Keyu Jin: China's Economy, Tariffs, Trade, Trump, Communism & Capitalism

00:00:00.000 | The following is a conversation with K. Yu Jin, an economist at the London School of Economics

00:00:05.600 | specializing in China's economy, international macroeconomics, global trade imbalances,

00:00:11.140 | and financial policy. She wrote the highly lauded book on China titled The New China Playbook,

00:00:19.060 | Beyond Socialism and Capitalism, that details China's economic transformation since 1978

00:00:26.660 | to today. And it dispels a lot of misconceptions about China's economy that people in the West

00:00:33.520 | have. This is the Lex Friedman podcast. To support it, please check out our sponsors in the description

00:00:39.500 | and consider subscribing to this channel. And now, dear friends, here's K. Yu Jin.

00:00:45.880 | What is the single biggest misconception the West has about China's economy today?

00:00:52.760 | The biggest misunderstanding is somehow that a group of people or even just one person runs the

00:00:59.420 | entire Chinese economy. It is far from the reality. It is a very complex, large economy. And even if

00:01:06.820 | there is an extreme form of political centralization, the economy is totally decentralized. The role that

00:01:14.180 | the local mayors, I call this the mayor economy, plays in reforms, but also driving the technological

00:01:21.140 | innovation that we're seeing right now, it is actually not run by just a handful of people. It's more

00:01:27.700 | decentralized than the U.S. is. And I think more broadly, a big misunderstanding is really the

00:01:33.360 | relationship between Chinese people and authority.

00:01:35.800 | Can you elaborate on that?

00:01:37.200 | Well, you know, people think that somehow there's almost blind submission to authority in China. We

00:01:42.680 | have a very nuanced relationship with authority, whether it is, you know, between kids and parents or

00:01:49.920 | students and their teachers or with your bosses and the Chinese government. It's kind of the same

00:01:55.740 | thing. There's paternalism. They think that they're responsible for you. But deference,

00:02:03.020 | a certain amount of deference to authority is not blind submission. It's been written implicitly in

00:02:08.760 | our contract for thousands of years that in exchange for some deference, we are given stability,

00:02:17.060 | security, and peace, and hopefully prosperity.

00:02:19.540 | So there is some element that we have in the West of freedom of the individual. So a little bit of the

00:02:25.800 | rebel is allowed in balance with the deference to authority.

00:02:30.540 | Yeah, absolutely. Without that, how can you have this radical, dynamic entrepreneurialism

00:02:35.460 | you see in China? If you don't have a sense of self, a sense of the fact that you can find

00:02:42.640 | opportunities, you look for opportunities, you drive opportunities, it's all self-motivated.

00:02:50.100 | Is there still a young kid in China that's able to dream to be sort of the stereotypical Steve Jobs

00:02:56.920 | in the garage, start a business, and change the world by doing so?

00:03:02.620 | There are millions of young kids like that in China. They might not be thinking about changing

00:03:07.780 | the world. And this is where the Chinese approach to innovation is very different from the Silicon

00:03:12.320 | Valley one, I'd say. But they see opportunity. They see a country with a billion consumers.

00:03:19.180 | They see scale. They see speed. They see that with their dreams and the team that you have in China

00:03:26.560 | with engineers and the digital transformation, you can do so many things. And this generation of young

00:03:32.340 | people think about transforming their local economy. I think we're going to get into this, but

00:03:36.160 | it's no longer going to just be manufacturing. The young kids are entrepreneurs.

00:03:40.820 | Well, let's stay in the big picture a bit. There's a perception that China

00:03:46.000 | is a communist country. So to what degree is China a capitalist country and to what degree is it a communist country?

00:03:52.460 | I've rarely seen a more capitalist

00:03:56.220 | society than China from the pure economic

00:04:00.500 | side. I've rarely seen companies that are as competitive

00:04:05.760 | as Chinese companies, people as ambitious

00:04:10.640 | and obsessed with making money as Chinese people,

00:04:13.460 | kind of ruthless, actually. And look, you know,

00:04:17.560 | consumers shop, firms invest.

00:04:20.840 | If you invest well financially,

00:04:23.740 | you'll get great returns. What is not capitalistic about

00:04:26.860 | the Chinese economy? At the same time,

00:04:29.620 | the social fabric is highly socialist.

00:04:33.600 | First of all, the state or enterprises dominate in many of the sectors. The state banks control the financial system.

00:04:39.060 | We often talk about

00:04:41.300 | common prosperity, about equal opportunity,

00:04:43.300 | just and fair society. But

00:04:45.340 | even, you know, daily stories,

00:04:47.320 | a walk in the park behind my

00:04:49.220 | parents' apartment, you're going to find

00:04:51.300 | at least 50

00:04:53.600 | organized social groups

00:04:55.680 | on a daily level,

00:04:56.800 | singing, dancing, exercising,

00:04:59.360 | doing whatever these fantastic,

00:05:01.300 | idiosyncratic hobbies they have,

00:05:02.980 | getting together

00:05:03.700 | every single day.

00:05:05.300 | And free courses for the elderly and retired,

00:05:08.860 | right? That sense of communalism,

00:05:10.000 | that sense of

00:05:11.540 | belonging,

00:05:12.680 | that strive for harmony

00:05:15.160 | at the societal level is there.

00:05:16.980 | So, just to go back to something you said,

00:05:20.080 | there is a value for competition,

00:05:21.280 | culturally.

00:05:21.900 | So, on the business side,

00:05:24.400 | on the economic side,

00:05:25.400 | there

00:05:26.740 | is sort of a cultural

00:05:28.880 | value of

00:05:30.120 | people competing in a meritocratic way.

00:05:32.720 | Competition is ferocious in China,

00:05:35.620 | especially when it comes to

00:05:37.320 | Chinese companies,

00:05:38.040 | but also

00:05:38.680 | in education.

00:05:40.420 | I should be thankful

00:05:41.640 | that I'm not,

00:05:42.420 | you know,

00:05:42.660 | born later than I am

00:05:44.200 | because I thought China

00:05:45.340 | was pretty competitive already

00:05:46.700 | going to the schools

00:05:48.280 | and studying for the exams.

00:05:49.180 | It is a different level today.

00:05:50.960 | Competition is not necessarily

00:05:53.360 | in the culture,

00:05:54.200 | I'd say.

00:05:54.700 | It's driven really

00:05:56.080 | by the changing economic

00:05:57.640 | and social circumstances

00:05:58.680 | of the day.

00:05:59.280 | The Chinese companies

00:06:01.400 | are all hardworking.

00:06:02.480 | They're all going after

00:06:03.520 | the market share.

00:06:04.020 | They all kind of want

00:06:05.240 | to do the same thing.

00:06:06.100 | You know,

00:06:06.400 | it's not quite like in the U.S.

00:06:07.580 | where you open a coffee shop.

00:06:09.640 | Well, next door,

00:06:10.440 | I'm going to, you know,

00:06:11.240 | open a bagel shop, right?

00:06:13.600 | In China,

00:06:14.380 | if the coffee shop does well,

00:06:15.500 | everybody wants to open

00:06:16.640 | the same coffee shop.

00:06:17.820 | And I think,

00:06:18.280 | again,

00:06:18.760 | I'm sure we're going to get to this,

00:06:19.860 | but there's a lot of

00:06:21.240 | that kind of competition

00:06:22.440 | which really drives

00:06:23.500 | the world sometimes crazy

00:06:24.760 | of replication.

00:06:27.380 | But it's because

00:06:29.460 | it's not easy, right?

00:06:30.520 | It's not easy to make money.

00:06:31.460 | In the education system,

00:06:33.060 | there are not enough jobs

00:06:34.200 | for the young people.

00:06:35.000 | So how do you get ahead?

00:06:37.240 | How, as, let's say,

00:06:39.020 | if you're part of

00:06:39.460 | a lower stratum society,

00:06:40.640 | how are you going to make sure

00:06:41.900 | that your children

00:06:43.000 | are going to have

00:06:43.480 | a better life

00:06:44.580 | than you?

00:06:45.040 | You invest in education.

00:06:46.480 | So everything is about

00:06:48.440 | competition in a country

00:06:49.680 | with 1.3 billion people.

00:06:51.000 | That's somewhat

00:06:52.500 | to be expected.

00:06:53.120 | Let's go back

00:06:54.480 | to the roots of that.

00:06:55.420 | So you described

00:06:56.720 | that China's economy model

00:06:57.940 | is rooted in its history.

00:07:00.540 | So can we talk

00:07:01.620 | about Confucianism?

00:07:02.520 | Can you explain

00:07:04.140 | to a degree

00:07:04.800 | those roots

00:07:05.840 | run back

00:07:06.500 | to Confucianism

00:07:07.340 | and in general

00:07:07.980 | to other parts

00:07:08.740 | of Chinese history?

00:07:09.480 | Yeah, Confucianism

00:07:11.560 | is more of a moral philosophy

00:07:13.740 | than, let's say,

00:07:15.780 | religion

00:07:16.320 | or a belief system.

00:07:17.860 | It prioritizes

00:07:19.900 | social harmony

00:07:22.480 | above anything else.

00:07:24.760 | It's not about

00:07:25.920 | metaphysics,

00:07:27.320 | but more about ethics.

00:07:29.140 | And at the individual level,

00:07:31.680 | the responsibility,

00:07:32.800 | the duties

00:07:34.000 | are all meant

00:07:35.140 | to preserve

00:07:35.660 | that social order.

00:07:36.740 | So it's filial piety.

00:07:38.240 | It is loyalty.

00:07:40.720 | It is how to be

00:07:41.860 | a Chinese gentleman.

00:07:43.580 | But things like

00:07:45.920 | saving,

00:07:46.580 | frugality,

00:07:47.380 | is part of

00:07:48.260 | the moral discipline.

00:07:49.240 | Education is part of

00:07:50.660 | the moral cultivation.

00:07:53.200 | So there's a very

00:07:54.080 | strong emphasis

00:07:54.960 | that you as a citizen

00:07:56.460 | have a responsibility

00:07:58.120 | to contribute

00:07:59.340 | to society

00:08:00.320 | as a whole.

00:08:00.980 | On the education side,

00:08:03.660 | a part of Confucianism

00:08:05.120 | is a value

00:08:06.060 | for meritocracy.

00:08:06.880 | So how does that

00:08:08.440 | permeate

00:08:09.060 | the education system

00:08:10.280 | in China?

00:08:11.260 | You've already

00:08:12.280 | spoken to it a little bit,

00:08:13.260 | the value of competition

00:08:14.300 | and that it's already

00:08:15.180 | getting more and more intense.

00:08:16.280 | But it would be

00:08:17.180 | very interesting

00:08:17.780 | to get your

00:08:18.860 | understanding

00:08:19.540 | of the education system,

00:08:20.640 | its history,

00:08:21.440 | and as it stands today.

00:08:22.800 | If China were

00:08:24.060 | relatively successful

00:08:25.200 | economically,

00:08:26.100 | a huge part of the reason

00:08:28.120 | is by and large

00:08:29.160 | it's been meritocratic.

00:08:30.540 | That is changing

00:08:32.600 | somewhat now,

00:08:33.480 | but

00:08:34.200 | the only way

00:08:37.260 | that you have

00:08:38.360 | still that many

00:08:39.080 | poor people,

00:08:39.720 | especially a couple

00:08:40.900 | decades back,

00:08:41.860 | still be

00:08:43.500 | in harmony

00:08:44.640 | with society,

00:08:45.240 | seeing all these

00:08:46.220 | rich people

00:08:46.880 | make tons of money

00:08:48.060 | and you're still

00:08:48.840 | belonging to that

00:08:49.900 | lower stratum,

00:08:50.940 | the only reason

00:08:51.640 | is that you believe

00:08:52.420 | that your children

00:08:53.240 | have a future

00:08:53.920 | through meritocracy.

00:08:55.660 | And even though

00:08:57.500 | it's imperfect,

00:08:58.080 | it's highly imperfect,

00:08:59.020 | standardized testing,

00:09:00.180 | all this competition,

00:09:01.060 | all of the

00:09:01.740 | hours and the

00:09:03.320 | tutorials

00:09:03.980 | to studying

00:09:05.080 | for standardized

00:09:05.740 | exams,

00:09:06.520 | well,

00:09:07.380 | that is

00:09:08.180 | a very realistic

00:09:09.900 | scenario in China

00:09:11.560 | because there's

00:09:12.040 | that many people.

00:09:12.700 | You know,

00:09:13.140 | when I was growing up

00:09:14.040 | in school,

00:09:14.440 | we had 60 people

00:09:15.500 | per class

00:09:16.280 | and there were

00:09:16.680 | 10 classes

00:09:17.300 | in one grade.

00:09:18.800 | now imagine

00:09:19.960 | that many

00:09:20.700 | people applying

00:09:21.660 | for colleges

00:09:23.080 | in the American

00:09:26.080 | way,

00:09:26.500 | how many essays

00:09:27.500 | would have been

00:09:28.340 | written and need

00:09:29.380 | to be scrutinized,

00:09:30.120 | but also that

00:09:30.920 | gives room for

00:09:32.040 | total corruption,

00:09:32.720 | if you,

00:09:33.800 | you know,

00:09:34.440 | if you know what I

00:09:35.020 | mean,

00:09:35.220 | just connection-based

00:09:36.820 | and actually

00:09:37.300 | standardized exams

00:09:38.540 | as imperfect as it

00:09:39.940 | is to select

00:09:40.800 | talent is still

00:09:42.800 | by and large

00:09:43.440 | fair.

00:09:44.980 | And that's

00:09:46.580 | how that

00:09:46.940 | whole generation

00:09:47.800 | of,

00:09:48.260 | you know,

00:09:48.540 | entrepreneurs,

00:09:49.160 | but bureaucrats,

00:09:51.040 | government officials

00:09:51.840 | were selected.

00:09:52.420 | If you look at

00:09:53.060 | the Chinese

00:09:53.520 | premiers,

00:09:54.040 | the presidents

00:09:55.460 | of the past,

00:09:56.320 | they all went

00:09:58.080 | to great schools.

00:09:58.720 | You know,

00:09:59.060 | a lot of them

00:09:59.500 | were engineers

00:10:00.160 | and same thing

00:10:01.760 | for civil servants.

00:10:02.800 | It has changed

00:10:04.340 | somewhat.

00:10:04.780 | You know,

00:10:05.440 | the meritocracy,

00:10:06.200 | I think,

00:10:06.540 | is eroding in China.

00:10:07.760 | I'm worried about

00:10:08.360 | that because

00:10:09.360 | it is fine

00:10:10.820 | that you get

00:10:11.440 | into a good

00:10:11.980 | university based

00:10:12.760 | on your own

00:10:13.200 | merit,

00:10:13.800 | but finding

00:10:14.380 | a job

00:10:15.220 | now becomes

00:10:15.880 | much less

00:10:16.380 | meritocratic.

00:10:16.960 | People with

00:10:18.220 | connections

00:10:18.720 | get jobs

00:10:19.960 | more easily

00:10:21.220 | than others.

00:10:22.280 | Of course,

00:10:22.840 | this is not

00:10:23.260 | just a unique

00:10:23.800 | Chinese phenomenon.

00:10:24.540 | It's actually

00:10:24.960 | everywhere,

00:10:25.500 | but I guess

00:10:26.700 | what I'm saying

00:10:27.200 | is that

00:10:27.640 | that meritocracy,

00:10:28.620 | which was so

00:10:29.360 | fundamental to

00:10:30.240 | the ancient

00:10:31.200 | Chinese education

00:10:32.120 | system,

00:10:32.520 | by the way,

00:10:32.900 | civil servants

00:10:33.780 | were selected

00:10:34.660 | based on

00:10:35.960 | standardized exams

00:10:36.920 | in the past.

00:10:37.500 | That's always

00:10:38.240 | been throughout

00:10:39.320 | Chinese history

00:10:40.420 | and that relates

00:10:41.020 | to Confucianism.

00:10:42.840 | now the

00:10:43.180 | opportunities

00:10:43.800 | and coming

00:10:44.340 | back to

00:10:44.640 | the competition

00:10:45.580 | point is that

00:10:47.020 | the opportunities

00:10:47.760 | are getting

00:10:48.200 | slimmer and

00:10:48.760 | slimmer.

00:10:49.060 | Again,

00:10:49.840 | this is not

00:10:50.360 | a unique

00:10:50.700 | Chinese phenomenon.

00:10:51.600 | Jobs,

00:10:52.620 | where are the

00:10:53.020 | jobs going

00:10:53.460 | to be?

00:10:53.820 | Meritocracy

00:10:56.660 | has become

00:10:57.240 | more of a

00:10:57.600 | problem.

00:10:57.860 | Do you have

00:10:58.760 | any memories

00:10:59.380 | of your own

00:10:59.940 | experience in

00:11:00.660 | terms of

00:11:00.920 | competition,

00:11:01.340 | the good

00:11:01.860 | and the bad

00:11:02.240 | of it?

00:11:02.540 | Maybe from

00:11:03.880 | that,

00:11:04.260 | can you pull

00:11:06.520 | out the thread

00:11:07.060 | of the value

00:11:08.260 | of that kind

00:11:08.720 | of competition?

00:11:09.620 | Basically,

00:11:10.000 | I grew up

00:11:11.580 | in the

00:11:11.720 | Soviet Union,

00:11:12.280 | so there's

00:11:13.180 | a kind

00:11:13.380 | of brutality

00:11:14.800 | to the

00:11:15.380 | competition,

00:11:15.980 | but I think

00:11:17.780 | it ultimately

00:11:18.680 | molds really

00:11:20.600 | interesting people.

00:11:21.620 | There is a good

00:11:22.760 | and bad part

00:11:23.580 | of competition.

00:11:24.180 | I remember

00:11:24.740 | when I was

00:11:25.600 | going to

00:11:25.860 | middle school,

00:11:26.500 | every single

00:11:27.560 | midterm exam,

00:11:28.760 | final exam,

00:11:29.760 | you are ranked

00:11:31.000 | from number

00:11:31.600 | one to number

00:11:32.600 | 800 in your

00:11:34.320 | entire grade

00:11:35.300 | and publicly

00:11:36.020 | displayed.

00:11:36.600 | Nice.

00:11:37.820 | Very nice.

00:11:38.980 | Imagine the

00:11:41.880 | majority of

00:11:42.460 | people and

00:11:42.800 | how they

00:11:43.060 | feel, but

00:11:45.280 | it does

00:11:46.120 | drive ambition

00:11:47.200 | in part,

00:11:48.340 | and you

00:11:48.860 | don't take

00:11:49.260 | anything for

00:11:49.740 | granted,

00:11:50.160 | and you

00:11:52.280 | work hard,

00:11:52.860 | you keep

00:11:54.200 | the spirit

00:11:55.600 | up.

00:11:56.180 | But going

00:11:58.260 | to the

00:11:58.560 | US, I

00:11:59.180 | finally realized

00:11:59.800 | that Americans

00:12:00.260 | are totally

00:12:00.940 | competitive,

00:12:01.360 | it's just

00:12:01.760 | that they

00:12:02.040 | don't display

00:12:03.220 | it, it's

00:12:03.760 | not as

00:12:04.180 | apparent.

00:12:05.140 | I remember

00:12:05.740 | I went to

00:12:06.580 | a very

00:12:07.040 | competitive

00:12:07.360 | high school,

00:12:07.840 | but everyone's

00:12:08.480 | like, so

00:12:09.200 | chill, oh,

00:12:10.060 | I'm not

00:12:10.400 | studying, oh,

00:12:11.840 | you know,

00:12:12.180 | they're studying,

00:12:13.280 | they are

00:12:14.160 | secretly

00:12:14.660 | studying.

00:12:15.200 | When I was

00:12:17.020 | doing my

00:12:17.440 | PhD at

00:12:18.080 | Harvard,

00:12:18.440 | people said,

00:12:19.000 | oh, you

00:12:19.460 | know, my

00:12:19.820 | parents say

00:12:20.240 | don't work

00:12:20.680 | so hard,

00:12:21.280 | you know,

00:12:21.680 | people say,

00:12:22.200 | don't say

00:12:22.940 | you worked,

00:12:23.300 | they're working

00:12:23.980 | hard, right?

00:12:24.940 | Just, you

00:12:25.820 | don't show

00:12:26.740 | it.

00:12:26.960 | In China,

00:12:27.460 | it's kind

00:12:28.460 | of a noble

00:12:30.220 | thing to show

00:12:31.160 | that you're

00:12:31.540 | working hard and

00:12:32.320 | that you're

00:12:32.620 | number one or

00:12:33.540 | that you're

00:12:34.200 | top of the

00:12:34.640 | class and

00:12:35.280 | you want to

00:12:35.620 | display it and

00:12:36.340 | you want to

00:12:36.840 | let everybody

00:12:37.580 | know.

00:12:37.920 | But in the

00:12:39.000 | US, everybody's

00:12:39.920 | like secretly

00:12:40.520 | doing it.

00:12:41.200 | Yeah, some

00:12:42.660 | of it is the

00:12:43.060 | signaling.

00:12:44.200 | The culture

00:12:45.340 | emphasizes the

00:12:46.700 | signaling of is

00:12:47.640 | it better to

00:12:49.120 | be kind of,

00:12:50.240 | for everything to

00:12:51.180 | come easily,

00:12:51.880 | thereby showing

00:12:53.420 | that you're a

00:12:53.860 | genius, it

00:12:54.480 | comes naturally,

00:12:55.060 | or is it

00:12:55.920 | better to show

00:12:56.620 | that you worked

00:12:57.320 | extremely hard for

00:12:58.560 | the thing, but

00:12:59.380 | the ultimate

00:12:59.720 | result is there's

00:13:00.460 | still competition.

00:13:01.580 | but I don't

00:13:01.940 | know, when

00:13:02.420 | you're visually

00:13:03.240 | displaying and

00:13:05.760 | explicitly stating

00:13:09.220 | that it's good to

00:13:09.960 | be number one and

00:13:10.880 | it's bad to be

00:13:11.540 | number 800, I

00:13:13.500 | think that permeates

00:13:14.260 | throughout the

00:13:14.620 | culture to where

00:13:15.520 | you understand,

00:13:17.160 | first of all, you

00:13:19.300 | understand that hard

00:13:20.380 | work is the only

00:13:21.060 | way to improve,

00:13:23.520 | to succeed in

00:13:25.240 | life.

00:13:26.180 | and second of

00:13:26.920 | all, you just

00:13:27.340 | create this

00:13:27.920 | framework of

00:13:29.860 | early on

00:13:31.460 | understanding what

00:13:32.220 | it means to

00:13:32.640 | live a good

00:13:33.060 | life.

00:13:33.380 | And a part of

00:13:35.120 | that is to

00:13:37.020 | find the thing

00:13:38.740 | you're damn

00:13:39.220 | good at and

00:13:40.760 | get even

00:13:42.900 | better at it,

00:13:43.560 | master it,

00:13:44.300 | become hopefully

00:13:45.560 | the best person

00:13:46.180 | in the world at

00:13:46.800 | that thing.

00:13:47.240 | I don't know,

00:13:48.040 | that's an

00:13:48.420 | extremely important

00:13:49.820 | lesson for society

00:13:50.640 | to teach.

00:13:51.680 | That's the

00:13:52.320 | right, I

00:13:52.900 | would say, the

00:13:53.440 | right kind of

00:13:54.340 | competition or

00:13:54.920 | the efficient kind

00:13:55.920 | of competition.

00:13:56.540 | I feel that in

00:13:57.820 | the Chinese education

00:13:58.640 | system, it was

00:14:00.300 | not necessarily

00:14:00.720 | efficient because

00:14:01.500 | it kind of frames

00:14:02.500 | you and molds

00:14:03.380 | you to be

00:14:04.060 | thinking in a

00:14:04.580 | certain way

00:14:05.280 | what's been

00:14:06.360 | taught to you.

00:14:07.020 | You don't have

00:14:07.680 | the bandwidth or

00:14:08.600 | the time or

00:14:09.220 | freedom to be

00:14:10.560 | more creative and

00:14:11.440 | to think outside

00:14:12.000 | the box.

00:14:12.380 | There, it's just

00:14:13.380 | the box.

00:14:13.880 | You maximize the

00:14:15.500 | box and that's

00:14:16.780 | it.

00:14:16.960 | You don't actually

00:14:17.740 | know what's

00:14:18.220 | outside of the box

00:14:18.900 | and you never

00:14:19.360 | actually go there.

00:14:20.040 | That's the bad

00:14:21.260 | part of Chinese

00:14:21.840 | competition.

00:14:22.340 | When I got to

00:14:24.200 | the U.S., the

00:14:25.440 | high school

00:14:25.680 | teachers were

00:14:26.580 | asking us to

00:14:27.360 | question authority,

00:14:28.420 | to question text.

00:14:29.560 | I'm like, wow,

00:14:31.020 | really you can do

00:14:31.980 | that?

00:14:32.340 | I started asking

00:14:33.680 | why.

00:14:34.040 | All right, so

00:14:35.320 | there has been

00:14:36.900 | this miracle in

00:14:37.900 | the Chinese

00:14:38.300 | economy from

00:14:39.260 | after Mao

00:14:40.660 | under Deng Xiaoping

00:14:43.020 | where the

00:14:44.300 | Chinese economy

00:14:44.840 | got transformed

00:14:45.640 | and grew

00:14:46.300 | incredibly.

00:14:47.300 | Can you explain

00:14:48.720 | what happened,

00:14:49.260 | the different

00:14:49.980 | transformations that

00:14:50.780 | happened?

00:14:51.140 | the different

00:14:52.600 | reforms that

00:14:53.500 | happened under

00:14:54.700 | Deng Xiaoping?

00:14:55.420 | Deng Xiaoping

00:14:56.560 | was by far

00:14:57.500 | our most

00:14:58.400 | pragmatic leader

00:14:59.300 | and I think

00:15:00.760 | everybody is

00:15:01.260 | grateful to

00:15:02.560 | Deng Xiaoping.

00:15:03.000 | My father's

00:15:03.640 | generation would

00:15:04.480 | not have seen

00:15:05.400 | that amount of

00:15:08.080 | prosperity and

00:15:09.020 | peace and

00:15:09.920 | opportunity without

00:15:11.040 | Deng Xiaoping.

00:15:11.500 | It started in the

00:15:13.260 | late 1970s when

00:15:14.720 | Deng Xiaoping came

00:15:15.720 | out with this

00:15:16.360 | open up and

00:15:17.780 | reform mandate

00:15:19.020 | and it was

00:15:20.460 | very tough.

00:15:20.920 | Again, coming

00:15:21.500 | back to the

00:15:21.920 | big misunderstanding

00:15:22.600 | of China,

00:15:23.460 | it's not as if

00:15:24.220 | one leader decides

00:15:25.260 | that that's what

00:15:25.780 | we're going to

00:15:26.020 | do and then

00:15:26.380 | everybody follows

00:15:27.020 | order and does

00:15:27.800 | that.

00:15:28.020 | No.

00:15:28.280 | There are tons

00:15:29.600 | of political

00:15:30.540 | barriers, tons

00:15:31.700 | of incentive

00:15:33.060 | compatibility problems

00:15:34.480 | at the local

00:15:35.220 | level.

00:15:35.500 | In the end, you

00:15:36.400 | need the local

00:15:37.440 | provincial governors,

00:15:38.880 | the mayors to

00:15:40.320 | do the job.

00:15:41.800 | And how many

00:15:43.220 | prefectures are

00:15:44.100 | there in China?

00:15:44.780 | A lot.

00:15:45.500 | And they have

00:15:47.880 | their own interests.

00:15:48.940 | We know this

00:15:50.320 | around the world.

00:15:50.940 | Politically, it's

00:15:51.600 | the most difficult

00:15:52.120 | thing to do.

00:15:52.700 | But somehow

00:15:54.260 | Deng Xiaoping was

00:15:55.060 | able to break

00:15:56.620 | tradition, break

00:15:57.920 | convention, come

00:16:00.180 | out with this

00:16:00.580 | completely new way

00:16:01.800 | of thinking about

00:16:03.420 | society, life, and

00:16:04.960 | the economy.

00:16:05.480 | And it was so

00:16:07.440 | transformative.

00:16:08.180 | I remember

00:16:08.560 | people of that

00:16:09.460 | generation told

00:16:11.760 | me one time that

00:16:13.000 | society was going

00:16:15.200 | to focus on the

00:16:16.460 | economy.

00:16:17.020 | Really?

00:16:18.040 | Why would they

00:16:19.300 | do that?

00:16:19.860 | Wasn't it

00:16:20.900 | politics?

00:16:21.500 | Wasn't it

00:16:22.140 | everything about

00:16:23.060 | politics and

00:16:23.920 | struggle and

00:16:24.400 | ideology?

00:16:24.900 | So for them,

00:16:26.380 | that the whole

00:16:27.060 | country and the

00:16:27.540 | government is going

00:16:27.980 | to focus on the

00:16:28.540 | economy was just

00:16:29.360 | so shocking, even

00:16:32.660 | though we take it

00:16:33.140 | for granted now,

00:16:33.900 | that shows you

00:16:35.940 | that breaking

00:16:36.980 | that mold was

00:16:38.860 | incredibly difficult.

00:16:39.920 | But I think

00:16:43.440 | opening up was a

00:16:46.580 | really momentous

00:16:47.320 | thing that China

00:16:47.800 | did.

00:16:48.020 | And it wasn't

00:16:48.460 | just joining the

00:16:49.100 | WTO.

00:16:49.520 | I mean, they

00:16:49.900 | were doing a

00:16:50.840 | decade of work

00:16:51.700 | in preparation

00:16:52.280 | leading up to

00:16:52.960 | that.

00:16:53.240 | What's called

00:16:55.320 | special economic

00:16:56.400 | zone is really

00:16:57.140 | to turn Shenzhen

00:16:57.860 | from a fishing

00:16:58.480 | village to an

00:16:59.780 | export platform,

00:17:00.600 | now to a

00:17:02.080 | Chinese-style

00:17:02.620 | Silicon Valley.

00:17:04.320 | And there

00:17:05.500 | was the

00:17:05.800 | agricultural

00:17:06.200 | reforms in

00:17:07.080 | the 1980s

00:17:08.240 | that meant

00:17:08.580 | that farmers

00:17:09.080 | could decide

00:17:09.680 | what they were

00:17:10.140 | going to grow

00:17:10.580 | and keep the

00:17:11.140 | surplus, whereas

00:17:12.880 | it was a

00:17:13.220 | collective system

00:17:13.920 | before.

00:17:14.660 | You know that

00:17:15.660 | very well.

00:17:16.260 | And then, of

00:17:18.400 | course, the

00:17:18.880 | ultimate transformation

00:17:20.380 | was when China

00:17:21.660 | actually joined

00:17:22.480 | the WTO in

00:17:23.460 | 2001.

00:17:24.060 | And the rest

00:17:25.700 | was history,

00:17:26.180 | right?

00:17:26.420 | We're still

00:17:27.000 | talking about

00:17:27.820 | the aftermath.

00:17:29.520 | But reforms

00:17:30.500 | was the

00:17:31.120 | single biggest

00:17:32.360 | impetus to

00:17:33.660 | Chinese growth.

00:17:34.420 | And every time

00:17:35.880 | there was a

00:17:36.260 | major reform,

00:17:37.080 | it was followed

00:17:37.780 | by a good

00:17:38.720 | decade-long

00:17:40.300 | growth.

00:17:40.880 | Every time

00:17:41.500 | growth went

00:17:42.140 | down, there

00:17:42.780 | was a new

00:17:43.560 | series of

00:17:44.540 | major reforms

00:17:45.320 | rolled out.

00:17:46.020 | And then,

00:17:46.560 | oops, that

00:17:47.220 | led to

00:17:48.000 | another wave

00:17:50.080 | of good growth.

00:17:51.540 | But I'd

00:17:52.740 | say that

00:17:53.200 | reform pace

00:17:54.280 | has slowed

00:17:55.300 | in the last

00:17:56.460 | 15 years.

00:17:58.040 | But are

00:17:59.500 | there reforms

00:18:00.200 | to be done?

00:18:00.740 | Yeah, absolutely.

00:18:01.500 | You know, has

00:18:02.220 | China reached

00:18:03.300 | even close to

00:18:04.720 | its potential?

00:18:05.400 | Not at all.

00:18:06.820 | But again,

00:18:08.500 | it comes back

00:18:09.440 | to politics,

00:18:10.020 | right?

00:18:10.280 | Now it's less

00:18:11.120 | about economics,

00:18:11.820 | it's more about

00:18:12.740 | national security,

00:18:13.400 | it's more about

00:18:13.960 | politics, and I

00:18:14.620 | think that is

00:18:15.100 | probably the

00:18:16.260 | single biggest

00:18:16.880 | barrier to

00:18:18.000 | continued good

00:18:19.160 | economic growth.

00:18:19.920 | Maybe can you

00:18:20.800 | speak to what

00:18:21.220 | it takes in

00:18:22.560 | such a large

00:18:23.120 | system, in

00:18:24.040 | many ways,

00:18:24.400 | such a successful

00:18:25.200 | economy to do

00:18:26.060 | reform?

00:18:26.500 | So you mentioned

00:18:27.360 | pragmatism.

00:18:28.020 | Deng Xiaoping

00:18:29.120 | famously said

00:18:30.220 | that it doesn't

00:18:30.660 | matter whether

00:18:31.260 | the cat is

00:18:31.740 | black or white

00:18:32.460 | as long as

00:18:33.140 | it catches

00:18:33.660 | mice.

00:18:34.180 | So there's

00:18:35.020 | that pragmatism

00:18:36.460 | that I think

00:18:37.960 | underlies a lot

00:18:38.700 | of great reforms.

00:18:39.640 | As a contrast

00:18:40.900 | to Soviet

00:18:41.500 | Union, the

00:18:43.320 | Chinese economy,

00:18:44.060 | as I mentioned,

00:18:44.940 | was extremely

00:18:45.720 | decentralized.

00:18:46.240 | You know, in

00:18:46.940 | Soviet Union,

00:18:47.520 | the ministries

00:18:48.340 | were in charge

00:18:49.240 | of essential

00:18:49.920 | bureaucracy,

00:18:50.900 | democracy, but

00:18:51.960 | a lot of

00:18:52.860 | the power

00:18:53.260 | were given

00:18:53.720 | to these

00:18:54.400 | provincial

00:18:54.800 | governors,

00:18:55.220 | party secretaries,

00:18:56.180 | mayors of

00:18:56.980 | different sorts,

00:18:57.780 | and they

00:18:59.620 | were incentivized.

00:19:00.360 | That's the

00:19:00.960 | key, is that

00:19:01.800 | these mayors

00:19:02.400 | were incentivized

00:19:03.280 | to do a good

00:19:04.160 | job.

00:19:04.600 | If I were

00:19:05.380 | successful on

00:19:06.060 | a radical

00:19:06.560 | reform, if I

00:19:08.180 | were successful,

00:19:08.800 | I'd be a

00:19:09.840 | national hero,

00:19:10.540 | and then that

00:19:12.400 | reform would be

00:19:13.120 | rolled out in

00:19:13.900 | every single

00:19:14.320 | city in the

00:19:15.060 | country over

00:19:15.660 | time, and I

00:19:16.960 | would be

00:19:17.180 | promoted to the

00:19:18.080 | higher run of

00:19:18.680 | the central

00:19:19.180 | government, and

00:19:19.960 | who knows,

00:19:20.440 | I might

00:19:20.840 | even become

00:19:21.520 | vice premier,

00:19:23.080 | premier president

00:19:23.920 | one day.

00:19:24.640 | That was how

00:19:26.420 | the individual

00:19:27.320 | was motivated

00:19:28.280 | to carry out

00:19:29.560 | these really

00:19:30.040 | tough reforms.

00:19:30.780 | Now, China

00:19:33.140 | has changed a

00:19:34.240 | bit, right?

00:19:34.920 | It's not about

00:19:35.660 | being radical,

00:19:36.340 | and radically

00:19:37.260 | successful.

00:19:37.840 | It's about

00:19:39.260 | being safe,

00:19:40.540 | right?

00:19:41.360 | So when you

00:19:41.820 | shift from

00:19:42.460 | basically an

00:19:44.160 | entrepreneurial

00:19:44.600 | state to a

00:19:45.820 | safe state,

00:19:46.520 | then the

00:19:48.020 | objective function

00:19:49.120 | changes, and

00:19:50.040 | you see it in

00:19:50.900 | different economic

00:19:51.860 | outcomes.

00:19:53.020 | So maybe can

00:19:54.940 | you speak to

00:19:55.300 | that?

00:19:55.460 | What are some

00:19:56.780 | important things

00:19:57.320 | to understand

00:19:57.740 | about the

00:19:58.100 | structure of

00:19:58.560 | the Chinese

00:19:59.020 | state?

00:19:59.400 | Well, the

00:20:01.180 | central leadership

00:20:02.160 | politically is

00:20:03.840 | extremely powerful

00:20:04.740 | and very

00:20:05.440 | consolidated, but

00:20:06.520 | they hold a

00:20:07.060 | very crucial key

00:20:08.020 | to the local

00:20:08.600 | governments, which

00:20:09.880 | is that they

00:20:10.280 | decide their

00:20:10.820 | fate.

00:20:11.120 | Am I going

00:20:12.200 | to promote

00:20:12.560 | them?

00:20:12.840 | Am I going

00:20:13.220 | to put them

00:20:13.540 | in jail?

00:20:13.960 | Am I going

00:20:14.560 | to fire

00:20:15.000 | them?

00:20:15.240 | Am I going

00:20:15.760 | to reward

00:20:16.240 | them?

00:20:16.400 | Am I going

00:20:16.620 | to punish

00:20:17.060 | them?

00:20:17.240 | They hold

00:20:18.460 | that crucial

00:20:19.040 | key.

00:20:19.480 | And I think

00:20:21.000 | what was very

00:20:22.420 | surprising for

00:20:23.620 | most of the

00:20:24.940 | Western audience

00:20:25.700 | is that when I

00:20:26.940 | mentioned about

00:20:27.380 | the mayor

00:20:27.780 | economy,

00:20:28.300 | why don't

00:20:29.560 | our American

00:20:30.280 | mayors in

00:20:31.060 | each city do

00:20:31.780 | these very

00:20:32.680 | radical things

00:20:33.640 | and then push

00:20:34.300 | for GDP

00:20:34.760 | growth and

00:20:35.760 | technology and

00:20:37.000 | innovation?

00:20:37.380 | It's quite

00:20:38.080 | different.

00:20:38.440 | I think this

00:20:38.980 | is where

00:20:39.740 | China is

00:20:40.240 | very unique

00:20:40.900 | in the

00:20:41.160 | world, is

00:20:41.720 | that political

00:20:42.420 | centralization,

00:20:43.340 | economic

00:20:43.900 | decentralization,

00:20:44.960 | and the

00:20:45.700 | yardstick to

00:20:46.520 | measure local

00:20:48.000 | mayors'

00:20:48.640 | competence

00:20:49.560 | through, in

00:20:51.600 | the first

00:20:51.920 | stage, it

00:20:52.300 | was GDP

00:20:52.660 | growth.

00:20:53.000 | So I

00:20:54.300 | am a

00:20:55.420 | mayor of

00:20:56.280 | the city

00:20:56.960 | of Nanjing

00:20:57.620 | in Jiangsu

00:20:58.240 | province.

00:20:58.580 | I'm going

00:20:58.860 | to peek at

00:20:59.820 | my neighbor's

00:21:00.660 | mayor's

00:21:01.340 | city's GDP

00:21:02.940 | growth, and

00:21:03.560 | I'm going

00:21:03.780 | to be very,

00:21:04.180 | very competitive.

00:21:04.720 | By the way,

00:21:05.300 | I forgot about

00:21:05.800 | that.

00:21:06.020 | Competition

00:21:06.560 | is extremely

00:21:07.980 | competitive

00:21:08.560 | among the

00:21:09.340 | local government

00:21:10.560 | officials because

00:21:11.260 | you are competing

00:21:12.100 | with other

00:21:12.920 | mayor for a

00:21:13.680 | top job,

00:21:14.420 | right?

00:21:14.620 | So you need

00:21:14.960 | to do better

00:21:15.360 | than them.

00:21:15.800 | And whether

00:21:17.480 | that was

00:21:17.860 | efficient structure

00:21:19.680 | or not,

00:21:20.580 | I cannot comment,

00:21:22.060 | but it certainly

00:21:23.180 | just fueled

00:21:24.340 | this massive

00:21:25.900 | and rapid

00:21:26.720 | expansion,

00:21:27.480 | economic expansion.

00:21:28.540 | First, it was

00:21:30.460 | industrialization.

00:21:31.360 | Everybody wanted

00:21:32.080 | to do exports.

00:21:33.240 | Then they

00:21:33.880 | discovered,

00:21:34.300 | oh my gosh,

00:21:35.200 | we can have

00:21:36.140 | so much

00:21:36.600 | fiscal revenues

00:21:37.340 | coming from

00:21:37.880 | land, right?

00:21:38.740 | Selling land

00:21:39.500 | and real estate.

00:21:39.940 | Let's build

00:21:41.180 | real estate

00:21:41.820 | and let's

00:21:42.460 | urbanize.

00:21:43.000 | And then the

00:21:44.240 | money kept

00:21:44.820 | coming in

00:21:45.680 | to these

00:21:46.060 | local governments

00:21:46.960 | and that they

00:21:47.400 | can spend

00:21:47.880 | it on nurturing

00:21:49.100 | more companies

00:21:50.260 | or supporting

00:21:51.160 | real estate

00:21:51.660 | or supporting

00:21:52.000 | investment

00:21:52.560 | and they can

00:21:53.520 | do a better

00:21:53.920 | job.

00:21:54.180 | So then it

00:21:55.020 | was geared

00:21:55.340 | towards real

00:21:56.680 | estate and

00:21:57.200 | that's how

00:21:57.540 | the property

00:21:58.060 | cycle became

00:21:59.080 | the big thing.

00:22:00.220 | Everything

00:22:01.040 | was at

00:22:02.320 | double speed

00:22:03.280 | because of

00:22:04.300 | what the

00:22:04.840 | local government's

00:22:05.720 | incentives were

00:22:07.320 | designed to do.

00:22:07.960 | I say now

00:22:09.440 | that China's

00:22:10.380 | biggest challenge

00:22:10.960 | is consumption,

00:22:11.620 | right?

00:22:11.980 | It's not

00:22:12.460 | production.

00:22:13.140 | We know that

00:22:13.880 | China's very,

00:22:14.400 | very competitive

00:22:14.920 | in production

00:22:15.500 | and supply.

00:22:16.160 | China needs

00:22:17.220 | to be a

00:22:17.860 | consuming country

00:22:18.720 | to be a rich

00:22:19.500 | country.

00:22:19.800 | Why don't you

00:22:20.420 | put consumption

00:22:21.040 | as part of

00:22:21.700 | the yardstick

00:22:22.660 | for measuring

00:22:23.280 | local governments?

00:22:24.160 | You know,

00:22:24.480 | for a while

00:22:24.980 | there's environmental

00:22:25.560 | protection.

00:22:26.060 | Guess what?

00:22:26.700 | Very few of them

00:22:27.760 | really want to do

00:22:28.420 | it seriously

00:22:28.920 | because it goes

00:22:29.760 | against the

00:22:31.200 | incentives of

00:22:33.120 | driving growth,

00:22:33.900 | right?

00:22:34.340 | They would

00:22:34.920 | suffer on

00:22:35.460 | GDP growth

00:22:36.080 | if they were

00:22:36.760 | very serious

00:22:37.680 | about environmental

00:22:38.160 | protection.

00:22:38.620 | So for a couple

00:22:39.520 | years nothing

00:22:40.860 | happened in

00:22:41.600 | China on that

00:22:42.280 | front.

00:22:42.540 | And then the

00:22:43.180 | central government

00:22:43.720 | got really

00:22:44.380 | kind of

00:22:45.300 | concerned and

00:22:46.520 | even angry

00:22:47.080 | and frustrated.

00:22:47.740 | So they

00:22:48.620 | decided to put

00:22:49.280 | that as a

00:22:50.120 | penalizing

00:22:50.840 | factor.

00:22:51.700 | And then guess

00:22:52.460 | what happened?

00:22:52.860 | Well,

00:22:53.140 | actually environmental

00:22:53.960 | protection

00:22:54.860 | sped up and

00:22:57.100 | you know,

00:22:57.740 | in a matter of

00:22:58.600 | short few years

00:22:59.620 | I see blue

00:23:00.140 | skies every day

00:23:00.780 | in Beijing.

00:23:01.180 | That's how it

00:23:02.140 | works.

00:23:02.400 | So GDP is a

00:23:05.000 | measure of

00:23:05.500 | success in

00:23:05.940 | production.

00:23:06.320 | What's the

00:23:08.760 | measure or

00:23:10.520 | what does it

00:23:11.000 | mean to be

00:23:11.320 | successful on

00:23:11.820 | the consumer

00:23:12.220 | side?

00:23:12.540 | You said it's

00:23:13.040 | important to

00:23:13.620 | improve that.

00:23:14.220 | What does it

00:23:14.640 | mean to be a

00:23:15.160 | successful

00:23:15.600 | consumer nation?

00:23:17.120 | The metrics

00:23:18.740 | shouldn't be

00:23:19.400 | geared just

00:23:20.000 | towards growth

00:23:21.100 | alone,

00:23:21.580 | GDP growth

00:23:22.280 | alone.

00:23:22.540 | It was just

00:23:23.060 | singular GDP

00:23:24.060 | growth and

00:23:24.860 | you can borrow

00:23:26.020 | heavily and just

00:23:27.480 | spend on

00:23:27.840 | infrastructure.

00:23:28.800 | that's not

00:23:29.160 | a productive

00:23:29.560 | way to

00:23:30.140 | drive the

00:23:30.580 | economy.

00:23:30.900 | That's what

00:23:31.300 | the local

00:23:32.080 | governments were

00:23:32.660 | doing for a

00:23:33.320 | long period of

00:23:33.780 | time.

00:23:34.060 | You know,

00:23:35.280 | in the last

00:23:35.940 | few years,

00:23:36.600 | innovation,

00:23:37.360 | unicorns,

00:23:38.340 | have kind of

00:23:38.820 | been an

00:23:39.120 | implicit yardstick

00:23:40.620 | for local

00:23:41.360 | governments.

00:23:41.700 | That's kind of

00:23:42.960 | how we've

00:23:43.400 | seen these

00:23:44.420 | great, you

00:23:44.940 | know,

00:23:45.020 | EV companies,

00:23:45.860 | 80 cities

00:23:46.700 | doing EVs.

00:23:47.420 | I mean,

00:23:47.660 | do we really

00:23:48.380 | need 80 cities

00:23:49.480 | to do their

00:23:50.200 | own EVs,

00:23:50.860 | right?

00:23:51.100 | Solar panels,

00:23:52.200 | now DeepSeek

00:23:53.360 | has become,

00:23:54.200 | you know,

00:23:54.600 | a star.

00:23:55.340 | Semiconductor

00:23:56.580 | companies,

00:23:57.060 | you know,

00:23:57.360 | each local

00:23:57.980 | government wants

00:23:58.660 | to have their

00:23:59.160 | own national

00:24:00.260 | champion.

00:24:00.800 | So,

00:24:01.840 | implicitly,

00:24:02.600 | technology was

00:24:03.520 | part of the

00:24:04.360 | yardstick

00:24:04.860 | competition as

00:24:05.820 | well,

00:24:06.240 | but if you

00:24:07.960 | can more

00:24:09.220 | accurately have

00:24:10.140 | a metric for

00:24:10.760 | consumption measures

00:24:11.640 | really focus

00:24:12.400 | on, you

00:24:13.180 | know,

00:24:13.220 | making sure

00:24:13.940 | that it's

00:24:14.340 | coming from

00:24:14.860 | consumption,

00:24:15.360 | this GDP

00:24:15.820 | growth,

00:24:16.160 | rather than

00:24:16.600 | from investment

00:24:17.320 | or infrastructure,

00:24:18.100 | then I think

00:24:19.380 | that it might

00:24:20.480 | focus the

00:24:21.740 | government's

00:24:22.320 | objective a bit

00:24:23.540 | more on

00:24:24.340 | thinking about

00:24:25.700 | how to make

00:24:26.180 | people feel

00:24:27.340 | more secure

00:24:28.000 | so that they

00:24:29.580 | want to save

00:24:30.000 | more.

00:24:30.200 | For instance,

00:24:30.720 | creating more

00:24:31.460 | jobs,

00:24:31.780 | for instance,

00:24:32.160 | more on

00:24:32.600 | social security

00:24:33.460 | spending,

00:24:33.880 | on health

00:24:34.300 | care,

00:24:34.560 | on elderly

00:24:35.680 | care,

00:24:36.120 | because for

00:24:37.660 | the longest

00:24:38.060 | period of

00:24:38.480 | time,

00:24:38.860 | this political

00:24:39.760 | economy model

00:24:40.500 | was brilliant

00:24:41.240 | at scaling

00:24:41.980 | up supply,

00:24:42.680 | but it was

00:24:43.340 | extremely weak

00:24:44.140 | at raising

00:24:44.640 | personal

00:24:45.140 | consumption

00:24:45.700 | because the

00:24:46.660 | incentive does

00:24:47.300 | not lie in

00:24:48.320 | consumption,

00:24:48.700 | it lies in

00:24:49.600 | production.

00:24:50.040 | So,

00:24:51.020 | you shift the

00:24:51.780 | objectives a

00:24:52.420 | little bit

00:24:52.820 | and maybe the

00:24:53.420 | local government

00:24:53.860 | will do more

00:24:54.680 | to stimulate

00:24:55.760 | consumption.

00:24:56.300 | Okay,

00:24:56.920 | you mentioned

00:24:57.420 | the mayor

00:24:58.140 | economy.

00:24:58.580 | That seems like

00:24:59.580 | an incredibly

00:25:00.240 | powerful idea.

00:25:01.480 | And you also

00:25:02.540 | mentioned that

00:25:03.020 | perhaps you're

00:25:04.800 | not sure exactly

00:25:05.900 | how perfectly

00:25:06.520 | efficient it is

00:25:07.640 | and what

00:25:08.260 | efficiency there

00:25:08.920 | means.

00:25:09.220 | How good are

00:25:10.540 | you at

00:25:11.440 | quickly figuring

00:25:12.700 | out the best

00:25:13.360 | ideas?

00:25:13.980 | That's what an

00:25:14.880 | efficient market

00:25:15.380 | does.

00:25:15.720 | There's a kind

00:25:16.700 | of component to

00:25:17.380 | what you're

00:25:17.640 | saying where

00:25:18.120 | you're a little

00:25:18.600 | bit critical

00:25:19.460 | of do you

00:25:21.040 | really need

00:25:21.600 | ADEV

00:25:22.480 | companies?

00:25:23.020 | But maybe you

00:25:23.620 | do.

00:25:23.920 | it seems

00:25:24.240 | like an

00:25:24.540 | incredible

00:25:25.000 | thing to

00:25:25.500 | do,

00:25:25.800 | right?

00:25:26.200 | So what are

00:25:27.260 | the pros

00:25:27.560 | and cons

00:25:27.900 | of this?

00:25:28.240 | Maybe you

00:25:28.600 | can speak

00:25:28.880 | to it a

00:25:29.160 | little bit

00:25:29.400 | more.

00:25:29.620 | I think

00:25:30.100 | it depends

00:25:30.640 | on the

00:25:31.620 | timing.

00:25:31.920 | If you're

00:25:33.080 | starting

00:25:33.400 | something,

00:25:33.900 | starting a

00:25:35.120 | new emerging

00:25:35.880 | strategic

00:25:36.320 | sector like

00:25:36.960 | EVs or

00:25:37.460 | batteries or

00:25:38.320 | solar panels,

00:25:39.060 | you need

00:25:40.340 | the local

00:25:40.900 | governments to

00:25:41.540 | be involved,

00:25:42.100 | to mobilize,

00:25:42.980 | right?

00:25:43.840 | The big

00:25:44.520 | push to

00:25:45.640 | coordinate the

00:25:46.780 | supply chains.

00:25:47.540 | If you wait

00:25:48.020 | for the markets

00:25:48.640 | to develop

00:25:49.160 | over time,

00:25:49.680 | it's going

00:25:49.940 | to take a

00:25:50.300 | long time.

00:25:50.580 | Maybe they

00:25:50.940 | don't even

00:25:51.240 | want to do

00:25:51.640 | it,

00:25:51.820 | right?

00:25:52.140 | look at

00:25:52.400 | the U.S.

00:25:52.780 | The U.S.

00:25:53.140 | is very,

00:25:53.440 | very behind

00:25:53.960 | on some

00:25:54.660 | of the

00:25:54.920 | new

00:25:55.380 | strategic

00:25:55.880 | sectors.

00:25:56.520 | But once

00:25:58.060 | you've

00:25:58.480 | reached a

00:25:59.720 | certain level

00:26:00.480 | of market

00:26:01.240 | competition,

00:26:01.780 | I think the

00:26:03.240 | state needs

00:26:03.640 | to withdraw

00:26:05.460 | or to

00:26:06.120 | retreat.

00:26:06.960 | because

00:26:07.540 | ultimately the

00:26:08.740 | state is

00:26:09.340 | not the

00:26:10.160 | best at

00:26:10.800 | allocating

00:26:11.600 | resources,

00:26:12.260 | picking

00:26:13.040 | winners.

00:26:13.440 | You want

00:26:14.640 | the private

00:26:15.100 | actors,

00:26:15.580 | whether it's

00:26:16.120 | the venture

00:26:16.560 | funds or

00:26:17.420 | the through

00:26:18.340 | market competition

00:26:19.240 | to ultimately

00:26:19.900 | decide who

00:26:20.600 | gets the

00:26:21.080 | most resources.

00:26:21.940 | But in the

00:26:22.920 | beginning,

00:26:23.180 | that big

00:26:23.840 | push is

00:26:24.480 | not really

00:26:25.320 | in any

00:26:25.820 | of the

00:26:26.140 | canonical

00:26:26.480 | models that

00:26:27.100 | I've

00:26:27.280 | studied in

00:26:27.700 | economics in

00:26:28.280 | the Western

00:26:28.700 | school of

00:26:29.460 | thought.

00:26:29.740 | State push,

00:26:30.960 | state

00:26:31.400 | mobilization,

00:26:32.200 | state

00:26:32.780 | initiation,

00:26:33.440 | that's not

00:26:33.960 | there.

00:26:34.820 | But I

00:26:35.620 | think if

00:26:35.960 | you look

00:26:36.320 | at EVs,

00:26:37.340 | solar panels,

00:26:38.280 | even just

00:26:39.020 | thinking about

00:26:39.560 | the idea of

00:26:40.100 | reforms in

00:26:40.660 | the first

00:26:41.020 | place,

00:26:41.500 | that initial

00:26:43.460 | state push

00:26:44.460 | was vitally

00:26:45.380 | important.

00:26:46.020 | The other

00:26:47.740 | negative,

00:26:49.220 | although I

00:26:50.320 | think by

00:26:51.100 | and large

00:26:51.500 | positive

00:26:52.080 | aspect,

00:26:52.880 | is I

00:26:54.260 | don't think

00:26:55.180 | that we

00:26:55.560 | need 80

00:26:56.280 | cities to

00:26:56.940 | do their

00:26:57.280 | own EV

00:26:57.800 | brands,

00:26:58.340 | but to

00:26:58.960 | get started,

00:26:59.720 | maybe that's

00:27:00.600 | what it

00:27:01.340 | would have

00:27:01.600 | taken to

00:27:02.600 | drive that

00:27:03.360 | incentive

00:27:03.880 | competitive.

00:27:04.880 | And then

00:27:05.060 | ultimately it's

00:27:05.800 | up to the

00:27:06.260 | market to

00:27:06.780 | decide who

00:27:07.200 | are the

00:27:07.440 | last five

00:27:08.280 | remaining

00:27:08.660 | EV companies

00:27:09.360 | through market

00:27:10.020 | mechanisms.

00:27:10.580 | That's

00:27:11.520 | Chinese-style

00:27:12.020 | industrial

00:27:12.320 | policy.

00:27:12.840 | Industrial

00:27:14.160 | policy was

00:27:14.660 | heavily

00:27:14.920 | criticized,

00:27:15.480 | and again,

00:27:16.220 | if I talk

00:27:17.020 | to my

00:27:17.500 | Harvard

00:27:18.380 | professors,

00:27:18.860 | they will

00:27:19.280 | be very,

00:27:19.900 | very,

00:27:20.180 | very skeptical

00:27:20.880 | about the

00:27:23.160 | role of

00:27:24.040 | the state,

00:27:24.480 | especially in

00:27:25.380 | such a

00:27:25.960 | major way.

00:27:26.740 | But if you

00:27:27.720 | look at the

00:27:28.080 | Chinese

00:27:28.380 | experience,

00:27:29.020 | the evidence

00:27:29.800 | for success

00:27:30.320 | is all

00:27:30.760 | there.

00:27:31.060 | The cities

00:27:32.500 | that have

00:27:33.280 | pushed the

00:27:33.800 | most on

00:27:34.740 | supporting

00:27:35.280 | that

00:27:35.580 | particular

00:27:35.940 | sector

00:27:36.420 | ultimately

00:27:37.080 | did the

00:27:37.780 | best in

00:27:38.120 | terms of

00:27:38.440 | production,

00:27:38.760 | but also

00:27:39.160 | in terms

00:27:39.460 | of

00:27:39.560 | innovation,

00:27:39.960 | measured

00:27:40.340 | by

00:27:40.560 | patents.

00:27:41.000 | It's

00:27:41.300 | all in

00:27:42.240 | the

00:27:42.400 | data.

00:27:42.740 | But the

00:27:44.300 | downside

00:27:44.700 | is that

00:27:45.600 | a lot of

00:27:46.280 | the capital

00:27:46.640 | is wasted.

00:27:47.220 | And this

00:27:48.280 | is what I

00:27:48.640 | also discuss

00:27:49.180 | in my

00:27:49.500 | book,

00:27:49.840 | is that

00:27:50.420 | it is

00:27:51.340 | inefficient,

00:27:51.800 | although

00:27:52.200 | maybe it's

00:27:52.820 | necessary.

00:27:53.360 | The amount

00:27:54.860 | of waste

00:27:55.580 | of investment

00:27:56.660 | plowed

00:27:57.840 | into these

00:27:58.600 | companies that

00:27:59.860 | will ultimately

00:28:00.400 | just go

00:28:01.640 | under,

00:28:02.680 | but also

00:28:03.200 | the

00:28:03.340 | misallocation

00:28:03.940 | of

00:28:04.180 | resources

00:28:04.620 | because it's

00:28:05.240 | led by

00:28:05.580 | the state

00:28:06.120 | are some

00:28:07.020 | of the

00:28:07.220 | downsides.

00:28:07.740 | But I

00:28:08.200 | guess on

00:28:09.120 | balance it's

00:28:09.880 | been positive

00:28:10.440 | because look

00:28:11.540 | at China's

00:28:12.200 | internal combustion

00:28:13.060 | engine effort,

00:28:14.340 | nothing,

00:28:15.080 | right?

00:28:16.000 | Semiconductors.

00:28:16.940 | Thanks to

00:28:18.300 | Biden,

00:28:18.580 | thanks to

00:28:19.080 | Trump,

00:28:19.340 | it's improved

00:28:20.540 | dramatically.

00:28:21.180 | But all

00:28:22.480 | these things

00:28:23.060 | that they

00:28:23.320 | tried to do

00:28:24.020 | before,

00:28:24.540 | they couldn't

00:28:25.140 | do.

00:28:25.280 | But when

00:28:25.740 | it's a new

00:28:26.380 | thing,

00:28:26.740 | like something

00:28:27.440 | that there's

00:28:28.240 | no incumbent,

00:28:29.260 | no particular

00:28:30.420 | advantage in

00:28:31.220 | any country,

00:28:31.760 | actually China

00:28:32.640 | is really

00:28:32.960 | spearheading

00:28:33.480 | these sectors.

00:28:34.000 | Can we linger

00:28:35.120 | a little bit

00:28:35.500 | more in this

00:28:35.960 | mayor economy?

00:28:36.640 | It just

00:28:37.200 | seems like

00:28:38.040 | such a

00:28:38.620 | powerful thing

00:28:39.680 | where one

00:28:40.560 | mayor looks

00:28:41.400 | over to the

00:28:41.880 | next and

00:28:42.640 | looks even

00:28:43.480 | just a

00:28:44.060 | trivially

00:28:44.520 | simple number

00:28:45.200 | like the

00:28:45.520 | GDP.

00:28:45.900 | Why don't

00:28:47.420 | we do that

00:28:47.840 | in the United

00:28:48.280 | States or

00:28:48.940 | in the West

00:28:49.360 | more?

00:28:49.640 | Just compete

00:28:50.920 | on GDP.

00:28:52.040 | Well,

00:28:52.800 | you need to

00:28:53.360 | be elected

00:28:53.860 | and re-elected,

00:28:54.960 | right?

00:28:55.640 | Is that what

00:28:56.500 | your electoral

00:28:57.360 | base cares

00:28:58.040 | about,

00:28:58.460 | right?

00:28:59.600 | In China,

00:29:00.200 | it's what

00:29:00.960 | the central

00:29:01.380 | government,

00:29:01.860 | your boss,

00:29:02.620 | cares about.

00:29:03.460 | If you ask

00:29:04.100 | the consumers,

00:29:04.580 | they'd rather

00:29:05.000 | you spend

00:29:05.780 | on social

00:29:06.300 | spending,

00:29:06.680 | right?

00:29:07.180 | The things

00:29:07.480 | we talked

00:29:07.820 | about that

00:29:08.180 | stimulates

00:29:08.560 | consumption,

00:29:09.040 | on education,

00:29:10.120 | on healthcare,

00:29:10.740 | things that

00:29:11.500 | stimulate demand.

00:29:12.440 | So that's

00:29:15.300 | the political,

00:29:15.880 | it's the

00:29:16.760 | difference of

00:29:17.120 | the political

00:29:17.460 | system.

00:29:17.880 | So maybe

00:29:19.220 | can you

00:29:19.520 | speak to

00:29:19.880 | the difference,

00:29:20.480 | another

00:29:21.060 | difference is

00:29:21.620 | the long-term

00:29:22.760 | multi-generational

00:29:23.840 | thinking that

00:29:26.200 | permeates

00:29:26.620 | Chinese culture.

00:29:27.340 | So how

00:29:27.900 | does that

00:29:28.200 | differ from

00:29:28.680 | the Western

00:29:30.580 | style capitalism

00:29:31.600 | of quarterly

00:29:33.000 | focused

00:29:33.720 | thinking?

00:29:34.520 | The Chinese

00:29:35.920 | are both

00:29:37.000 | the most

00:29:37.460 | patient and

00:29:38.660 | the most

00:29:39.420 | short-termist

00:29:41.440 | economic

00:29:43.060 | actors I

00:29:44.360 | met.

00:29:44.620 | The patience

00:29:45.720 | I don't need

00:29:46.120 | to explain

00:29:46.700 | because I

00:29:47.700 | think the

00:29:48.960 | political

00:29:49.300 | continuity

00:29:49.860 | means that

00:29:50.560 | they can

00:29:51.120 | make plans

00:29:51.840 | for two

00:29:52.400 | decades ahead,

00:29:53.300 | right?

00:29:54.060 | even longer.

00:29:54.680 | The

00:29:56.860 | investment

00:29:57.840 | of Chinese

00:29:58.720 | parents in

00:29:59.320 | their

00:29:59.480 | children

00:29:59.880 | is a

00:30:01.280 | multi-decade

00:30:02.380 | long project

00:30:03.440 | and they

00:30:04.780 | save.

00:30:05.300 | You know,

00:30:05.740 | Chinese people

00:30:06.200 | love to

00:30:06.560 | save because

00:30:07.600 | they think

00:30:08.080 | that they'll

00:30:08.640 | have even

00:30:09.380 | more money

00:30:09.960 | if they

00:30:10.980 | save that

00:30:11.340 | money rather

00:30:11.660 | than spend

00:30:12.180 | it on a

00:30:12.520 | ski vacation.

00:30:13.180 | So that

00:30:14.140 | I think

00:30:14.880 | it's

00:30:15.260 | patently

00:30:15.760 | obvious to

00:30:16.780 | most people

00:30:18.540 | around the

00:30:19.280 | world.

00:30:19.560 | But I

00:30:20.780 | think that

00:30:21.260 | most of

00:30:21.840 | them would

00:30:22.160 | not have

00:30:22.860 | known that

00:30:23.340 | there's a

00:30:24.440 | very popular

00:30:25.020 | motto in

00:30:25.900 | China which

00:30:26.840 | is called

00:30:27.200 | short,

00:30:27.680 | flat,

00:30:28.380 | fast.

00:30:29.140 | that's

00:30:29.780 | the

00:30:30.060 | impatient

00:30:30.720 | part of

00:30:31.480 | the

00:30:31.640 | Chinese

00:30:31.980 | culture

00:30:32.840 | especially

00:30:33.300 | with

00:30:33.800 | respect

00:30:34.080 | to

00:30:34.240 | the

00:30:34.340 | economy.

00:30:34.680 | Short,

00:30:35.880 | flat,

00:30:36.460 | fast was

00:30:37.680 | used to

00:30:38.380 | describe a

00:30:38.860 | winning

00:30:39.100 | volleyball

00:30:39.760 | strategy

00:30:40.340 | that

00:30:40.740 | eventually

00:30:41.140 | became

00:30:41.680 | adapted to

00:30:42.440 | describing

00:30:42.920 | the society

00:30:43.540 | as a

00:30:43.820 | whole

00:30:44.020 | and

00:30:44.380 | economic

00:30:44.880 | decision

00:30:45.280 | making.

00:30:45.620 | If you're

00:30:46.800 | an investor

00:30:47.320 | you only

00:30:48.060 | want to

00:30:48.400 | invest

00:30:48.760 | in things

00:30:49.340 | that you

00:30:49.660 | can

00:30:49.800 | quickly

00:30:50.060 | turn

00:30:50.320 | around

00:30:50.560 | make

00:30:50.780 | a lot

00:30:51.000 | of

00:30:51.120 | money

00:30:51.380 | and

00:30:51.680 | don't

00:30:51.900 | need

00:30:52.040 | to

00:30:52.140 | do

00:30:52.260 | much

00:30:52.460 | work.

00:30:52.820 | It

00:30:53.760 | also

00:30:54.000 | applies

00:30:54.360 | to

00:30:54.600 | marriages.

00:30:55.080 | So a

00:30:56.300 | short

00:30:56.560 | courtship,

00:30:57.220 | a very

00:30:57.880 | flat

00:30:58.300 | emotional

00:30:58.900 | relationship

00:30:59.580 | and a

00:30:59.860 | fast

00:31:00.060 | divorce.

00:31:00.380 | That is

00:31:03.220 | how you

00:31:04.780 | see these

00:31:05.620 | companies

00:31:06.740 | rise

00:31:07.800 | within a

00:31:08.840 | very short

00:31:09.300 | period of

00:31:09.700 | time.

00:31:09.920 | Of course

00:31:10.260 | investors

00:31:10.640 | are only

00:31:11.140 | interested

00:31:11.580 | in those

00:31:11.960 | companies

00:31:12.320 | that can

00:31:13.380 | turn around

00:31:14.120 | and exit

00:31:14.660 | in a

00:31:15.180 | very short

00:31:15.540 | period of

00:31:15.840 | time

00:31:16.040 | making

00:31:16.400 | many

00:31:17.220 | many

00:31:17.420 | multiples.

00:31:17.840 | So in

00:31:19.900 | that sense

00:31:20.480 | people are

00:31:21.040 | very

00:31:21.500 | impatient.

00:31:22.320 | I sit

00:31:24.520 | on some

00:31:24.840 | boards

00:31:25.140 | of these

00:31:25.920 | long-standing

00:31:27.080 | companies

00:31:27.720 | and

00:31:28.420 | the

00:31:29.080 | values

00:31:29.500 | are

00:31:29.720 | just

00:31:29.920 | so

00:31:30.300 | different.

00:31:30.920 | Even

00:31:31.860 | though

00:31:32.080 | a lot

00:31:32.340 | of

00:31:32.420 | these

00:31:32.560 | public

00:31:32.820 | companies

00:31:33.180 | are

00:31:33.360 | constrained

00:31:33.920 | by the

00:31:34.440 | quarterly

00:31:34.760 | results

00:31:35.480 | and so

00:31:35.880 | forth,

00:31:36.160 | but the

00:31:36.900 | values

00:31:37.400 | are

00:31:37.800 | about

00:31:38.360 | sustaining

00:31:39.380 | something,

00:31:40.540 | a company,

00:31:41.140 | for a long

00:31:41.840 | time,

00:31:42.220 | thinking about

00:31:42.700 | organic

00:31:43.220 | growth,

00:31:43.860 | thinking about

00:31:45.200 | investments

00:31:45.900 | for the

00:31:46.340 | future,

00:31:46.660 | sustainability,

00:31:47.200 | maybe it's

00:31:49.020 | that competition,

00:31:49.760 | maybe it's

00:31:50.500 | the speed

00:31:51.260 | that we're

00:31:51.740 | used to

00:31:52.160 | in China,

00:31:52.720 | people think

00:31:53.560 | about short.

00:31:55.060 | So this

00:31:56.240 | dichotomy

00:31:56.840 | is very

00:31:57.240 | interesting.

00:31:57.780 | That's

00:31:59.140 | surprising

00:31:59.580 | to me.

00:32:00.020 | It's a

00:32:01.100 | surprising

00:32:01.460 | idea,

00:32:01.920 | right?

00:32:02.180 | So there

00:32:03.880 | is a

00:32:04.180 | kind of

00:32:04.560 | in the

00:32:05.360 | West

00:32:05.520 | conception

00:32:05.940 | of

00:32:06.380 | Chinese

00:32:07.060 | culture,

00:32:07.380 | Chinese

00:32:07.760 | economy,

00:32:08.180 | that

00:32:08.520 | everything

00:32:08.920 | is

00:32:09.320 | 50,

00:32:10.440 | 100,

00:32:10.880 | 200

00:32:11.480 | years

00:32:11.860 | out,

00:32:12.120 | you have

00:32:12.580 | this

00:32:12.780 | long

00:32:13.060 | vision,

00:32:13.400 | but you're

00:32:14.240 | basically

00:32:14.500 | saying

00:32:14.880 | that there's

00:32:15.380 | a deep

00:32:16.120 | in the

00:32:17.860 | business

00:32:18.120 | sector

00:32:18.620 | impatience

00:32:19.680 | about

00:32:19.900 | everything.

00:32:20.260 | That's

00:32:21.060 | a

00:32:21.400 | transitory

00:32:22.140 | phenomenon,

00:32:22.680 | I'd say.

00:32:23.300 | But if you

00:32:23.940 | look at

00:32:24.420 | the cheaper

00:32:24.900 | stuff,

00:32:26.360 | poor quality,

00:32:27.220 | that's a

00:32:27.640 | reflection of

00:32:28.120 | the copying,

00:32:28.660 | it's the

00:32:29.120 | same kind

00:32:29.480 | of mentality,

00:32:29.920 | just get

00:32:30.400 | ahead quickly.

00:32:31.040 | But again,

00:32:32.520 | that is

00:32:33.500 | all shifting.

00:32:33.940 | That is

00:32:34.660 | all shifting

00:32:35.400 | because China

00:32:37.200 | is now in

00:32:37.720 | a different

00:32:38.040 | stage of

00:32:38.540 | development.

00:32:38.960 | If you

00:32:39.360 | ask the

00:32:40.260 | younger

00:32:40.700 | generation,

00:32:41.340 | they really

00:32:41.820 | care about

00:32:42.220 | quality.

00:32:42.700 | They care

00:32:43.580 | about

00:32:43.760 | values.

00:32:44.320 | And these

00:32:45.680 | companies,

00:32:46.100 | these very

00:32:46.700 | successful

00:32:47.060 | companies,

00:32:47.620 | successful in

00:32:48.400 | five years,

00:32:48.840 | ten years,

00:32:49.580 | found

00:32:49.760 | themselves

00:32:50.200 | in a

00:32:50.440 | very

00:32:50.580 | difficult

00:32:50.920 | position

00:32:51.380 | after a

00:32:52.280 | longer

00:32:52.460 | period

00:32:52.700 | of

00:32:52.860 | time.

00:32:53.120 | So that

00:32:53.920 | short,

00:32:54.300 | flat,

00:32:54.760 | fast attitude,

00:32:56.440 | which was

00:32:56.940 | so popular,

00:32:57.560 | especially

00:32:57.980 | before the

00:32:58.620 | pandemic,

00:32:58.980 | that's

00:32:59.900 | actually

00:33:00.220 | somewhat

00:33:00.800 | disappearing.

00:33:01.260 | So in

00:33:01.600 | some sense,

00:33:02.060 | this economic

00:33:02.620 | downturn is

00:33:03.320 | not that

00:33:03.860 | bad for

00:33:04.300 | China because

00:33:05.200 | it made

00:33:05.780 | the Chinese

00:33:06.780 | realize that

00:33:07.540 | it's not

00:33:07.900 | always going

00:33:08.440 | to go up

00:33:08.980 | and it

00:33:10.560 | made them

00:33:11.040 | really look

00:33:11.580 | down deeper

00:33:12.340 | into what

00:33:13.620 | they really

00:33:14.040 | should be

00:33:14.420 | focused on,

00:33:15.120 | that there

00:33:16.540 | will be

00:33:16.780 | cycles,

00:33:17.160 | there will

00:33:17.460 | be up

00:33:17.760 | and downs.

00:33:18.280 | And so

00:33:18.820 | these very

00:33:19.260 | short-termist

00:33:20.520 | thinking and

00:33:21.800 | opportunistic

00:33:22.960 | way of

00:33:24.060 | driving business

00:33:25.000 | will ultimately

00:33:25.800 | fail.

00:33:27.440 | it's bad

00:33:28.700 | for China

00:33:29.300 | that we're

00:33:30.060 | having a

00:33:30.500 | sustained

00:33:30.880 | economic

00:33:31.480 | softness,

00:33:33.660 | sustained

00:33:34.560 | economic

00:33:34.960 | softness,

00:33:35.460 | but I

00:33:36.600 | think it's

00:33:37.140 | also a

00:33:37.540 | very,

00:33:37.700 | very important

00:33:38.220 | lesson for

00:33:38.920 | the Chinese

00:33:39.240 | people to

00:33:39.580 | go through.

00:33:39.900 | Let's go,

00:33:41.500 | if we can,

00:33:42.200 | a bit to the

00:33:42.840 | personal.

00:33:43.120 | So you

00:33:43.480 | grew up in

00:33:43.960 | China.

00:33:44.240 | What are

00:33:45.400 | some moments

00:33:45.960 | from childhood

00:33:46.520 | that were

00:33:47.120 | maybe defining

00:33:49.600 | to your

00:33:50.020 | understanding of

00:33:50.980 | Chinese culture

00:33:52.100 | Chinese economy?

00:33:53.640 | You know,

00:33:55.160 | we look back

00:33:55.840 | at those

00:33:56.380 | moments when

00:33:57.140 | everybody in

00:33:57.720 | China was

00:33:58.120 | very poor

00:33:58.940 | with a bit

00:33:59.820 | of nostalgia.

00:34:00.500 | I remember

00:34:03.140 | no doors were

00:34:04.540 | locked.

00:34:04.780 | I was in

00:34:05.620 | Beijing and

00:34:06.780 | I remember

00:34:07.480 | every day in

00:34:08.860 | the summer

00:34:09.340 | everybody just

00:34:10.940 | went downstairs

00:34:11.720 | and chatted

00:34:12.340 | with everybody

00:34:12.800 | else.

00:34:15.180 | it was very

00:34:16.100 | social,

00:34:16.500 | very community

00:34:17.560 | based.

00:34:17.940 | The neighbors

00:34:18.680 | help each

00:34:19.160 | other.

00:34:19.400 | We had

00:34:20.460 | very,

00:34:20.800 | very little

00:34:22.180 | small

00:34:23.580 | apartments,

00:34:24.140 | very limited

00:34:25.220 | access to

00:34:25.840 | certain goods.

00:34:26.280 | When I was

00:34:26.680 | born,

00:34:26.940 | even in

00:34:28.140 | Beijing,

00:34:28.360 | there were

00:34:29.260 | these vouchers

00:34:31.260 | for how many

00:34:31.720 | eggs you can

00:34:32.520 | buy.

00:34:32.940 | And even

00:34:33.940 | Beijing,

00:34:34.300 | there were

00:34:34.780 | three or

00:34:35.180 | four blackouts

00:34:35.940 | per week,

00:34:36.480 | typically.

00:34:37.160 | There was a

00:34:38.400 | sense of

00:34:39.200 | community.

00:34:39.860 | There was a

00:34:40.640 | very strong

00:34:41.240 | bond between

00:34:42.560 | people and

00:34:44.160 | within the

00:34:44.680 | family,

00:34:45.140 | because they

00:34:45.700 | were going

00:34:46.220 | after a

00:34:46.600 | common goal,

00:34:47.040 | making your

00:34:47.620 | life better,

00:34:48.120 | struggling,

00:34:48.780 | striving to

00:34:49.520 | make your

00:34:49.840 | life better.

00:34:50.320 | And I

00:34:51.260 | remember being

00:34:52.200 | on the back

00:34:52.800 | of my

00:34:53.240 | father's

00:34:53.860 | bike,

00:34:54.380 | getting up

00:34:56.080 | 6 a.m.

00:34:57.140 | every day

00:34:57.760 | and going

00:34:58.360 | to nursery.

00:34:59.260 | And that's

00:35:01.340 | the typical

00:35:02.160 | day.

00:35:02.560 | Not a lot

00:35:03.640 | of material

00:35:04.100 | goods,

00:35:04.540 | but people

00:35:05.280 | had a sense

00:35:05.880 | of purpose.

00:35:06.440 | And that's

00:35:09.020 | radically

00:35:09.580 | different.

00:35:10.320 | It's

00:35:11.280 | completely

00:35:11.880 | different now

00:35:12.440 | in China.

00:35:12.820 | Do you

00:35:13.580 | think that

00:35:14.100 | if you

00:35:15.100 | go to

00:35:15.340 | the human

00:35:15.660 | condition,

00:35:16.140 | do you

00:35:16.440 | think that

00:35:16.800 | nostalgia has

00:35:17.780 | some truth

00:35:18.260 | to it,

00:35:18.560 | or is it

00:35:18.860 | just nostalgia

00:35:20.080 | like any

00:35:20.540 | other?

00:35:20.760 | Is there

00:35:21.120 | some aspect

00:35:22.900 | of an

00:35:24.200 | intense,

00:35:24.760 | competitive,

00:35:25.480 | vibrant

00:35:26.020 | economy that

00:35:27.200 | loses some

00:35:28.000 | element?

00:35:28.440 | Absolutely.

00:35:29.500 | Of everybody

00:35:30.360 | being poor

00:35:31.060 | together?

00:35:31.540 | Well,

00:35:32.100 | everybody having

00:35:34.100 | a common

00:35:34.900 | goal and a

00:35:35.740 | sense of

00:35:36.380 | community,

00:35:37.000 | right?

00:35:37.380 | That is what's

00:35:38.360 | missing in

00:35:38.900 | these extremely

00:35:39.580 | individual-based

00:35:40.700 | capitalist

00:35:41.140 | societies.

00:35:41.720 | And I

00:35:42.140 | think what

00:35:43.080 | the Chinese

00:35:43.460 | government is

00:35:43.940 | striving to

00:35:44.760 | do with

00:35:45.440 | Chinese

00:35:46.160 | socialistic

00:35:47.300 | characteristics

00:35:48.180 | is to

00:35:49.080 | somehow try

00:35:49.600 | to preserve

00:35:50.200 | a bit of

00:35:51.020 | that socialist

00:35:51.660 | character while

00:35:53.080 | still relying on

00:35:54.180 | markets,

00:35:54.700 | market-based

00:35:55.460 | incentives.

00:35:55.880 | But if you're

00:35:57.120 | an extremely

00:35:57.600 | individual-based

00:35:58.840 | society, I

00:35:59.780 | think you do

00:36:00.420 | lose a lot

00:36:01.540 | of that.

00:36:01.880 | And I think

00:36:02.420 | some of the

00:36:02.920 | backlash that

00:36:03.580 | we're seeing

00:36:04.520 | from society

00:36:05.960 | is a

00:36:06.620 | reflection of

00:36:07.240 | that,

00:36:07.480 | right?

00:36:07.860 | People being

00:36:08.720 | alone more

00:36:09.560 | and more,

00:36:09.940 | the death of

00:36:11.960 | despair in

00:36:12.800 | the U.S.,

00:36:14.480 | the addiction,

00:36:15.500 | you know,

00:36:16.380 | that they're

00:36:18.200 | lonely,

00:36:18.640 | right?

00:36:19.240 | And competition

00:36:20.360 | means that you

00:36:21.560 | kind of have to

00:36:22.160 | be somewhat

00:36:22.920 | badass.

00:36:23.520 | And you

00:36:25.300 | sometimes put

00:36:27.020 | down values

00:36:27.880 | and you

00:36:29.180 | forsake harmony

00:36:30.020 | in order to

00:36:31.000 | get ahead.

00:36:31.440 | That's certainly

00:36:32.260 | the Chinese

00:36:32.680 | society now.

00:36:33.280 | That was not

00:36:33.840 | the case

00:36:34.160 | before.

00:36:34.580 | You think

00:36:35.200 | that's a

00:36:35.540 | natural

00:36:35.760 | consequence

00:36:36.200 | of capitalism

00:36:38.060 | almost always

00:36:38.880 | that you

00:36:39.620 | become more

00:36:40.240 | individualized,

00:36:41.620 | you become

00:36:42.620 | lonelier,

00:36:43.120 | you feel

00:36:44.360 | lesser if

00:36:46.240 | you're not

00:36:46.720 | winning,

00:36:47.180 | and thereby

00:36:48.440 | somehow that

00:36:50.880 | breaks down

00:36:51.460 | society,

00:36:52.000 | community,

00:36:53.140 | more and

00:36:54.040 | more?

00:36:54.240 | I think

00:36:55.040 | it's a

00:36:55.280 | spectrum,

00:36:55.640 | right?

00:36:56.340 | And Europe

00:36:57.600 | is somewhere

00:36:58.500 | in between,

00:36:59.420 | I'd say.

00:37:00.300 | But Europe

00:37:02.260 | also is not

00:37:03.240 | as technologically

00:37:04.080 | innovative as

00:37:05.680 | the U.S.,

00:37:06.540 | but on a

00:37:07.340 | social level

00:37:07.900 | there is

00:37:08.300 | more social

00:37:08.780 | protection for

00:37:09.440 | the people,

00:37:09.880 | there is

00:37:10.520 | a stronger

00:37:12.080 | sense of

00:37:12.580 | community,

00:37:13.000 | I'd argue.

00:37:13.940 | It's not

00:37:14.620 | perfect.

00:37:15.120 | Ultimately,

00:37:16.080 | it is a

00:37:16.520 | choice,

00:37:16.860 | and this is

00:37:17.420 | what I think

00:37:18.040 | China has to

00:37:19.320 | decide,

00:37:19.760 | right?

00:37:20.160 | Do you want

00:37:21.080 | technological

00:37:21.680 | supremacy and

00:37:22.820 | radical

00:37:23.160 | breakthroughs?

00:37:24.060 | Well,

00:37:24.660 | yes,

00:37:25.080 | if you do,

00:37:25.580 | then you have

00:37:26.100 | to tolerate

00:37:26.600 | that there

00:37:27.060 | are going

00:37:27.280 | to be

00:37:27.500 | some people

00:37:28.140 | who are

00:37:28.400 | going to be

00:37:28.800 | just going

00:37:30.540 | to be

00:37:30.980 | uncomfortably

00:37:32.260 | rich,

00:37:32.900 | right?

00:37:33.320 | Like in the

00:37:33.740 | United States.

00:37:34.300 | You can't

00:37:35.400 | say that you

00:37:35.980 | detest the

00:37:36.700 | financial system

00:37:37.620 | for its

00:37:38.440 | greed,

00:37:38.920 | but then not

00:37:40.440 | accept the

00:37:40.940 | fact that it

00:37:41.640 | is what fuels

00:37:42.440 | innovation,

00:37:43.040 | right?

00:37:43.840 | Risky capital

00:37:46.680 | fuels

00:37:47.760 | uncertain

00:37:49.400 | investments,

00:37:50.060 | which allows

00:37:50.960 | for countries

00:37:51.880 | like the

00:37:52.260 | United States

00:37:52.900 | to be making

00:37:54.080 | these breakthroughs.

00:37:55.060 | That's what

00:37:55.660 | China wants,

00:37:56.160 | but at the

00:37:56.620 | same time,

00:37:57.060 | China can't

00:37:58.000 | tolerate these

00:37:59.440 | extremely rich

00:38:00.320 | people around

00:38:01.460 | and their

00:38:01.900 | power that

00:38:02.480 | is accrued

00:38:03.180 | to them.

00:38:03.560 | They want

00:38:04.820 | to be a

00:38:07.080 | leader in

00:38:07.520 | technology,

00:38:08.040 | but then the

00:38:09.400 | financial system

00:38:10.260 | is not

00:38:10.820 | liberalized.

00:38:11.520 | It's highly

00:38:12.460 | regulated,

00:38:13.740 | but there's

00:38:14.940 | also intervention.

00:38:15.780 | Even if we

00:38:17.280 | look back at

00:38:18.040 | the French

00:38:19.160 | civil law

00:38:19.780 | versus the

00:38:20.540 | English

00:38:21.160 | common law,

00:38:22.200 | well,

00:38:22.820 | the former

00:38:23.380 | protects

00:38:24.100 | creditors,

00:38:25.620 | and the

00:38:26.900 | latter is

00:38:27.660 | more friendly

00:38:28.300 | towards debtors,

00:38:29.000 | which gives

00:38:29.560 | them more

00:38:29.900 | breathing space

00:38:31.060 | to innovate,

00:38:32.100 | but also to

00:38:32.660 | fail and to

00:38:33.260 | innovate again.

00:38:33.940 | And that makes

00:38:35.240 | a big difference.

00:38:35.880 | So it's all

00:38:37.120 | about a

00:38:37.540 | spectrum,

00:38:37.960 | right?

00:38:38.780 | But you

00:38:39.440 | can't have

00:38:39.840 | it both

00:38:40.320 | ways.

00:38:40.600 | We don't

00:38:42.100 | often enough

00:38:42.840 | have that

00:38:43.760 | nationwide

00:38:44.700 | conversation

00:38:45.520 | about what

00:38:46.220 | we want to

00:38:46.660 | be as a

00:38:47.120 | country.

00:38:47.420 | There's just

00:38:48.360 | a group of

00:38:49.120 | people yelling,

00:38:49.880 | we don't

00:38:50.560 | want billionaires,

00:38:51.440 | and another

00:38:52.380 | group saying,

00:38:53.620 | we don't want

00:38:54.240 | communists or

00:38:55.400 | whatever,

00:38:55.640 | it's a very

00:38:56.160 | trivialized

00:38:56.940 | kind of

00:38:57.500 | chanting,

00:38:58.020 | but there

00:38:59.260 | is a

00:38:59.540 | balance,

00:38:59.880 | there is a

00:39:00.380 | spectrum,

00:39:00.760 | and you

00:39:01.120 | get to

00:39:01.500 | decide.

00:39:02.020 | Do you

00:39:04.080 | like the

00:39:04.680 | nice things,

00:39:05.520 | the nice

00:39:06.240 | toys?

00:39:07.120 | And the

00:39:07.500 | power that

00:39:07.980 | the U.S.

00:39:08.400 | has.

00:39:08.760 | And the

00:39:09.220 | power,

00:39:09.580 | the geopolitical

00:39:10.420 | power,

00:39:10.740 | the military

00:39:11.300 | power,

00:39:11.820 | cultural power,

00:39:13.200 | influence on the

00:39:13.940 | rest of the

00:39:14.240 | world?

00:39:14.500 | Yeah,

00:39:14.900 | you get to

00:39:15.340 | choose which

00:39:15.940 | do you

00:39:16.540 | want.

00:39:16.800 | So the

00:39:19.740 | first time

00:39:20.360 | you went

00:39:21.180 | to U.S.,

00:39:22.400 | what was

00:39:22.800 | that like?

00:39:23.300 | You mentioned

00:39:23.920 | Harvard.

00:39:24.560 | how did

00:39:24.860 | that change

00:39:25.240 | your

00:39:25.360 | understanding

00:39:25.740 | of the

00:39:25.980 | world?

00:39:26.200 | Well,

00:39:28.580 | it's funny

00:39:29.220 | that we're

00:39:29.600 | talking about

00:39:30.100 | this now

00:39:30.560 | because I

00:39:31.180 | was able

00:39:31.740 | to go to

00:39:32.180 | the U.S.

00:39:32.660 | on a scholarship

00:39:33.400 | to an American

00:39:34.060 | high school

00:39:34.480 | because the U.S.

00:39:35.600 | at that time

00:39:36.400 | was open arms,

00:39:37.680 | all open arms

00:39:38.440 | towards international

00:39:39.220 | students.

00:39:40.600 | They kind of

00:39:41.440 | wanted to be

00:39:42.280 | the country

00:39:43.360 | that was

00:39:44.460 | going to

00:39:45.220 | educate

00:39:45.960 | the future

00:39:46.920 | leaders of

00:39:47.420 | the world

00:39:47.880 | and their

00:39:48.780 | elitist

00:39:49.220 | institutions

00:39:50.360 | like Harvard

00:39:51.740 | was really

00:39:52.800 | going to be,

00:39:53.440 | you know,

00:39:53.800 | they're the

00:39:54.080 | center of the

00:39:54.520 | world.

00:39:54.740 | So they

00:39:55.660 | welcomed

00:39:56.160 | students like

00:39:57.140 | me and

00:39:57.460 | many,

00:39:57.660 | many others

00:39:58.380 | to be

00:39:59.280 | exchange

00:39:59.660 | students

00:40:00.120 | to study

00:40:00.700 | in the

00:40:01.240 | U.S.

00:40:02.460 | and we

00:40:03.600 | thought,

00:40:03.900 | wow,

00:40:04.400 | we've never

00:40:05.120 | seen a

00:40:05.640 | more generous

00:40:06.340 | country.

00:40:07.000 | And I

00:40:09.400 | was able

00:40:09.900 | to go

00:40:11.360 | to high

00:40:11.620 | school,

00:40:12.000 | an American

00:40:12.560 | high school

00:40:12.880 | and live

00:40:13.120 | with an

00:40:13.380 | American

00:40:13.620 | family,

00:40:14.080 | which was,

00:40:14.860 | wow,

00:40:15.820 | can I say

00:40:16.520 | a big

00:40:17.420 | change

00:40:18.160 | from China,

00:40:20.060 | not only

00:40:20.680 | because I

00:40:21.160 | was plucked

00:40:21.680 | from the

00:40:22.260 | Communist

00:40:22.820 | Youth League

00:40:23.760 | party and

00:40:25.180 | then straight

00:40:25.720 | to supporting

00:40:26.320 | their Democratic

00:40:27.040 | campaign

00:40:27.520 | because the

00:40:28.600 | host family

00:40:29.020 | was running

00:40:29.440 | for state

00:40:30.000 | attorney general

00:40:30.560 | in New

00:40:30.800 | York.

00:40:31.320 | I was

00:40:32.640 | going to

00:40:33.040 | these

00:40:33.240 | conventions

00:40:33.720 | and handing

00:40:34.300 | out flyers

00:40:34.940 | and trying

00:40:35.220 | to get

00:40:35.480 | votes

00:40:35.800 | in,

00:40:35.940 | I don't

00:40:36.240 | know,

00:40:36.380 | in Chinatown

00:40:37.360 | or something.

00:40:37.780 | But it

00:40:39.640 | was so

00:40:40.880 | interesting

00:40:41.600 | to see

00:40:42.680 | that's how

00:40:43.200 | the system

00:40:43.600 | worked.

00:40:44.120 | But in

00:40:45.880 | the course

00:40:46.200 | of doing

00:40:46.560 | that,

00:40:46.940 | I realized

00:40:47.740 | that people

00:40:49.100 | had a very

00:40:49.560 | simplistic

00:40:49.940 | understanding

00:40:50.500 | about China.

00:40:51.120 | And that's

00:40:51.800 | probably,

00:40:52.260 | even when I

00:40:54.920 | was 14,

00:40:55.720 | I decided

00:40:56.600 | that one

00:40:57.720 | thing I

00:40:58.040 | wanted to

00:40:58.480 | do was

00:40:59.520 | to

00:41:00.180 | dispel

00:41:01.840 | some of

00:41:02.480 | these

00:41:02.680 | deep

00:41:02.980 | myths

00:41:03.380 | about

00:41:03.980 | China

00:41:04.380 | because

00:41:04.820 | the

00:41:05.220 | China

00:41:05.520 | that

00:41:05.840 | they

00:41:06.100 | knew,

00:41:06.420 | and again,

00:41:06.960 | it was all

00:41:07.400 | the three

00:41:07.800 | Ts back

00:41:08.800 | in the late

00:41:09.140 | 1990s,

00:41:09.920 | Taiwan,

00:41:11.420 | Tibet,

00:41:12.580 | and Tiananmen

00:41:13.560 | Square.

00:41:13.780 | That's,

00:41:14.220 | that's,

00:41:14.780 | they thought

00:41:15.700 | about China,

00:41:16.100 | they thought

00:41:16.500 | about these

00:41:16.880 | three things.

00:41:17.480 | And I was

00:41:18.380 | like,

00:41:18.500 | well,

00:41:18.640 | that's

00:41:18.860 | strange

00:41:19.240 | because

00:41:19.700 | that's

00:41:20.320 | not how

00:41:21.060 | I'm

00:41:21.800 | feeling

00:41:22.160 | in China

00:41:22.660 | with all

00:41:23.140 | this,

00:41:23.460 | you know,

00:41:24.120 | bidding for

00:41:24.980 | the Olympics

00:41:25.520 | before 2000

00:41:26.600 | and all

00:41:27.280 | these

00:41:27.620 | buildings

00:41:28.140 | going up

00:41:28.720 | and down,

00:41:29.140 | all this

00:41:29.520 | excitement

00:41:30.020 | about,

00:41:31.100 | you know,

00:41:31.340 | joining the

00:41:31.920 | WTO,

00:41:32.780 | all these

00:41:33.420 | radical

00:41:33.820 | reforms

00:41:34.360 | that are

00:41:34.700 | taking place

00:41:36.840 | and then

00:41:37.480 | all this

00:41:37.880 | effervescence

00:41:38.740 | that you

00:41:39.040 | feel in the

00:41:39.580 | air.

00:41:39.820 | It's not

00:41:40.620 | GDP growth

00:41:41.300 | as numbers,

00:41:41.860 | you actually

00:41:42.360 | see it.

00:41:43.040 | I said,

00:41:44.280 | this is

00:41:44.760 | really,

00:41:45.220 | you know,

00:41:45.760 | and they're

00:41:46.160 | describing China

00:41:46.840 | as if it

00:41:47.220 | was a place

00:41:48.120 | shredded

00:41:48.440 | white terror.

00:41:49.320 | And so

00:41:50.660 | I thought,

00:41:51.100 | hmm,

00:41:51.360 | that's

00:41:51.860 | interesting.

00:41:52.320 | There's a

00:41:53.720 | big gap,

00:41:54.100 | big gap

00:41:55.220 | of

00:41:55.380 | understanding.

00:41:55.900 | And even

00:41:57.140 | today,

00:41:57.660 | that many

00:41:59.060 | years later,

00:41:59.880 | people know

00:42:02.880 | China a little

00:42:03.500 | bit more,

00:42:03.840 | but the

00:42:04.200 | sentiment

00:42:04.480 | hasn't

00:42:05.020 | profoundly

00:42:05.480 | changed.

00:42:05.860 | It's still

00:42:06.260 | the three

00:42:06.660 | Ts,

00:42:07.040 | I feel

00:42:07.660 | like.

00:42:07.960 | Some

00:42:09.500 | variation

00:42:09.980 | of that.

00:42:10.440 | So what

00:42:11.580 | about the

00:42:12.480 | level of

00:42:12.880 | misunderstanding

00:42:13.300 | of Chinese

00:42:14.060 | people of

00:42:15.320 | the West?

00:42:15.880 | Is there

00:42:16.660 | a similar

00:42:17.140 | level of

00:42:17.740 | misunderstanding

00:42:18.160 | the other

00:42:18.700 | direction as

00:42:19.300 | well?

00:42:19.480 | I don't

00:42:20.560 | think to

00:42:21.140 | the same

00:42:21.460 | extent,

00:42:21.940 | because

00:42:22.380 | there's

00:42:22.900 | Hollywood.

00:42:23.240 | They can

00:42:24.820 | see

00:42:25.120 | daily

00:42:25.520 | American

00:42:25.900 | life,

00:42:26.240 | although

00:42:26.620 | it might

00:42:27.340 | not be

00:42:27.720 | totally

00:42:28.240 | realistic.

00:42:29.240 | There was

00:42:31.940 | a huge

00:42:32.720 | amount of

00:42:33.480 | admiration

00:42:34.040 | of U.S.

00:42:36.200 | technology,

00:42:37.640 | innovation,

00:42:38.120 | but also

00:42:38.480 | the American

00:42:38.920 | dream.

00:42:39.260 | I think

00:42:41.800 | our

00:42:42.340 | newspapers,

00:42:43.040 | even though

00:42:44.040 | there's

00:42:44.400 | bias

00:42:44.760 | everywhere,

00:42:45.300 | is not

00:42:46.540 | focused only

00:42:48.160 | on reporting

00:42:48.700 | the really

00:42:49.080 | bad stuff

00:42:49.700 | and portraying

00:42:50.560 | a negative

00:42:50.960 | side.

00:42:51.640 | I think

00:42:52.080 | these few

00:42:52.500 | years have

00:42:52.800 | been a little

00:42:53.160 | bit

00:42:53.320 | different,

00:42:53.680 | but so

00:42:54.500 | many

00:42:54.720 | students

00:42:55.160 | went to

00:42:55.520 | the U.S.,

00:42:56.380 | right?

00:42:56.640 | So many

00:42:57.660 | people

00:42:58.060 | traveled to

00:42:58.680 | the U.S.,

00:42:59.420 | and this

00:43:00.480 | is an

00:43:00.740 | interesting

00:43:00.960 | thing.

00:43:01.480 | I've

00:43:02.820 | rarely met

00:43:03.820 | an

00:43:04.260 | American

00:43:04.700 | who has

00:43:06.420 | been to

00:43:07.080 | China

00:43:07.440 | and who

00:43:08.540 | still goes

00:43:09.420 | on about

00:43:10.140 | how bad

00:43:10.840 | China is.

00:43:11.500 | I think

00:43:12.820 | that going

00:43:13.640 | to China

00:43:14.240 | makes all

00:43:15.060 | the difference.

00:43:15.600 | I feel

00:43:16.300 | that's one

00:43:17.120 | of the big

00:43:17.520 | gaps of

00:43:18.240 | my life

00:43:18.660 | that I

00:43:18.920 | need to

00:43:19.360 | alleviate

00:43:20.340 | is to

00:43:20.820 | travel

00:43:21.140 | in a

00:43:21.560 | real way

00:43:22.060 | for a

00:43:22.380 | long time

00:43:22.940 | to really

00:43:23.580 | experience

00:43:24.000 | the people

00:43:24.520 | and the

00:43:24.820 | cultures.

00:43:25.180 | And China

00:43:26.440 | is a big

00:43:26.840 | place.

00:43:27.200 | Go dig

00:43:29.060 | deep and

00:43:29.580 | don't just

00:43:30.100 | go to

00:43:30.320 | Beijing and

00:43:30.760 | Shanghai.

00:43:31.000 | Let's go

00:43:33.840 | back to

00:43:34.220 | the economics.

00:43:34.740 | So can

00:43:35.840 | you just

00:43:36.420 | dig a little

00:43:38.860 | deeper on the

00:43:39.680 | relationship in

00:43:40.800 | China between

00:43:41.460 | the government

00:43:41.940 | and the

00:43:42.220 | companies in

00:43:42.800 | the private

00:43:43.120 | sector?

00:43:43.480 | So how

00:43:44.480 | much freedom

00:43:45.400 | do companies

00:43:46.460 | have?

00:43:48.800 | Another big

00:43:49.400 | misunderstanding

00:43:50.100 | and a

00:43:50.680 | fundamental

00:43:51.000 | one is

00:43:52.020 | that people

00:43:53.040 | somehow think

00:43:53.960 | that the

00:43:54.280 | state suppresses

00:43:55.240 | the private

00:43:55.680 | sector.

00:43:56.000 | It's not

00:43:57.360 | at all as

00:43:58.280 | simple as

00:43:58.680 | that.

00:43:59.040 | For the

00:44:00.520 | most part,

00:44:00.980 | if we look

00:44:01.380 | at the

00:44:01.600 | local

00:44:01.800 | government's

00:44:02.300 | incentive

00:44:02.600 | system,

00:44:03.060 | they want

00:44:03.620 | to help

00:44:04.100 | the best

00:44:04.700 | private

00:44:05.400 | companies,

00:44:06.420 | which are

00:44:07.100 | the most

00:44:07.400 | promising,

00:44:07.840 | because it

00:44:08.640 | makes them

00:44:08.960 | look good.

00:44:09.360 | It adds

00:44:09.800 | to their

00:44:10.140 | GDP.

00:44:10.440 | It adds

00:44:10.840 | to the

00:44:11.180 | jobs,

00:44:11.540 | investment.

00:44:12.100 | They are

00:44:13.400 | so helpful

00:44:14.020 | to these

00:44:14.520 | private

00:44:14.800 | companies.

00:44:15.220 | Actually,

00:44:15.640 | I know

00:44:16.980 | many of

00:44:17.440 | these local

00:44:18.380 | government

00:44:18.700 | officials

00:44:19.120 | working

00:44:19.600 | tirelessly

00:44:20.380 | day and

00:44:21.200 | night,

00:44:21.520 | especially

00:44:22.340 | in bad

00:44:23.560 | times,

00:44:24.080 | to coordinate

00:44:25.680 | between debtors

00:44:26.500 | and creditors

00:44:27.400 | and to

00:44:27.900 | smooth out

00:44:28.840 | and to

00:44:29.120 | find

00:44:29.280 | relationships

00:44:29.860 | with banks.

00:44:30.860 | They want

00:44:31.660 | to help

00:44:31.860 | these private

00:44:32.260 | companies,

00:44:32.640 | because again,

00:44:33.300 | their incentives

00:44:34.420 | are aligned.

00:44:35.700 | DeepSeek is

00:44:37.460 | a private

00:44:37.780 | company,

00:44:38.220 | by the way,

00:44:38.900 | so it

00:44:40.080 | has done

00:44:40.620 | the country

00:44:41.360 | proud,

00:44:42.180 | and why

00:44:43.440 | would the

00:44:43.880 | state want

00:44:44.300 | to go and

00:44:44.760 | suppress

00:44:45.140 | these private

00:44:45.680 | companies,

00:44:46.100 | which ultimately

00:44:46.900 | represents a

00:44:49.500 | beacon of

00:44:49.760 | success for

00:44:50.280 | China.

00:44:50.620 | Now,

00:44:53.020 | on how much

00:44:53.900 | freedom they

00:44:54.420 | have,

00:44:54.820 | it's really

00:44:55.380 | ranged from

00:44:56.600 | too much

00:44:57.660 | freedom,

00:44:58.160 | that's part of

00:44:59.160 | the problem,

00:44:59.700 | where you have

00:45:01.000 | defense companies

00:45:01.920 | buying art

00:45:02.640 | auction houses,

00:45:03.500 | real estate

00:45:04.480 | companies like

00:45:05.140 | Evergrande

00:45:05.940 | buying soccer

00:45:06.940 | clubs,

00:45:07.480 | doing EVs,

00:45:08.940 | companies

00:45:11.120 | investing in

00:45:12.920 | real estate

00:45:13.320 | that has

00:45:13.640 | nothing to do

00:45:14.440 | with their

00:45:14.760 | core business,

00:45:15.440 | that's how

00:45:16.160 | much latitude

00:45:16.700 | were given

00:45:17.180 | to private

00:45:17.600 | companies,

00:45:18.060 | and there

00:45:18.840 | were consequences.

00:45:19.940 | They were

00:45:21.540 | not reined in.

00:45:22.120 | And then you

00:45:22.780 | go to the

00:45:23.300 | other extreme

00:45:24.180 | where they're

00:45:25.340 | scolded,

00:45:25.700 | they're reprimanded,

00:45:26.780 | they're reined in,

00:45:27.720 | and they're kind

00:45:28.660 | of folded into

00:45:29.420 | submission.

00:45:29.840 | So that is

00:45:31.600 | the whole

00:45:32.040 | spectrum.

00:45:32.500 | You have the

00:45:33.340 | whole range.

00:45:34.120 | But I guess

00:45:34.800 | what we're

00:45:35.280 | really getting

00:45:35.940 | at is it

00:45:37.400 | is a country

00:45:38.020 | that is

00:45:39.160 | moving from

00:45:40.320 | a no rule

00:45:42.000 | of law or

00:45:42.660 | very little

00:45:43.320 | rule of law,

00:45:44.220 | very immature

00:45:45.020 | markets to

00:45:45.920 | something that

00:45:46.700 | is being

00:45:47.640 | gradually

00:45:48.400 | established,

00:45:51.620 | bankruptcy laws,

00:45:53.000 | you know,

00:45:53.440 | corruption laws,

00:45:54.640 | rules and

00:45:56.060 | regulations on

00:45:57.480 | what's possible.

00:45:58.360 | One interesting

00:45:59.800 | point is that

00:46:00.940 | in China,

00:46:03.060 | you ask the

00:46:05.320 | companies to

00:46:05.960 | innovate first,

00:46:06.540 | and then you

00:46:07.240 | regulate after,

00:46:08.360 | right?

00:46:09.160 | So that has

00:46:10.520 | led to things

00:46:11.280 | like P2P

00:46:12.040 | platforms,

00:46:12.960 | you know,

00:46:13.600 | it's led to

00:46:14.220 | lots of

00:46:14.680 | kind of

00:46:14.940 | financial

00:46:15.360 | innovations,

00:46:16.060 | some of

00:46:16.980 | which has

00:46:17.340 | actually been

00:46:18.020 | very helpful

00:46:19.220 | and good,

00:46:19.720 | some of which

00:46:20.620 | have been

00:46:20.980 | disastrous.

00:46:21.600 | But the

00:46:22.580 | intention to

00:46:23.260 | regulate after

00:46:24.300 | the fact is

00:46:25.700 | to really not

00:46:26.820 | slow down or

00:46:28.140 | hinder the

00:46:28.800 | innovation.

00:46:29.100 | This is a

00:46:29.520 | very different

00:46:29.900 | approach from

00:46:30.400 | Europe.

00:46:30.740 | You regulate

00:46:31.460 | first,

00:46:31.960 | and then,

00:46:32.860 | you know,

00:46:33.100 | companies have

00:46:33.980 | to work around

00:46:34.680 | that.

00:46:35.000 | So this is

00:46:37.360 | why Chinese

00:46:37.960 | economy is so

00:46:38.680 | complex.

00:46:39.420 | you cannot

00:46:39.940 | reduce it

00:46:40.680 | to simply

00:46:41.200 | a statement

00:46:41.600 | saying the

00:46:42.100 | state is

00:46:42.680 | unhelpful for

00:46:43.400 | the private

00:46:43.840 | or something

00:46:45.520 | like that.

00:46:46.140 | There are

00:46:47.780 | certain sectors

00:46:48.440 | where the

00:46:48.840 | SOEs dominate,

00:46:49.840 | right, when it

00:46:51.240 | comes to

00:46:51.540 | national security

00:46:52.200 | in terms of

00:46:52.680 | energy.

00:46:53.000 | But let's

00:46:53.840 | not focus on

00:46:54.480 | these few

00:46:55.040 | sectors.

00:46:55.500 | By and large,

00:46:56.720 | most of the

00:46:58.140 | economy, if you

00:46:58.960 | actually admit to

00:47:00.480 | the fact that

00:47:01.040 | China is highly

00:47:01.560 | innovative and

00:47:02.180 | highly entrepreneurial,

00:47:03.100 | means that it

00:47:04.140 | must be the

00:47:04.740 | private sector that

00:47:05.600 | is driving the

00:47:06.160 | show.

00:47:06.340 | Innovate

00:47:07.260 | first,

00:47:07.540 | regulate after,

00:47:08.960 | really

00:47:09.260 | interesting.

00:47:09.700 | I also,

00:47:11.720 | in my mind,

00:47:12.820 | am contrasting

00:47:14.620 | it with the

00:47:15.260 | way the

00:47:15.700 | Soviet Union

00:47:16.340 | and Russia

00:47:17.060 | since operated.

00:47:18.040 | It doesn't

00:47:19.020 | sound at all

00:47:19.780 | like this

00:47:20.740 | model.

00:47:21.100 | And it's

00:47:22.040 | interesting that

00:47:22.980 | countries that

00:47:23.780 | at least on

00:47:24.160 | the surface

00:47:24.860 | had a similar

00:47:26.140 | cultural

00:47:27.040 | communist

00:47:27.800 | problems,

00:47:28.860 | you know,

00:47:29.420 | the bureaucracies

00:47:30.140 | that form inside

00:47:30.820 | the communist

00:47:31.600 | state,

00:47:31.980 | it just seems

00:47:32.960 | that China

00:47:34.720 | broke away

00:47:35.500 | from that

00:47:35.920 | somehow,

00:47:36.300 | that don't

00:47:37.140 | understand exactly

00:47:38.080 | what happened.

00:47:38.860 | In the West,

00:47:39.780 | they grouped

00:47:40.320 | these economies

00:47:41.480 | together as if

00:47:42.880 | they're the same

00:47:43.320 | thing.

00:47:43.580 | No, it's not the

00:47:44.400 | same at all.

00:47:44.900 | There's so many

00:47:45.520 | differences,

00:47:46.000 | so much more

00:47:47.320 | flexibility.

00:47:47.820 | You can have

00:47:49.440 | dynamic

00:47:50.000 | entrepreneurialism

00:47:50.920 | at the same

00:47:51.440 | time have

00:47:52.100 | socialist

00:47:52.640 | characteristics,

00:47:53.620 | and I think

00:47:54.080 | this is what

00:47:54.620 | China has been

00:47:55.540 | able to shape

00:47:56.680 | and mold,

00:47:57.260 | a unique model

00:47:58.660 | that balances

00:47:59.680 | between

00:48:00.080 | government

00:48:00.480 | industry,

00:48:01.080 | between

00:48:02.280 | state

00:48:03.220 | coordination

00:48:03.780 | and

00:48:04.060 | market

00:48:04.360 | mechanisms

00:48:04.900 | and

00:48:05.660 | between

00:48:05.960 | individualism

00:48:06.760 | and

00:48:06.900 | communalism.

00:48:07.480 | It's not

00:48:08.020 | necessarily

00:48:08.340 | black and

00:48:08.780 | white.

00:48:08.920 | You can have

00:48:09.380 | all these

00:48:09.920 | things

00:48:10.400 | at the

00:48:11.200 | same

00:48:11.360 | time.

00:48:11.680 | So what

00:48:12.540 | are the

00:48:12.740 | pros and

00:48:13.100 | cons of

00:48:13.440 | being an

00:48:13.760 | entrepreneur

00:48:14.140 | in China

00:48:14.620 | versus

00:48:14.940 | the West?

00:48:15.380 | Like if

00:48:15.720 | you get

00:48:15.940 | a choice,

00:48:16.480 | you have

00:48:17.120 | a dream,

00:48:17.640 | you want

00:48:17.980 | to build

00:48:18.320 | epic

00:48:18.720 | things,

00:48:19.320 | and you

00:48:21.220 | get to

00:48:21.500 | choose

00:48:21.840 | where to

00:48:22.360 | start that

00:48:22.800 | business,

00:48:23.240 | what are

00:48:23.700 | the pros

00:48:24.060 | and cons

00:48:24.480 | of each

00:48:24.980 | path?

00:48:26.660 | In China,

00:48:27.000 | the speed

00:48:27.600 | is just

00:48:28.260 | awe-inspiring.

00:48:29.300 | You have

00:48:30.260 | a good

00:48:30.460 | idea,

00:48:30.860 | you implement

00:48:31.580 | it,

00:48:32.140 | you realize

00:48:33.060 | your dream

00:48:33.340 | very fast

00:48:33.840 | because there's

00:48:34.200 | also the

00:48:34.680 | support system,

00:48:35.360 | right?

00:48:35.620 | The infrastructure

00:48:36.140 | there,

00:48:36.500 | the digital

00:48:36.960 | infrastructure

00:48:37.400 | there,

00:48:37.680 | the engineers

00:48:38.220 | are there,

00:48:38.580 | the talent

00:48:39.000 | is there,

00:48:39.380 | and they're

00:48:39.600 | cheap,

00:48:39.900 | and the

00:48:41.240 | market

00:48:41.680 | competition

00:48:42.240 | is there

00:48:42.760 | to keep

00:48:43.340 | you going.

00:48:44.560 | The consumers

00:48:45.220 | give you a

00:48:46.080 | very,

00:48:46.260 | very fast

00:48:46.820 | feedback.

00:48:47.300 | Look at

00:48:48.460 | Xiaomi,

00:48:48.780 | it was making

00:48:49.460 | phones and

00:48:50.740 | now it makes

00:48:51.420 | one of the

00:48:51.860 | world's best

00:48:52.780 | EVs.

00:48:53.520 | 270,000

00:48:54.760 | cars sold

00:48:55.340 | in one

00:48:55.760 | day.

00:48:56.640 | a few

00:48:56.840 | days ago

00:48:57.300 | with a

00:48:57.840 | new

00:48:57.960 | model.

00:48:58.280 | They were

00:48:59.160 | phone makers.

00:48:59.720 | So there's

00:49:01.800 | an advantage

00:49:02.220 | to that,

00:49:02.660 | okay?

00:49:03.300 | But I

00:49:05.320 | would not

00:49:05.920 | feel safe,

00:49:06.600 | not because

00:49:08.520 | of danger

00:49:09.700 | of expropriation

00:49:10.540 | or nothing

00:49:11.100 | like that,

00:49:11.680 | but the

00:49:12.240 | bankruptcy laws

00:49:13.740 | are not

00:49:14.080 | there,

00:49:14.340 | right?

00:49:14.780 | It's not

00:49:15.720 | necessarily

00:49:16.000 | always fair

00:49:16.500 | competition.

00:49:17.060 | Things don't

00:49:18.480 | happen necessarily

00:49:19.520 | in an orderly

00:49:20.300 | manner.

00:49:20.720 | If you have

00:49:21.960 | a competitor,

00:49:22.460 | you can have

00:49:23.160 | a very evil

00:49:23.800 | competitor,

00:49:24.180 | and evil

00:49:24.600 | competitors

00:49:24.980 | are there

00:49:25.640 | everywhere in

00:49:26.340 | China.

00:49:26.640 | They would

00:49:27.820 | call the

00:49:28.580 | police on

00:49:29.000 | you,

00:49:29.100 | put you

00:49:29.440 | in jail,

00:49:29.840 | spread false

00:49:30.820 | rumors about

00:49:31.400 | you.

00:49:31.600 | Maybe that

00:49:32.060 | happens also

00:49:32.660 | in the U.S.,

00:49:33.160 | but there's

00:49:33.720 | a different

00:49:34.120 | level in

00:49:36.120 | China.

00:49:36.460 | And also,

00:49:38.560 | the mold that

00:49:40.160 | you can have

00:49:40.700 | to protect

00:49:41.260 | yourself,

00:49:41.720 | the IP

00:49:42.240 | protection,

00:49:42.760 | right?

00:49:43.460 | That's much

00:49:44.120 | weaker in

00:49:44.700 | China because

00:49:45.360 | the legal

00:49:45.700 | system is

00:49:46.280 | not very

00:49:46.700 | effective.

00:49:47.080 | You have

00:49:48.040 | a good idea

00:49:48.440 | you'll be

00:49:48.680 | copied.

00:49:49.480 | And there's

00:49:49.920 | a lot of

00:49:50.520 | work.

00:49:50.820 | You have

00:49:51.160 | to dine

00:49:52.520 | and wine

00:49:52.900 | with the

00:49:53.160 | local

00:49:53.360 | governments.

00:49:53.820 | I mean,

00:49:54.220 | that's not

00:49:54.940 | allowed anymore,

00:49:55.540 | by the way,

00:49:56.060 | but you

00:49:57.120 | dine and

00:49:57.560 | wine,

00:49:57.900 | figuratively

00:49:58.900 | speaking,

00:49:59.360 | you have

00:49:59.640 | to have

00:50:00.200 | a very

00:50:00.460 | good

00:50:00.620 | relationship

00:50:01.140 | with them.

00:50:01.620 | That's

00:50:01.900 | a different

00:50:02.280 | kind of

00:50:02.640 | work.

00:50:02.960 | the wine

00:50:03.640 | and dine

00:50:04.220 | and the

00:50:04.560 | evil

00:50:04.820 | competitors

00:50:05.420 | is an

00:50:06.360 | interesting

00:50:06.720 | challenge.

00:50:07.340 | That,

00:50:07.800 | in some

00:50:08.760 | maybe distant

00:50:09.500 | ways,

00:50:09.860 | akin to the

00:50:10.680 | problems of

00:50:11.260 | the Soviet

00:50:11.640 | Union.

00:50:12.120 | I think,

00:50:13.160 | I guess,

00:50:13.440 | in the

00:50:13.700 | United States,

00:50:14.340 | there's

00:50:15.300 | less of

00:50:16.760 | that.

00:50:17.280 | And I

00:50:17.600 | don't even

00:50:17.900 | know if

00:50:18.380 | that's

00:50:19.020 | based on

00:50:19.600 | laws,

00:50:20.280 | because there's

00:50:21.320 | a lot of

00:50:21.900 | lawyers in

00:50:22.440 | the U.S.

00:50:22.960 | that could

00:50:23.640 | do the

00:50:23.940 | same kind

00:50:24.340 | of evil

00:50:24.680 | competitor

00:50:25.100 | stuff

00:50:25.580 | technically.

00:50:26.080 | That's

00:50:26.380 | true.

00:50:26.560 | The potential

00:50:27.240 | negative

00:50:27.760 | ramifications

00:50:28.880 | are there.

00:50:29.380 | But I

00:50:30.060 | think personal

00:50:31.240 | protection is

00:50:32.340 | a big

00:50:32.740 | difference.

00:50:33.260 | If you

00:50:34.220 | make a

00:50:35.440 | mistake,

00:50:35.920 | if your

00:50:36.880 | company's

00:50:37.360 | not run

00:50:37.740 | well,

00:50:38.060 | you go

00:50:38.500 | to jail.

00:50:38.920 | I think

00:50:39.540 | that the

00:50:40.660 | U.S.

00:50:40.860 | is much,

00:50:41.400 | much more

00:50:41.780 | tolerant

00:50:42.140 | on

00:50:42.420 | entrepreneurship,

00:50:42.960 | entrepreneurs

00:50:43.880 | on failure.

00:50:44.660 | Since

00:50:45.580 | we're talking

00:50:46.000 | about it,

00:50:46.360 | there was

00:50:46.700 | a lot of

00:50:47.880 | controversy

00:50:48.280 | around Jack

00:50:48.840 | Ma

00:50:49.080 | disappearing,

00:50:50.000 | quote-unquote,

00:50:50.800 | and reappearing

00:50:52.340 | a bit

00:50:52.740 | later.

00:50:53.300 | And there's

00:50:53.800 | been rumors

00:50:54.940 | of some

00:50:55.540 | tense

00:50:56.180 | relationships

00:50:56.760 | that he

00:50:57.200 | has

00:50:57.600 | with the

00:50:59.120 | Chinese

00:51:00.020 | government.

00:51:00.540 | What is

00:51:02.420 | important

00:51:02.800 | to

00:51:02.940 | understand

00:51:03.240 | about

00:51:03.420 | the

00:51:03.580 | whole

00:51:03.760 | situation?

00:51:04.300 | To what

00:51:06.420 | degree

00:51:06.660 | is it

00:51:06.900 | reflective

00:51:07.340 | of the

00:51:08.140 | issues

00:51:08.700 | entrepreneurs

00:51:09.860 | face in

00:51:10.500 | China?

00:51:10.740 | In the

00:51:12.000 | U.S.,

00:51:13.080 | capital

00:51:13.580 | controls

00:51:14.080 | politics,

00:51:14.880 | one could

00:51:15.720 | argue.

00:51:16.040 | In China,

00:51:17.440 | it has to

00:51:18.520 | be the

00:51:18.760 | other way

00:51:19.060 | around.

00:51:19.360 | Capital

00:51:20.780 | must be

00:51:21.680 | reined in

00:51:22.240 | by politics.

00:51:23.180 | As part

00:51:24.440 | of the

00:51:24.640 | capitalist

00:51:24.980 | class,

00:51:25.520 | do not

00:51:26.180 | have the

00:51:27.200 | ambition

00:51:27.460 | to

00:51:28.060 | exceed

00:51:28.860 | the

00:51:29.040 | powers

00:51:29.380 | of

00:51:29.520 | the

00:51:29.660 | political

00:51:29.980 | class

00:51:30.640 | is

00:51:31.540 | really

00:51:31.760 | at

00:51:31.960 | the

00:51:32.080 | core

00:51:32.300 | of it,

00:51:32.740 | I'd

00:51:33.260 | say,

00:51:33.500 | the

00:51:33.940 | biggest

00:51:34.140 | difference

00:51:34.500 | between

00:51:34.840 | U.S.

00:51:35.140 | and China.

00:51:35.560 | There are

00:51:38.040 | important

00:51:38.720 | details

00:51:40.460 | that I

00:51:41.040 | think the

00:51:41.900 | West has

00:51:42.380 | not

00:51:43.520 | fully

00:51:44.580 | provided to

00:51:45.160 | the public,

00:51:45.720 | for instance,

00:51:47.620 | and financial,

00:51:48.440 | as innovative

00:51:49.660 | as it

00:51:51.220 | was,

00:51:51.720 | was doing

00:51:53.840 | banking

00:51:55.100 | jobs

00:51:57.180 | without being

00:51:57.840 | regulated

00:51:58.260 | like a

00:51:58.640 | bank.

00:51:58.880 | So,

00:51:59.780 | that obviously

00:52:01.120 | poses a

00:52:02.220 | host of

00:52:03.320 | financial

00:52:04.080 | stability

00:52:04.560 | questions

00:52:05.160 | and rules

00:52:07.000 | and regulations

00:52:07.580 | and so

00:52:07.940 | forth.

00:52:08.160 | So,

00:52:08.320 | the fact

00:52:08.660 | that IPO

00:52:09.200 | was halted,

00:52:10.160 | you could

00:52:11.240 | say that

00:52:11.640 | there were

00:52:12.080 | strong

00:52:12.840 | economic

00:52:13.840 | regulatory

00:52:14.340 | grounds

00:52:15.080 | for that.

00:52:16.400 | But I

00:52:17.840 | think more

00:52:18.340 | broadly

00:52:18.740 | speaking,

00:52:19.420 | if you're

00:52:20.540 | an entrepreneur,

00:52:21.060 | part of the

00:52:22.280 | capitalist

00:52:22.760 | class,

00:52:23.380 | keep your

00:52:25.120 | head down,

00:52:25.460 | make money,

00:52:25.920 | and that's

00:52:26.240 | fine.

00:52:26.540 | Right?

00:52:27.320 | Do some

00:52:28.620 | philanthropy.

00:52:29.000 | There are

00:52:30.180 | also many,

00:52:31.100 | many other

00:52:31.880 | billionaires

00:52:32.680 | that are

00:52:33.440 | just fine,

00:52:33.880 | that are

00:52:34.460 | actually

00:52:34.920 | very much

00:52:35.880 | in favor

00:52:36.620 | of the

00:52:38.060 | political

00:52:38.520 | leadership,

00:52:38.980 | and they

00:52:41.160 | do their

00:52:41.420 | thing.

00:52:41.700 | Now,

00:52:42.320 | I'm not

00:52:42.740 | saying what's

00:52:43.280 | right,

00:52:43.440 | what's

00:52:43.680 | wrong,

00:52:43.820 | it's just

00:52:44.180 | a very,

00:52:44.620 | very different

00:52:45.380 | culture and

00:52:46.280 | different

00:52:46.480 | country.

00:52:46.900 | In the

00:52:47.900 | U.S.,

00:52:48.400 | it's great

00:52:49.160 | to be

00:52:49.460 | colorful.

00:52:49.880 | I mean,

00:52:50.620 | you have

00:52:50.820 | a very,

00:52:51.080 | very colorful

00:52:51.740 | president,

00:52:52.660 | he would

00:52:53.420 | never have

00:52:54.100 | been able

00:52:54.940 | to make

00:52:55.440 | it in

00:52:56.200 | China.

00:52:56.820 | You have

00:52:57.900 | the likes

00:52:58.340 | of Elon

00:52:58.820 | Musk,

00:52:59.200 | it's great

00:52:59.800 | to be

00:53:00.060 | different,

00:53:00.320 | it's great

00:53:00.760 | to stand

00:53:01.400 | out.

00:53:01.600 | You do

00:53:02.220 | not want

00:53:02.660 | to stand

00:53:03.120 | out in

00:53:03.860 | China.

00:53:04.160 | So the

00:53:06.160 | moral of

00:53:06.540 | the story

00:53:07.060 | is that

00:53:07.900 | the top

00:53:09.020 | leadership

00:53:09.380 | understands

00:53:10.080 | that it

00:53:10.660 | needs these

00:53:11.280 | top

00:53:11.640 | entrepreneurs,

00:53:12.180 | the likes

00:53:12.860 | of Jack

00:53:13.260 | Ma,

00:53:13.420 | and they

00:53:15.800 | have done

00:53:16.760 | so many

00:53:17.180 | great things

00:53:17.680 | for the

00:53:18.020 | country,

00:53:18.240 | even for

00:53:18.620 | the world.

00:53:19.160 | But in

00:53:20.560 | China,

00:53:20.960 | garnering too

00:53:22.900 | much influence

00:53:24.260 | and power,

00:53:25.020 | even through

00:53:26.000 | social media,

00:53:26.820 | doesn't make

00:53:29.760 | you look that

00:53:30.380 | great.

00:53:30.680 | It's not a

00:53:31.200 | good thing for

00:53:31.720 | you personally.

00:53:32.260 | And there's a

00:53:33.340 | saying in

00:53:33.960 | China that you

00:53:35.180 | just don't want

00:53:35.540 | to be the

00:53:35.860 | tallest tree,

00:53:36.480 | right?

00:53:37.300 | The tallest

00:53:37.820 | tree gets

00:53:38.900 | the most

00:53:39.380 | wind.

00:53:40.360 | So I

00:53:40.880 | don't agree

00:53:41.260 | at all

00:53:41.640 | with the

00:53:42.200 | Western

00:53:43.160 | conclusion

00:53:43.900 | that this

00:53:45.040 | anecdote,

00:53:45.680 | this story

00:53:46.300 | has meant

00:53:46.760 | that

00:53:47.060 | entrepreneurs

00:53:47.620 | don't want

00:53:48.680 | to be

00:53:48.840 | entrepreneurs

00:53:49.240 | anymore.

00:53:49.600 | The young

00:53:50.000 | kids don't

00:53:50.580 | aspire to

00:53:51.180 | be people

00:53:51.580 | like Jack

00:53:51.980 | Ma.

00:53:52.080 | That's not

00:53:52.480 | true at

00:53:52.760 | all.

00:53:52.980 | The incentives

00:53:53.900 | are still

00:53:54.360 | there.

00:53:54.660 | It's a

00:53:55.800 | different

00:53:56.140 | kind of

00:53:57.060 | rich elite

00:53:57.960 | class in

00:53:58.460 | China.

00:53:58.680 | So on

00:54:00.460 | what

00:54:01.020 | dimensions

00:54:01.740 | do you

00:54:02.800 | think

00:54:03.300 | that the

00:54:04.520 | height of

00:54:04.940 | the tree

00:54:05.320 | is measured?

00:54:05.980 | Is it

00:54:08.920 | more about

00:54:09.700 | just mouthing

00:54:10.420 | off in

00:54:11.680 | public?

00:54:12.200 | So can

00:54:13.200 | you still

00:54:13.680 | be the

00:54:14.140 | richest

00:54:14.360 | person in

00:54:15.000 | China and

00:54:15.720 | actually not

00:54:16.760 | clash with

00:54:18.640 | the state?

00:54:19.000 | Absolutely.

00:54:19.400 | Don't be

00:54:20.560 | too outspoken.

00:54:21.300 | Don't try

00:54:22.220 | to get too

00:54:23.200 | much attention

00:54:23.700 | and too

00:54:24.020 | much influence.

00:54:24.800 | And just,

00:54:26.100 | you know,

00:54:26.500 | again, it's a

00:54:27.140 | cultural thing,

00:54:27.900 | but just keep

00:54:28.500 | your head

00:54:28.800 | down, be

00:54:29.200 | humble,

00:54:29.720 | you know,

00:54:31.480 | contribute to

00:54:32.200 | society, do

00:54:32.840 | philanthropy,

00:54:33.420 | work, collaborate

00:54:35.520 | with the

00:54:35.920 | government, and

00:54:36.980 | you're kind

00:54:37.600 | of okay.

00:54:38.120 | So the

00:54:39.400 | signal the

00:54:40.100 | Jack Ma

00:54:40.400 | situation sends

00:54:41.360 | to the

00:54:41.800 | entrepreneurs

00:54:42.180 | in China

00:54:42.800 | is not

00:54:45.180 | don't be an

00:54:46.480 | entrepreneur.

00:54:46.880 | It's more

00:54:47.820 | like don't

00:54:49.260 | be too

00:54:49.420 | colorful.

00:54:49.780 | Don't be

00:54:50.460 | too colorful

00:54:50.960 | and colorful

00:54:51.440 | means you

00:54:52.560 | can be

00:54:52.800 | colorful about

00:54:53.480 | the technical

00:54:54.260 | details of

00:54:55.780 | your

00:54:56.700 | technology,

00:54:57.320 | but don't

00:54:58.320 | be

00:54:58.520 | colorful

00:54:58.820 | about

00:54:59.220 | Xi Jinping

00:54:59.780 | and politics

00:55:02.120 | and just

00:55:02.820 | stay out.

00:55:03.360 | Yeah, stay

00:55:04.560 | out of

00:55:04.920 | politics, but

00:55:05.840 | I just want

00:55:06.420 | to say,

00:55:06.860 | that said,

00:55:08.020 | Jack Ma

00:55:08.660 | was really

00:55:09.960 | an emblem

00:55:10.620 | of extreme

00:55:14.320 | success,

00:55:14.940 | right, for

00:55:15.920 | China, and

00:55:16.600 | the Chinese

00:55:16.980 | entrepreneurs

00:55:17.460 | look up to

00:55:18.160 | him.

00:55:18.380 | That's really

00:55:19.800 | important.

00:55:20.140 | It was a

00:55:20.580 | signal that

00:55:21.400 | unfortunately

00:55:22.080 | was misconstrued

00:55:23.800 | by the

00:55:25.220 | side and

00:55:25.620 | also outside

00:55:26.360 | world, but

00:55:28.320 | it's laid a

00:55:28.960 | different path

00:55:29.580 | for what

00:55:30.160 | these

00:55:30.400 | entrepreneurs

00:55:30.860 | should be

00:55:31.380 | doing.

00:55:31.640 | What do

00:55:32.460 | you think

00:55:32.600 | happened to

00:55:33.080 | him?

00:55:33.200 | He's now

00:55:34.720 | living in

00:55:35.420 | Japan.

00:55:35.780 | That's by

00:55:36.480 | choice.

00:55:36.840 | By choice.

00:55:37.620 | He's an

00:55:38.980 | extremely

00:55:39.460 | fascinating

00:55:40.140 | character.

00:55:40.680 | If he were

00:55:42.220 | in the

00:55:42.500 | U.S., he'd

00:55:43.600 | thrive.

00:55:44.300 | Funny,

00:55:45.420 | witty,

00:55:45.880 | smart,

00:55:46.800 | wise,

00:55:47.720 | creative,

00:55:49.920 | loves a

00:55:50.740 | good life.

00:55:51.320 | I think

00:55:53.080 | it's by

00:55:53.540 | choice that

00:55:54.040 | he's roaming

00:55:54.500 | around the

00:55:54.880 | world,

00:55:55.180 | given that

00:55:57.260 | he has

00:55:57.820 | more free

00:55:58.160 | time.

00:55:58.420 | Do you

00:55:59.220 | think he

00:55:59.480 | loves China?

00:56:00.020 | All of

00:56:01.440 | them do.

00:56:01.840 | All of

00:56:03.100 | them do

00:56:03.400 | because their

00:56:04.440 | lives,

00:56:05.100 | their destinies

00:56:06.800 | were totally

00:56:07.480 | changed because

00:56:09.060 | of China,

00:56:10.080 | because of

00:56:10.620 | the government,

00:56:11.060 | because of

00:56:11.540 | Deng Xiaoping,

00:56:12.020 | because of

00:56:12.620 | everything.

00:56:13.100 | I know a

00:56:15.640 | lot of

00:56:15.840 | people from

00:56:16.220 | the former

00:56:16.920 | Soviet Union

00:56:17.600 | and there's

00:56:18.060 | a deep

00:56:18.400 | resentment.

00:56:18.840 | of

00:56:20.440 | broken

00:56:21.080 | promises,

00:56:21.680 | broken

00:56:22.420 | dreams.

00:56:23.040 | So that

00:56:24.040 | is not

00:56:24.640 | something you

00:56:25.120 | see.

00:56:25.240 | That's not

00:56:25.500 | how I would

00:56:25.920 | describe that

00:56:26.720 | generation and

00:56:27.920 | their feelings

00:56:28.500 | towards China.

00:56:29.500 | Of course,

00:56:30.280 | you always get

00:56:30.800 | exceptions,

00:56:31.260 | right?

00:56:31.540 | The ones who

00:56:31.940 | have moved

00:56:32.220 | to the

00:56:32.440 | U.S.

00:56:32.760 | and who

00:56:33.080 | wants a

00:56:34.460 | democracy,

00:56:34.980 | but by

00:56:35.740 | and large,

00:56:36.360 | people are

00:56:37.480 | deeply

00:56:38.000 | grateful to

00:56:39.160 | China,

00:56:39.480 | the Chinese

00:56:40.060 | government,

00:56:40.480 | the Communist

00:56:41.320 | Party,

00:56:41.720 | if you want

00:56:42.180 | to label

00:56:42.520 | it as

00:56:42.800 | that,

00:56:43.040 | because they've

00:56:44.520 | seen their

00:56:45.200 | lives be

00:56:46.240 | totally

00:56:46.780 | transformed.

00:56:47.440 | I mean,

00:56:48.040 | Jack Ma

00:56:48.580 | went from

00:56:49.220 | being a

00:56:49.680 | schoolteacher

00:56:50.180 | to becoming

00:56:50.880 | one of the

00:56:51.320 | most powerful

00:56:51.820 | people in

00:56:52.260 | the world.

00:56:52.560 | I mean,

00:56:52.860 | if you

00:56:53.600 | didn't have

00:56:54.200 | China,

00:56:54.880 | how could

00:56:56.400 | that have

00:56:56.740 | happened,

00:56:57.160 | right?

00:56:57.500 | Can you

00:56:58.700 | speak to the

00:56:59.100 | thing you

00:56:59.320 | mentioned a

00:56:59.720 | few times,

00:57:00.320 | which is the

00:57:00.940 | difference in

00:57:01.680 | American versus

00:57:03.020 | Chinese or

00:57:03.820 | maybe Western

00:57:04.400 | versus Chinese

00:57:05.160 | approach to

00:57:07.780 | entrepreneurship,

00:57:08.320 | zero to one

00:57:09.680 | versus one

00:57:10.340 | to N?

00:57:12.800 | maybe can you

00:57:13.620 | explain that

00:57:14.640 | and what

00:57:15.620 | will it

00:57:15.900 | take for

00:57:16.180 | China to

00:57:16.520 | become a

00:57:17.980 | consistent

00:57:18.640 | zero to

00:57:19.900 | one innovator

00:57:20.820 | for the

00:57:21.500 | individual

00:57:21.820 | entrepreneurs

00:57:22.280 | to create

00:57:23.080 | totally new

00:57:23.780 | things versus

00:57:25.000 | doing the

00:57:25.500 | things you

00:57:25.800 | mentioned about

00:57:26.260 | speed and

00:57:26.940 | scale?

00:57:28.480 | the U.S.

00:57:28.980 | will lead

00:57:29.660 | for some

00:57:30.120 | time on

00:57:31.140 | breakthroughs,

00:57:31.940 | on disruptive

00:57:33.280 | technologies,

00:57:34.120 | the zero to

00:57:34.920 | one technologies

00:57:35.820 | that ultimately

00:57:37.800 | change the

00:57:38.280 | world.

00:57:38.520 | But

00:57:39.980 | innovation is

00:57:42.220 | a process.

00:57:42.860 | It goes from

00:57:43.720 | invention to

00:57:45.280 | production and

00:57:46.120 | commercialization

00:57:46.980 | and diffusion,

00:57:47.620 | diffusing

00:57:48.900 | technology

00:57:49.500 | throughout all

00:57:50.200 | parts of the

00:57:50.720 | economy.

00:57:51.060 | And on those

00:57:52.100 | two stages,

00:57:52.780 | I think that

00:57:53.400 | China has a

00:57:53.840 | unique advantage,

00:57:54.480 | even if it

00:57:56.060 | still can't do

00:57:56.780 | the zero to

00:57:57.200 | one breakthroughs.

00:57:58.300 | because in

00:57:59.120 | the end,

00:57:59.520 | how much

00:58:00.220 | this technology

00:58:01.020 | is adopted

00:58:02.200 | by the

00:58:03.540 | countries and

00:58:04.180 | by the

00:58:04.780 | various parts

00:58:05.400 | of the

00:58:05.620 | economy is

00:58:06.280 | fundamentally

00:58:06.980 | crucial to

00:58:08.100 | how much

00:58:08.500 | productivity will

00:58:09.220 | be unleashed.

00:58:09.880 | And China's

00:58:11.900 | innovation

00:58:13.220 | currently,

00:58:14.060 | the DeepSeek

00:58:15.440 | is really one

00:58:16.260 | example, and I

00:58:16.940 | think it's

00:58:17.260 | really the

00:58:17.660 | beginning of

00:58:18.720 | the scale-based

00:58:19.940 | leading-edge

00:58:20.900 | technology,

00:58:21.740 | cost-cutting

00:58:22.940 | driven kind

00:58:24.160 | of innovation

00:58:24.920 | model,

00:58:25.420 | could be

00:58:26.460 | just as

00:58:27.280 | powerful

00:58:28.120 | maybe even

00:58:28.760 | more effective

00:58:29.420 | and powerful

00:58:30.380 | than the

00:58:31.160 | breakthroughs.

00:58:31.940 | And it's a

00:58:33.520 | very different

00:58:33.940 | approach to

00:58:35.260 | innovation.

00:58:35.820 | The Chinese

00:58:36.780 | companies focus

00:58:38.440 | on solutions,

00:58:39.980 | problem-solving.

00:58:41.020 | Again, that comes

00:58:41.760 | back to the

00:58:42.160 | education system,

00:58:42.960 | right?

00:58:43.160 | You're giving a

00:58:43.740 | problem, I'm

00:58:44.680 | going to find

00:58:45.040 | the answer,

00:58:45.560 | the Chinese

00:58:46.300 | students can

00:58:46.780 | do it.

00:58:47.080 | You want

00:58:47.860 | them to

00:58:48.400 | write their

00:58:49.540 | own question,

00:58:50.300 | they can't

00:58:50.780 | do it,

00:58:51.180 | right?

00:58:51.420 | I'm exaggerating

00:58:52.140 | a little bit,

00:58:52.540 | but it's a

00:58:52.940 | little like

00:58:53.320 | that, right?

00:58:53.740 | They see a

00:58:54.240 | problem,

00:58:54.480 | they're going

00:58:54.780 | to go after

00:58:55.340 | and they're

00:58:55.600 | going to find

00:58:55.860 | the best

00:58:56.180 | solution.

00:58:57.940 | And that's

00:58:58.740 | really, really

00:58:59.100 | useful, right?

00:58:59.740 | Because we

00:59:00.480 | don't need,

00:59:01.180 | or developing

00:59:02.020 | countries especially,

00:59:02.800 | don't need these

00:59:04.060 | frontier technologies

00:59:04.900 | that they can't

00:59:05.460 | use.

00:59:05.720 | And China

00:59:07.540 | currently has

00:59:08.160 | this AI

00:59:09.060 | plus program,

00:59:10.340 | which is about

00:59:10.920 | pushing AI

00:59:11.460 | into every

00:59:12.360 | single plausible

00:59:13.620 | sector with

00:59:15.080 | the help of

00:59:16.020 | the state.

00:59:17.080 | So, adoption

00:59:18.160 | diffusion is

00:59:19.360 | very important.

00:59:20.120 | Why China

00:59:21.360 | can't do

00:59:23.040 | breakthroughs or

00:59:24.140 | can't do

00:59:24.620 | zero-to-one

00:59:25.420 | technologies,

00:59:26.540 | I think,

00:59:27.740 | at the root

00:59:28.680 | of it,

00:59:29.020 | and there are

00:59:29.640 | some deeper,

00:59:30.540 | we talked

00:59:31.780 | about the

00:59:32.300 | proximate

00:59:33.900 | reasons,

00:59:34.860 | the short,

00:59:35.580 | flat,

00:59:35.980 | fast,

00:59:36.380 | for instance,

00:59:36.860 | right?

00:59:37.320 | You don't want

00:59:38.220 | to spend too

00:59:38.840 | much time on

00:59:39.620 | investigating

00:59:40.360 | something that

00:59:41.180 | you don't even

00:59:41.640 | know if it's

00:59:42.240 | commercially viable.

00:59:43.980 | So, basic

00:59:44.840 | research is still

00:59:45.660 | weaker than in

00:59:46.640 | the U.S.,

00:59:47.320 | universities,

00:59:47.920 | but also this

00:59:48.980 | kind of intrinsic

00:59:49.680 | motivation.

00:59:50.380 | It's very

00:59:51.080 | different,

00:59:51.440 | right?

00:59:51.680 | In China,

00:59:52.420 | it's driven by

00:59:53.040 | extrinsic

00:59:53.720 | motivation.

00:59:54.200 | You are

00:59:55.000 | rewarded by,

00:59:56.720 | you know,

00:59:57.300 | compensation,

00:59:58.260 | financial

00:59:58.800 | compensation,

00:59:59.320 | all these

00:59:59.840 | kind of

01:00:00.540 | extrinsic

01:00:01.100 | motivation is

01:00:01.800 | what drives

01:00:02.280 | you,

01:00:02.420 | but intrinsic

01:00:03.460 | motivation,

01:00:04.160 | pursuit of

01:00:04.820 | knowledge for

01:00:05.340 | knowledge's

01:00:05.800 | sake,

01:00:06.080 | right?

01:00:06.960 | That was

01:00:07.280 | deep in the

01:00:07.740 | Confucius

01:00:08.400 | philosophies,

01:00:09.080 | but of course,

01:00:09.580 | you know,

01:00:09.840 | poverty has

01:00:10.580 | changed all

01:00:11.100 | that.

01:00:11.400 | The profound

01:00:12.700 | commitment

01:00:13.400 | commitment to

01:00:14.300 | scholarship to

01:00:15.440 | research,

01:00:16.000 | which we know

01:00:17.200 | is very much

01:00:17.920 | true in the

01:00:19.260 | U.S.

01:00:19.540 | universities,

01:00:20.220 | that's,

01:00:21.180 | it's starting,

01:00:22.120 | it's starting,

01:00:22.840 | but it's not

01:00:23.380 | there.

01:00:23.660 | So,

01:00:25.200 | I think these

01:00:26.060 | two approaches

01:00:26.720 | are actually

01:00:27.140 | quite compatible

01:00:27.780 | with each

01:00:28.240 | other.

01:00:28.440 | I don't know

01:00:29.060 | what all this

01:00:29.680 | fuss is about,

01:00:30.460 | right?

01:00:30.840 | China uses

01:00:32.260 | technology very

01:00:33.140 | well,

01:00:33.400 | can scale up

01:00:35.040 | and reduce

01:00:35.680 | costs,

01:00:36.180 | and then it

01:00:36.820 | can spread it

01:00:37.360 | around,

01:00:37.820 | and the U.S.,

01:00:39.280 | you know,

01:00:39.500 | has,

01:00:39.760 | makes the

01:00:40.740 | highest value

01:00:41.440 | added by

01:00:42.100 | inventing

01:00:42.640 | these

01:00:42.840 | technologies,

01:00:43.460 | but,

01:00:45.080 | you know,

01:00:45.520 | again,

01:00:46.280 | diffusion

01:00:46.820 | matters.

01:00:47.240 | Well,

01:00:48.100 | yeah,

01:00:48.300 | the things

01:00:48.880 | you mentioned,

01:00:49.220 | the scale,

01:00:50.120 | the manufacturing,

01:00:51.320 | the diffusion,

01:00:52.240 | from a sort of

01:00:54.720 | economics perspective,

01:00:55.620 | you wonder which

01:00:56.640 | is the more

01:00:57.140 | important skill

01:00:58.040 | to have,

01:00:58.540 | and it seems

01:00:58.980 | like the

01:01:01.040 | cost-cutting,

01:01:02.480 | the efficient,

01:01:04.100 | large-scale,

01:01:04.860 | fast manufacture,

01:01:06.060 | the diffusion

01:01:07.340 | is much more

01:01:08.200 | important for the

01:01:09.180 | success and the

01:01:09.800 | growth of the

01:01:10.220 | economy.

01:01:10.580 | I think

01:01:11.480 | where it

01:01:11.880 | ultimately leads

01:01:12.820 | to an impact

01:01:13.500 | on the

01:01:14.020 | economy,

01:01:14.440 | that's

01:01:15.460 | more important.

01:01:17.120 | It's this

01:01:18.280 | persistent question

01:01:19.560 | we have,

01:01:20.080 | why don't we

01:01:21.620 | see the

01:01:22.080 | productivity in

01:01:22.680 | the numbers,

01:01:23.080 | right?

01:01:23.840 | You're in

01:01:24.880 | AI.

01:01:25.220 | AI,

01:01:25.780 | we had

01:01:26.300 | long periods

01:01:27.240 | of investment,

01:01:27.860 | right?

01:01:28.340 | You just

01:01:28.600 | don't,

01:01:28.980 | you haven't,

01:01:29.380 | you hadn't

01:01:29.840 | seen it in

01:01:30.380 | the numbers

01:01:30.800 | until maybe

01:01:31.460 | even recently,

01:01:32.000 | and it's

01:01:32.240 | still very

01:01:32.620 | slow.

01:01:33.000 | But China's

01:01:34.040 | pushing that

01:01:34.680 | in the sectors,

01:01:35.880 | you know,

01:01:36.220 | robotics,

01:01:37.780 | AI,

01:01:38.380 | cloud,

01:01:39.100 | industrial

01:01:39.900 | internet of

01:01:40.500 | things,

01:01:40.980 | and even

01:01:41.640 | companies like

01:01:42.200 | Huawei,

01:01:42.440 | I think it's

01:01:44.080 | gotten a little

01:01:44.620 | bit too bad

01:01:45.940 | of a rep

01:01:46.660 | in the U.S.,

01:01:47.940 | but American

01:01:49.140 | engineers working

01:01:49.920 | for Huawei

01:01:50.400 | said that it's,

01:01:51.180 | you know,

01:01:51.520 | they're so happy

01:01:52.120 | working for

01:01:52.580 | Huawei.

01:01:52.900 | The intent

01:01:53.640 | focus on

01:01:54.560 | innovation,

01:01:55.020 | but also on

01:01:55.640 | solution-driven

01:01:56.680 | innovations in

01:01:58.100 | Africa,

01:01:58.500 | in rural

01:01:59.380 | areas,

01:01:59.960 | really changes

01:02:00.600 | people's lives.

01:02:01.180 | It doesn't

01:02:01.500 | change the

01:02:01.880 | world,

01:02:02.080 | but it changes

01:02:02.760 | individuals'

01:02:03.320 | lives.

01:02:04.440 | What's

01:02:04.960 | the feeling

01:02:06.180 | that Chinese

01:02:07.480 | entrepreneurs

01:02:07.980 | have about

01:02:08.880 | copying

01:02:09.400 | technology?

01:02:10.280 | Because I

01:02:11.620 | think one

01:02:12.180 | of the

01:02:12.420 | cultural

01:02:12.680 | things in

01:02:13.220 | the U.S.

01:02:13.860 | is just

01:02:15.120 | really not

01:02:15.600 | respected if

01:02:16.320 | you copy.

01:02:16.800 | So,

01:02:17.720 | like,

01:02:17.880 | that's not

01:02:18.280 | seen,

01:02:18.760 | that's seen

01:02:19.280 | as a big

01:02:19.660 | problem.

01:02:20.120 | And is

01:02:22.380 | there some

01:02:22.740 | degree to

01:02:23.140 | where in

01:02:23.400 | China it's

01:02:23.940 | not?

01:02:24.240 | No,

01:02:25.180 | unfortunately,

01:02:25.800 | this is a

01:02:28.160 | big cultural

01:02:28.620 | difference.

01:02:29.200 | Our sense

01:02:30.540 | of property

01:02:31.580 | rights is

01:02:32.780 | actually quite

01:02:33.420 | different from

01:02:34.020 | the U.S.

01:02:34.460 | I think

01:02:34.760 | that will

01:02:35.100 | change over

01:02:35.580 | time,

01:02:36.020 | but absolutely

01:02:37.180 | you're right.

01:02:37.880 | They have no

01:02:40.440 | qualms about

01:02:40.980 | copying as

01:02:41.680 | long as it

01:02:42.020 | leads to

01:02:42.340 | success,

01:02:42.720 | right?

01:02:42.920 | That's the

01:02:43.280 | difference in

01:02:43.800 | values.

01:02:44.280 | As we

01:02:46.240 | mentioned in

01:02:46.640 | the beginning,

01:02:46.880 | you asked

01:02:47.420 | why the

01:02:48.800 | level of

01:02:49.180 | competition is

01:02:49.760 | so fierce.

01:02:50.300 | Well,

01:02:51.200 | they all do

01:02:52.260 | the same

01:02:52.560 | thing once

01:02:53.000 | they've seen

01:02:53.500 | one successful

01:02:54.360 | thing,

01:02:54.600 | everybody does

01:02:55.140 | the same

01:02:55.500 | thing.

01:02:55.760 | You'd have

01:02:56.500 | no respect

01:02:57.060 | for doing

01:02:57.540 | that in

01:02:57.920 | the U.S.,

01:02:58.460 | right?

01:02:58.740 | But in

01:02:59.580 | China it's

01:02:59.920 | all fine.

01:03:00.280 | But I

01:03:01.580 | think that over

01:03:02.100 | time it will

01:03:02.700 | change.

01:03:03.020 | Just give it

01:03:03.560 | a little

01:03:03.780 | bit of

01:03:04.060 | time.

01:03:04.240 | So do you

01:03:05.120 | fundamentally

01:03:05.520 | it's a bad

01:03:06.060 | thing?

01:03:06.420 | In the end,

01:03:08.280 | if China is

01:03:09.360 | all about

01:03:09.680 | innovation

01:03:10.120 | technology,

01:03:10.760 | you cannot

01:03:11.940 | not have

01:03:13.100 | very strict

01:03:13.880 | IP protection,

01:03:14.840 | right?

01:03:15.940 | And ultimately,

01:03:17.220 | again,

01:03:17.780 | we're still in

01:03:18.700 | the short,

01:03:19.020 | flat,

01:03:19.440 | fast stage,

01:03:21.680 | right?

01:03:22.120 | When we

01:03:22.840 | graduate from

01:03:23.880 | that stage,

01:03:24.880 | you're going

01:03:25.300 | to have very

01:03:25.700 | different views

01:03:26.540 | about these

01:03:27.120 | things.

01:03:27.400 | You're going to

01:03:27.740 | try to

01:03:28.160 | diversify and

01:03:28.740 | do different

01:03:29.180 | things.

01:03:29.620 | But again,

01:03:30.180 | it's a stage.

01:03:30.960 | Chinese people

01:03:31.840 | were hungry.

01:03:32.360 | They're still a

01:03:32.940 | little bit

01:03:33.180 | hungry.

01:03:33.440 | They're not

01:03:33.820 | going to be

01:03:34.100 | as hungry

01:03:34.560 | in the

01:03:34.960 | future.

01:03:35.260 | So can you

01:03:36.660 | describe the

01:03:37.080 | DeepSeek moment

01:03:37.840 | and DeepSeek

01:03:38.900 | as it represents

01:03:39.640 | what China is

01:03:40.260 | thinking about

01:03:40.660 | in the space

01:03:41.000 | of AI?

01:03:41.320 | And does

01:03:43.300 | China have

01:03:44.580 | a chance

01:03:45.140 | at outrunning

01:03:46.900 | US in the

01:03:48.400 | AI race?

01:03:49.060 | DeepSeek was a

01:03:51.060 | surprise to the

01:03:51.940 | world, but I

01:03:52.700 | don't think it

01:03:53.260 | was that much

01:03:54.260 | of a surprise

01:03:54.920 | to the same

01:03:55.620 | degree to

01:03:57.000 | the Chinese.

01:03:58.060 | And remember

01:04:00.640 | that DeepSeek

01:04:01.320 | happened in

01:04:02.200 | times of

01:04:03.240 | crisis,

01:04:05.220 | urgency,

01:04:05.920 | not in

01:04:06.440 | times of

01:04:07.120 | comfort.

01:04:07.620 | A lot of

01:04:09.460 | these

01:04:09.860 | technological

01:04:10.500 | breakthroughs

01:04:11.520 | and leapfrogging

01:04:12.760 | happens in

01:04:14.340 | times of

01:04:14.720 | crisis.

01:04:15.000 | This is

01:04:15.360 | called crisis

01:04:15.900 | innovation.

01:04:16.420 | And you

01:04:17.480 | got to

01:04:17.680 | thank the

01:04:17.980 | US for

01:04:18.420 | that,

01:04:18.700 | right?

01:04:19.460 | When the

01:04:20.380 | Chinese were

01:04:21.080 | comfortably

01:04:22.000 | importing chips

01:04:23.660 | from the

01:04:24.060 | US, the

01:04:24.840 | whole industry

01:04:25.540 | stalled for

01:04:26.080 | 20 years.

01:04:26.580 | I mean,

01:04:27.580 | why would

01:04:27.880 | you plow

01:04:28.280 | in billions,

01:04:28.800 | tens of

01:04:29.220 | billions,

01:04:29.440 | and even

01:04:29.800 | more when

01:04:30.440 | you can

01:04:30.660 | just import

01:04:31.400 | the best?

01:04:31.880 | You don't

01:04:32.660 | want to do

01:04:32.980 | your own

01:04:33.240 | innovation.

01:04:33.820 | It's because

01:04:35.220 | of these

01:04:35.580 | export controls,

01:04:36.440 | these sanctions

01:04:37.860 | on these

01:04:38.380 | companies that

01:04:39.060 | Chinese companies

01:04:39.900 | in the

01:04:40.220 | Chinese state

01:04:40.860 | felt an

01:04:42.020 | existential

01:04:42.580 | crisis a

01:04:44.200 | few years

01:04:44.940 | ago by

01:04:46.520 | being cut

01:04:47.800 | off from

01:04:48.220 | these critical

01:04:48.680 | components.

01:04:49.160 | And guess

01:04:49.520 | what happened?

01:04:50.000 | In a short

01:04:50.700 | amount of

01:04:51.060 | time, the

01:04:51.540 | degree of

01:04:52.600 | domestic

01:04:53.100 | capacity ramping

01:04:54.560 | up and

01:04:55.220 | catch up

01:04:55.740 | has been

01:04:56.700 | nothing short

01:04:57.480 | of remarkable.

01:04:58.160 | Again, thanks

01:04:59.380 | to US

01:05:01.480 | truculence on

01:05:02.640 | technology.

01:05:03.240 | Now, I'm

01:05:04.900 | sure there

01:05:05.200 | are many

01:05:05.680 | aspects of

01:05:06.260 | hyperbole

01:05:07.380 | related to

01:05:08.140 | DeepSeq,

01:05:08.720 | but it just

01:05:10.040 | shows you

01:05:10.680 | that the

01:05:11.620 | gap is much

01:05:12.260 | smaller between

01:05:13.440 | China and

01:05:13.960 | the US on

01:05:15.100 | leading-edge

01:05:15.500 | technologies than

01:05:16.300 | what was

01:05:16.580 | expected, that

01:05:17.600 | these export

01:05:18.260 | controls were

01:05:18.940 | not effective,

01:05:19.500 | they may have

01:05:20.460 | even backfired.

01:05:21.780 | And it

01:05:22.440 | shows you

01:05:22.840 | that China

01:05:23.380 | has this

01:05:25.100 | relentless

01:05:25.680 | focus on

01:05:27.500 | taking some

01:05:28.060 | of the

01:05:28.360 | existing

01:05:28.820 | technologies

01:05:29.540 | and using

01:05:31.380 | scale and

01:05:33.680 | the

01:05:34.680 | advantages to

01:05:36.800 | cut cost

01:05:37.580 | and to

01:05:38.280 | diffuse.

01:05:38.700 | And this

01:05:40.220 | is just the

01:05:40.940 | beginning.

01:05:41.260 | I think it

01:05:41.860 | will happen in

01:05:42.480 | many other

01:05:42.920 | industries as

01:05:43.600 | well, including

01:05:44.220 | in semiconductors.

01:05:46.120 | And that's

01:05:46.860 | the Chinese

01:05:47.220 | approach.

01:05:47.660 | Now, there's

01:05:50.440 | an interesting

01:05:51.360 | dilemma here,

01:05:52.320 | which is that

01:05:53.340 | this is happening

01:05:54.360 | in a time of

01:05:56.820 | extreme economic

01:05:58.180 | softness,

01:05:58.800 | slowdown,

01:05:59.880 | and missed

01:06:02.780 | uncertainty,

01:06:03.620 | trade wars,

01:06:04.680 | a lack of

01:06:07.140 | confidence,

01:06:07.660 | a slowdown in

01:06:09.600 | private investment

01:06:10.320 | and consumption,

01:06:10.960 | a withdrawal of

01:06:12.880 | foreign investment

01:06:13.540 | from China,

01:06:14.160 | especially the

01:06:14.940 | US venture,

01:06:15.900 | funding.

01:06:18.120 | Imagine what

01:06:20.160 | China would

01:06:20.860 | have been like,

01:06:21.520 | let's say,

01:06:22.480 | if the economy

01:06:23.140 | was doing better,

01:06:23.860 | right?

01:06:24.540 | But you could also

01:06:25.540 | argue that it's

01:06:26.500 | because people

01:06:27.520 | feel threatened

01:06:28.180 | that they make

01:06:29.000 | more leads.

01:06:29.820 | Now, I wish

01:06:30.820 | the world is not,

01:06:31.600 | we don't have to,

01:06:32.660 | you know,

01:06:32.920 | drive each other

01:06:33.880 | to the corners

01:06:34.580 | to do something

01:06:35.580 | great,

01:06:36.080 | but that is the

01:06:37.120 | reality.

01:06:37.560 | And I don't

01:06:39.800 | think that there's

01:06:40.800 | an easy say

01:06:41.400 | between who wins

01:06:42.260 | because I think

01:06:42.700 | the winning idea

01:06:43.760 | is part of the

01:06:44.740 | old playbook.

01:06:45.420 | right?

01:06:46.240 | You're all kind

01:06:47.020 | of part of a

01:06:47.620 | network.

01:06:48.040 | Different countries,

01:06:49.420 | different players

01:06:50.100 | have different

01:06:50.620 | choke points on

01:06:51.300 | each other.

01:06:51.740 | I don't think

01:06:52.540 | it's just about

01:06:53.040 | the US and

01:06:53.600 | China.

01:06:53.920 | And what's

01:06:56.720 | more,

01:06:57.100 | you use your

01:06:58.740 | leverage once

01:06:59.560 | and that leverage

01:07:00.900 | has a half-life.

01:07:01.860 | It becomes a lot

01:07:03.620 | less effective the

01:07:04.500 | second time around

01:07:05.120 | because other

01:07:05.620 | countries,

01:07:06.060 | other companies

01:07:06.660 | are going to

01:07:06.960 | try to substitute

01:07:07.520 | it away.

01:07:07.880 | You know,

01:07:08.620 | if China uses

01:07:09.840 | the rare earth

01:07:10.840 | leverage,

01:07:11.480 | which I think it

01:07:12.400 | is now a

01:07:13.140 | little bit,

01:07:13.660 | there will be

01:07:16.380 | alternatives and

01:07:17.120 | substitutes.

01:07:17.700 | Got to be very,

01:07:18.880 | very careful of

01:07:20.180 | what coercion

01:07:21.020 | leverage means.

01:07:21.800 | Same thing with

01:07:22.300 | the US,

01:07:22.800 | right?

01:07:23.560 | So I think this

01:07:24.740 | is all the old

01:07:25.700 | thinking of who

01:07:26.520 | wins,

01:07:26.760 | who dominates.

01:07:27.460 | I think we need

01:07:28.020 | a new playbook.

01:07:28.900 | So to you,

01:07:30.280 | maybe when you

01:07:31.440 | refer to Biden

01:07:32.060 | and Trump,

01:07:32.520 | if you go back

01:07:33.460 | to Biden,

01:07:33.860 | it would be the

01:07:34.380 | CHIPS Act.

01:07:34.900 | So the export

01:07:36.260 | controls created

01:07:38.100 | unintended,

01:07:39.040 | unexpected effect

01:07:40.820 | where it had

01:07:41.400 | the reverse

01:07:42.100 | geopolitical effect.

01:07:43.880 | I hope it was

01:07:44.040 | unintentional,

01:07:44.640 | otherwise you'd

01:07:45.620 | be questioning

01:07:46.360 | the level of

01:07:47.360 | intelligence of

01:07:48.180 | the US

01:07:48.560 | administration,

01:07:49.380 | right?

01:07:49.840 | But I think

01:07:51.780 | that the things

01:07:52.920 | they laid out

01:07:54.380 | did the opposite

01:07:54.980 | of what was

01:07:55.880 | intended.

01:07:56.300 | It sped up

01:07:58.760 | domestic capacity.

01:08:01.240 | It motivated

01:08:04.400 | the whole country

01:08:05.000 | to do this

01:08:05.500 | whole of a

01:08:06.020 | nation program

01:08:06.620 | to go after

01:08:07.180 | technology.

01:08:07.720 | It's kind of

01:08:08.160 | like the way

01:08:08.580 | they go after

01:08:09.080 | Olympics,

01:08:09.540 | right?

01:08:10.340 | Olympic gold

01:08:10.840 | medals.

01:08:11.140 | They wanted

01:08:11.520 | to maximize

01:08:12.160 | Olympic gold

01:08:13.180 | medals and

01:08:13.600 | they put the

01:08:14.020 | whole nation

01:08:14.560 | at work and

01:08:15.080 | all the resources

01:08:15.760 | and that's

01:08:16.100 | what China

01:08:16.420 | did.

01:08:16.740 | Huawei,

01:08:17.580 | another example,

01:08:18.460 | they were

01:08:18.860 | sanctioned.

01:08:19.520 | Guess what?

01:08:20.440 | They have

01:08:21.560 | come back to

01:08:22.200 | life stronger

01:08:23.100 | than ever

01:08:23.660 | before.

01:08:24.140 | And this is

01:08:25.900 | not unique to

01:08:26.600 | this episode.

01:08:27.220 | If we look

01:08:27.700 | throughout history,

01:08:28.580 | these blockades

01:08:29.820 | don't work.

01:08:30.400 | The continental

01:08:31.160 | system actually

01:08:32.960 | indirectly led

01:08:34.400 | to industrial

01:08:35.640 | revolution in

01:08:37.520 | the UK when

01:08:39.160 | the Spanish

01:08:41.740 | kind of

01:08:43.020 | blockade the

01:08:43.780 | Portuguese,

01:08:44.300 | they came up

01:08:44.960 | with a very

01:08:45.540 | ferocious,

01:08:46.140 | forceful naval

01:08:47.440 | power.

01:08:47.880 | And you're

01:08:49.460 | talking about

01:08:49.800 | China here.

01:08:50.320 | They just

01:08:50.760 | don't lie

01:08:51.620 | down and

01:08:52.260 | lie flat and

01:08:53.040 | say, oh,

01:08:53.560 | we give up,

01:08:54.280 | right?

01:08:54.780 | They're more

01:08:55.820 | motivated than

01:08:56.700 | ever before.

01:08:59.200 | So the

01:08:59.940 | lesson is

01:09:00.740 | don't force

01:09:03.780 | people or

01:09:04.860 | nations into

01:09:05.600 | a corner.

01:09:06.060 | Yeah.

01:09:06.880 | You make

01:09:08.380 | them have a

01:09:08.780 | very comfortable

01:09:09.360 | situation and

01:09:10.320 | they tend to

01:09:10.980 | become complacent

01:09:12.460 | and they

01:09:14.900 | stagnate.

01:09:15.660 | All right.

01:09:17.040 | So can you

01:09:18.860 | talk through

01:09:19.660 | the whole saga

01:09:20.820 | of the Trump's

01:09:21.720 | tariffs that's

01:09:22.260 | still going on,

01:09:23.180 | especially tariffs

01:09:24.400 | on China,

01:09:24.920 | from your

01:09:25.980 | perspective as an

01:09:26.740 | economist?

01:09:27.160 | To what degree

01:09:28.280 | was it

01:09:28.580 | justified?

01:09:28.980 | To what degree

01:09:29.620 | was it

01:09:29.940 | effective?

01:09:30.300 | To what degree

01:09:31.440 | is it bad

01:09:31.880 | policy?

01:09:32.380 | For U.S.,

01:09:34.760 | for the West,

01:09:35.460 | for the world,

01:09:36.760 | also for China.

01:09:37.860 | You know,

01:09:38.840 | China has been

01:09:39.740 | preparing for

01:09:40.460 | this for the

01:09:40.980 | last five years

01:09:41.880 | and for the

01:09:42.900 | return of

01:09:43.360 | Trump and

01:09:44.300 | for Trump's

01:09:47.360 | maniac trade

01:09:49.240 | policies.

01:09:49.780 | You'd think

01:09:50.960 | that Trump

01:09:51.480 | also had five

01:09:52.320 | years to

01:09:52.860 | prepare for

01:09:53.480 | this battle

01:09:54.000 | with China.

01:09:54.600 | It didn't

01:09:56.000 | show.

01:09:58.240 | you can

01:09:58.880 | say that

01:09:59.720 | the Chinese,

01:10:01.120 | at least this

01:10:01.920 | time around,

01:10:02.540 | have played

01:10:03.180 | their hand

01:10:03.500 | pretty well

01:10:03.980 | when dealing

01:10:05.180 | with Trump's

01:10:06.740 | tariff threats

01:10:07.500 | and the trade

01:10:08.140 | war.

01:10:08.420 | With a level

01:10:10.400 | of calibrated

01:10:11.160 | assertiveness,

01:10:11.920 | they have really

01:10:12.700 | thought through

01:10:13.160 | everything very

01:10:13.840 | elaborately.

01:10:14.500 | And look,

01:10:17.380 | you know,

01:10:17.940 | this is not good

01:10:19.020 | for either country.

01:10:19.680 | Let's just be

01:10:20.280 | clear.

01:10:20.520 | It's bad

01:10:21.320 | for U.S.

01:10:22.880 | and China,

01:10:23.340 | and it's

01:10:23.740 | bad for the

01:10:24.620 | world.

01:10:24.980 | And every

01:10:25.860 | country has

01:10:27.080 | a stake in

01:10:28.000 | the U.S.-China

01:10:29.100 | trade war

01:10:30.020 | because whether

01:10:31.220 | you trade

01:10:31.800 | directly or

01:10:32.540 | indirectly with

01:10:33.240 | China,

01:10:33.440 | you're going

01:10:33.720 | to be

01:10:33.880 | affected.

01:10:34.220 | They are

01:10:35.340 | one of the

01:10:35.760 | largest

01:10:36.120 | intermediate

01:10:36.880 | exporters

01:10:37.920 | in the

01:10:38.420 | world,

01:10:38.820 | and Chinese

01:10:40.860 | manufacturing

01:10:41.640 | goods anchor

01:10:43.080 | global

01:10:43.860 | manufacturing

01:10:44.660 | prices.

01:10:46.580 | the cumulative

01:10:47.740 | tariff

01:10:48.900 | burdens,

01:10:49.660 | when you get

01:10:50.360 | to Canada,

01:10:50.800 | when you get

01:10:51.180 | to Mexico,

01:10:51.580 | when you get

01:10:51.980 | to any

01:10:52.300 | other final

01:10:53.300 | destination,

01:10:54.000 | these tariffs

01:10:56.000 | will affect

01:10:57.180 | you,

01:10:57.460 | right?

01:10:58.160 | So it's

01:10:59.100 | clearly very,

01:11:00.120 | very bad

01:11:00.760 | for the

01:11:01.420 | world.

01:11:01.720 | China's

01:11:04.260 | core principles,

01:11:05.520 | and I think

01:11:06.400 | that this is

01:11:07.000 | not well

01:11:07.380 | understood

01:11:07.740 | from the

01:11:09.040 | rest of

01:11:09.360 | the world

01:11:09.800 | towards the

01:11:10.800 | U.S.,

01:11:11.400 | and something

01:11:12.000 | that they

01:11:12.340 | have kept

01:11:13.200 | up is

01:11:14.080 | equivalence,

01:11:14.900 | reciprocity,

01:11:16.000 | and realism.

01:11:17.140 | China's not

01:11:18.600 | going to lower

01:11:18.960 | tariffs unless

01:11:19.500 | the U.S.

01:11:19.900 | does,

01:11:20.200 | right?

01:11:20.720 | You can kind

01:11:21.840 | of stand up

01:11:22.400 | to Trump

01:11:22.780 | like a man.

01:11:23.340 | That's the

01:11:23.740 | only way,

01:11:24.240 | you know,

01:11:24.500 | to deal with

01:11:24.980 | Trump.

01:11:25.200 | That's its

01:11:25.700 | view.

01:11:25.980 | The deal

01:11:28.860 | has to be

01:11:29.300 | realistic.

01:11:29.760 | The phase

01:11:30.360 | one deal

01:11:30.780 | of the last

01:11:31.220 | time wasn't

01:11:32.120 | realistic,

01:11:32.460 | and China

01:11:33.160 | thinks,

01:11:33.520 | look,

01:11:33.780 | the U.S.

01:11:35.100 | is going

01:11:35.340 | to use

01:11:36.120 | this as

01:11:36.400 | leverage,

01:11:36.880 | right?

01:11:37.640 | That's not

01:11:38.420 | possible.

01:11:39.300 | This can't

01:11:40.180 | be seen as

01:11:40.860 | political

01:11:41.580 | concession.

01:11:42.200 | The deal

01:11:43.480 | has to be

01:11:43.960 | seen as

01:11:44.360 | mutual

01:11:44.620 | commerce,

01:11:45.020 | so where

01:11:47.020 | China can

01:11:48.240 | have room

01:11:48.980 | to negotiate

01:11:49.820 | is opening

01:11:50.860 | up things

01:11:51.300 | like services,

01:11:51.960 | you know,

01:11:52.380 | American banks,

01:11:53.460 | American financial

01:11:54.220 | institutions have

01:11:54.900 | a lot of

01:11:55.260 | business to do

01:11:55.800 | in China.

01:11:56.220 | They can buy

01:11:57.380 | a limited

01:11:57.900 | number of

01:11:58.460 | more goods.

01:11:59.220 | They can

01:12:00.300 | discuss about

01:12:01.100 | transparency

01:12:01.920 | around rules

01:12:03.360 | and regulations

01:12:04.120 | on e-commerce,

01:12:05.020 | on data,

01:12:05.320 | all that is

01:12:05.880 | fine.

01:12:06.200 | But don't

01:12:08.000 | confound

01:12:08.860 | economic issues

01:12:10.020 | with political

01:12:10.520 | issues.

01:12:10.980 | Hong Kong,

01:12:12.000 | Taiwan is not

01:12:12.760 | part of

01:12:13.160 | the deal,

01:12:13.500 | by the

01:12:14.080 | way,

01:12:14.280 | in case

01:12:14.780 | anyone was

01:12:15.320 | wondering.

01:12:15.680 | Trying to

01:12:17.440 | change

01:12:17.900 | China's

01:12:18.640 | state-hybrid

01:12:19.540 | private-sector

01:12:20.300 | model,

01:12:20.760 | don't go

01:12:21.620 | there.

01:12:21.880 | Anything that

01:12:23.900 | challenges

01:12:24.460 | China's

01:12:25.300 | technology,

01:12:25.880 | security,

01:12:26.680 | that's not

01:12:28.200 | really part

01:12:28.560 | of the

01:12:28.740 | discussion.

01:12:29.120 | I think

01:12:30.120 | that people

01:12:30.780 | have to be

01:12:31.340 | clear about

01:12:32.320 | also what

01:12:32.860 | China thinks

01:12:34.000 | and wants,

01:12:35.120 | and also the

01:12:36.440 | Chinese to be

01:12:36.960 | clear about

01:12:37.240 | what Trump

01:12:37.640 | wants,

01:12:37.860 | although I

01:12:38.220 | don't know

01:12:38.820 | anybody,

01:12:39.400 | even Trump

01:12:39.840 | himself

01:12:40.140 | knows

01:12:40.400 | exactly

01:12:40.780 | what he

01:12:41.100 | wants,

01:12:41.420 | in order

01:12:42.720 | for these

01:12:43.900 | very complex

01:12:45.100 | negotiations

01:12:45.900 | to actually

01:12:46.580 | succeed.

01:12:47.020 | Okay,

01:12:47.760 | so China

01:12:48.880 | has a few

01:12:49.800 | red lines,

01:12:50.520 | so don't

01:12:52.100 | mention Hong

01:12:52.680 | Kong or

01:12:53.080 | Taiwan.

01:12:53.460 | Don't mix

01:12:54.840 | the political

01:12:55.560 | issues with

01:12:56.840 | the trade

01:12:57.440 | deal.

01:12:57.640 | Right,

01:12:57.980 | and then

01:12:58.820 | is there

01:12:59.260 | some degree

01:12:59.780 | maybe you

01:13:00.160 | can speak

01:13:00.460 | to culturally

01:13:01.100 | where

01:13:02.600 | stylistically

01:13:04.540 | there's

01:13:05.460 | red lines

01:13:06.140 | meaning

01:13:07.220 | don't

01:13:07.700 | bully

01:13:08.000 | China

01:13:08.600 | like

01:13:09.660 | language

01:13:10.140 | wise

01:13:10.600 | or

01:13:11.740 | does

01:13:11.900 | that

01:13:12.080 | not

01:13:12.360 | matter

01:13:12.740 | because

01:13:13.640 | there's

01:13:14.200 | a kind

01:13:14.500 | of way

01:13:14.920 | of speaking

01:13:15.580 | in the

01:13:16.020 | United

01:13:16.320 | States

01:13:16.880 | that

01:13:17.740 | you know

01:13:19.280 | I feel

01:13:19.800 | like

01:13:20.080 | in diplomacy

01:13:21.360 | in general

01:13:22.040 | neither

01:13:23.420 | side wants

01:13:24.000 | to be

01:13:24.300 | humiliated

01:13:25.140 | and

01:13:26.720 | in

01:13:27.680 | great

01:13:28.340 | deals

01:13:29.240 | even

01:13:29.640 | when one

01:13:30.220 | side

01:13:30.560 | on paper

01:13:31.220 | wins

01:13:31.800 | you want

01:13:32.740 | to make

01:13:33.460 | the other

01:13:33.860 | side

01:13:34.100 | especially

01:13:34.740 | the side

01:13:35.420 | that gets

01:13:35.780 | the short

01:13:36.440 | end of the

01:13:36.880 | stake

01:13:37.080 | feel like

01:13:37.940 | they've

01:13:38.260 | won

01:13:38.660 | and show

01:13:39.480 | the rest

01:13:39.820 | of the

01:13:40.060 | world

01:13:40.360 | that they're

01:13:41.020 | the winner

01:13:41.560 | well that's

01:13:42.500 | diplomacy

01:13:43.000 | we have

01:13:44.380 | an absence

01:13:44.840 | of diplomacy

01:13:45.620 | but you're

01:13:46.300 | absolutely

01:13:46.540 | right

01:13:46.840 | there needs

01:13:47.480 | to be

01:13:47.720 | respect

01:13:48.120 | the Chinese

01:13:49.720 | at least

01:13:50.200 | really care

01:13:50.960 | about

01:13:51.400 | respect

01:13:51.960 | and I

01:13:54.200 | wish there

01:13:54.640 | was just

01:13:55.020 | a bit

01:13:55.360 | more

01:13:55.640 | cultural

01:13:56.060 | fluency

01:13:56.700 | and I

01:13:57.700 | think a

01:13:58.000 | lot of

01:13:58.280 | things would

01:13:58.700 | be so

01:13:59.020 | much

01:13:59.180 | easier

01:13:59.580 | between

01:14:00.660 | the two

01:14:00.980 | countries

01:14:01.480 | just

01:14:01.920 | understanding

01:14:02.440 | that

01:14:02.800 | because

01:14:03.540 | you can

01:14:03.880 | actually

01:14:04.220 | push

01:14:04.520 | China

01:14:04.760 | to do

01:14:05.060 | a lot

01:14:05.300 | of

01:14:05.420 | things

01:14:05.760 | right

01:14:06.120 | all

01:14:06.300 | within

01:14:06.540 | reason

01:14:06.900 | that

01:14:07.640 | would

01:14:07.940 | work

01:14:08.480 | in

01:14:08.640 | favor

01:14:08.900 | of

01:14:09.080 | the

01:14:09.200 | U.S.

01:14:09.580 | but understand

01:14:10.880 | that respect

01:14:11.400 | is vitally

01:14:12.060 | important

01:14:12.660 | face

01:14:13.340 | saving

01:14:13.920 | is very

01:14:14.840 | very

01:14:15.100 | very

01:14:15.340 | important

01:14:15.820 | to

01:14:16.880 | to what

01:14:17.080 | to what

01:14:17.080 | degree

01:14:17.520 | what

01:14:18.280 | Xi Jinping

01:14:18.740 | says

01:14:19.280 | and what

01:14:19.700 | they're

01:14:20.200 | putting out

01:14:20.940 | there in

01:14:21.220 | the world

01:14:21.720 | represents

01:14:22.900 | the truth

01:14:23.580 | so he has

01:14:24.500 | a whole way

01:14:24.940 | of being

01:14:25.360 | of like

01:14:26.000 | let's

01:14:26.880 | de-escalate

01:14:27.740 | let's all

01:14:29.040 | make good

01:14:30.100 | deals

01:14:30.440 | together

01:14:30.920 | let's

01:14:31.540 | almost like

01:14:32.220 | let's be

01:14:32.680 | friends

01:14:32.940 | like

01:14:33.320 | Modi a little

01:14:34.360 | bit has a

01:14:34.860 | similar way

01:14:35.400 | of being

01:14:35.900 | like let's

01:14:36.780 | just

01:14:37.020 | and the

01:14:38.000 | implied

01:14:38.360 | thing is

01:14:38.920 | like

01:14:39.300 | forgive the

01:14:40.800 | French

01:14:41.140 | but if

01:14:41.880 | you fuck

01:14:42.320 | with us

01:14:42.840 | we won't

01:14:44.000 | be nice

01:14:44.440 | but let's

01:14:44.800 | just all

01:14:45.160 | be nice

01:14:45.620 | together

01:14:46.300 | is he

01:14:47.360 | speaking

01:14:47.760 | the truth

01:14:48.120 | Xi Jinping

01:14:48.520 | is not

01:14:48.980 | Putin

01:14:49.340 | right

01:14:49.980 | and

01:14:51.260 | there is

01:14:52.920 | a genuine

01:14:53.720 | desire

01:14:54.620 | on China's

01:14:55.680 | part

01:14:56.060 | to de-escalate

01:14:57.080 | again

01:14:57.880 | coming back

01:14:58.380 | to the

01:14:58.680 | level

01:14:58.940 | of

01:14:59.580 | pragmatism

01:15:00.340 | under

01:15:02.060 | economic

01:15:02.580 | strain

01:15:03.100 | in China

01:15:03.620 | you don't

01:15:04.240 | really want

01:15:04.640 | to be

01:15:04.840 | picking

01:15:05.080 | fights

01:15:05.560 | they

01:15:07.940 | don't

01:15:08.740 | agree

01:15:09.040 | at all

01:15:09.480 | with

01:15:09.740 | Trump's

01:15:10.440 | economic

01:15:11.980 | views

01:15:13.020 | and world

01:15:14.060 | vision

01:15:14.520 | let's

01:15:14.940 | just put

01:15:15.360 | it

01:15:15.560 | simply

01:15:16.260 | so

01:15:17.360 | understanding

01:15:19.860 | that a lot

01:15:21.080 | of this

01:15:21.360 | is also

01:15:21.700 | driven by

01:15:22.160 | American

01:15:22.720 | internal

01:15:23.280 | politics

01:15:23.960 | which they

01:15:24.480 | are aware

01:15:24.960 | of

01:15:25.380 | helps

01:15:25.980 | a bit

01:15:26.460 | but there's

01:15:27.960 | a genuine

01:15:28.580 | desire to

01:15:29.580 | take the

01:15:29.920 | temperature

01:15:30.200 | down

01:15:30.520 | with the

01:15:30.920 | U.S.

01:15:31.160 | even if

01:15:31.800 | the weather

01:15:32.220 | doesn't

01:15:32.600 | fundamentally

01:15:32.980 | change

01:15:33.460 | what is

01:15:34.500 | a good

01:15:35.160 | diplomacy

01:15:35.720 | look like

01:15:36.520 | here

01:15:36.820 | for both

01:15:37.980 | sides

01:15:38.740 | what is

01:15:39.520 | the best

01:15:39.840 | possible

01:15:40.340 | and

01:15:41.300 | just

01:15:41.680 | strictly

01:15:42.200 | on

01:15:42.360 | the

01:15:42.460 | economics

01:15:42.860 | and

01:15:43.120 | the

01:15:43.280 | trade

01:15:44.340 | the

01:15:44.720 | tariffs

01:15:45.160 | what's

01:15:46.140 | the best

01:15:46.500 | possible

01:15:46.900 | outcome

01:15:47.320 | for the

01:15:48.100 | world

01:15:48.320 | I think

01:15:49.260 | that

01:15:49.580 | Trump

01:15:49.940 | can

01:15:50.200 | show

01:15:50.540 | to the

01:15:50.880 | American

01:15:51.240 | consumers

01:15:51.860 | that he

01:15:52.460 | has gotten

01:15:52.820 | some sort

01:15:53.340 | of a

01:15:53.580 | deal

01:15:53.840 | right

01:15:54.520 | that the

01:15:54.860 | Chinese

01:15:55.160 | have bought

01:15:55.780 | more

01:15:56.200 | American

01:15:56.640 | goods

01:15:57.000 | or promised

01:15:57.520 | to buy

01:15:57.920 | American

01:15:58.300 | goods

01:15:58.820 | and then

01:15:59.280 | the

01:15:59.460 | American

01:15:59.920 | companies

01:16:00.420 | can come

01:16:00.860 | into

01:16:01.060 | China

01:16:01.440 | and then

01:16:02.100 | a lot

01:16:02.860 | of the

01:16:03.180 | previously

01:16:03.580 | restricted

01:16:04.200 | investment

01:16:04.780 | opportunities

01:16:05.340 | are now

01:16:05.720 | not

01:16:05.980 | restricted

01:16:06.400 | and the

01:16:06.660 | American

01:16:06.900 | banks

01:16:07.320 | can make

01:16:07.700 | money

01:16:08.660 | in China

01:16:09.240 | he can

01:16:10.840 | say that

01:16:11.440 | and

01:16:12.480 | I think

01:16:13.860 | that could

01:16:15.020 | be part

01:16:15.620 | of a really

01:16:16.040 | realistic

01:16:16.560 | deal

01:16:17.080 | that somehow

01:16:18.640 | American

01:16:19.100 | companies will

01:16:19.740 | be better

01:16:20.040 | protected

01:16:20.440 | through

01:16:21.000 | IP protection

01:16:21.800 | and again

01:16:22.340 | that's in

01:16:22.980 | China's

01:16:23.340 | interest

01:16:23.800 | as well

01:16:24.180 | so I

01:16:24.380 | don't see

01:16:24.680 | a fundamental

01:16:25.080 | conflict

01:16:25.580 | here

01:16:25.900 | and at

01:16:27.840 | the same

01:16:28.120 | time

01:16:28.400 | they lower

01:16:28.780 | the tariffs

01:16:29.300 | right

01:16:29.540 | not to

01:16:29.920 | the rates

01:16:30.320 | where they

01:16:30.740 | were before

01:16:31.340 | but lower

01:16:32.600 | and you

01:16:33.660 | don't

01:16:33.880 | prohibit

01:16:34.280 | trade

01:16:34.740 | and then

01:16:36.360 | for China

01:16:37.020 | that would

01:16:37.420 | also be

01:16:37.800 | a success

01:16:38.060 | so you

01:16:38.380 | can actually

01:16:38.800 | have success

01:16:39.300 | for both

01:16:39.840 | places

01:16:40.540 | but being

01:16:41.300 | realistic

01:16:41.640 | is part

01:16:42.380 | of the

01:16:42.560 | game

01:16:42.760 | is tariffs

01:16:44.060 | question to

01:16:45.500 | you as an

01:16:45.820 | economist

01:16:46.160 | is tariffs

01:16:46.660 | a useful

01:16:47.300 | effective

01:16:48.880 | tool

01:16:49.860 | for

01:16:51.080 | global

01:16:53.400 | trade

01:16:54.560 | no

01:16:55.900 | I think

01:16:57.260 | that there

01:16:58.100 | is

01:16:58.580 | a real

01:16:59.680 | problem

01:17:00.060 | in global

01:17:00.760 | trading

01:17:01.040 | system

01:17:01.540 | and

01:17:02.800 | globalization

01:17:03.600 | in general

01:17:04.280 | that is not

01:17:04.960 | going to be

01:17:05.320 | resolved by

01:17:05.900 | tariffs

01:17:06.280 | we do need

01:17:07.660 | to think

01:17:08.020 | about

01:17:08.500 | more harmony

01:17:10.720 | between

01:17:13.120 | countries

01:17:13.780 | where

01:17:15.620 | let's say

01:17:16.300 | not one

01:17:17.040 | country

01:17:17.320 | dominates

01:17:17.800 | and here

01:17:18.140 | I'd push

01:17:19.240 | back on

01:17:19.920 | China

01:17:20.160 | and say

01:17:20.700 | yes you

01:17:21.640 | have amazing

01:17:22.340 | companies

01:17:22.740 | and competitive

01:17:23.240 | companies

01:17:23.740 | but you

01:17:24.740 | just can't

01:17:25.160 | dominate

01:17:25.500 | everything

01:17:26.000 | that would

01:17:26.840 | not be

01:17:27.180 | good for

01:17:27.520 | global

01:17:27.880 | harmony

01:17:28.400 | you need

01:17:28.880 | to give

01:17:29.180 | other

01:17:29.400 | countries

01:17:29.780 | opportunity

01:17:30.440 | you need

01:17:32.280 | to develop

01:17:32.660 | your own

01:17:32.980 | internal

01:17:33.300 | economy

01:17:33.860 | rely on

01:17:34.800 | your consumers

01:17:35.440 | as part

01:17:35.920 | of the

01:17:36.140 | deal

01:17:36.420 | tariffs

01:17:37.960 | this kind

01:17:38.880 | of highly

01:17:39.260 | protectionist

01:17:40.400 | method

01:17:41.060 | is very

01:17:41.840 | distortionary

01:17:42.620 | and it's

01:17:42.960 | going to be

01:17:43.300 | bad for

01:17:43.700 | the US

01:17:44.260 | I'd

01:17:44.820 | actually argue

01:17:45.420 | that both

01:17:46.120 | China

01:17:46.580 | and the

01:17:47.160 | US

01:17:47.640 | have

01:17:48.600 | totally

01:17:49.960 | taken

01:17:51.120 | advantage

01:17:51.480 | and also

01:17:51.860 | enjoyed

01:17:52.480 | the

01:17:54.460 | global

01:17:55.200 | economic

01:17:57.000 | realm

01:17:57.720 | under

01:17:58.240 | the US

01:17:58.760 | liberal

01:17:59.040 | order

01:17:59.500 | I think

01:18:00.960 | China

01:18:01.320 | quite

01:18:01.600 | likes

01:18:01.940 | it

01:18:02.100 | actually

01:18:02.500 | you know

01:18:03.440 | US

01:18:04.160 | kept

01:18:04.540 | peace

01:18:05.140 | and

01:18:05.320 | during

01:18:05.560 | this

01:18:05.740 | peaceful

01:18:06.040 | times

01:18:06.540 | things

01:18:06.940 | were

01:18:07.160 | working

01:18:07.460 | very well

01:18:07.900 | economically

01:18:08.600 | technologically

01:18:09.960 | they kept

01:18:11.520 | the sea lanes

01:18:12.160 | open

01:18:12.700 | they did

01:18:13.400 | their part

01:18:13.840 | to preserve

01:18:15.020 | peace

01:18:16.460 | to the extent

01:18:17.020 | they can

01:18:17.800 | I guess

01:18:18.440 | but China

01:18:19.440 | wants peace

01:18:20.000 | only with peace

01:18:20.920 | can they do

01:18:21.380 | what they can

01:18:22.200 | and actually

01:18:22.720 | US

01:18:23.240 | despite saying

01:18:24.620 | they've been

01:18:25.020 | victimized

01:18:25.680 | not

01:18:25.860 | look

01:18:26.160 | they've

01:18:26.500 | had

01:18:26.660 | a very

01:18:27.140 | very

01:18:27.340 | good

01:18:27.540 | time

01:18:27.860 | right

01:18:28.500 | never

01:18:28.820 | have

01:18:29.060 | quality

01:18:29.760 | of life

01:18:30.220 | standards

01:18:30.560 | of living

01:18:31.080 | technology

01:18:31.860 | risen as

01:18:32.780 | much

01:18:33.140 | as

01:18:33.560 | the US

01:18:34.240 | did under

01:18:34.700 | its own

01:18:35.180 | liberal order

01:18:35.760 | than it has

01:18:36.420 | ever before

01:18:37.440 | and the amount

01:18:38.620 | of influence

01:18:39.220 | and power

01:18:39.580 | yes of course

01:18:40.180 | you can blame

01:18:41.660 | the US

01:18:42.000 | for lots

01:18:42.500 | of things

01:18:42.860 | that happened

01:18:43.380 | but it

01:18:44.400 | actually

01:18:44.800 | had a really

01:18:45.780 | good time

01:18:46.260 | and China

01:18:46.900 | as well

01:18:47.460 | so now

01:18:48.080 | they're going

01:18:48.340 | to take

01:18:48.580 | this apart

01:18:49.060 | they think

01:18:50.240 | that they're

01:18:50.540 | going to be

01:18:51.020 | somehow

01:18:51.320 | better off

01:18:52.220 | that

01:18:52.520 | American

01:18:53.340 | people

01:18:53.900 | and Chinese

01:18:54.340 | people

01:18:54.620 | are going

01:18:54.900 | to be

01:18:55.080 | better off

01:18:55.700 | under more

01:18:56.200 | disorderly

01:18:56.820 | fragmented

01:18:57.500 | rule of a jungle

01:18:58.860 | kind of world

01:18:59.680 | that's an illusion

01:19:00.920 | that's what

01:19:01.400 | politicians tell

01:19:02.340 | their people

01:19:03.120 | but that's

01:19:04.460 | not the truth

01:19:04.960 | so what

01:19:06.520 | are

01:19:06.840 | if not

01:19:07.420 | tariffs

01:19:07.880 | ways to

01:19:08.840 | incentivize

01:19:10.000 | countries like

01:19:11.400 | the United States

01:19:12.000 | to build

01:19:12.720 | internally

01:19:13.380 | so to build

01:19:14.500 | semiconductor ships

01:19:15.860 | internally

01:19:16.280 | for example

01:19:16.900 | well exactly

01:19:18.040 | tariffs is a way

01:19:19.400 | to punish

01:19:19.980 | foreigners

01:19:20.420 | but what

01:19:21.100 | you really

01:19:21.580 | want to do

01:19:22.140 | is to strengthen

01:19:22.920 | your own

01:19:23.520 | domestic competitiveness

01:19:24.760 | and I want

01:19:25.480 | to draw

01:19:25.840 | an analogy

01:19:27.220 | to the US

01:19:28.140 | Japan

01:19:28.780 | competition

01:19:30.000 | in the 1980s

01:19:31.300 | Japan actually

01:19:33.440 | took over

01:19:34.000 | in many parts

01:19:34.540 | of the

01:19:34.780 | semiconductors

01:19:35.420 | industry

01:19:35.920 | even though

01:19:36.340 | the microchip

01:19:36.880 | was invented

01:19:37.340 | in the US

01:19:37.980 | but guess

01:19:38.800 | what happened

01:19:39.400 | well

01:19:39.880 | it actually

01:19:40.720 | drove

01:19:41.700 | more competition

01:19:42.760 | and more

01:19:43.340 | mobilization

01:19:44.080 | in the US

01:19:44.840 | actually

01:19:45.360 | creating this

01:19:46.400 | innovation system

01:19:47.560 | changed a few

01:19:48.260 | really critical

01:19:48.880 | laws

01:19:49.500 | that helped

01:19:50.320 | with US

01:19:50.860 | innovation

01:19:51.360 | and the

01:19:52.480 | consumers

01:19:52.840 | benefited

01:19:53.360 | the US

01:19:54.120 | took over

01:19:54.620 | again

01:19:54.980 | as the leader

01:19:55.800 | of the

01:19:56.080 | semiconductors

01:19:56.740 | industry

01:19:57.260 | there's no

01:19:58.140 | better way

01:19:58.980 | than to

01:19:59.500 | strengthen

01:19:59.780 | yourself

01:20:00.340 | to be

01:20:01.040 | competitive

01:20:01.460 | because

01:20:02.500 | ultimately

01:20:03.060 | tariffs

01:20:04.460 | have not

01:20:05.400 | done anything

01:20:05.960 | to help

01:20:06.380 | the US

01:20:07.020 | the trade

01:20:08.180 | deficits

01:20:08.540 | have

01:20:08.860 | widened

01:20:10.220 | since

01:20:11.140 | Trump

01:20:11.900 | right

01:20:12.560 | they haven't

01:20:13.020 | closed

01:20:13.400 | the

01:20:14.160 | imbalance

01:20:14.540 | with

01:20:14.900 | China

01:20:15.420 | with

01:20:15.640 | the

01:20:15.740 | rest

01:20:15.920 | of

01:20:16.060 | the

01:20:16.180 | world

01:20:16.520 | because

01:20:17.700 | ultimately

01:20:18.360 | the US

01:20:19.140 | saves

01:20:20.580 | less than

01:20:21.340 | in a mess

01:20:21.940 | and that's

01:20:23.000 | a macro

01:20:23.340 | phenomenon

01:20:23.840 | it's not

01:20:24.200 | a trade

01:20:24.560 | phenomenon

01:20:25.020 | but I

01:20:26.040 | fear that

01:20:27.100 | the US

01:20:27.840 | by kind

01:20:28.460 | of dropping

01:20:28.920 | off of

01:20:29.480 | this

01:20:29.680 | global

01:20:30.480 | trading

01:20:32.360 | network

01:20:33.340 | and system

01:20:34.340 | it will

01:20:35.240 | lose

01:20:35.840 | more and

01:20:36.540 | more of

01:20:36.880 | its power

01:20:37.440 | you have

01:20:38.380 | power

01:20:38.840 | when you're

01:20:39.400 | deeply

01:20:39.700 | engaged

01:20:40.500 | and embedded

01:20:41.160 | with a

01:20:41.580 | country

01:20:41.880 | once

01:20:42.240 | you've

01:20:42.700 | left

01:20:44.000 | it

01:20:44.320 | you

01:20:44.640 | actually

01:20:44.980 | lose

01:20:45.400 | any

01:20:45.620 | sort

01:20:45.840 | of

01:20:45.940 | leverage

01:20:46.320 | so

01:20:47.240 | there's

01:20:47.700 | got to

01:20:47.940 | be

01:20:48.040 | ways

01:20:48.320 | to

01:20:48.500 | incentivize

01:20:49.400 | industrial

01:20:49.920 | policy

01:20:50.480 | building

01:20:51.260 | more

01:20:51.560 | stuff

01:20:52.000 | internally

01:20:52.840 | without

01:20:53.240 | tariffs

01:20:53.720 | right

01:20:54.020 | so you

01:20:54.680 | just

01:20:54.860 | invest

01:20:55.360 | from a

01:20:55.920 | federal

01:20:56.120 | perspective

01:20:56.680 | you've

01:20:57.000 | invested

01:20:57.360 | in

01:20:57.540 | companies

01:20:57.980 | maybe

01:20:59.440 | like

01:20:59.740 | more

01:21:00.260 | carrot

01:21:00.660 | towards

01:21:02.560 | the

01:21:02.840 | domestic

01:21:03.260 | versus

01:21:03.620 | stick

01:21:04.140 | versus

01:21:04.460 | the

01:21:04.680 | foreigner

01:21:05.040 | all

01:21:05.680 | kinds

01:21:06.040 | of

01:21:06.340 | subsidies

01:21:07.200 | that

01:21:07.660 | are

01:21:07.860 | justified

01:21:08.620 | for

01:21:09.200 | the

01:21:09.800 | green

01:21:10.020 | transition

01:21:10.600 | for

01:21:11.240 | innovation

01:21:12.060 | R&D

01:21:13.020 | support

01:21:13.860 | for

01:21:14.180 | the

01:21:14.340 | university

01:21:14.800 | system

01:21:15.600 | you know

01:21:16.360 | that

01:21:16.560 | the

01:21:16.820 | U.S.

01:21:17.160 | is the

01:21:17.460 | world

01:21:17.680 | leader

01:21:17.900 | in terms

01:21:18.300 | of

01:21:18.440 | attracting

01:21:18.880 | talent

01:21:19.280 | has

01:21:19.480 | everything

01:21:19.760 | going

01:21:20.140 | for it

01:21:20.780 | but

01:21:21.480 | it

01:21:21.680 | was

01:21:21.820 | a little

01:21:22.020 | bit

01:21:22.200 | complacent

01:21:23.000 | and

01:21:24.400 | by

01:21:24.760 | dropping

01:21:25.140 | off

01:21:25.580 | of

01:21:25.780 | that

01:21:26.060 | global

01:21:26.460 | network

01:21:27.060 | it's

01:21:28.040 | going to

01:21:28.200 | do

01:21:28.320 | itself

01:21:28.580 | more

01:21:28.840 | disservice

01:21:29.380 | yeah

01:21:30.260 | terrorists

01:21:30.620 | don't

01:21:30.820 | quite

01:21:31.020 | make

01:21:31.240 | sense

01:21:31.480 | to

01:21:31.600 | me

01:21:31.780 | maybe

01:21:32.260 | I'm

01:21:32.520 | dumb

01:21:32.780 | it

01:21:33.220 | just

01:21:33.420 | doesn't

01:21:33.700 | make

01:21:33.900 | it

01:21:34.060 | doesn't

01:21:34.280 | make

01:21:34.420 | sense

01:21:34.680 | to

01:21:34.920 | economists

01:21:35.420 | either

01:21:35.820 | and

01:21:36.020 | economists

01:21:36.400 | are

01:21:36.580 | not

01:21:36.760 | all

01:21:36.940 | dumb

01:21:37.180 | all

01:21:40.140 | right

01:21:40.380 | you

01:21:42.120 | did

01:21:42.320 | mention

01:21:42.540 | immigration

01:21:42.980 | a little

01:21:43.240 | bit

01:21:43.400 | I

01:21:44.120 | think

01:21:44.480 | that's

01:21:44.780 | a

01:21:44.900 | component

01:21:45.200 | of it

01:21:45.560 | also

01:21:46.060 | you

01:21:47.520 | said

01:21:47.700 | your

01:21:48.260 | own

01:21:48.480 | experience

01:21:48.920 | was

01:21:49.200 | that

01:21:49.500 | U.S.

01:21:50.160 | was

01:21:50.640 | much

01:21:51.020 | more

01:21:51.200 | open

01:21:51.520 | to

01:21:51.980 | immigration

01:21:53.020 | in the

01:21:53.480 | past

01:21:53.860 | what

01:21:54.560 | do

01:21:54.640 | you

01:21:54.640 | think

01:21:54.780 | about

01:21:55.000 | this

01:21:55.340 | on

01:21:56.460 | the

01:21:56.600 | human

01:21:56.840 | side

01:21:57.100 | of

01:21:57.200 | the

01:21:57.260 | protectionism

01:21:57.900 | the

01:21:58.420 | closing

01:22:00.000 | of

01:22:00.180 | the

01:22:00.300 | borders

01:22:00.660 | that

01:22:00.980 | the

01:22:01.180 | U.S.

01:22:01.500 | is

01:22:01.620 | doing

01:22:01.940 | is

01:22:02.600 | that

01:22:02.840 | what

01:22:03.600 | are

01:22:03.680 | the

01:22:03.780 | pros

01:22:03.980 | and

01:22:04.140 | cons

01:22:04.380 | of

01:22:04.500 | that

01:22:04.760 | from

01:22:05.220 | an

01:22:05.360 | economics

01:22:05.720 | perspective

01:22:06.260 | on

01:22:07.420 | U.S.

01:22:08.040 | immigration

01:22:08.640 | I

01:22:10.860 | understand

01:22:11.800 | both sides

01:22:12.480 | of the

01:22:12.740 | story

01:22:12.980 | to be

01:22:13.240 | very

01:22:13.460 | honest

01:22:13.820 | and

01:22:14.220 | I

01:22:14.340 | also

01:22:14.620 | understand

01:22:15.180 | a

01:22:15.380 | bit

01:22:15.500 | of

01:22:15.600 | the

01:22:15.720 | protectionist

01:22:16.360 | streak

01:22:16.720 | not

01:22:17.120 | only

01:22:17.400 | coming

01:22:17.740 | from

01:22:17.920 | the

01:22:18.040 | U.S.

01:22:18.280 | but

01:22:18.440 | also

01:22:18.620 | from

01:22:18.820 | Europe

01:22:19.100 | and

01:22:19.360 | various

01:22:19.720 | parts

01:22:19.960 | of

01:22:20.080 | the

01:22:20.200 | world

01:22:20.440 | which

01:22:20.660 | is

01:22:20.800 | going

01:22:20.940 | to

01:22:20.980 | be

01:22:21.120 | a

01:22:21.300 | trend

01:22:21.620 | I

01:22:22.500 | understand

01:22:22.880 | that

01:22:23.380 | before

01:22:23.700 | you

01:22:23.920 | care

01:22:24.180 | about

01:22:24.660 | people

01:22:25.280 | in

01:22:25.400 | rural

01:22:25.700 | villages

01:22:26.140 | in

01:22:26.500 | Indonesia

01:22:27.000 | you

01:22:27.860 | really

01:22:28.100 | care

01:22:28.400 | about

01:22:28.880 | the

01:22:29.740 | northern

01:22:30.100 | Brits

01:22:30.560 | in

01:22:30.740 | this

01:22:30.920 | country

01:22:31.300 | and

01:22:31.860 | they

01:22:32.040 | have

01:22:32.180 | not

01:22:32.360 | fared

01:22:32.560 | well

01:22:32.880 | I

01:22:33.800 | understand

01:22:34.200 | that

01:22:35.000 | your

01:22:36.080 | jobs

01:22:36.600 | may

01:22:37.600 | be

01:22:37.760 | under

01:22:38.000 | threat

01:22:38.400 | because

01:22:38.900 | of

01:22:39.360 | this

01:22:39.680 | uncontrolled

01:22:40.740 | influx

01:22:41.780 | of

01:22:42.480 | illegal

01:22:44.220 | immigrants

01:22:44.860 | from

01:22:46.320 | a

01:22:46.480 | purely

01:22:46.740 | economic

01:22:47.460 | and

01:22:47.820 | rational

01:22:48.300 | level

01:22:48.900 | you'd

01:22:49.260 | say

01:22:49.600 | immigration

01:22:50.080 | is

01:22:50.340 | very

01:22:50.540 | important

01:22:50.960 | because

01:22:52.040 | it

01:22:52.300 | keeps

01:22:52.480 | the

01:22:52.620 | prices

01:22:52.880 | down

01:22:53.300 | keeps

01:22:53.700 | inflation

01:22:54.080 | down

01:22:54.600 | it

01:22:55.380 | keeps

01:22:55.600 | up

01:22:55.760 | the

01:22:55.920 | supply

01:22:56.380 | which

01:22:57.140 | is

01:22:57.320 | very

01:22:57.500 | important

01:22:57.880 | when

01:22:58.340 | you

01:22:58.440 | have

01:22:58.580 | that

01:22:58.780 | much

01:22:58.980 | demand

01:22:59.460 | and

01:23:00.520 | look

01:23:00.820 | you

01:23:01.000 | know

01:23:01.260 | the

01:23:01.700 | standards

01:23:02.040 | of

01:23:02.260 | living

01:23:02.600 | have

01:23:03.220 | also

01:23:03.520 | improved

01:23:04.080 | for

01:23:04.460 | many

01:23:05.120 | people

01:23:05.380 | who

01:23:05.520 | can

01:23:05.640 | afford

01:23:05.920 | it

01:23:06.120 | right

01:23:06.420 | the

01:23:06.780 | low

01:23:07.640 | cost

01:23:07.860 | workers

01:23:08.300 | being

01:23:08.800 | able

01:23:09.040 | to

01:23:09.540 | sustain

01:23:10.840 | the

01:23:11.060 | service

01:23:11.420 | economy

01:23:11.900 | so I

01:23:12.620 | understand

01:23:12.920 | both

01:23:13.220 | sides

01:23:13.440 | of the

01:23:13.700 | story

01:23:14.080 | I

01:23:14.820 | think

01:23:15.080 | that

01:23:15.480 | in

01:23:16.260 | the

01:23:16.380 | end

01:23:16.620 | it

01:23:17.120 | is

01:23:17.260 | a

01:23:17.400 | balance

01:23:17.880 | and

01:23:18.360 | I

01:23:18.520 | do

01:23:18.700 | believe

01:23:19.180 | even

01:23:19.480 | as an

01:23:19.800 | economist

01:23:20.300 | that

01:23:20.700 | social

01:23:20.980 | harmony

01:23:21.400 | and I

01:23:21.760 | come back

01:23:22.100 | to this

01:23:22.380 | word

01:23:22.540 | harmony

01:23:22.980 | repeatedly

01:23:23.500 | even though

01:23:23.980 | as an

01:23:24.220 | economist

01:23:24.580 | this thing

01:23:25.000 | doesn't

01:23:25.620 | even

01:23:25.960 | exist

01:23:26.560 | is

01:23:29.460 | becoming

01:23:30.240 | ever

01:23:30.460 | more

01:23:30.680 | important

01:23:31.140 | and

01:23:33.200 | as a

01:23:33.720 | nation

01:23:34.440 | you know

01:23:35.900 | some

01:23:36.400 | kinds

01:23:36.660 | of

01:23:36.800 | skilled

01:23:37.080 | immigration

01:23:37.600 | is

01:23:38.220 | actually

01:23:38.540 | what

01:23:38.780 | makes

01:23:39.020 | the

01:23:39.200 | US

01:23:39.540 | the

01:23:39.900 | most

01:23:40.260 | technologically

01:23:41.840 | advanced

01:23:43.720 | country

01:23:44.220 | in the

01:23:44.440 | world

01:23:44.740 | at the

01:23:45.240 | same

01:23:45.400 | time

01:23:45.760 | you

01:23:45.940 | do

01:23:46.060 | have

01:23:46.180 | to

01:23:46.280 | think

01:23:46.400 | about

01:23:46.580 | your

01:23:46.720 | own

01:23:46.880 | citizens

01:23:47.300 | the

01:23:47.600 | ones

01:23:47.880 | that

01:23:48.140 | have

01:23:48.440 | had

01:23:48.660 | generations

01:23:49.180 | and

01:23:49.480 | been

01:23:49.640 | around

01:23:50.000 | and

01:23:50.320 | you

01:23:50.480 | have

01:23:50.620 | to

01:23:50.720 | think

01:23:50.860 | about

01:23:51.100 | their

01:23:51.300 | livelihoods

01:23:52.560 | the

01:23:52.880 | puzzle

01:23:53.120 | of

01:23:53.280 | social

01:23:53.500 | harmony

01:23:53.820 | is

01:23:53.960 | a

01:23:54.060 | fascinating

01:23:54.400 | one

01:23:54.660 | because

01:23:54.820 | you

01:23:54.960 | spoke

01:23:55.240 | to

01:23:55.440 | the

01:23:55.680 | long

01:23:56.140 | history

01:23:56.480 | of

01:23:56.700 | China

01:23:57.040 | how

01:23:57.320 | they

01:23:57.560 | yeah

01:23:58.020 | that was

01:23:58.540 | Confucius

01:23:59.040 | yeah

01:23:59.460 | that's

01:23:59.740 | Confucius

01:24:00.320 | and then

01:24:00.800 | there is

01:24:01.780 | a kind

01:24:02.100 | of

01:24:02.220 | social

01:24:02.640 | harmony

01:24:02.960 | a very

01:24:03.320 | different

01:24:03.620 | set

01:24:03.860 | of

01:24:04.000 | ideologies

01:24:04.520 | in the

01:24:04.940 | United

01:24:05.180 | States

01:24:05.540 | and in

01:24:06.520 | the

01:24:06.640 | West

01:24:06.840 | broadly

01:24:07.300 | and it's

01:24:08.480 | it's

01:24:08.660 | all a

01:24:08.960 | puzzle

01:24:09.220 | and you

01:24:10.420 | do

01:24:10.640 | want to

01:24:11.080 | have

01:24:11.240 | some

01:24:11.500 | cohesion

01:24:12.000 | but

01:24:13.040 | in

01:24:13.440 | the

01:24:13.560 | United

01:24:13.760 | States

01:24:14.300 | one

01:24:14.760 | of

01:24:14.900 | its

01:24:15.260 | beautiful

01:24:16.640 | aspects

01:24:17.060 | is

01:24:17.360 | the

01:24:17.520 | diversity

01:24:18.020 | of

01:24:18.320 | humans

01:24:18.720 | and

01:24:20.120 | so

01:24:20.440 | the

01:24:21.400 | continued

01:24:21.980 | influx

01:24:22.960 | of

01:24:23.140 | diversity

01:24:23.700 | is

01:24:25.480 | you know

01:24:26.420 | feeds

01:24:26.860 | the

01:24:27.100 | machine

01:24:27.480 | that

01:24:27.720 | makes

01:24:28.100 | America

01:24:28.540 | great

01:24:29.040 | also

01:24:29.580 | but

01:24:30.460 | too

01:24:30.720 | much

01:24:31.160 | breaks

01:24:33.280 | the

01:24:33.500 | fabric

01:24:33.820 | of

01:24:34.040 | that

01:24:34.200 | society

01:24:34.680 | so

01:24:35.220 | it's

01:24:35.500 | such an

01:24:35.960 | interesting

01:24:36.220 | puzzle

01:24:36.560 | and

01:24:37.080 | some

01:24:37.520 | of it

01:24:37.820 | is like

01:24:38.240 | we humans

01:24:39.100 | can't

01:24:40.000 | balance

01:24:40.440 | so you

01:24:40.880 | go

01:24:41.120 | one

01:24:41.540 | extreme

01:24:41.960 | the other

01:24:42.380 | you just

01:24:43.100 | oscillate

01:24:43.660 | back and

01:24:44.140 | forth

01:24:44.480 | and then

01:24:45.420 | also

01:24:46.120 | politics

01:24:46.680 | especially

01:24:47.120 | in the

01:24:47.360 | United

01:24:47.460 | States

01:24:47.800 | there's

01:24:48.380 | a red

01:24:48.680 | team

01:24:48.940 | and a

01:24:49.540 | blue

01:24:49.720 | team

01:24:50.140 | when

01:24:51.920 | the

01:24:52.280 | red

01:24:52.940 | team

01:24:53.380 | is

01:24:54.240 | at

01:24:54.380 | the

01:24:54.520 | top

01:24:54.840 | the

01:24:55.040 | blue

01:24:55.240 | team

01:24:55.460 | just

01:24:55.760 | pulls

01:24:56.520 | all the

01:24:57.020 | way

01:24:57.140 | to

01:24:57.240 | the

01:24:57.380 | other

01:24:57.500 | direction

01:24:57.900 | and

01:24:58.180 | vice

01:24:58.400 | versa

01:24:58.720 | we

01:24:58.980 | just

01:24:59.140 | kind

01:24:59.360 | of

01:24:59.480 | oscillate

01:24:59.880 | back

01:25:00.100 | and

01:25:00.260 | forth

01:25:00.480 | in

01:25:00.620 | this

01:25:00.760 | way

01:25:01.000 | and

01:25:01.460 | hopefully

01:25:01.760 | make

01:25:02.020 | progress

01:25:02.480 | over

01:25:02.740 | time

01:25:03.080 | but

01:25:03.680 | I

01:25:03.780 | want

01:25:03.900 | to

01:25:03.980 | come

01:25:04.120 | back

01:25:04.360 | to

01:25:04.500 | the

01:25:04.660 | point

01:25:05.020 | of

01:25:05.320 | choice

01:25:05.920 | right

01:25:06.400 | what

01:25:06.920 | makes

01:25:07.340 | America

01:25:07.840 | so

01:25:08.300 | great

01:25:08.800 | is

01:25:09.700 | that

01:25:10.200 | it

01:25:11.520 | tolerates

01:25:12.380 | instability

01:25:13.600 | it

01:25:14.180 | tolerates

01:25:14.820 | clashes

01:25:15.440 | it

01:25:15.780 | tolerates

01:25:16.380 | volatility

01:25:17.080 | think

01:25:17.740 | about

01:25:17.900 | the

01:25:18.020 | financial

01:25:18.340 | crisis

01:25:18.900 | right

01:25:19.240 | the

01:25:19.380 | financial

01:25:19.720 | volatility

01:25:20.100 | again

01:25:20.640 | the

01:25:21.320 | US

01:25:21.500 | dollar

01:25:21.760 | is

01:25:22.040 | where

01:25:22.280 | it

01:25:22.400 | is

01:25:22.620 | because

01:25:22.860 | of

01:25:23.160 | this

01:25:23.340 | deep

01:25:23.920 | liquid

01:25:25.180 | financial

01:25:25.760 | system

01:25:26.460 | in the

01:25:26.880 | US

01:25:27.040 | that

01:25:27.240 | no

01:25:27.540 | other

01:25:27.820 | country

01:25:28.180 | has

01:25:28.400 | managed

01:25:28.880 | to

01:25:29.140 | build

01:25:29.520 | there

01:25:31.180 | are

01:25:31.680 | clashes

01:25:32.480 | everywhere

01:25:33.160 | in

01:25:33.600 | society

01:25:34.120 | but

01:25:35.220 | it

01:25:35.720 | is

01:25:35.840 | a

01:25:35.920 | very

01:25:36.060 | diverse

01:25:36.520 | country

01:25:37.260 | with

01:25:38.020 | all

01:25:38.380 | the

01:25:38.520 | benefits

01:25:38.980 | to

01:25:39.200 | that

01:25:39.560 | it

01:25:40.580 | is

01:25:40.700 | a

01:25:40.920 | highly

01:25:41.280 | unequal

01:25:42.220 | country

01:25:43.300 | economically

01:25:43.860 | speaking

01:25:44.460 | these

01:25:46.060 | the

01:25:46.660 | CEO

01:25:47.160 | pays

01:25:47.900 | right

01:25:48.280 | the

01:25:48.540 | the

01:25:49.180 | businessmen

01:25:50.020 | being able

01:25:50.540 | to be

01:25:51.200 | in top

01:25:51.660 | political

01:25:52.140 | positions

01:25:52.720 | you

01:25:53.060 | kind of

01:25:54.060 | balk at

01:25:54.540 | that

01:25:54.780 | level

01:25:55.280 | of

01:25:56.140 | cronyism

01:25:58.380 | if you

01:25:58.740 | will

01:25:59.080 | but

01:26:00.260 | you know

01:26:01.520 | the US

01:26:02.020 | is

01:26:02.340 | the

01:26:02.820 | technological

01:26:03.320 | leadership

01:26:03.920 | and

01:26:04.540 | it

01:26:04.800 | kind of

01:26:05.140 | is able

01:26:05.580 | to

01:26:05.840 | stomach

01:26:06.500 | that

01:26:07.620 | volatility

01:26:08.520 | and clash

01:26:09.300 | without

01:26:09.560 | breaking

01:26:09.860 | apart

01:26:10.220 | and

01:26:11.520 | other

01:26:12.100 | countries

01:26:12.620 | don't

01:26:13.180 | have

01:26:13.380 | the

01:26:13.480 | capacity

01:26:13.840 | of

01:26:13.980 | the

01:26:14.060 | institutions

01:26:14.580 | the

01:26:14.900 | culture

01:26:15.380 | to be

01:26:16.400 | able

01:26:16.620 | to

01:26:16.820 | tolerate

01:26:17.200 | and

01:26:17.780 | still

01:26:18.180 | maintain

01:26:19.320 | keep

01:26:21.420 | the

01:26:21.620 | society

01:26:22.020 | together

01:26:22.480 | so I

01:26:22.940 | think

01:26:23.140 | it

01:26:23.280 | is

01:26:23.480 | a

01:26:23.980 | very

01:26:24.140 | interesting

01:26:24.580 | but

01:26:25.720 | yeah

01:26:27.020 | it's

01:26:27.320 | a

01:26:27.420 | puzzle

01:26:27.640 | so we

01:26:29.340 | talked

01:26:29.520 | about

01:26:29.720 | the

01:26:29.880 | economic

01:26:30.180 | side

01:26:30.700 | of

01:26:31.100 | tariffs

01:26:31.480 | and

01:26:32.380 | you

01:26:32.500 | mentioned

01:26:32.760 | the

01:26:32.940 | other

01:26:33.180 | red

01:26:33.580 | line

01:26:33.980 | and

01:26:35.160 | the

01:26:35.300 | three

01:26:35.500 | T's

01:26:36.020 | can

01:26:37.420 | we

01:26:37.780 | talk

01:26:38.300 | about

01:26:38.560 | Taiwan

01:26:39.020 | so

01:26:39.700 | how

01:26:39.880 | important

01:26:40.180 | is

01:26:40.320 | Taiwan

01:26:40.560 | to

01:26:40.800 | the

01:26:40.960 | Chinese

01:26:41.320 | economy

01:26:42.020 | and

01:26:42.180 | the

01:26:42.280 | global

01:26:43.000 | economy

01:26:43.600 | Taiwan

01:26:44.540 | has

01:26:45.060 | among

01:26:45.460 | other

01:26:45.740 | things

01:26:46.260 | TSMC

01:26:47.300 | which is

01:26:47.960 | vitally

01:26:48.360 | important

01:26:48.760 | for the

01:26:49.060 | global

01:26:49.320 | economy

01:26:49.820 | it's

01:26:51.480 | also

01:26:51.640 | very

01:26:51.940 | important

01:26:52.200 | for the

01:26:52.500 | Chinese

01:26:52.960 | leadership

01:26:53.700 | and

01:26:54.700 | the

01:26:54.820 | Chinese

01:26:55.020 | people

01:26:55.340 | you

01:26:56.380 | don't

01:26:56.500 | want

01:26:56.600 | to

01:26:56.680 | ask

01:26:56.860 | what

01:26:57.000 | I

01:26:57.160 | think

01:26:57.540 | ask

01:26:58.380 | the

01:26:58.760 | Chinese

01:26:59.160 | young

01:26:59.840 | generation

01:27:00.420 | they

01:27:01.380 | would

01:27:01.640 | one

01:27:01.920 | day

01:27:02.100 | like

01:27:02.380 | to

01:27:02.560 | see

01:27:02.760 | unification

01:27:03.360 | it's

01:27:04.600 | part

01:27:04.880 | of

01:27:05.080 | the

01:27:05.380 | patriotic

01:27:07.000 | the

01:27:07.580 | dream

01:27:08.020 | if you

01:27:08.340 | will

01:27:08.620 | so

01:27:10.620 | and

01:27:11.700 | it's

01:27:11.980 | it's

01:27:12.200 | a chip

01:27:12.560 | right

01:27:12.980 | between

01:27:13.340 | the

01:27:13.640 | U.S.

01:27:13.880 | and

01:27:14.020 | China

01:27:14.340 | so

01:27:15.220 | everybody

01:27:15.540 | is

01:27:16.000 | watching

01:27:16.780 | Taiwan

01:27:17.240 | but

01:27:17.660 | I'd

01:27:18.000 | say

01:27:18.160 | that

01:27:18.420 | this

01:27:18.640 | attention

01:27:18.940 | is

01:27:19.140 | not

01:27:19.380 | necessarily

01:27:20.040 | good

01:27:20.260 | for

01:27:20.420 | Taiwan

01:27:20.840 | because

01:27:21.880 | all

01:27:22.300 | this

01:27:22.480 | uncertainty

01:27:23.000 | all the

01:27:23.380 | political

01:27:23.720 | risk

01:27:24.120 | has

01:27:24.320 | meant

01:27:24.540 | that

01:27:24.760 | investment

01:27:25.200 | there

01:27:25.500 | has

01:27:25.780 | dramatically

01:27:26.280 | been

01:27:27.100 | curtailed

01:27:28.020 | and

01:27:29.460 | mainland

01:27:30.960 | China

01:27:31.300 | is a

01:27:31.580 | very

01:27:31.760 | important

01:27:32.400 | economic

01:27:32.900 | partner

01:27:33.340 | to

01:27:34.040 | the

01:27:34.680 | Taiwanese

01:27:34.960 | economy

01:27:35.520 | I

01:27:37.060 | think

01:27:37.300 | that

01:27:37.720 | I

01:27:38.820 | don't

01:27:38.940 | have

01:27:39.080 | a

01:27:39.200 | lot

01:27:39.360 | of

01:27:39.500 | views

01:27:39.880 | around

01:27:41.060 | this

01:27:41.400 | but

01:27:41.560 | I

01:27:41.660 | just

01:27:41.860 | say

01:27:42.060 | this

01:27:42.440 | I

01:27:44.260 | think

01:27:44.460 | there's

01:27:44.860 | more

01:27:45.640 | political

01:27:46.140 | wisdom

01:27:46.580 | of the

01:27:47.460 | Chinese

01:27:47.700 | government

01:27:48.060 | side

01:27:48.500 | than

01:27:48.900 | we

01:27:49.560 | assume

01:27:50.120 | outside

01:27:50.720 | of

01:27:50.940 | China

01:27:51.200 | and

01:27:52.480 | that

01:27:52.820 | strategic

01:27:53.420 | ambiguity

01:27:54.120 | but

01:27:54.640 | also

01:27:54.840 | strategic

01:27:55.340 | patience

01:27:56.140 | especially

01:27:56.960 | given

01:27:57.860 | China's

01:27:58.460 | economic

01:27:58.900 | situation

01:27:59.860 | currently

01:28:00.360 | means

01:28:01.900 | that

01:28:02.180 | more likely

01:28:02.700 | or not

01:28:03.280 | I

01:28:03.540 | think

01:28:03.820 | that

01:28:04.200 | if

01:28:05.160 | China

01:28:05.680 | does

01:28:06.280 | really

01:28:06.860 | well

01:28:07.200 | economically

01:28:07.960 | and

01:28:09.240 | Taiwan

01:28:09.440 | is

01:28:09.620 | not

01:28:09.840 | doing

01:28:10.120 | as

01:28:10.360 | well

01:28:10.540 | economically

01:28:11.080 | as

01:28:11.360 | we've

01:28:11.600 | seen

01:28:11.960 | that

01:28:13.040 | over

01:28:13.260 | time

01:28:13.940 | this

01:28:14.980 | is

01:28:15.300 | still

01:28:15.840 | the

01:28:16.020 | best

01:28:16.300 | strategy

01:28:16.840 | from

01:28:17.520 | China's

01:28:17.940 | point

01:28:18.100 | of

01:28:18.240 | view

01:28:18.420 | to

01:28:20.420 | resolve

01:28:20.940 | these

01:28:21.160 | differences

01:28:21.560 | I think

01:28:21.980 | any

01:28:22.440 | military

01:28:23.340 | use

01:28:23.980 | and

01:28:24.120 | action

01:28:24.620 | would

01:28:25.600 | be

01:28:26.220 | actually

01:28:27.880 | quite

01:28:28.620 | detrimental

01:28:29.140 | to

01:28:29.940 | China

01:28:30.220 | so

01:28:31.200 | what's

01:28:31.460 | a way

01:28:31.720 | to

01:28:32.020 | avoid

01:28:33.040 | military

01:28:33.680 | conflict

01:28:34.100 | here

01:28:34.420 | there

01:28:34.760 | it

01:28:34.860 | seems

01:28:35.040 | like

01:28:35.200 | a

01:28:35.320 | red

01:28:35.500 | line

01:28:36.000 | unification

01:28:36.800 | is

01:28:37.020 | a

01:28:37.120 | red

01:28:37.260 | line

01:28:37.580 | for

01:28:38.020 | the

01:28:39.040 | United

01:28:39.280 | States

01:28:39.680 | and

01:28:41.600 | it

01:28:41.820 | just

01:28:42.000 | feels

01:28:42.300 | like

01:28:42.420 | a

01:28:42.580 | very

01:28:42.900 | tense

01:28:43.400 | situation

01:28:44.220 | so

01:28:45.780 | is

01:28:46.440 | there

01:28:46.600 | a path

01:28:47.000 | forward

01:28:47.420 | here

01:28:47.720 | that

01:28:47.960 | avoids

01:28:48.380 | any

01:28:48.600 | military

01:28:49.260 | conflict

01:28:49.740 | where

01:28:50.320 | everybody

01:28:51.360 | is

01:28:51.600 | happy

01:28:51.820 | from

01:28:52.060 | an

01:28:52.320 | economics

01:28:52.760 | perspective

01:28:53.320 | from

01:28:54.240 | a

01:28:54.700 | semiconductor

01:28:55.440 | manufacturer

01:28:56.420 | perspective

01:28:56.860 | also

01:28:57.260 | well

01:28:58.160 | first

01:28:58.360 | of

01:28:58.460 | you

01:28:58.600 | have

01:28:58.740 | to

01:28:58.880 | keep

01:28:59.200 | the

01:28:59.340 | communication

01:28:59.940 | channel

01:29:00.320 | open

01:29:00.840 | right

01:29:01.480 | there

01:29:01.640 | was

01:29:01.780 | a

01:29:01.900 | risk

01:29:02.080 | of

01:29:02.260 | that

01:29:02.520 | being

01:29:02.800 | shut

01:29:03.020 | off

01:29:03.280 | during

01:29:03.560 | the

01:29:03.740 | Biden

01:29:04.060 | administration

01:29:04.800 | that's

01:29:05.260 | highly

01:29:05.620 | dangerous

01:29:06.520 | meaning

01:29:07.240 | US

01:29:07.760 | China

01:29:08.100 | communication

01:29:08.680 | yeah

01:29:09.060 | there's

01:29:10.000 | also

01:29:10.200 | something

01:29:10.540 | that

01:29:10.780 | I

01:29:10.880 | think

01:29:11.000 | people

01:29:11.260 | miss

01:29:11.780 | which

01:29:12.760 | is

01:29:13.000 | that

01:29:13.460 | the

01:29:14.540 | soldiers

01:29:15.120 | in

01:29:15.620 | mainland

01:29:15.860 | China

01:29:16.240 | that's

01:29:16.560 | part

01:29:16.780 | of

01:29:17.060 | the

01:29:17.460 | one

01:29:17.640 | child

01:29:17.800 | policy

01:29:18.200 | generation

01:29:18.800 | right

01:29:19.760 | there's

01:29:20.760 | only

01:29:20.920 | one

01:29:21.200 | son

01:29:21.480 | families

01:29:22.480 | have

01:29:22.680 | only

01:29:22.880 | one

01:29:23.200 | son

01:29:23.520 | and

01:29:25.000 | I

01:29:25.600 | think

01:29:25.880 | to

01:29:27.120 | assume

01:29:27.420 | that

01:29:27.600 | the

01:29:27.840 | Chinese

01:29:28.100 | people

01:29:28.380 | desire

01:29:29.040 | and

01:29:30.160 | would

01:29:30.300 | be

01:29:30.480 | able

01:29:30.700 | to

01:29:31.060 | forsake

01:29:31.760 | that

01:29:32.020 | generation

01:29:32.660 | for

01:29:33.820 | unification

01:29:34.380 | purposes

01:29:35.140 | or

01:29:35.740 | be able

01:29:36.420 | to

01:29:36.900 | tolerate

01:29:37.820 | lost

01:29:38.740 | lives

01:29:39.240 | for

01:29:39.420 | this

01:29:39.700 | I

01:29:40.440 | think

01:29:40.600 | is

01:29:40.740 | also

01:29:40.940 | a bit

01:29:41.220 | of

01:29:41.480 | an

01:29:42.080 | exaggeration

01:29:42.780 | and

01:29:42.960 | stress

01:29:43.300 | and

01:29:43.700 | I

01:29:43.900 | think

01:29:44.060 | Chinese

01:29:44.360 | people

01:29:44.640 | also

01:29:45.140 | really

01:29:46.400 | they

01:29:49.460 | really

01:29:49.720 | care

01:29:50.020 | about

01:29:50.440 | peace

01:29:51.360 | and

01:29:51.640 | stability

01:29:52.140 | chaos

01:29:53.620 | is

01:29:53.940 | just

01:29:54.140 | not

01:29:54.400 | part

01:29:54.660 | of

01:29:54.940 | what

01:29:55.760 | they

01:29:55.880 | think

01:29:56.060 | is

01:29:56.220 | good

01:29:56.400 | for

01:29:56.560 | them

01:29:56.860 | the

01:29:58.920 | role

01:29:59.180 | that

01:29:59.420 | TSMC

01:30:00.120 | plays

01:30:00.600 | is

01:30:00.820 | so

01:30:01.120 | critical

01:30:01.660 | given

01:30:02.400 | the

01:30:02.580 | choke

01:30:02.800 | point

01:30:03.020 | they

01:30:03.200 | have

01:30:03.540 | on

01:30:03.840 | the

01:30:03.940 | rest

01:30:04.140 | of

01:30:04.280 | the

01:30:04.400 | world

01:30:04.780 | in

01:30:06.560 | the

01:30:06.680 | semiconductors

01:30:07.340 | industry

01:30:07.740 | which

01:30:07.980 | we

01:30:08.160 | know

01:30:08.460 | is

01:30:08.820 | one

01:30:09.020 | of

01:30:09.100 | the

01:30:09.180 | most

01:30:09.340 | important

01:30:09.660 | industries

01:30:10.260 | sustaining

01:30:10.980 | the

01:30:11.160 | economy

01:30:11.540 | not

01:30:12.480 | to

01:30:12.620 | mention

01:30:13.020 | things

01:30:13.700 | like

01:30:13.880 | AI

01:30:14.160 | and

01:30:14.940 | technologies

01:30:15.860 | look

01:30:17.620 | you know

01:30:17.940 | the

01:30:18.920 | US

01:30:19.200 | has

01:30:19.400 | been

01:30:19.540 | trying

01:30:19.860 | to

01:30:20.480 | to

01:30:21.400 | build

01:30:22.000 | another

01:30:23.000 | TSMC

01:30:24.680 | outside

01:30:25.160 | of

01:30:25.340 | Taiwan

01:30:25.740 | it's

01:30:26.840 | very

01:30:27.280 | very

01:30:27.660 | very

01:30:27.940 | slow

01:30:28.420 | right

01:30:29.240 | there

01:30:31.060 | are

01:30:31.140 | a lot

01:30:31.340 | of

01:30:31.500 | cumulative

01:30:32.060 | knowledge

01:30:33.720 | experience

01:30:34.420 | and

01:30:35.700 | skills

01:30:36.260 | that are

01:30:36.760 | involved

01:30:37.220 | it's

01:30:37.500 | not

01:30:37.760 | that

01:30:38.040 | easy

01:30:38.500 | the

01:30:39.740 | Chinese

01:30:40.040 | don't

01:30:40.260 | want

01:30:40.400 | to

01:30:40.500 | see

01:30:40.820 | an

01:30:41.500 | eruption

01:30:41.820 | of

01:30:42.220 | TSMC

01:30:43.600 | either

01:30:43.980 | because

01:30:45.680 | again

01:30:46.560 | it's

01:30:46.960 | vitally

01:30:47.320 | important

01:30:47.700 | for

01:30:47.940 | everybody

01:30:48.420 | whilst

01:30:50.040 | I

01:30:50.240 | don't

01:30:50.520 | think

01:30:50.780 | that

01:30:51.180 | this

01:30:51.420 | is

01:30:51.560 | really

01:30:51.780 | necessarily

01:30:52.140 | a

01:30:52.340 | bargaining

01:30:52.680 | chip

01:30:53.140 | because

01:30:53.600 | if

01:30:54.380 | you

01:30:54.660 | really

01:30:56.380 | see

01:30:56.820 | what

01:30:57.060 | the

01:30:57.200 | Chinese

01:30:57.420 | thinks

01:30:57.760 | about

01:30:58.060 | Taiwan

01:30:58.400 | it

01:30:58.680 | goes

01:30:58.860 | beyond

01:30:59.140 | economics

01:30:59.680 | it

01:31:00.160 | goes

01:31:00.380 | beyond

01:31:00.660 | the

01:31:00.800 | logical

01:31:01.120 | it

01:31:01.920 | is

01:31:02.100 | about

01:31:02.580 | realizing

01:31:05.220 | a

01:31:05.720 | dream

01:31:06.080 | which

01:31:06.500 | even

01:31:08.240 | I

01:31:08.640 | tended

01:31:09.600 | to

01:31:10.560 | not

01:31:12.600 | place

01:31:12.920 | enough

01:31:13.180 | importance

01:31:13.680 | but

01:31:14.160 | when I

01:31:14.440 | talked

01:31:14.640 | to

01:31:14.760 | the

01:31:14.920 | young

01:31:15.120 | people

01:31:15.520 | in

01:31:15.760 | China

01:31:16.120 | I

01:31:16.840 | realized

01:31:17.380 | that

01:31:17.780 | it's

01:31:18.120 | still

01:31:18.280 | their

01:31:18.460 | dream

01:31:18.780 | it's

01:31:19.620 | just

01:31:19.760 | unfortunate

01:31:20.180 | that

01:31:20.560 | this

01:31:21.300 | dream

01:31:21.620 | is

01:31:21.780 | mixed

01:31:22.000 | up

01:31:22.220 | in

01:31:22.320 | the

01:31:22.440 | fact

01:31:22.640 | that

01:31:22.860 | Taiwan

01:31:23.260 | with

01:31:23.820 | TSMC

01:31:24.300 | has

01:31:24.440 | been

01:31:24.560 | incredibly

01:31:25.000 | good

01:31:25.240 | at

01:31:25.360 | manufacturing

01:31:25.900 | it's

01:31:26.640 | just

01:31:26.780 | an

01:31:27.040 | interesting

01:31:27.560 | puzzle

01:31:27.980 | why

01:31:28.500 | it's

01:31:28.740 | so

01:31:28.920 | difficult

01:31:29.420 | at

01:31:30.720 | low

01:31:30.980 | cost

01:31:31.440 | at

01:31:31.760 | scale

01:31:32.220 | to

01:31:32.420 | manufacture

01:31:32.840 | chips

01:31:33.240 | and

01:31:33.880 | it's

01:31:34.000 | just

01:31:34.320 | incredible

01:31:36.520 | that they

01:31:36.860 | were able

01:31:37.140 | to do

01:31:37.480 | it

01:31:37.680 | and

01:31:37.960 | it's

01:31:38.180 | an

01:31:38.500 | interesting

01:31:38.840 | puzzle

01:31:39.220 | for how

01:31:40.020 | China

01:31:40.320 | can do

01:31:40.640 | it

01:31:40.740 | domestically

01:31:41.320 | and how

01:31:42.060 | US

01:31:42.280 | can do

01:31:42.600 | it

01:31:42.700 | domestically

01:31:43.240 | and it

01:31:44.420 | seems like

01:31:44.920 | there's

01:31:45.140 | increasing

01:31:45.540 | urgency

01:31:46.000 | on that

01:31:46.400 | and I

01:31:46.640 | think

01:31:46.880 | if we

01:31:48.160 | look out

01:31:48.620 | in the

01:31:48.800 | next

01:31:48.960 | hundred

01:31:49.160 | years

01:31:49.760 | the

01:31:51.680 | urgency

01:31:52.080 | is

01:31:52.340 | good

01:31:52.620 | because

01:31:53.040 | it's

01:31:53.260 | probably

01:31:53.520 | good

01:31:53.740 | for

01:31:53.920 | each

01:31:54.200 | individual

01:31:54.560 | country

01:31:54.900 | to

01:31:55.040 | be

01:31:55.160 | manufacturing

01:31:55.720 | majority

01:31:56.240 | of

01:31:56.480 | their

01:31:56.660 | chips

01:31:57.000 | right

01:31:58.380 | it's

01:31:58.720 | less

01:31:59.800 | likely

01:32:00.260 | to

01:32:00.580 | lead

01:32:01.140 | to

01:32:02.320 | conflict

01:32:03.060 | well

01:32:04.060 | this

01:32:04.420 | is

01:32:04.580 | the

01:32:04.740 | trend

01:32:05.200 | that

01:32:05.960 | you

01:32:06.300 | need

01:32:06.520 | to

01:32:06.700 | manufacturing

01:32:07.420 | things

01:32:07.900 | that

01:32:08.020 | are

01:32:08.120 | important

01:32:08.460 | for

01:32:08.720 | national

01:32:09.040 | security

01:32:09.540 | it's

01:32:10.520 | not

01:32:10.660 | efficient

01:32:11.080 | but

01:32:11.940 | it's

01:32:12.920 | so-called

01:32:13.440 | strategically

01:32:13.920 | safer

01:32:14.480 | you

01:32:15.280 | mentioned

01:32:15.560 | one

01:32:15.800 | child

01:32:16.020 | policy

01:32:16.400 | so

01:32:16.680 | can

01:32:17.100 | we

01:32:17.200 | speak

01:32:17.380 | a little

01:32:17.600 | bit

01:32:17.740 | more

01:32:17.900 | to

01:32:18.040 | that

01:32:18.200 | like

01:32:18.400 | what

01:32:18.640 | broadly

01:32:19.200 | what

01:32:20.320 | impact

01:32:20.660 | has it

01:32:21.000 | had

01:32:21.360 | on the

01:32:22.240 | Chinese

01:32:22.740 | society

01:32:23.300 | on culture

01:32:24.220 | you already

01:32:24.520 | mentioned

01:32:24.980 | some of

01:32:25.480 | it

01:32:25.760 | some of

01:32:27.340 | the

01:32:27.420 | impact

01:32:27.820 | on the

01:32:28.360 | economics

01:32:28.920 | on the

01:32:29.600 | culture

01:32:30.040 | on the

01:32:31.440 | demographics

01:32:31.880 | of China

01:32:32.700 | it's

01:32:33.340 | probably

01:32:33.560 | one of

01:32:33.840 | the

01:32:33.920 | most

01:32:34.100 | radical

01:32:34.600 | policies

01:32:35.240 | that

01:32:35.640 | China

01:32:35.940 | has

01:32:36.220 | enacted

01:32:36.800 | in

01:32:37.540 | its

01:32:37.740 | history

01:32:38.180 | and

01:32:40.480 | the

01:32:41.080 | enforcement

01:32:41.500 | was

01:32:41.860 | very

01:32:42.140 | strict

01:32:42.580 | in

01:32:44.060 | my

01:32:44.280 | class

01:32:44.780 | nobody

01:32:45.940 | had

01:32:46.160 | a

01:32:46.280 | sibling

01:32:46.540 | except

01:32:47.220 | my

01:32:48.020 | friend

01:32:48.340 | who

01:32:48.760 | was

01:32:49.140 | a

01:32:49.400 | weak

01:32:49.560 | were

01:32:49.740 | 98%

01:32:52.500 | of

01:32:52.840 | urban

01:32:53.100 | households

01:32:53.720 | had

01:32:54.380 | only

01:32:54.600 | one

01:32:54.840 | child

01:32:55.140 | the

01:32:55.680 | other

01:32:55.820 | 2%

01:32:56.240 | are

01:32:56.460 | twins

01:32:56.760 | which

01:32:57.240 | you're

01:32:57.400 | allowed

01:32:57.560 | to

01:32:57.740 | keep

01:32:57.940 | thank

01:32:58.280 | goodness

01:32:58.600 | if

01:33:00.160 | you

01:33:00.260 | had

01:33:00.400 | the

01:33:00.560 | good

01:33:00.940 | fortune

01:33:01.340 | of

01:33:01.780 | giving

01:33:02.180 | birth

01:33:02.460 | to

01:33:02.660 | twins

01:33:03.060 | it

01:33:04.880 | had

01:33:05.140 | lots

01:33:05.620 | of

01:33:05.940 | unintended

01:33:06.360 | consequences

01:33:07.160 | on

01:33:07.840 | the

01:33:07.980 | economy

01:33:08.280 | and

01:33:08.480 | society

01:33:08.940 | as

01:33:09.260 | well

01:33:09.900 | maybe

01:33:11.760 | on

01:33:12.020 | the

01:33:12.180 | good

01:33:12.440 | side

01:33:13.020 | it's

01:33:14.420 | actually

01:33:14.660 | a

01:33:14.800 | golden

01:33:14.960 | age

01:33:15.240 | for

01:33:15.420 | Chinese

01:33:15.720 | women

01:33:15.980 | because

01:33:16.920 | the

01:33:17.440 | Chinese

01:33:17.820 | girls

01:33:18.260 | never

01:33:18.580 | had

01:33:19.140 | as

01:33:19.400 | much

01:33:19.680 | education

01:33:20.500 | investment

01:33:21.100 | apportioned

01:33:21.680 | to

01:33:21.780 | them

01:33:22.100 | as

01:33:22.840 | they've

01:33:23.100 | had

01:33:23.420 | after

01:33:23.860 | being

01:33:24.280 | the

01:33:24.480 | only

01:33:24.800 | child

01:33:25.180 | in

01:33:25.320 | the

01:33:25.420 | family

01:33:25.820 | and

01:33:26.100 | you

01:33:26.220 | raised

01:33:26.720 | a

01:33:27.360 | daughter

01:33:27.540 | like

01:33:27.760 | a

01:33:27.920 | son

01:33:28.160 | and

01:33:29.160 | if

01:33:29.280 | we

01:33:29.380 | look

01:33:29.520 | at

01:33:29.660 | all

01:33:29.800 | the

01:33:29.920 | skill

01:33:30.160 | gaps

01:33:30.680 | and

01:33:31.080 | the

01:33:31.620 | education

01:33:32.040 | gaps

01:33:32.680 | and

01:33:32.840 | the

01:33:32.900 | returns

01:33:33.160 | to

01:33:33.280 | education

01:33:33.540 | actually

01:33:33.880 | girls

01:33:35.160 | fared

01:33:35.440 | better

01:33:35.760 | apart

01:33:37.180 | from

01:33:37.820 | the

01:33:38.780 | top

01:33:39.440 | top

01:33:39.760 | top

01:33:40.020 | leadership

01:33:40.460 | in the

01:33:41.160 | Chinese

01:33:41.440 | political

01:33:41.820 | class

01:33:42.440 | you

01:33:43.840 | look at

01:33:44.280 | the

01:33:44.480 | CEOs

01:33:44.960 | of

01:33:45.260 | major

01:33:45.460 | companies

01:33:46.300 | the

01:33:47.740 | in

01:33:48.640 | the

01:33:48.780 | ministry

01:33:49.200 | civil

01:33:49.560 | servants

01:33:50.060 | there

01:33:50.520 | are

01:33:50.600 | a

01:33:50.800 | lot

01:33:51.100 | of

01:33:51.380 | Chinese

01:33:51.720 | women

01:33:52.060 | and

01:33:53.180 | actually

01:33:53.740 | recently

01:33:54.320 | if you

01:33:54.640 | look at

01:33:54.900 | the

01:33:55.040 | surveys

01:33:55.480 | the

01:33:56.000 | Chinese

01:33:56.300 | families

01:33:56.740 | would

01:33:57.040 | prefer

01:33:57.260 | to

01:33:57.420 | have

01:33:57.660 | a

01:33:58.020 | daughter

01:33:58.280 | than

01:33:58.840 | a

01:33:59.020 | son

01:33:59.260 | because

01:34:00.100 | they've

01:34:00.720 | seen

01:34:01.100 | how much

01:34:01.700 | bargaining

01:34:02.100 | power

01:34:02.640 | you as

01:34:04.460 | a

01:34:04.640 | Chinese

01:34:05.180 | woman

01:34:05.660 | and

01:34:06.240 | as

01:34:06.440 | a

01:34:06.600 | rare

01:34:06.880 | bride

01:34:07.740 | or

01:34:08.780 | a

01:34:09.340 | scarce

01:34:09.760 | supply

01:34:10.440 | of

01:34:10.640 | brides

01:34:11.080 | goes

01:34:11.480 | you

01:34:11.960 | have

01:34:12.200 | raised

01:34:12.500 | your

01:34:12.640 | bargaining

01:34:12.900 | power

01:34:13.300 | and

01:34:13.480 | you

01:34:13.580 | can

01:34:13.760 | command

01:34:14.200 | high

01:34:14.680 | amounts

01:34:15.020 | of

01:34:15.180 | dowry

01:34:15.480 | that

01:34:16.120 | was

01:34:16.320 | an

01:34:16.520 | unintended

01:34:16.920 | good

01:34:17.520 | thing

01:34:17.840 | about

01:34:18.260 | the

01:34:19.040 | one

01:34:19.200 | child

01:34:19.340 | policy

01:34:19.960 | and

01:34:21.220 | to

01:34:22.420 | the

01:34:22.580 | opposite

01:34:23.000 | the

01:34:23.620 | recent

01:34:23.920 | relaxation

01:34:24.420 | of

01:34:25.080 | the

01:34:25.220 | one

01:34:25.360 | child

01:34:25.500 | policy

01:34:25.860 | actually

01:34:26.240 | women

01:34:26.680 | are

01:34:26.860 | now

01:34:27.120 | encouraged

01:34:27.760 | to

01:34:27.900 | have

01:34:28.040 | as

01:34:28.660 | many

01:34:28.840 | kids

01:34:29.060 | as

01:34:29.200 | they

01:34:29.360 | possibly

01:34:29.820 | can

01:34:30.380 | the

01:34:31.140 | flip

01:34:31.440 | side

01:34:31.760 | of

01:34:31.940 | the

01:34:32.060 | one

01:34:32.220 | child

01:34:32.380 | policy

01:34:32.900 | has

01:34:33.240 | not

01:34:33.560 | necessarily

01:34:34.080 | been

01:34:35.040 | good

01:34:35.300 | to

01:34:35.680 | women

01:34:35.940 | in

01:34:36.100 | the

01:34:36.220 | job

01:34:36.440 | market

01:34:37.280 | because

01:34:37.680 | they

01:34:38.140 | think

01:34:38.320 | oh

01:34:38.540 | well

01:34:38.720 | you've

01:34:38.920 | only

01:34:39.040 | had

01:34:39.180 | one

01:34:39.340 | child

01:34:39.500 | oh

01:34:39.680 | guess

01:34:39.880 | what

01:34:40.020 | you

01:34:40.140 | can

01:34:40.300 | have

01:34:40.480 | another

01:34:40.740 | child

01:34:41.060 | so

01:34:41.400 | that's

01:34:42.320 | not

01:34:42.600 | necessarily

01:34:42.980 | good

01:34:43.280 | for

01:34:43.640 | long

01:34:43.960 | term

01:34:44.280 | employability

01:34:45.480 | but

01:34:48.220 | on the

01:34:49.300 | economic

01:34:49.660 | side

01:34:49.960 | I've

01:34:50.140 | written

01:34:50.300 | about

01:34:50.600 | this

01:34:50.900 | in my

01:34:51.140 | academic

01:34:51.520 | papers

01:34:52.060 | it's

01:34:53.400 | been

01:34:53.660 | one of

01:34:54.220 | the

01:34:54.600 | very

01:34:54.980 | important

01:34:55.420 | causes

01:34:55.960 | of

01:34:56.640 | high

01:34:56.860 | saving

01:34:57.140 | rate

01:34:57.440 | you know

01:34:58.060 | always

01:34:58.340 | tell

01:34:58.480 | people

01:34:58.740 | you

01:34:58.920 | want

01:34:59.200 | to

01:34:59.940 | stimulate

01:35:00.220 | consumption

01:35:00.720 | or

01:35:00.900 | have

01:35:01.040 | more

01:35:01.220 | kids

01:35:01.540 | you

01:35:02.360 | know

01:35:02.480 | how

01:35:02.620 | much

01:35:02.820 | one

01:35:02.960 | of

01:35:03.060 | those

01:35:03.220 | costs

01:35:03.640 | right

01:35:04.080 | especially

01:35:05.480 | in

01:35:05.760 | China

01:35:06.060 | the

01:35:06.700 | tutorialships

01:35:07.640 | education

01:35:08.300 | you have

01:35:08.920 | to buy

01:35:09.180 | a house

01:35:09.620 | you have

01:35:09.880 | to buy

01:35:10.100 | a house

01:35:10.400 | for them

01:35:10.820 | so that

01:35:11.200 | they can

01:35:11.420 | get married

01:35:11.900 | eventually

01:35:12.320 | so it's

01:35:14.220 | very very

01:35:14.920 | expensive

01:35:15.320 | to have

01:35:15.720 | a child

01:35:16.440 | if you have

01:35:16.780 | more

01:35:17.020 | children

01:35:17.500 | you spend

01:35:18.680 | more

01:35:18.900 | but maybe

01:35:19.500 | people

01:35:19.880 | don't want

01:35:20.520 | to have

01:35:20.640 | more

01:35:20.800 | children

01:35:21.000 | because

01:35:21.380 | the cost

01:35:22.140 | of having

01:35:22.520 | a child

01:35:22.900 | is so

01:35:23.280 | high

01:35:23.540 | and this

01:35:24.180 | is driven

01:35:24.760 | by the

01:35:25.560 | competition

01:35:26.160 | and why

01:35:26.820 | is there

01:35:27.060 | so much

01:35:27.320 | competition

01:35:27.700 | because

01:35:28.160 | there's

01:35:28.860 | a one

01:35:29.140 | child

01:35:29.300 | policy

01:35:29.780 | generation

01:35:30.720 | right

01:35:31.060 | you want

01:35:31.860 | your child

01:35:32.300 | to be

01:35:32.740 | the dragon

01:35:33.340 | or the

01:35:33.920 | phoenix

01:35:34.320 | and you

01:35:36.060 | put everything

01:35:36.940 | into that

01:35:37.500 | one child

01:35:38.040 | that makes

01:35:39.560 | the child

01:35:39.960 | more anxious

01:35:40.620 | makes the

01:35:41.500 | whole

01:35:41.900 | environment

01:35:42.520 | more

01:35:42.960 | competitive

01:35:43.420 | and in

01:35:44.840 | the end

01:35:45.360 | these

01:35:45.840 | one child

01:35:46.280 | policy

01:35:46.680 | children

01:35:47.480 | don't want

01:35:48.140 | to have

01:35:48.340 | a lot

01:35:48.520 | of kids

01:35:48.880 | because

01:35:49.220 | they don't

01:35:49.440 | want

01:35:49.580 | them to

01:35:50.480 | see them

01:35:50.920 | suffer

01:35:51.320 | what they

01:35:51.760 | have

01:35:51.920 | suffered

01:35:52.300 | right

01:35:52.680 | so there

01:35:53.420 | are all

01:35:53.640 | these

01:35:53.840 | kind of

01:35:54.660 | unexpected

01:35:55.540 | consequences

01:35:56.120 | but also

01:35:56.700 | changing

01:35:57.060 | the social

01:35:57.480 | fabric

01:35:57.880 | I'd like

01:35:58.400 | to say

01:35:58.740 | that it

01:35:59.140 | broke the

01:35:59.500 | hierarchy

01:35:59.940 | of the

01:36:00.640 | family

01:36:00.940 | where the

01:36:01.260 | parents

01:36:01.560 | had the

01:36:01.820 | dominant

01:36:02.100 | role

01:36:02.460 | now the

01:36:03.300 | kids

01:36:03.520 | are the

01:36:03.780 | boss

01:36:04.120 | they boss

01:36:05.420 | everybody

01:36:05.700 | around

01:36:06.000 | they boss

01:36:06.340 | their

01:36:06.520 | grandparents

01:36:06.900 | around

01:36:07.420 | it relates

01:36:09.480 | to the

01:36:09.780 | puzzle

01:36:10.100 | the housing

01:36:10.840 | puzzle

01:36:11.280 | how is it

01:36:13.420 | possible that

01:36:14.280 | the Chinese

01:36:14.760 | youth can

01:36:15.220 | afford

01:36:15.780 | these

01:36:16.740 | really

01:36:17.660 | expensive

01:36:18.200 | real estate

01:36:19.180 | with their

01:36:19.700 | meager

01:36:20.080 | income

01:36:20.660 | well one

01:36:21.740 | common saying

01:36:22.260 | is that they

01:36:22.580 | have six

01:36:22.940 | wallets

01:36:23.380 | right

01:36:23.960 | you and

01:36:24.640 | your spouse

01:36:25.120 | together

01:36:26.120 | with the

01:36:26.400 | parents

01:36:26.760 | and maybe

01:36:27.640 | even the

01:36:27.900 | grandparents

01:36:28.240 | would chip

01:36:28.660 | in

01:36:28.900 | so there's

01:36:29.900 | this kind

01:36:30.300 | of

01:36:31.080 | intergenerational

01:36:32.720 | family dynamics

01:36:34.320 | that makes

01:36:36.080 | our models

01:36:36.840 | focused on the

01:36:37.600 | individual

01:36:38.040 | consumption

01:36:38.700 | just

01:36:39.800 | completely

01:36:40.620 | inappropriate

01:36:41.980 | to describe

01:36:42.920 | these dynamics

01:36:43.720 | but the

01:36:46.840 | demographic

01:36:47.340 | side is

01:36:48.420 | the other

01:36:50.000 | challenge

01:36:52.320 | which is

01:36:53.420 | they

01:36:54.800 | were so

01:36:55.860 | strict

01:36:56.220 | about the

01:36:57.080 | one-child policy

01:36:57.780 | and they

01:36:58.340 | kept it

01:36:58.840 | in for too

01:36:59.980 | long

01:37:00.500 | so that

01:37:01.580 | once they

01:37:02.460 | decide to

01:37:03.420 | loosen it

01:37:04.320 | and decided

01:37:05.140 | that

01:37:05.760 | fertility rates

01:37:07.320 | were way

01:37:07.760 | too low

01:37:08.300 | to sustain

01:37:08.840 | the Chinese

01:37:09.240 | economy

01:37:09.620 | in its

01:37:10.000 | future

01:37:10.360 | it was

01:37:10.680 | already

01:37:11.180 | too late

01:37:12.320 | and now

01:37:13.620 | they're finding

01:37:14.960 | all kinds

01:37:15.460 | of creative

01:37:15.780 | ways to

01:37:16.240 | make people

01:37:16.720 | have more

01:37:17.060 | kids

01:37:17.280 | this is not

01:37:17.980 | something

01:37:18.440 | that they

01:37:19.460 | can demand

01:37:20.820 | and command

01:37:21.480 | in ways

01:37:22.220 | that they

01:37:22.480 | can demand

01:37:22.920 | and command

01:37:23.420 | emerging

01:37:24.620 | strategic

01:37:25.100 | sectors

01:37:25.680 | right

01:37:26.100 | so

01:37:27.500 | all these

01:37:28.740 | really

01:37:28.980 | interesting

01:37:29.440 | social

01:37:29.860 | anecdotes

01:37:30.540 | where

01:37:30.720 | they're

01:37:30.860 | encouraging

01:37:31.340 | even

01:37:31.720 | single

01:37:32.800 | women

01:37:33.080 | in a

01:37:33.340 | highly

01:37:33.580 | conservative

01:37:34.180 | society

01:37:34.900 | encouraging

01:37:35.480 | single

01:37:36.040 | women

01:37:36.300 | to raise

01:37:36.760 | children

01:37:37.180 | nothing

01:37:37.820 | to be

01:37:38.880 | afraid

01:37:39.100 | about

01:37:39.340 | that

01:37:39.700 | lots

01:37:40.180 | of

01:37:40.360 | support

01:37:40.700 | system

01:37:41.080 | going

01:37:41.420 | going

01:37:41.740 | there

01:37:41.940 | I mean

01:37:42.200 | they're

01:37:42.840 | radically

01:37:43.220 | changing

01:37:43.840 | the whole

01:37:44.520 | you know

01:37:45.060 | thinking

01:37:45.420 | around

01:37:45.820 | these

01:37:46.100 | kind

01:37:46.280 | of

01:37:46.400 | issues

01:37:46.820 | well

01:37:47.600 | it seems

01:37:47.840 | like

01:37:48.120 | even

01:37:48.660 | the

01:37:48.820 | west

01:37:49.040 | a lot

01:37:49.300 | of

01:37:49.400 | the

01:37:49.520 | developed

01:37:49.860 | countries

01:37:50.380 | are

01:37:51.800 | have

01:37:52.240 | a

01:37:52.540 | demographics

01:37:52.960 | problem

01:37:53.440 | seems

01:37:54.620 | like a lot

01:37:54.960 | of

01:37:55.060 | countries

01:37:55.320 | not

01:37:55.520 | have

01:37:55.720 | enough

01:37:55.940 | babies

01:37:56.360 | South

01:37:57.600 | Korea

01:37:57.980 | very

01:37:59.520 | very

01:37:59.840 | very

01:38:00.060 | low

01:38:00.260 | fertility

01:38:00.720 | rate

01:38:01.040 | it's

01:38:02.180 | just

01:38:02.340 | that

01:38:02.660 | for

01:38:03.180 | China's

01:38:03.680 | stage

01:38:04.500 | of

01:38:04.680 | development

01:38:05.280 | it

01:38:06.320 | should

01:38:06.460 | be

01:38:06.600 | having

01:38:06.780 | more

01:38:07.000 | babies

01:38:07.360 | than

01:38:07.600 | it

01:38:07.720 | is

01:38:07.860 | currently

01:38:08.180 | having

01:38:08.660 | so

01:38:08.860 | the

01:38:09.000 | one

01:38:09.140 | child

01:38:09.280 | policy

01:38:09.740 | accelerated

01:38:11.000 | that

01:38:11.640 | demographic

01:38:12.480 | transition

01:38:13.060 | right

01:38:13.720 | it

01:38:13.900 | really

01:38:14.180 | squeezed

01:38:15.320 | in

01:38:15.560 | many

01:38:15.740 | many

01:38:15.940 | decades

01:38:16.460 | into

01:38:16.840 | two

01:38:17.660 | but

01:38:19.420 | my

01:38:20.480 | view

01:38:20.860 | about

01:38:21.360 | the

01:38:21.920 | demographic

01:38:22.840 | aspects

01:38:23.600 | for the

01:38:24.400 | economy

01:38:24.840 | is

01:38:25.200 | not

01:38:25.640 | as

01:38:26.240 | pessimistic

01:38:27.180 | as

01:38:27.560 | most

01:38:27.840 | people

01:38:28.300 | because

01:38:29.840 | meanwhile

01:38:31.080 | we're

01:38:31.260 | talking

01:38:31.480 | about

01:38:31.660 | aging

01:38:32.060 | there

01:38:35.000 | are

01:38:35.220 | also

01:38:35.660 | high

01:38:36.400 | rates

01:38:36.660 | of

01:38:36.820 | unemployment

01:38:37.380 | right

01:38:38.600 | when

01:38:40.580 | we're

01:38:40.800 | talking

01:38:41.160 | about

01:38:41.740 | is there

01:38:43.140 | enough

01:38:43.340 | people

01:38:43.700 | to do

01:38:44.000 | the

01:38:44.160 | jobs

01:38:44.620 | we have

01:38:46.000 | things

01:38:46.180 | like

01:38:46.360 | AI

01:38:46.700 | and

01:38:47.360 | not

01:38:47.600 | enough

01:38:47.900 | jobs

01:38:48.440 | and

01:38:48.640 | these

01:38:48.820 | kind

01:38:48.980 | of

01:38:49.060 | questions

01:38:49.480 | that

01:38:50.000 | are

01:38:50.200 | first

01:38:50.960 | order

01:38:51.440 | we

01:38:53.340 | haven't

01:38:53.740 | even

01:38:53.900 | figured

01:38:54.160 | out

01:38:54.380 | the

01:38:54.580 | relationship

01:38:55.120 | between

01:38:55.680 | labor

01:38:56.180 | force

01:38:56.740 | productivity

01:38:57.440 | you know

01:38:58.360 | what are

01:38:58.600 | the factors

01:38:59.160 | of production

01:38:59.780 | that will

01:39:00.400 | be most

01:39:01.000 | important

01:39:01.360 | for future

01:39:02.040 | economy

01:39:03.340 | and so

01:39:05.100 | we shouldn't

01:39:05.580 | be

01:39:05.920 | terrified

01:39:06.480 | that there's

01:39:07.160 | a looming

01:39:07.560 | aging

01:39:07.920 | problem

01:39:08.340 | because I

01:39:08.680 | think the

01:39:08.940 | more

01:39:09.300 | important

01:39:09.740 | question

01:39:10.200 | is that

01:39:11.220 | skill

01:39:11.720 | gap

01:39:12.920 | right

01:39:13.700 | what kind

01:39:14.180 | of skills

01:39:14.720 | do we

01:39:15.140 | actually

01:39:15.520 | need

01:39:15.920 | in the

01:39:16.480 | economy

01:39:16.700 | what kind

01:39:16.960 | of education

01:39:17.440 | system

01:39:17.800 | should we

01:39:18.120 | design

01:39:18.720 | in the

01:39:19.180 | economy

01:39:19.540 | to better

01:39:20.640 | suit

01:39:21.160 | the country

01:39:22.040 | to an

01:39:23.160 | ever-evolving

01:39:24.040 | and transformative

01:39:24.860 | technological

01:39:26.200 | society

01:39:26.920 | because if that's

01:39:27.800 | successful

01:39:28.140 | then we'd

01:39:28.540 | be able

01:39:28.800 | to respond

01:39:29.320 | to whatever

01:39:30.040 | puzzle

01:39:31.300 | the demographic

01:39:32.220 | situation

01:39:32.740 | creates

01:39:33.180 | yeah

01:39:33.420 | if you

01:39:34.140 | look at

01:39:34.760 | the most

01:39:35.720 | recent

01:39:35.980 | evidence

01:39:36.360 | on this

01:39:37.280 | issue

01:39:37.720 | they found

01:39:38.260 | that

01:39:38.480 | post

01:39:38.920 | 1990

01:39:39.640 | aging

01:39:42.120 | economies

01:39:42.800 | became

01:39:43.320 | richer

01:39:43.660 | not the

01:39:45.300 | other way

01:39:45.520 | around

01:39:45.820 | which was

01:39:46.680 | true for

01:39:47.060 | the pre

01:39:47.420 | 1990

01:39:47.860 | sample

01:39:48.480 | and the

01:39:49.260 | reason

01:39:49.580 | is that

01:39:50.200 | these

01:39:50.400 | aging

01:39:50.620 | societies

01:39:51.140 | much

01:39:51.680 | more

01:39:51.880 | rapidly

01:39:52.260 | adopted

01:39:53.200 | new

01:39:53.540 | technologies

01:39:54.180 | automation

01:39:56.060 | that actually

01:39:57.000 | helped

01:39:57.200 | the entire

01:39:57.720 | economy

01:39:58.520 | so

01:40:00.060 | should we

01:40:00.560 | be panicking

01:40:01.140 | about this

01:40:01.580 | now when

01:40:01.980 | we're actually

01:40:02.420 | also panicking

01:40:03.160 | about the

01:40:03.520 | fact there

01:40:03.800 | are not

01:40:04.000 | enough

01:40:04.240 | jobs

01:40:04.700 | around

01:40:05.100 | there are

01:40:07.300 | other

01:40:08.040 | issues

01:40:08.860 | that are

01:40:09.320 | more relevant

01:40:09.860 | for the

01:40:10.180 | Chinese

01:40:10.420 | economy

01:40:10.720 | today

01:40:11.080 | there are

01:40:12.080 | constant

01:40:12.520 | predictions

01:40:12.960 | of China's

01:40:13.700 | economy

01:40:14.100 | collapsing

01:40:14.640 | you have

01:40:15.440 | pushed

01:40:15.680 | against

01:40:16.040 | that

01:40:16.300 | narrative

01:40:16.680 | but you've

01:40:18.900 | also spoken

01:40:19.400 | to some

01:40:19.700 | of the

01:40:19.920 | challenges

01:40:20.340 | it's going

01:40:22.000 | through

01:40:22.300 | what's the

01:40:23.580 | GDP

01:40:23.940 | going to

01:40:24.320 | look like

01:40:24.880 | is the

01:40:26.000 | Chinese

01:40:26.540 | economy

01:40:26.900 | going to

01:40:27.200 | collapse

01:40:27.640 | is it

01:40:28.060 | going to

01:40:28.240 | flourish

01:40:28.660 | what do

01:40:29.780 | you think

01:40:30.220 | collapse

01:40:32.220 | is such

01:40:32.820 | a strong

01:40:33.500 | word

01:40:33.940 | and the

01:40:35.460 | West has

01:40:35.960 | been using

01:40:36.420 | this word

01:40:37.040 | repeatedly

01:40:37.640 | if I

01:40:38.560 | remember

01:40:38.980 | correctly

01:40:39.440 | maybe

01:40:39.760 | four to

01:40:40.460 | five times

01:40:41.000 | maybe even

01:40:41.440 | six times

01:40:42.060 | since

01:40:42.480 | 1980s

01:40:44.180 | during the

01:40:44.700 | period of

01:40:45.160 | China's

01:40:45.620 | fastest

01:40:46.000 | growth

01:40:46.600 | I

01:40:48.660 | tend to

01:40:49.560 | not

01:40:49.820 | think

01:40:50.240 | that

01:40:50.440 | Chinese

01:40:50.780 | economy

01:40:51.400 | will

01:40:51.700 | collapse

01:40:52.280 | but

01:40:52.740 | with a

01:40:53.180 | slow down

01:40:53.680 | continue

01:40:54.180 | will it

01:40:54.840 | be able

01:40:55.180 | to lift

01:40:56.300 | up again

01:40:57.040 | will it

01:40:57.660 | be able

01:40:58.320 | to come

01:40:59.020 | out of

01:40:59.320 | this

01:40:59.540 | cycle

01:41:00.080 | soon

01:41:01.680 | I think

01:41:03.100 | that's

01:41:03.440 | more

01:41:03.660 | relevant

01:41:04.080 | and

01:41:05.260 | the

01:41:07.140 | Chinese

01:41:07.540 | economy

01:41:07.960 | has a

01:41:08.800 | lot of

01:41:09.020 | potential

01:41:09.340 | because

01:41:09.580 | the

01:41:09.760 | fundamentals

01:41:10.120 | are

01:41:10.320 | still

01:41:10.500 | there

01:41:10.700 | right

01:41:11.560 | when

01:41:11.800 | we

01:41:11.860 | talk

01:41:12.000 | about

01:41:12.160 | the

01:41:12.260 | fundamentals

01:41:12.760 | it's

01:41:13.400 | the

01:41:13.540 | skills

01:41:13.860 | it's

01:41:14.040 | the

01:41:14.120 | human

01:41:14.340 | capital

01:41:14.760 | it's

01:41:15.120 | the

01:41:15.400 | physical

01:41:16.120 | capital

01:41:16.740 | it's

01:41:17.700 | the macroeconomic

01:41:18.680 | stability

01:41:19.200 | and political

01:41:19.600 | stability

01:41:20.100 | that's a lot

01:41:21.400 | going for

01:41:22.760 | a country

01:41:23.320 | if you look

01:41:23.860 | around the

01:41:24.300 | world

01:41:24.520 | right now

01:41:25.180 | right

01:41:25.740 | and this

01:41:26.700 | is why

01:41:27.260 | the

01:41:27.700 | entrepreneurialism

01:41:28.480 | is still

01:41:28.800 | there

01:41:28.980 | because the

01:41:29.360 | fundamentals

01:41:29.760 | are there

01:41:30.240 | even though

01:41:30.880 | the economy

01:41:31.540 | is weak

01:41:32.000 | consumers

01:41:32.460 | are not

01:41:32.880 | confident

01:41:33.280 | and private

01:41:33.760 | investment

01:41:34.200 | is insufficient

01:41:34.920 | the

01:41:35.860 | fundamentals

01:41:36.260 | are there

01:41:36.820 | is China

01:41:37.880 | where it

01:41:38.540 | should be

01:41:39.060 | far

01:41:40.380 | far

01:41:40.820 | far

01:41:41.060 | from

01:41:41.280 | it

01:41:41.520 | because

01:41:42.040 | China's

01:41:42.420 | potential

01:41:42.880 | based

01:41:43.420 | on

01:41:43.940 | the

01:41:44.320 | fundamentals

01:41:44.800 | is a

01:41:45.680 | much

01:41:45.880 | higher

01:41:46.240 | level

01:41:46.640 | of

01:41:46.840 | per capita

01:41:47.240 | income

01:41:47.720 | than

01:41:48.160 | where

01:41:48.520 | it is

01:41:48.740 | currently

01:41:49.020 | it's

01:41:49.180 | kind of

01:41:49.600 | currently

01:41:50.140 | in a

01:41:50.380 | $10,000

01:41:50.920 | bracket

01:41:51.520 | and this

01:41:52.940 | is also

01:41:53.620 | a puzzle

01:41:54.060 | because

01:41:54.700 | you're a

01:41:55.480 | $10,000

01:41:56.080 | per capita

01:41:56.760 | income

01:41:57.120 | country

01:41:57.540 | that can

01:41:57.900 | actually

01:41:58.160 | do

01:41:58.380 | leading

01:41:58.640 | edge

01:41:58.840 | technology

01:41:59.380 | and

01:41:59.840 | can

01:42:00.020 | be

01:42:00.340 | neck

01:42:00.740 | to

01:42:00.880 | neck

01:42:01.080 | with

01:42:01.500 | U.S.

01:42:02.360 | companies

01:42:02.960 | on these

01:42:03.760 | high tech

01:42:04.160 | that's

01:42:04.680 | the first

01:42:05.300 | time in

01:42:05.660 | history

01:42:05.980 | even

01:42:06.820 | the

01:42:07.000 | Soviet

01:42:07.220 | Union

01:42:07.600 | which

01:42:07.860 | was

01:42:07.980 | very

01:42:08.220 | technologically

01:42:08.860 | advanced

01:42:09.280 | did not

01:42:09.640 | have the

01:42:09.980 | extent

01:42:10.360 | of

01:42:10.780 | commercializable

01:42:11.840 | civilian

01:42:12.320 | technology

01:42:12.980 | and the

01:42:13.740 | technologies

01:42:14.880 | that were

01:42:15.640 | pervasive

01:42:16.220 | throughout

01:42:16.580 | the

01:42:16.780 | economy

01:42:17.160 | but

01:42:18.760 | fundamentally

01:42:19.400 | we have

01:42:20.080 | to understand

01:42:20.560 | how much

01:42:21.100 | of this

01:42:21.540 | real estate

01:42:22.300 | crisis

01:42:23.120 | has

01:42:24.140 | impinged

01:42:24.920 | on the

01:42:25.320 | economy

01:42:25.720 | and

01:42:26.300 | explains

01:42:27.280 | the

01:42:28.100 | persistent

01:42:28.540 | slowdown

01:42:29.240 | can you

01:42:29.840 | explain

01:42:30.220 | the

01:42:30.900 | real estate

01:42:31.280 | crisis

01:42:31.660 | a few

01:42:32.520 | years

01:42:32.760 | ago

01:42:33.160 | there was

01:42:35.180 | a crackdown

01:42:35.840 | on the

01:42:36.120 | real estate

01:42:36.620 | sector

01:42:37.180 | and

01:42:38.360 | again

01:42:39.140 | it comes

01:42:39.520 | back to

01:42:40.120 | the

01:42:40.500 | lot of

01:42:41.280 | the

01:42:41.400 | social

01:42:41.640 | issues

01:42:41.940 | we were

01:42:42.280 | discussing

01:42:42.700 | you know

01:42:43.220 | why

01:42:43.540 | aren't

01:42:43.920 | people

01:42:44.280 | having

01:42:44.680 | kids

01:42:45.100 | well

01:42:45.320 | maybe

01:42:45.620 | it's

01:42:45.940 | because

01:42:46.340 | housing

01:42:46.780 | is

01:42:47.040 | too

01:42:47.280 | expensive

01:42:47.840 | maybe

01:42:48.760 | it's

01:42:48.940 | because

01:42:49.140 | education

01:42:49.640 | system

01:42:50.060 | is

01:42:50.240 | too

01:42:50.420 | competitive

01:42:50.900 | the

01:42:52.660 | speculative

01:42:53.560 | bubbles

01:42:54.160 | in the

01:42:54.800 | real estate

01:42:55.180 | is making

01:42:55.720 | housing

01:42:56.300 | unaffordable

01:42:56.980 | and that's

01:42:57.400 | not part

01:42:57.720 | of the

01:42:58.000 | Chinese

01:42:58.240 | social

01:42:58.580 | characteristics

01:42:59.220 | right

01:42:59.820 | and so

01:43:02.340 | when

01:43:02.900 | they decided

01:43:03.640 | that

01:43:04.300 | the

01:43:04.940 | property

01:43:05.400 | investors

01:43:06.280 | were going

01:43:06.680 | to be

01:43:06.900 | reigned

01:43:07.240 | in

01:43:07.560 | that

01:43:07.760 | housing

01:43:08.120 | was to

01:43:08.600 | be

01:43:08.760 | lived

01:43:09.020 | in

01:43:09.200 | not

01:43:09.540 | speculated

01:43:10.940 | it really

01:43:11.900 | brought down

01:43:12.580 | the whole

01:43:13.120 | sector

01:43:13.460 | in terms

01:43:13.960 | of

01:43:14.140 | investment

01:43:14.620 | in terms

01:43:15.820 | of

01:43:16.240 | the

01:43:16.540 | financing

01:43:17.040 | of the

01:43:18.180 | sector

01:43:18.540 | but

01:43:19.500 | ultimately

01:43:20.300 | it

01:43:21.160 | made

01:43:21.380 | such

01:43:21.700 | a

01:43:21.860 | massive

01:43:22.180 | impact

01:43:22.820 | or

01:43:23.080 | such

01:43:23.500 | a

01:43:23.620 | massive

01:43:23.840 | dent

01:43:24.200 | on

01:43:24.400 | the

01:43:24.520 | economy

01:43:24.920 | because

01:43:25.500 | it

01:43:26.800 | really

01:43:27.180 | embodied

01:43:28.660 | the two

01:43:29.680 | fundamental

01:43:30.320 | pillars

01:43:30.800 | of the

01:43:31.120 | economy

01:43:31.420 | one is

01:43:32.120 | the fiscal

01:43:33.520 | system

01:43:33.920 | and one is

01:43:34.940 | the financial

01:43:35.280 | system

01:43:35.660 | so coming

01:43:36.100 | back to our

01:43:36.520 | local mayor

01:43:37.040 | economy

01:43:37.580 | where did you

01:43:39.180 | think the

01:43:39.540 | local mayors

01:43:40.200 | got their

01:43:40.600 | funds

01:43:40.900 | right

01:43:41.620 | through real

01:43:42.000 | estate

01:43:42.280 | they sold

01:43:43.300 | land

01:43:43.660 | real estate

01:43:45.960 | property developers

01:43:46.800 | came in

01:43:47.380 | they can

01:43:47.640 | develop

01:43:47.920 | the entire

01:43:48.460 | local

01:43:49.340 | economy

01:43:49.780 | because

01:43:50.460 | the services

01:43:51.200 | will come

01:43:51.600 | in

01:43:51.700 | the jobs

01:43:52.040 | will come

01:43:52.360 | in

01:43:52.600 | and by

01:43:53.060 | the way

01:43:53.300 | you're an

01:43:53.600 | equity

01:43:53.980 | owner

01:43:54.520 | of the

01:43:55.480 | entire

01:43:55.860 | city

01:43:56.240 | so you

01:43:56.880 | want these

01:43:57.400 | property

01:43:57.740 | developers

01:43:58.360 | around

01:43:58.860 | many countries

01:44:04.900 | throughout history

01:44:05.740 | all have this

01:44:06.900 | property

01:44:07.420 | transition

01:44:08.300 | right

01:44:09.100 | you need to

01:44:09.700 | wean the

01:44:10.460 | economy

01:44:10.900 | off of

01:44:11.600 | property

01:44:12.040 | in a

01:44:14.060 | good

01:44:14.660 | situation

01:44:16.000 | it takes

01:44:16.680 | three to

01:44:16.980 | five years

01:44:17.420 | in a bad

01:44:17.860 | situation

01:44:18.320 | it can

01:44:18.900 | take

01:44:19.060 | ten years

01:44:19.500 | I don't

01:44:21.140 | know

01:44:21.400 | where

01:44:22.140 | China

01:44:22.700 | belongs

01:44:23.840 | currently

01:44:24.380 | but

01:44:25.520 | the

01:44:27.120 | real estate

01:44:27.660 | collapse

01:44:28.480 | also meant

01:44:29.000 | the local

01:44:29.580 | finances

01:44:30.300 | local

01:44:30.580 | government

01:44:30.860 | finances

01:44:31.420 | also

01:44:31.960 | shrunk

01:44:32.300 | dramatically

01:44:32.920 | real estate

01:44:34.320 | was a really

01:44:35.200 | important part

01:44:35.840 | of the

01:44:36.140 | financial

01:44:36.460 | industry

01:44:36.880 | it brought

01:44:37.220 | that down

01:44:37.820 | together

01:44:38.720 | it really

01:44:40.320 | had a major

01:44:40.920 | impact on

01:44:41.360 | the economy

01:44:41.720 | but also

01:44:42.320 | from the

01:44:42.640 | consumer

01:44:43.060 | side

01:44:43.580 | their

01:44:44.260 | wealth

01:44:44.700 | was

01:44:44.940 | primarily

01:44:45.420 | tied

01:44:46.320 | into

01:44:46.680 | real

01:44:46.880 | estate

01:44:47.140 | not the

01:44:47.680 | stock

01:44:47.880 | market

01:44:48.320 | not other

01:44:49.180 | kind of

01:44:49.440 | investment

01:44:49.760 | opportunities

01:44:50.340 | it was

01:44:51.020 | real estate

01:44:51.720 | so they

01:44:52.060 | felt poor

01:44:52.600 | they consumed

01:44:53.280 | less

01:44:53.620 | so in the

01:44:55.160 | spirit of

01:44:55.480 | understanding

01:44:55.860 | China better

01:44:56.560 | maybe to

01:44:58.940 | get a bit

01:44:59.500 | of your

01:44:59.740 | advice

01:45:00.180 | if I were

01:45:01.140 | to visit

01:45:01.580 | China

01:45:01.940 | what's the

01:45:02.340 | right way

01:45:02.980 | to visit

01:45:04.260 | to experience

01:45:04.960 | it

01:45:05.340 | to see

01:45:07.180 | the people

01:45:07.540 | to talk

01:45:07.900 | to the

01:45:08.140 | people

01:45:08.440 | maybe outside

01:45:09.060 | of the

01:45:09.280 | big cities

01:45:09.800 | is there

01:45:10.160 | any advice

01:45:10.600 | you can

01:45:10.860 | give to

01:45:11.360 | somebody

01:45:11.640 | going to

01:45:12.020 | China

01:45:12.340 | a

01:45:13.420 | checkout

01:45:13.900 | speed

01:45:15.360 | his

01:45:18.000 | travels

01:45:18.620 | into

01:45:19.300 | China

01:45:19.680 | I think

01:45:20.900 | they

01:45:21.200 | represent

01:45:21.940 | a more

01:45:24.480 | dynamic

01:45:25.940 | reality

01:45:26.520 | than just

01:45:27.640 | visiting

01:45:28.000 | Beijing

01:45:28.340 | and Shanghai

01:45:28.940 | and Shenzhen

01:45:29.900 | the big

01:45:30.280 | cities

01:45:30.680 | I actually

01:45:31.960 | think a lot

01:45:32.520 | of the

01:45:32.700 | opportunities

01:45:33.300 | especially

01:45:33.740 | economic

01:45:34.160 | opportunities

01:45:34.760 | are in the

01:45:35.240 | second

01:45:35.460 | third tier

01:45:35.880 | cities

01:45:36.200 | in China

01:45:38.240 | and there's

01:45:39.760 | a return

01:45:40.300 | of talent

01:45:41.200 | you know

01:45:42.520 | these

01:45:42.780 | companies

01:45:43.440 | Pop Mart

01:45:45.900 | they're coming

01:45:47.260 | from these

01:45:47.940 | second tier

01:45:48.720 | cities

01:45:49.240 | that care

01:45:50.280 | about the

01:45:51.240 | local economy

01:45:52.000 | about fun

01:45:53.500 | entertainment

01:45:54.740 | that's what the

01:45:55.720 | new generation

01:45:56.200 | is about

01:45:56.620 | they don't

01:45:57.340 | want to be

01:45:57.660 | lining up

01:45:58.300 | some factory

01:45:59.740 | you know

01:46:00.420 | doing

01:46:00.660 | manufacturing

01:46:01.460 | jobs

01:46:02.160 | if you

01:46:02.420 | think

01:46:02.620 | that

01:46:02.880 | the

01:46:03.480 | Chinese

01:46:03.820 | new

01:46:04.080 | generation

01:46:04.500 | is still

01:46:04.880 | all about

01:46:05.500 | that

01:46:06.060 | you know

01:46:06.480 | you should

01:46:07.400 | really study

01:46:07.980 | them a little

01:46:08.480 | bit more

01:46:09.240 | they're all

01:46:10.740 | about

01:46:11.140 | making their

01:46:12.040 | lives more

01:46:12.640 | fun and

01:46:13.060 | more interesting

01:46:13.640 | right

01:46:14.460 | that's the

01:46:15.260 | cycle

01:46:15.620 | right

01:46:15.980 | in the

01:46:16.260 | beginning

01:46:16.520 | Chinese

01:46:16.960 | people

01:46:17.180 | are hungry

01:46:17.540 | they

01:46:18.000 | want to

01:46:18.660 | look for

01:46:19.120 | jobs

01:46:19.560 | and they

01:46:19.900 | find these

01:46:20.280 | jobs

01:46:20.500 | in the

01:46:20.720 | manufacturing

01:46:21.140 | now they

01:46:21.560 | want to

01:46:21.820 | work-life

01:46:22.200 | balance

01:46:22.660 | they are

01:46:24.380 | a spearheading

01:46:25.540 | fashion

01:46:26.020 | right

01:46:26.560 | they spend

01:46:27.220 | so much

01:46:27.680 | more on

01:46:28.440 | entertainment

01:46:29.860 | travel

01:46:30.580 | clothing

01:46:32.400 | restaurants

01:46:33.500 | they have

01:46:35.340 | come out

01:46:35.940 | with these

01:46:36.380 | amazing

01:46:36.900 | coffee

01:46:37.280 | chains

01:46:37.700 | that have

01:46:38.000 | beaten

01:46:38.320 | completely

01:46:39.040 | Starbucks

01:46:39.520 | within a

01:46:40.360 | very short

01:46:41.180 | amount of

01:46:41.680 | time

01:46:41.820 | this is all

01:46:42.320 | the new

01:46:42.700 | generation

01:46:43.360 | where the

01:46:44.760 | opportunities

01:46:45.220 | it's in the

01:46:45.840 | local

01:46:46.360 | areas

01:46:47.140 | it's all

01:46:47.520 | about

01:46:47.680 | localism

01:46:48.220 | not globalism

01:46:49.120 | localism

01:46:49.900 | being rooted

01:46:51.380 | in your

01:46:51.900 | local

01:46:52.480 | economy

01:46:53.200 | you will

01:46:54.080 | actually find

01:46:54.780 | so many

01:46:55.460 | more

01:46:55.620 | opportunities

01:46:56.240 | you go to

01:46:57.660 | Chongqing

01:46:58.100 | I actually

01:46:59.420 | was watching

01:47:00.040 | a video

01:47:00.480 | about Chongqing

01:47:00.960 | I thought

01:47:01.240 | we were

01:47:01.480 | in Shanghai

01:47:01.860 | I was

01:47:02.520 | so surprised

01:47:03.380 | and you

01:47:05.080 | go to

01:47:05.320 | Chengdu

01:47:05.760 | it's fun

01:47:07.080 | you know

01:47:07.660 | people work

01:47:08.220 | a little bit

01:47:08.600 | less

01:47:09.000 | but it's

01:47:10.640 | really exciting

01:47:11.320 | it's very

01:47:12.000 | fun

01:47:12.440 | people are

01:47:13.140 | really nice

01:47:13.780 | go to

01:47:14.720 | Xinjiang

01:47:15.020 | take a look

01:47:16.280 | for yourself

01:47:16.820 | there's ski

01:47:17.780 | resorts

01:47:18.220 | being open

01:47:19.660 | there

01:47:19.980 | you have a

01:47:21.860 | very interesting

01:47:22.580 | colorful

01:47:23.180 | dynamic

01:47:23.880 | complex

01:47:24.760 | country

01:47:25.480 | and it's

01:47:26.060 | not defined

01:47:26.840 | by Beijing

01:47:27.480 | and Shanghai

01:47:27.940 | so the

01:47:28.900 | small

01:47:29.120 | cities

01:47:29.640 | are

01:47:30.140 | flourishing

01:47:30.620 | and are

01:47:31.560 | developing

01:47:31.960 | a personality

01:47:32.600 | of their

01:47:32.980 | own

01:47:33.200 | they are

01:47:33.860 | flourishing

01:47:34.400 | more

01:47:35.020 | than the

01:47:35.820 | first

01:47:36.200 | major

01:47:36.760 | tier

01:47:37.100 | cities

01:47:37.640 | interesting

01:47:38.300 | what is

01:47:39.600 | what's the

01:47:40.160 | most beautiful

01:47:40.680 | thing to you

01:47:41.420 | about China

01:47:42.100 | and its

01:47:42.480 | people

01:47:42.880 | that you

01:47:44.380 | wish more

01:47:45.000 | people knew

01:47:45.700 | behind

01:47:46.800 | all this

01:47:47.840 | competition

01:47:48.520 | and ambition

01:47:49.500 | you have

01:47:51.280 | a very

01:47:51.560 | genuine

01:47:52.000 | group

01:47:52.440 | of

01:47:52.620 | people

01:47:53.040 | they are

01:47:54.580 | funny

01:47:54.980 | they are

01:47:56.840 | they are

01:47:58.360 | community

01:47:58.860 | based

01:47:59.460 | they are

01:48:00.940 | authentic

01:48:01.440 | actually

01:48:02.240 | it's

01:48:02.640 | it's

01:48:03.060 | it's not

01:48:04.080 | contradictory

01:48:04.620 | right

01:48:05.040 | you have

01:48:05.540 | a society

01:48:06.700 | which is

01:48:07.260 | heavily

01:48:07.520 | controlled

01:48:08.040 | but

01:48:08.480 | they find

01:48:09.360 | ways to

01:48:09.820 | be

01:48:09.960 | truly

01:48:10.600 | truly

01:48:11.040 | authentic

01:48:11.640 | and

01:48:14.440 | ultimately

01:48:17.000 | they're

01:48:17.500 | just

01:48:17.780 | a very

01:48:18.200 | social

01:48:18.580 | group

01:48:18.960 | right

01:48:19.280 | again

01:48:19.520 | I

01:48:19.700 | keep

01:48:20.000 | on

01:48:20.220 | coming

01:48:21.040 | to this

01:48:21.560 | being

01:48:22.380 | lonely

01:48:22.880 | aspect

01:48:23.680 | of the

01:48:24.700 | western

01:48:24.980 | society

01:48:25.640 | and

01:48:26.400 | increasingly

01:48:27.000 | living

01:48:27.520 | alone

01:48:28.060 | that is

01:48:29.000 | not

01:48:29.180 | China

01:48:29.500 | it's

01:48:29.940 | still

01:48:30.420 | very

01:48:30.800 | very

01:48:31.000 | warm

01:48:31.420 | country

01:48:32.000 | and

01:48:33.680 | they're

01:48:34.280 | warm

01:48:34.660 | to

01:48:34.880 | foreigners

01:48:35.320 | and

01:48:36.680 | they

01:48:37.160 | are

01:48:37.400 | friendly

01:48:37.740 | well

01:48:39.280 | I'm

01:48:40.680 | very

01:48:41.300 | grateful

01:48:41.680 | for

01:48:43.000 | you

01:48:43.480 | being

01:48:43.760 | a

01:48:43.920 | voice

01:48:44.140 | of

01:48:44.300 | balance

01:48:44.640 | a

01:48:44.820 | voice

01:48:45.020 | of

01:48:45.160 | reason

01:48:45.420 | in

01:48:45.640 | this

01:48:45.820 | world

01:48:46.140 | and

01:48:46.780 | for

01:48:47.060 | the

01:48:47.200 | book

01:48:47.400 | you've

01:48:47.560 | written

01:48:47.700 | on

01:48:47.880 | China

01:48:48.200 | that

01:48:48.800 | a lot

01:48:49.180 | of

01:48:49.320 | people

01:48:49.580 | deeply

01:48:49.880 | respect

01:48:50.340 | and

01:48:50.900 | for

01:48:51.040 | talking

01:48:51.320 | today

01:48:51.640 | K.U.

01:48:52.400 | Thank you so much

01:48:53.060 | this was an honor

01:48:53.680 | great to be with you

01:48:54.740 | it's a pleasure

01:48:55.440 | thanks for listening to this conversation

01:48:57.940 | with K.U. Jin

01:48:58.720 | to support this podcast

01:49:00.100 | please check out our sponsors

01:49:01.280 | in the description

01:49:02.060 | and consider

01:49:03.040 | subscribing

01:49:03.920 | to the channel

01:49:04.980 | and now

01:49:06.100 | let me leave you

01:49:07.100 | with some words

01:49:07.740 | from

01:49:08.120 | Confucius

01:49:09.080 | it does not matter

01:49:11.400 | how slowly you go

01:49:12.860 | as long

01:49:14.500 | as you do not

01:49:15.260 | stop

01:49:15.700 | thank you for listening

01:49:18.100 | and hope to see you

01:49:19.180 | next time

01:49:20.180 | you

01:49:20.680 | you

01:49:21.180 | you

01:49:21.680 | you

01:49:22.180 | you

01:49:22.680 | you

01:49:23.180 | you

01:49:23.680 | you

01:49:24.180 | you

01:49:24.180 | Thank you.

Keyu Jin: China's Economy, Tariffs, Trade, Trump, Communism & Capitalism | Lex Fridman Podcast #477

Chapters