LEILA FADEL, HOST:
In the coming days, a MORNING EDITION team will be reporting in China, and that's led by Steve Inskeep. Hey, Steve. Why...
STEVE INSKEEP, BYLINE: Hi there.
FADEL: ...Are you going now?
INSKEEP: Because of the trade war that the United States has launched against China, Leila. I want to see how this looks from the other side. I want to see how the Chinese respond to American tariffs and, really, a broader U.S. attitude toward the world. So one of the things we're going to do in China is go to this Chinese business conference, the CDF for global businesspeople. That's the China Development Forum. It's a chance to check in on the economy.
FADEL: And who shows up to a forum like this?
INSKEEP: Usually international CEOs, along with specialists in China and its economy. People from Europe, certainly. This year, it seems the Americans are sparse, but there are some. I'm going to be listening for how the government and business leaders present themselves publicly in this global confrontation.
FADEL: Well, what is China's economy like as the U.S. ramps up tariffs?
INSKEEP: The big picture, I think, is pretty well-known. China's had slower growth than in the past. Low real estate prices are dragging people down. High-tech is pulling them up. But I wanted to get at some of the subtleties, so before traveling, I talked with Dan Wang - or Wang Dan, as you would call her in China. She has a life story that says a lot about China's evolving economy.
DAN WANG: I grew up in Shanxi in the capital city called Taiyuan. It is a coal province, a very conservative city, very conservative province.
INSKEEP: Yes.
WANG: And my parents both for - worked for the coal bureau.
FADEL: The coal bureau?
INSKEEP: Yeah, old economy, all in this coal mining region that I've visited in past years, and that reminds me of industrial Appalachia. You've got mountains. You've got old factories. Anyway, she got to college in China and then at the University of Washington in the United States and in Europe. She is super highly educated, and she became an economist, which does not sound as glamorous as you would think.
WANG: So I took over a project in a national survey to figure out the feed demand in pork industry. So I studied pigs for two years.
INSKEEP: (Laughter).
WANG: Right. So between 2013 and 2015, I was the leading expert in the pig industry.
INSKEEP: OK. So were you, like, studying pig statistics, or did you sometimes go to a farm and, you know, look at pigs?
WANG: I spent most of the time, actually, of that two years studying the pig farms and talk to those farmers operating it - what they fed the pig and how did they do disease control. And the ultimate goal is to figure out the soybean demand of China.
FADEL: OK, wait. I did not expect this to take a pig turn...
INSKEEP: (Laughter).
FADEL: ...But OK. Go ahead (laughter).
INSKEEP: Pigs - and the pigs eat soybeans. A lot of the soybeans have come from the United States, and you can see the relevance here. In fact, China has begun diverting some of its soybean purchases to other countries amid the trade wars that began in the first Trump term. So that is one thing that's happening here. And in her study of pigs, something else became clear.
WANG: The most helpful conclusion from that study was that Chinese pig industry has become very efficient. It used to be dominated by backyard producers. But since 2010, there's an important transition, that the commercial farms has become a dominant player.
INSKEEP: OK. They're efficient - so efficient that they've produced more pork. That's kept prices down, which sounds good, Leila, except there are many, many Chinese industries that are producing too much stuff. And prices are falling, and there's some risk of deflation. We worry about inflation. They're worried about deflation, and pork leads the way.
WANG: It is the ultimate factor that would decide inflation.
INSKEEP: Wait a minute. Did you just tell me that the pig industry is central to the story of deflation right now, or it's just a factor? How should I think about that?
WANG: The pig factor is the most important factor when it comes to inflation in China.
INSKEEP: You're blowing my mind. I've not heard this anywhere.
WANG: Right? The inflation cycle in China is basically the pork cycle. Pork - of course, it's a very important meat in daily expense for a typical household. But also, it's a reflection on the business activities because most the pork consumed in China are not by households. It's by restaurants, hotels, food processing companies.
INSKEEP: And people are not eating out because there's not enough consumer confidence. Now, Dan Wang, the economist who used to study pigs, knows about the broader effects because she rose to become the chief economist for a major bank in Shanghai, which she did for years, and that gave her a special role in China. In a country where the internet is censored, and public debate is limited, she was able to speak out about economic problems.
WANG: I don't think the Western listeners, or even my Western colleagues holding the same position, understand what a privileged job it is to become a chief economist in China because that's one of the few professions that are allowed to talk publicly, not just about policy changes but also social changes and, occasionally, political structure changes. And we could get away with it. And one reason - that's my speculation - is that in the past 40 years, China was focused so much on economic growth, but now the priority is on security. The long-term agenda - of course, China will become stronger. People become richer. But in the short term, probably Chinese economy have to suffer a lot of pain. And the chief economists - they are not as outspoken as before, and the public debate space is getting smaller.
FADEL: I mean, that's surprising to me that there was even space to speak on the economy. But I guess even that's closing now that they're changing...
INSKEEP: Yeah.
FADEL: ...Their focus.
INSKEEP: When I've spoken with her and other economists in the past, they have been very frank about what's going on in the economy. But now that national security is more important, Dan Wang has left that job, and, in fact, she's moved out of China. She's still analyzing the economy there, but for a private firm - the Eurasia Group - and she's working out of Singapore.
FADEL: So what is all this saying, everything we heard now about China's economy?
INSKEEP: This is a super strong economy that is under a lot of different kinds of stress...
FADEL: Yeah.
INSKEEP: ...From the United States and also from within, from the frustrations and disappointments of many of its people. And one of the things that the government is doing to deal with all of this is encouraging Chinese companies to invest more abroad and move production abroad, even move workers abroad. That does a lot of things for them. American firms invest outside the borders of the United States, of course. But one of the reasons seems to be avoiding U.S. tariffs on China and continuing the manufacturing power that brought China to the place where it is now.
FADEL: Steve, we'll be looking forward to your reports from China. We'll also hear from our colleagues John Ruwitch and Anthony Kuhn. Have a good trip.
INSKEEP: Thank you so much.
FADEL: I think the next time we talk, you'll be in China.
INSKEEP: You bet.
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