of the unwinding of globalization or is it just a maturation that comes once you've actually already done all of that?

>> I think it's both, but it's more than that.

And the more than that is the fact that I think China has developed a different sense of itself, and the U.S. has become more defensive.

Basically, I think we are, I believe, moving from the American century to the Chinese century.

And this idea for us in the U.S. to get used to the idea of becoming number two, and by the way, for China, the idea of becoming number one, those are huge transitions.

>> Now, there are so many ways that I could say I don't necessarily agree with that.

In the sense that, number one, militarily, the United States is just overwhelmingly a global power and China's not remotely close to one.

And then secondly, I would focus on all of the internal challenges that China seems to be experiencing economically right now, some of which you've written about because of the middle-income trap.

>> Absolutely.

>> But also the demographics are so much worse than one would normally expect.

>> They're not worse than ours, but they're a lot worse than they were before.

>> A lot worse than they were before.

I mean, China's already peaked population at a time that they're very poor and all of the inefficiencies, the debt challenges that come with that.

Why in the context of all of that would you feel confident that it's a Chinese century?

China more powerful, absolutely.

But that Chinese century, the way you framed it implies that literally we're going to go from U.S. number one, China number two, and we're just going to flip them.

Do you really think that's happening?

>> Yeah, I think so.

>> Okay.

>> I think that as a result of what they have done, much of which has been really something we can admire, I think, there is a momentum.

It's like being on a boat and steering a boat, as I just recently did.

Once you're on a certain course, to move in a slightly different direction is very, very difficult.

And what I think is happening is that China now has a certain momentum.

You were talking about the superiority, which unquestionably, the United States still has militarily.

But let's not forget that the United States hasn't really won any major conflict in a long, long time.

So this military superiority as applied to being effective in specific places, let's take Taiwan for example, is not so clear.

>> I agree with that.

Address the question of your confidence in -- your continued confidence in China's model economically, in a way because I mean, what China's done for the last 50 years has been extraordinary, but so much of that has come from a different model.

I mean, we look at China over the last 50 years -- massive amount of surplus, inexpensive, incredibly efficient labor.

None of those things are going to apply to China's growth model going forward.

>> There have been times over the past 25 years that I've gone back and forth to being an admirer to being a skeptic.

And unquestionably, there are things that China will have difficulty with.

For one, the fact that in a society where thought is controlled, and let's face it, thought is controlled in China far more than most other places, I think it is very difficult to be truly innovative.

But I mean innovative at the edge of innovation.

But then when I think about that, I say, "Yeah, that's theoretically true."

But now take a look at one of the three, four major things that we have to watch I think in the future of the world, which is nuclear fusion.

Who is now number one in this area?

It's China.

>> China, yeah.

And you think that's close to a breakthrough?

I mean, I see a lot more money is going into it as an energy source.

>> Well, I mean, basically it's very tempting to put money into this particular area because it is possibly a remarkable solution.

I mean, it's like creating an artificial sun.

So the first one to win that race -- and by the way, Princeton is working it, Korea is working it, everybody's working it, and it's not just China -- but the one to win that race or to be ahead is going to benefit from that.

And I cite it just as an example, and the same is true for artificial intelligence, the same is true in other areas, cyber, you name it, where China has made remarkable innovative progress, more, frankly, than I had anticipated, so you have to give them credit.

And that somehow has not stopped.

>> You would weigh China's advantages in cutting-edge technologies more heavily than you would the constraints from demographics, lack of efficiency, indebtedness, zero-COVID, all the rest.

That's what you're telling me.

>> I think that's a good way of putting it, yes, yes.

But that doesn't deny that those challenges exist.

Those challenges really are there.

I mean, China is the only major economy in the world that has never gone through a really profound crisis the way we did in 2008.

>> That's a concern.

And their willingness and ability to continue to kick the can down the road on big challenges like bad corporate debt or real-estate bubbles and the rest, at some point -- >> And we all know what that leads to.

>> Right.

And are you saying that you think that China can continue to do that for the foreseeable future or that you have a lot of uncertainty about your China projection?

>> China is better able to deal with those challenges than I had thought, and I give that to them.

But I think, as you put it, in the balance, I think in that balance, I think their ability to do better than we might think is one that makes me, let's say, optimistic about their ability to become a true global power.

In fact, the major, true global power in the future.

Not that that is a prospect, by the way, that I relish, because I don't think that this is going to be a nicer world.

I think it's going to be a much less nice world.

>> Switch to the other side of the equation, the American side of the equation.

The U.S. -- I know that you're not happy about where the political system is going right now.

On the other hand, the American political system hasn't prevented extraordinary innovation and entrepreneurship from emerging in the U.S. from being attracted to the United States.

The U.S. dollar today is at multi-decade highs.

>> It's amazing.

>> So why are you so comparatively negative about where the United States is heading as an investor?

>> Well, first of all, we have some real problems lying ahead, not just in the United States, but in Europe and probably the rest of the world, in that I think we're entering a two-, three-year period of stagflation.

That then is combined -- >> Stagflation, so we're talking low growth, high inflation.

>> Five, six percent inflation and no growth, perhaps negative growth for a little bit, but certainly lower growth than we need to have.

>> So real wealth is being contracted in those countries.

>> Real wealth is being contracted.

While at the same time, and this is one of the big problems, and I think one of the reasons why our democracy has become more fragile, is inequality continues to rise, in essence because you could say "noblesse no longer oblige."

I think the elite of this country and the elite of other countries have basically not taken care of the country around them and made sure that this inequality stop rising and in fact got brought back a little bit, which I think is required for a healthy democracy.

>> No, that's been going on for decades in the United States.

>> But it has become worse I think in the last decade.

>> What's the single thing right now -- If I give you a 10-year horizon, what's the thing that worries you the most?

>> What worries me most I think is that I don't see the growth of inequality, the rise of inequality in the U.S. and other countries being brought back.

And I believe that that then undermines a democracy because democracy in the eyes of many people is not doing what democracy is supposed to do.

>> Which is create and afford opportunities.

>> Exactly.

So that's my biggest concern.

>> Because inequality in the United States today is at its highest levels that we've seen since just before the Great Depression.

>> Right.

>> And you say it's going to continue, and yet no one out there is projecting an imminent great depression.

And so does that mean -- >> Neither do I.

>> Does that mean that the political institutions just start eroding/imploding, in your view?

>> I think we have seen an erosion of our political institutions.

I mean, let's not forget that basically we had for four years someone running this country or at least pretending to run this country who had ideas that I think did not move this country forward.

And I think that -- let's call a spade a spade -- that the Biden administration, which by the way I think doesn't get enough credit for what it has been doing, although I think just today his popularity figures were a little bit higher, but I think that he has not been getting enough credit for what he has been doing.

I think he's been trying to kind of bring that back, but it's not easy.

>> I'm wondering, I mean, the early part of this conversation, we talked about your view that there is going to be this shift in power from the United States towards China.

We start talking about what you're optimistic about because in some ways you're pessimistic and concerned about both the United States and China as governments, as political systems, but the things you're optimistic about actually have to do with centralization shifting to decentralization, moving away from central governments and moving to other things.

>> You're right, >> So are we really talking about a China century or are we talking about a century that doesn't belong to countries?

>> That could very well be the case.

And I certainly would want governments to do everything to make it possible for, let's say, the private sector, for individual researchers, et cetera, to be productive and to be innovative.

But while I would love to see decentralization, as you call it, take the place of the role of major governments, do I realistically think that is possible in the way we are going?

I have my doubts.

>> Antoine van Agtmael, it's great to be with you.

>> Same here.

♪♪ >> Moving now from China to Russia, which has made plenty of headlines in recent weeks, too many, if you're asking me, not least for casually threatening to use nuclear weapons in their war with Ukraine.

The news sparked for millions an anxiety that recalls those 13 days 60 years ago when we came the closest we ever have to an all-out nuclear war, the Cuban Missile Crisis.

>> Within the past week, unmistakable evidence has established the fact that a series of offensive missile sites is now in preparation on that imprisoned island.

>> The crisis came to a head between the United States and the Soviet Union as Moscow threatened to park nuclear missiles 90 miles from Florida, and the Cold War nearly became a very hot one over 13 long and dangerous days.

>> Crisis -- the word suddenly springs alive.

>> The most dangerous day of the crisis was October 27, 1962.

We knew it as Black Saturday.

An American spy plane was shot down over Cuba by a Soviet missile.

It was a strike that Soviet leader Nikita Khrushchev never actually authorized.

But of course, Kennedy and the White House didn't know that at the time.

Assistant Secretary of Defense Paul Nitze said what many were thinking -- "They fired the first shot."

Things looked so dire that at one point when Jackie Kennedy learned that the Soviets were installing missiles in Cuba aimed in American cities, she begged her husband not to send her away.

Here she is in 1964, 2 years later.

Just before that spy plane was shot down, Khrushchev himself wrote Kennedy an emotional message...

Despite the spy plane incident, Kennedy and the White House were still searching for a diplomatic solution.

And after a secret meeting with the Soviet ambassador, the two sides backed down.

>> Progress is now being made towards the restoration of peace in the Caribbean, and it is our firm hope and purpose that this progress shall go forward.

>> At the end of the day, or 13 days, I should say, a shared sense of humanity between two world leaders prevented the worst from coming to pass.

60 years later, if similarly tested, would Moscow and Washington be able to do the same?

I'm not sure.

Let's hope we don't find out.

♪♪ And now to "Puppet Regime" where once again, Vladimir Putin is taking your calls.

>> Alright, let's get this nightmare started.

Hi, hello, welcome to "Putin' It Out There," your pipeline to self-realization.

Today's first caller is Jim from Astoria.

Jim, your life, put it out there.

>> Hi, Vladimir.

First time, long time.

I love your work.

>> Yes, so do I.

What's going on?

>> Well, I recently asked all my employees to attend a work party this weekend, mandatory, but Pete from accounting doesn't want to go.

>> Jim, I am confused, you have made party attendance mandatory and he still will not go?

>> No, he even says he has a job offer in Atlanta that he'll take if we force him.

>> God, if I had a nickel for every time someone tried to move to Georgia after being conscripted.

>> Tell me about it.

But what should I do?

>> Well, Jim, have you considered, I don't know, having him fall out of a window?

>> A what?

>> I mean, you've got windows at the office, da?

>> Yeah, but would -- >> Well, he can just, like, fall out of one.

>> Uh, and then what?

>> Then you have your company party and everyone is there, except Pete from accounting who is not there.

>> [ Sighs ] Boy, Pete really is a pain in the neck.

Alright, I'll give it a shot.

>> A shot?

Jim, you're wilding.

That's literally overkill.

I think just the window will do.

>> "Puppet Regime"!

>> That's our show this week.

Come back next week.

And if you like what you see or even if you don't, but you're concerned about nuclear Armageddon and would like something a little softer to share with your kids for bedtime, why don't you check us out at gzeromedia.com?

♪♪ ♪♪ ♪♪ ♪♪ >> Major corporate funding provided by founding sponsor First Republic.

At First Republic, our clients come first.

Taking the time to listen helps us provide customized banking and wealth-management solutions.

More on our clients at firstrepublic.com.

Additional funding provided by... ...and by...