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

I'm Ian Bremmer, and today, will the world's next great military conflict take place between the United States and China?

And if so, when?

Today's guest says sooner than you may think.

And he's worried about America's chances.

But what does he know?

He's just a retired four-star admiral and former Supreme Allied Commander of NATO.

Jim Stavridis joins the show.

His new best-selling novel depicts all-out war between the United States and China in the year 2034.

More a five-alarm fire than cautionary tale.

Then one big reason Beijing may be so intent on annexing Taiwan could be due to something quite small.

Don't worry.

I've also got your "Puppet Regime."

>> ♪ I'm Smokin' Joe, the Candy Candy Man ♪ ♪ Giving out a couple jabs to needy foreign lands ♪ >> 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... >> This is power.

It is the power of America.

>> Legend has it that at the height of the U.S.-Soviet space race, NASA scientists spent millions of taxpayer dollars to develop a pen that would work in zero gravity.

The Soviets?

They sent their cosmonauts up with a pencil.

The story, alas, is a myth.

Fake news.

Records actually show that NASA ordered 35 mechanical pencils in 1965 at an only modestly ludicrous $128 a pop, which caused its own little scandal at the time.

But it rings true today in one important sense, that technology is not always the solution.

In fact, sometimes it becomes a problem.

Fast-forward to 2021, and America's chief adversary on the global stage is no longer Russia, much as President Putin wishes it were.

It's China, a country that has experienced astronomical growth in the last few decades with an economy that's expanded by $12 trillion in the last 15 years alone.

And thanks in part to an ability to weather the coronavirus pandemic far better than its Western counterparts, Wall Street analysts now expect China to unseat the United States as the world's largest economy by 2028.

That's five years earlier than most previous forecasts pre-pandemic.

Much of that economic growth is going straight into military spending with a defense budget that's seen a nearly sevenfold increase over the past 20 years.

China now spends more on its defense than Japan, South Korea, the Philippines and Vietnam combined.

Beijing hasn't been shy about flexing their military might either, through skirmishes in the South China Sea and high-altitude dustups with India on their Himalayan border.

And yet its military spending still pales in comparison to that of the United States, which dropped somewhere in the neighborhood of $450 billion more on defense than China in 2019.

But despite all the money that both nations have pumped into fancy new battleships and armored tanks, they also understand that a key paradigm shift in 21st-century warfare is already well underway.

The decisive battles of the future will largely be fought and won or lost in cyberspace.

This is not a hypothetical.

In fact, in just the last few months alone, the United States has weathered at least three extensive and severe cyberespionage operations, two of which were directly linked to China.

The U.S. Cybersecurity and Infrastructure Security Agency, or CISA, warned last month that China's latest hacking campaign is "affecting U.S. government agencies, critical infrastructure entities and other private-sector organizations."

Despite its global dominance when it comes to cyberattacks, the United States is severely lacking in cyberdefense.

And that begs the trillion-dollar question -- what good are fighter jets or nuclear submarines if the enemy can disable them with a few lines of computer code?

Is the United States still spinning its wheels on that perfect space pen while China takes over the world with a pencil?

That's the subject of today's interview.

Admiral Jim Stavridis.

He is former Supreme Commander of NATO, and his new book, "2034," on The New York Times best-seller list.

Congratulations to you, Jim.

>> Thanks, Ian.

In fiction, you can really splash some paint all around the canvas.

It's kind of fun.

>> And you do that.

You say that, you know, we're heading to war between the United States and China and that we've basically lost military dominance in the world by 2034.

How likely do you think that really is?

>> Well, first of all, people say to me sometimes, "Oh, Admiral, you know, you've written this book of predictive fiction."

No, this is a book of caution.

It is a cautionary tale.

So to answer the question, I think -- I feel the United States kind of waking up to this, if you will, looming tower of losing military superiority, which we still enjoy.

And I think if we pay attention to the challenges that are coming, if we understand how determined China is, we have time to maintain our military edge.

So I think in all probability, we will maintain that edge.

But I worry about it.

Hence, "2034" is a cautionary tale in that regard.

>> I mean, I get the sense that what you're really saying is that, unaddressed, the present trajectory is one where 2034, if it doesn't become reality, still, it will probably define the balance of power.

>> That is absolutely correct and a principal reason for that, and you know this well, Ian, is that the Chinese are spending very intelligently in their defense budget.

So they're very focused on offensive cyber, on militarizing space, on using quantum computing, which is moving quickly and will readdress the whole idea of cybersecurity, on hypersonic cruise missiles.

The list goes on and on.

They are spending cleverly.

It is integrated with their overall geoeconomic strategy.

They are formidable and they will continue to be so.

>> Now, I mean, there's some pretty scary stuff in this book.

You've got sunken battleships.

You've got tactical nukes going off.

Talk a little bit about how, in your book, the Chinese government both achieves and exploits profound military unipolar advantage in a near-future world.

>> First of all, a number of our mutual friends have said to me, Ian, "Oh, Stavridis, you wrote a really good book.

You only got one thing wrong, and it's the date."

This is coming sooner, that the potential for a war is actually nearer than 2034.

Let's hope not.

The way that China will move forward is kind of the old-fashioned way.

They'll educate.

They're pumping out huge numbers of people with advanced degrees.

They're investing government resources into the kind of research, the R&D that we should be doing more of here in the United States.

They are seeking further collaboration with Russia, which is a prime, high-end military, technical nation.

So they're doing all the things I would do if I were in their position to increase their capability.

And here's the big advantage they have.

They're a streamlined, shall we say, system of government.

When they want to direct resources, they're not in a huge argument with a parliament or a Congress about where things are going to go.

We need to wake up to this.

And frankly, I'm encouraged by some of what I'm seeing on Capitol Hill.

This is increasingly a fairly bipartisan issue to look at the kinds of things we need to do if we're going to continue to compete with China.

>> How obsolete is our military becoming every day compared to what the Chinese are spending on?

>> This is not an on and off switch.

It's not a simple bipolar moment.

In other words, the choices are not "let's just continue to build huge legacy platforms" or "let's stop building those completely and just go after the new, if you will, high-tech things China's doing."

Think of it as a rheostat, like the dimmer in your dining room.

And right now you are correct.

I would say in really broad strokes, 75% to 80% of the R&D procurement is still going to legacy systems, big land armies, tanks, aircraft carriers.

And there are scenarios in which those have real facility.

But we better start moving that rheostat.

We better start moving that dial toward the higher-end technologies we spoke about a moment ago, because I assure you, China has already done so.

You know, see paragraph one, where we started this conversation, about a streamlined system.

They get to make decisions and move out in ways that we are retarded from doing by the messiness, as wonderful as it is, of our democratic system.

>> We talked about the fact that the United States government is messy and not streamlined/authoritarian.

But beyond that, some of the greatest advances in all of these new technologies is the private sector.

I mean, if the United States were truly to address this in the next 15 years, what does that mean for the role of the most important tech companies in the United States?

>> Think of an iceberg.

The government is the little tip of the iceberg up there.

The mass of the iceberg, the capability of America, is down there in the private sector.

So we're going to have to kind of incentivize.

We're going to have to kind of cajole.

We need thought leaders from both sides.

It'll be an effort to do this.

What will help crystallize this, I think in the minds of Americans over time, is watching China and watching what they're doing on the international scene, from cracking down on Hong Kong to imprisoning Uyghurs, to pressurizing Taiwan, to, in the high Himalayas, going after borders and boundaries of India, pressuring our allies like Australia on trade relations.

The list goes on and on.

It's a looming tower.

We better wake up.

>> Now, to go back to what that means for the tech companies, so, I mean, does that mean for you that a company like Apple, which is presently making a big piece of the iPhone in mainland China, Tesla, which is doing a lot of its advanced electric battery development with a Chinese company, does that mean that those models are just not going to work in a decade's time?

>> I don't know and I don't think anybody does.

But I will tell you this.

We need a very hard, fast look at what are the critical supply chains, where are they located, which ones absolutely must be on shored or at least redundancy created, and by the way, you mentioned tech appropriately.

I'd say medical supplies.

Biotech is another area that would benefit from some scrutiny.

But you and I have had this conversation.

I think it would be a mistake to simply break relations with China and walk away and create, in effect, a bipolar world.

That's not what we need.

The way I think of it, Ian, is we kind of need to bend the relationship with China on some of the topics I mentioned a moment ago, including their claim of ownership of the South China Sea.

We're going to have to bend it, but we want to avoid breaking it all together because down that path doth a war lie.

>> Now, on the other side of how much we need to do on the tech front, you have also called recently for the primitivization of U.S. defenses.

Explain a little bit what you mean by that.

>> Let me put it in nautical terms again.

When I came out of the Naval Academy, you know, 1.2 million years ago in the early '80s, I was quite good with a sextant, and I knew how to use a nautical almanac and use paper charts and navigate my ship.

By the time I was in the middle of my career, Ian, commanding destroyers, being the commodore of a destroyer like the scene that opens "2034," the novel, by that time we didn't pay much attention to that.

Nobody really used sextants.

We were all GPS, like we all drive our cars around today.

Today, the Navy is going back to ensuring every officer who stands a bridge watch knows how to use a sextant.

It's a long way of saying we need a plan B because these exquisite systems upon which we have come to rely so deeply because they were invulnerable, fighting the Taliban or fighting al-Qaeda, they're not invulnerable anymore.

So we need still those exquisite systems, but we need a plan for when and if they are attacked.

What's plan B?

And in the novel, it's no coincidence the first aircraft you encounter is a sixth-generation Joint Strike Fighter, which is forced down over Iran, mysteriously.

By the end of the novel, you're watching an old F/A-18 Hornet, a pretty simple aircraft, conducting the defense of the nation.

So we need a plan B.

>> So, I want to push you on this, because, of course, when we talked about the Soviets in the day, we didn't do -- in a sense, a Plan B.

We didn't do a missile defense shield that would be effective against nukes because we knew that there was no way to engage in mutual deterrence when you had that level of extraordinary offensive firepower from a nuclear perspective.

We had mutually assured destruction.

Now, when we talk about the Chinese, when we talk about offensive cyber capabilities in the U.S. and China and Russia, to a degree, dominating those capabilities, for which there really are no defenses, why don't we want to lean into that?

Why don't we want a mutually assured cyber destruction where both sides are so capable that we know that, you know, shipping out some sextants is not going to actually do it?

>> We 100% want to, as you put it, lean into this.

And we ought to look back at the history of the Cold War and kind of re-engineer how we got from nukes going off in Nagasaki and Hiroshima to the very finely tuned systems and norms of international law and treaties dealing with nuclear weapons.

There's an entire story there, a narrative that I believe, I suspect you believe, could be profitably applied in the world of cyber because these systems are beginning to approach that level of capability.

So that's, if you will, Ian, the strategic track.

And that, I think, is work that is underway to some degree in think tanks and in policy papers.

But it's got nowhere in the real world.

And I would put that pretty high on my list in terms of U.S., China and Russia relations.

There is also a tactical side to this, which gets us back to sextants and old Hornets that can be pulled out of the boneyard if necessary.

That is different than the Cold War.

We didn't have that because we didn't have the level of risk to the command and control networks that we do now.

The Soviets could jam a little bit.

They didn't have the ability, however, to really go after command and control the way that China can today.

So there's a strategic side and a tactical side.

>> So, there are tactical nukes going off in "2034," and the ultimate taboo, thankfully something we haven't had to deal with since the end of World War II.

What was going on in your mind when you said, "I'm actually -- I'm going there" in this book?

>> First and foremost, it's the ultimate cautionary tale, right, is to make the point that these nukes, tactical nukes, are in hand.

Secondly, based on, you know, a lifetime in the military and as a very senior officer, it is not inconceivable to military planners that, at one point or another, we might use a tactical nuke.

As you well know, during the Cold War, there were always war plans that included use of tactical nuclear weapons.

The worrying strain, in my view, between the U.S. and China in this conversation is that one side or the other may decide that we absolutely need it because we're overmatched and we'll use it at sea.

And that will be a kind of barrier, a kind of a cap in the ladder of escalation.

It is very hard to control the ladder of escalation, especially when you pull a nuclear weapon out of the holster.

>> Where do you think we are closest to major military confrontation right now?

>> Taiwan.

And I think that it is increasingly a concern, and don't take my word for it.

How about an active-duty, four-star admiral who is the combatant commander for Indo-Pacific Command in charge of all U.S. military forces -- Army, Navy, Air Force, Marines, Coast Guard, et cetera -- through that vast space?

His name is Phil Davidson.

>> What you're seeing China do in the region, some of the maligned military actions they've taken in and around Taiwan are indicative that China's pace is quickening, and we need to be postured to prevent that quickening from happening.

>> He is very concerned about the possibility of a Chinese attack, an invasion, if you will, of Taiwan in the next six years.

So he's looking at all the high-grade intelligence imaginable.

He wakes up every morning trying to figure out what China's doing, and he's testifying in open source that he's very concerned about something as soon as the next six years.

That was quite remarkable to me and syncs with my own thinking.

>> If you were to think about what a trip wire in Taiwan looks like, take us through that.

>> If China decided that they wanted to move now against Taiwan, one aspect of that perhaps would be their feeling that, "Well, the U.S. is very distracted."

We're coming off this terrible 6 January event.

Our Congress is split right down the middle.

I think it would be a miscalculation on the part of the Chinese, but they may calculate that now is the moment.

If they did it, here's how I think they would do it.

First of all, I would guess there are significant, if you will, sleeper cells already embedded in Taiwanese society.

They would link up with Chinese special forces.

They would take control of airfields.

They would have a airlift that would literally leap over the Taiwanese defenses at sea and air.

They would flood the zone with ships and submarines on the far side of Taiwan, presuming that we would try and come in and assist Taiwan.

All of this would be a miscalculation, but I think it is not impossible to conceive of that over the next few years.

>> It's Admiral Jim Stavridis.

His new book, "2034."

Thanks so much, Jim.

>> Thanks, Ian.

♪♪ >> As Jim Stavridis made clear, Beijing has wanted to bring Taiwan back into the Chinese fold for years, and given how much President Xi has tightened his grip on Hong Kong in the last year alone, Taipei has reason to be nervous.

But one big reason the Chinese leader may be pushing harder than ever to annex Taiwan could be because of something that fits in the palm of your hand.

The self-governing island has an outsized manufacturing capacity for semiconductors, the little chips that bind the electrical circuits we use in our daily lives.

Cellphones, laptops, modern cars and even airplanes all rely on these tiny computer wafers.

And Taiwanese chip manufacturer TSMC alone makes more than half of the chips outsourced by all foreign companies, which means your iPhone likely runs on Taiwanese-made semiconductors.

If China were to someday reunify Taiwan with the mainland, it would become such a chip juggernaut that it could bend individual countries to its will by controlling supply.

>> Semiconductors are the brains that power technology, and right now there is a massive shortage of those brains.

>> Meanwhile, the Chinese are burning through cash to get a bigger slice of the global semiconductor pie.

Chips are so essential to feed China's tech beast that last year, Chinese firms spent over $35 billion in ramping up production.

That's four times more than the year before.

The United States, for its part, has its own clear interest in propping up Taiwan as a global chip-making power.

Taiwanese-made semiconductors are cheaper than those produced in America, and the more that are sold to the U.S. and its allies, the less China gets.

So the next time you hear a U.S. government official say something like this... >> We have a serious commitment to Taiwan being able to defend itself.

And in that context, it would be a serious mistake for anyone to try to change that status quo by force.

>> ...you can be assured that it's not just the valiant defense of freedom and democracy driving that messaging.

It's the phone in your pocket talking too.

And now to "Puppet Regime," where the global pressure is mounting on the United States to share its vaccine stockpile with the rest of the world.

That doesn't sound like puppets.

And despite some initial reluctance, President Biden is starting to sing that tune.

Okay, that sounds like puppets.

Take it away, Joe.

♪♪ >> ♪ Now, some people say we've been hoarding ♪ ♪ Keeping vaccines in numbers more than we need ♪ ♪ And all along we've been kind of ignoring developing countries and the poor indeed ♪ ♪ Well, I said I'd jab every American first ♪ ♪ But now the situation elsewhere is so much worse ♪ ♪ We've got a couple extras sitting on a shelf ♪ ♪ So sure, what the hell?

♪ ♪ They can go to someone else ♪ ♪ I'm Smokin' Joe, the Candy Candy Man ♪ ♪ Giving out a couple jabs to needy foreign lands ♪ ♪ Maybe not as fast as I really, really can ♪ ♪ But take it or leave it ♪ ♪ I'm the Candy Candy Man ♪ ♪ Now, let me be clear ♪ ♪ It's just a few AstraZenecas we weren't gonna use at all ♪ ♪ But maybe we'll have more than we need and soon ♪ ♪ 'Cause of these anti-vaxxers and MAGA loons by this fall ♪ ♪ So if you want a vaccine, just give me a call ♪ [ Cellphone rings ] Oh, who's this?

Narendra Modi?

>> ♪ President Biden, it's Modi G♪ ♪ Shouldn't you be doing more to be helping me?

♪ >> ♪ Now, hang on, fella ♪ ♪ I know things are bad ♪ ♪ But it's not because I'm not sending enough jabs ♪ >> ♪ Well, have you seen today's kills tally?

♪ >> ♪ Well, how about you cut the festivals and political rallies?

♪ ♪ Don't you think that might be causing infections?

♪ >> ♪ It's the price I'll pay to win my elections ♪ >> ♪ That's sick, but still, you're not half as bad as that jerk in Brazil ♪ ♪ So I will waive patent protections ♪ >> ♪ He's Smokin' Joe, the Candy Candy Man ♪ ♪ Giving out a couple jabs to needy foreign lands ♪ ♪ Maybe not as fast as he really, really can ♪ ♪ But take it or leave it ♪ ♪ He's the Candy Candy Man ♪ >> "Puppet Regime"!

>> That's our show this week.

Come back next week, and if you like what you see, 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...