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Speaker 1: Pushkin. Over the past few years, there's been this just

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Speaker 1: incredible transformation in the Chinese car industry, and this transformation

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Speaker 1: has been basically invisible to those of us in the

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Speaker 1: United States because the US has essentially banned Chinese cars.

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Speaker 1: What's happened is this, Chinese car makers spent decades as

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Speaker 1: sort of marginal players in the global car industry, but

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Speaker 1: now kind of all of a sudden, Chinese car makers

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Speaker 1: are the biggest car exporters in the world by far,

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Speaker 1: and they're not just selling cheap cars. They're selling some

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Speaker 1: of the best cars on the planet to buyers in

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Speaker 1: countries around the world. I'm Jacob Goldstein, and this is

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Speaker 1: what's your problem. My guest today is Michael Dunn. He's

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Speaker 1: the CEO of Done Insights, a company that consults on

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Speaker 1: the future of cars. Michael grew up in Detroit. He

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Speaker 1: studied Chinese at the University of Michigan, and he's been

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Speaker 1: consulting to the Chinese car industry since nineteen ninety. If

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Speaker 1: I were doing our usual problem framing for this episode,

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Speaker 1: I'd say something like, Michael's problem is this, how can

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Speaker 1: the United States catch up with the Chinese auto industry?

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Speaker 1: And we do talk about that later in the show,

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Speaker 1: and we talk about why, in Michael's view, having a

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Speaker 1: robust auto industry is just essential for the United States.

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Speaker 1: But to be honest, largely I wanted to talk to

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Speaker 1: Michael because I'm really curious about how this happened, about

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Speaker 1: how China suddenly emerged with this world beating auto industry.

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Speaker 1: And Michael was a great person to tell the story

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Speaker 1: because he was there to see it. But honestly, to

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Speaker 1: a large extent, I was just curious about how all

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Speaker 1: this happened, about how China suddenly emerged with this world

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Speaker 1: beating auto industry. Michael was a great person to tell

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Speaker 1: the story because he was there to see this transformation.

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Speaker 1: To start, I wanted to get a sense of where

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Speaker 1: things stand today, where we are now, So I asked

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Speaker 1: Michael to tell me about a few of the leading

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Speaker 1: Chinese car makers.

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Speaker 2: First one to know is a company called shall me,

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Speaker 2: shall Me? And Chinese, of course means millet, as in

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Speaker 2: rice millet.

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Speaker 3: Not a name. Is that how you're showing up in

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Speaker 3: your millet?

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Speaker 1: What?

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Speaker 2: So there's a history there. Malzatong famously said, rifles and

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Speaker 2: rice millets, that's the people's liberation Army and so as

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Speaker 2: a tribute this founder, late June who's the CEO and

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Speaker 2: founder of Shaw me one of the biggest handset makers

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Speaker 2: in the world.

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Speaker 1: Phonemakers.

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Speaker 2: Yeah, phone makers five years ago said we're going in

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Speaker 2: the cars. And today they manufactured two models, the XU seven,

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Speaker 2: the Yu seven that look like a hybrid of a Porsche,

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Speaker 2: and a Model three, beautifully designed. He recruited the best

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Speaker 2: designers out of Germany. It's got a battery powered vehicle,

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Speaker 2: really good looking, and it starts at like thirty two

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Speaker 2: thousand dollars. It's a total unbelievable shocker. Jim Farley at

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Speaker 2: Ford drives one.

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Speaker 1: Wait, Jim Farley, the CEO of Ford, drives a Chinese car,

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Speaker 1: a Chinese car that, by the way, you basically can't

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Speaker 1: get in America.

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Speaker 2: Right, that's just sacrilegious. As a native of Detroit, he's

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Speaker 2: crossed the line.

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Speaker 3: What is he doing?

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Speaker 1: What is he doing?

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Speaker 2: Yeah, he went to China. He saw one, and he said,

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Speaker 2: I need to drive that thing to figure out just

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Speaker 2: how good they are and why they're better than we are.

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Speaker 2: And so he drove one at least for six months.

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Speaker 2: He may still have it, said he didn't want to

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Speaker 2: give it up.

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Speaker 1: Is it right that there's a high end Chinese car

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Speaker 1: that can rotate three hundred and sixty degrees in place

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Speaker 1: and operate in the water like a boat for short distances?

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Speaker 1: Is that true?

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Speaker 2: This is not science fiction? That's absolutely right. BYD, which

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Speaker 2: is China's leading ev maker, recently launched a high end

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Speaker 2: brand to compete against Range Drover, and it's called the

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Speaker 2: Yang Wang or Look Up or Aspire the Young Lung.

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Speaker 2: You wait, I've bin in one here in California. Drove

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Speaker 2: into a parking lot, got to a dead end, you know,

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Speaker 2: the kind where you have cars parked on the right,

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Speaker 2: right and left. How do I back out here? No,

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Speaker 2: no backing out. Just hit a button and the car

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Speaker 2: rotated one hundred age agrees.

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Speaker 1: It turns on its axis.

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Speaker 2: Yeah, right, like in place. It's spin spinned around and

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Speaker 2: then I'm facing outward. Unbelievable. I haven't had the courage

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Speaker 2: to go in the water with one yet.

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Speaker 1: And just drive into the Pacific Ocean and see what happens.

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Speaker 3: Someone else do that. Touch.

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Speaker 2: But the point is that Chinese automakers have really come

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Speaker 2: up in terms of their capabilities, their R and D,

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Speaker 2: their innovation. They're not just delivering affordable vehicles, they're delivering

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Speaker 2: world class products that have all the latest features. So

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Speaker 2: this is what keeps the boardrooms in Stuttgart, in Nagoya,

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Speaker 2: and Detroit up at night. This is real, This is existential,

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Speaker 2: as Jim Farley's said, So.

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Speaker 1: I want to talk a lot more about what's happening

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Speaker 1: now and how carmakers in the US and elsewhere, and

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Speaker 1: for that matter, policymakers in the US and elsewhere are

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Speaker 1: responding and should respond. But I want to spend some

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Speaker 1: time talking about how China got here. And I'm particularly

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Speaker 1: interested to talk with you because, as I understand it,

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Speaker 1: you first went was it in nineteen ninety? You first

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Speaker 1: went to China and worked with the car industry in

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Speaker 1: nineteen ninety? Is that true?

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Speaker 3: That's right.

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Speaker 2: Days after graduating from Michigan with a degree in Chinese,

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Speaker 2: I got a three thousand dollars grant to start a

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Speaker 2: company in China, three thousand bucks. So I bought an

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Speaker 2: airline ticket and Apple computer and I was gone.

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Speaker 1: What a little farther in nineteen ninety that it goes today?

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Speaker 1: And so what tell me about the car industry as

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Speaker 1: you encountered it there in nineteen ninety. What was going

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Speaker 1: on with Chinese cars at the time.

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Speaker 3: Pitiful, just pitiful.

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Speaker 2: You wouldn't have like, Okay, First of all, I got

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Speaker 2: there and I announced I'm here to help. You know,

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Speaker 2: American companies sell cars to the Chinese, and my Chinese

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Speaker 2: friends on the ground said, well, that's ridiculous because nobody

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Speaker 2: here owns a private car there. We don't manufacture our

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Speaker 2: own cars, we don't have the incomes. What are you

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Speaker 2: doing here?

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Speaker 1: Yeah, I mean China was a profoundly poorer country at

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Speaker 1: that time. Right, the economic rise of China over those

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Speaker 1: thirty five years has been maybe unprecedented in the history

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Speaker 1: of the world, certainly like the unails over that time.

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Speaker 3: Yeah, give a little color to it.

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Speaker 2: So the very first car I did ride in was

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Speaker 2: called the Shanghai seven sixty. There's powder blue bench, seats,

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Speaker 2: no seat belts, big steering wheel, and I thought, wow,

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Speaker 2: this reminds me of something from my earliest childhood in

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Speaker 2: the nineteen sixties. Well, it turns out the Shanghai seven

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Speaker 2: sixty is a replica of a Russian car that was

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Speaker 2: a copy of a German car from nineteen fifty five.

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Speaker 1: Wow, and that's what they were still making in China

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Speaker 1: in nineteen ninety.

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Speaker 2: That's right, only a few thousand of them, and only

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Speaker 2: for senior party officials or in my case, the president

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Speaker 2: of the university where I was studying in China got

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Speaker 2: one to be driven around in. That was it one

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Speaker 2: car in the whole basically.

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Speaker 1: So it was an extremely high status thing to have

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Speaker 1: a car that was built on a forty year old

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Speaker 1: car at that time extraordinary.

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Speaker 2: You drive in a car, you ride in a car

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Speaker 2: more often, you are elite, and the common person in

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Speaker 2: China has no hope of riding in a car, let

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Speaker 2: alone owning one. Now China looked around. Dunshell Ping was

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Speaker 2: a leader and he's very pragmatic guy. He famously said,

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Speaker 2: I don't care if the cat is black or white.

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Speaker 2: If it catches a mouse, it's a good cat.

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Speaker 1: This is him pivoting from socialism to capitalism in some.

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Speaker 2: Way without saying it, without saying the word capitalism. Yeah,

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Speaker 2: let's just be let's just be smarter as a nation.

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Speaker 2: So how did what did he set out to do?

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Speaker 2: He said, the way we're going to get richer. He

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Speaker 2: traveled to Japan and the United States, and he saw

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Speaker 2: these two economies are booming, very wealthy, and they both

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Speaker 2: have powerful auto industries. We want that too, So how

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Speaker 2: do we get one? We have nothing. We have no capital,

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Speaker 2: no no how, no management expertise, no technology, no market.

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Speaker 2: How do we get going? So he said, we'll devise

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Speaker 2: a strategy called the joint venture strategy. We'll invite automakers

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Speaker 2: from around the world to come into China and they'll

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Speaker 2: have access to potentially the biggest market in the world.

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Speaker 2: But there's a caveat we will we China will always

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Speaker 2: hold fifty percent or more of those companies that are

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Speaker 2: investing in So they have to joint venture and they

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Speaker 2: have to give fifty percent ownership to a Chinese partner.

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Speaker 1: How does that fit with this country where essentially nobody

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Speaker 1: could afford a car? Like, what is the incentive for

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Speaker 1: automakers to come in if nobody could afford a car?

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Speaker 2: Anyway, it was all about this enticing picture of the future.

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Speaker 2: We're not there yet, but look what happened with Japan,

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Speaker 2: Look what happened with Korea. China is opening up and

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Speaker 2: reforming and we're going to allow some profit making. You

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Speaker 2: guys come in and the first one is going to

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Speaker 2: have access to the biggest potential market and was all

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Speaker 2: a promise of the future.

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Speaker 1: I've heard you talk about what it was like at

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Speaker 1: Chinese car factories at that time when you went in.

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Speaker 3: What was it like, wow, early days.

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Speaker 2: I was at a company called Cherry, which today is

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Speaker 2: China's leading exporter, ships of more than a million cars

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Speaker 2: around the world, including to Europe, UK, Australia. But at

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Speaker 2: that time, the manager said, I want you to walk

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Speaker 2: the line with us. We have real quality issues. And

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Speaker 2: I said what kind of quality issues? He goes, well,

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Speaker 2: so people here are so unfamiliar with cars that, for example,

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Speaker 2: you see that rear view mirror on that car, tell

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Speaker 2: me what's wrong with it? And I looked closely, and

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Speaker 2: I looked, oh, okay. The rear view mirror was assembled

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Speaker 2: facing outward.

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Speaker 1: So you looked at it. If you were driving, you

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Speaker 1: wouldn't see the mirror.

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Speaker 2: No, you don't see the mirror. The mirror is in

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Speaker 2: the correct location, but it's facing.

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Speaker 1: Outward because the person making it has never driven, probably

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Speaker 1: has never been in a car.

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Speaker 3: No clue, no clue.

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Speaker 2: So that's one small example of the kinds of quality

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Speaker 2: issues they had. How to assemble a car when we've

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Speaker 2: never driven one. We don't know what that looks like.

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Speaker 1: So okay, So danksaw Ping sets up these rules. We're

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Speaker 1: gonna we're gonna build a car industry using four and

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Speaker 1: know how by having foreign companies come in and do

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Speaker 1: joint ventures exact and that, in fact happens. Lots of

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Speaker 1: companies do it right, Volkswagen does it. Audi becomes the

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Speaker 1: high status car in China. What's the big inflection point

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Speaker 1: after that? Like, obviously China's economy grows, people get cars.

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Speaker 1: People are in China are driving Oudis and there's a

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Speaker 1: GM brand, right, is it Buick that's big in China.

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Speaker 2: Yeah, sensationally popular. Just everyone wants a Buick.

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Speaker 1: And we're talking like turn of the century. Now two

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Speaker 1: thousand is where we are.

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Speaker 2: In our starting in the two thousand, So think about it.

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Speaker 2: Two thousand and twenty ten, you go from a may

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Speaker 2: less than a million cars a year sold in China

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Speaker 2: to becoming it by twenty ten, the largest car market

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Speaker 2: in the world, far surpassing the United States. Buick selling

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Speaker 2: eighty percent of the worldwide sales are now in China,

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Speaker 2: making lots of money. The president of GM China at

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Speaker 2: the time is said, how is business? He said, We're

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Speaker 2: making more money than God. So you got Chinese consumers

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Speaker 2: loving buicks, are building a ton of them, selling them

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Speaker 2: faster they can build them, and making big profits on it.

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Speaker 2: So all is good for Western audio as you mentioned

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Speaker 2: Audi with super BMW Mercedes come in. It's a party

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Speaker 2: for Western automakers.

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Speaker 3: Yeah.

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Speaker 2: And then but for the people in Beijing who you

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Speaker 2: know Dung's successors. Yeah, they're looking around saying, wait a second,

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Speaker 2: We're the largest market in the world. We produce more

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Speaker 2: cars than anyone else. But where are the Chinese cars?

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Speaker 3: What?

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Speaker 2: This is not acceptable? All this money going to the

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Speaker 2: foreigners and the joint ventures. And oh, by the way,

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Speaker 2: we now import one hundred billion dollars worth of oil

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Speaker 2: a year. This is a problem. What are we going

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Speaker 2: to do about it?

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Speaker 1: Just to be clear, why is it a problem to

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Speaker 1: import one hundred billion dollars worth of oil every year?

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Speaker 1: I mean certainly they have a lot of exports. They

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Speaker 1: have plenty of capital to buy the oil.

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Speaker 3: Yeah.

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Speaker 2: They don't like the idea of being vulnerable to outsiders.

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Speaker 2: This goes back hundreds of years in Chinese history. We

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Speaker 2: don't want to be vulnerable in any way. And also

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Speaker 2: Chinese whenever possible, they don't like to spend money outside

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Speaker 2: their own country.

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Speaker 3: So they look around and they go, we're vulnerable on

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Speaker 3: the oil front.

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Speaker 2: We don't want to get into Mid East quagmires like

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Speaker 2: the United States has done.

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Speaker 3: Let's avoid that mistake.

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Speaker 2: And then, as a point of national pride, why is

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Speaker 2: it that we can put you know, rockets into orbit,

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Speaker 2: but we have a nuclear bomb, but we don't have

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Speaker 2: our own cars. This has got a little bit of

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Speaker 2: a national embarrassment. And so the brightest mind of Beijing

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Speaker 2: looked around and said, look, we've been playing a game

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Speaker 2: of catch up with the West on internal combustion engines.

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Speaker 2: Every time we learn to make a better engine, out

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Speaker 2: or BMW or Toyota makes an even better engine, and

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Speaker 2: Chinese consumers don't like Chinese bread. What can we do

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Speaker 2: to change the game.

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Speaker 3: So you know the.

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Speaker 1: Answer evs electric vehicles.

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Speaker 2: Yes, And it didn't just suddenly come to them in

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Speaker 2: twenty ten. Earlier on in the year two thousand. This

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Speaker 2: is only known later on. It's a very important guy

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Speaker 2: named Wan Gong Onan Gong born in northeast humble beginnings,

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Speaker 2: Northeast China, and the rust belt, goes to Germany, gets

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Speaker 2: a PhD, goes to work for Audi in the nineteen nineties,

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Speaker 2: works there for eight years. In two thousand, he comes

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Speaker 2: back secretly and delivers a white paper to the State Council,

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Speaker 2: the highest governing body in China, and he said, I've

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Speaker 2: seen it. We're never going to catch up with the

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Speaker 2: Germans or the other westerners. In Gasinba in two thousand

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Speaker 2: wrote a white paper and said the future for China

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Speaker 2: is electric and here's how to get there now. At

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Speaker 2: the time, everybody, kind of the leaders in China said,

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Speaker 2: that's very a brilliant take, but we have nothing. We

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Speaker 2: have zero capability and a small market and we're just

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Speaker 2: starting out. We'll tuck it, we'll put it in side.

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Speaker 1: But good idea and eves aren't a thing, right, I

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Speaker 1: mean at that point, GM had tried an electric car

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Speaker 1: that failed, right, Tesla is not a company yet maybe

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Speaker 1: in two thousand, Yeah.

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Speaker 2: Two thousand and three. Was only in two thousand and

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Speaker 2: three that they're founded. And you're right, GM tried that

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Speaker 2: ev one didn't work out. They ended up, you know,

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Speaker 2: collecting them and smashing them, so it didn't wasn't a

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Speaker 2: thing It wasn't a moment in time two thousand, but

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Speaker 2: in twenty ten, who's the Minister of Science and Technology

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Speaker 2: in China in twenty ten one Gum he left Audi.

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Speaker 3: He's the guy, He's the guy in charge.

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Speaker 2: He goes, hey, by the way, I have an idea

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Speaker 2: how he can make this pivot, dusts off his old paper.

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Speaker 2: Shijing Ping takes power. China's new leader. He looks around

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Speaker 2: and he's a definitely they call him redder than red.

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Speaker 2: He wants China to win, he wants the Communist Party

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Speaker 2: to win, and he loves anything they will give him

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Speaker 2: leverage on that front. So he throws his weight behind

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Speaker 2: this big new policy called Maiden China twenty twenty five.

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Speaker 2: This is this isn't a period from like twenty eleven

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Speaker 2: to twenty fourteen.

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Speaker 1: So this is their forward looking It's like a it's

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Speaker 1: like instead of a five year plan, it's a ten

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Speaker 1: or fifteen year plan kind.

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Speaker 2: Of yes, like with muscle, like, we're not fooling around.

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Speaker 2: We're going this is a pivot, but there's an opportunity

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Speaker 2: to change the game. We are going to throw all

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Speaker 2: kinds of funding behind the cultivation of our own independent

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Speaker 2: auto industry built on batteries and electric vehicles.

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Speaker 1: Okay, So, I mean interestingly, there's a long history of

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Speaker 1: governments trying to sort of steer their economies and it

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Speaker 1: going quite badly, not least in China in the middle

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Speaker 1: of the twentieth century. Right, Like, the reason at some

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Speaker 1: level that China got rich was they stopped doing that.

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Speaker 2: You could argue absolutely one hundred percent agree and so

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Speaker 2: and guess what in the early years of this effort

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Speaker 2: to throw tens of billions, even hundreds of billions of

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Speaker 2: dollars behind electric vehicles, it falls completely flat. The Chinese

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Speaker 2: consumer doesn't want two things. No electric it's short range,

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Speaker 2: it's unreliable. We heard about fires, and they're not good looking.

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Speaker 2: And two they're not foreign. There's no prestige. Like Chinese

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Speaker 2: electric car is a double loser. I don't want to

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Speaker 2: go there. So for most of the twenty tens, that

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Speaker 2: policy really struggles.

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Speaker 1: So what changed? So in fact it wasn't working. It's

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Speaker 1: a classic example of like government policy not working, wasting money.

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Speaker 1: Like it could have ended that way, right, I mean,

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Speaker 1: it could have just been a thing they tried that

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Speaker 1: didn't work.

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Speaker 2: It was very nearly that because by the end of

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Speaker 2: the decade, they were spending as much on subsidies as

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Speaker 2: they were on oil imports.

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Speaker 1: Wow, on subsidies for cars and batteries.

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Speaker 3: Right, it's like, please consumer, and.

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Speaker 1: This is twenty twenty, this is the decades, this.

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Speaker 2: Is twenty nineteen. I remember being with the CEO of

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Speaker 2: a major Chinese automaker and I asked him, I said,

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Speaker 2: what's the future of EVS. I know you guys been

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Speaker 2: trying now for almost a decade. He said, never more

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Speaker 2: than an issue here, huh, five to ten percent. Chinese

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Speaker 2: consumer doesn't want it. They're too complicated. What about charging

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Speaker 2: the batteries or shorter range? The government wants us to

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Speaker 2: go in that direction. But he had joined ventures with

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Speaker 2: Toyota and Honda. He said, we're making great products, we're

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Speaker 2: making great profits, consumers love the brand. We'll carve out

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Speaker 2: part of our business for EVS. But it's more like

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Speaker 2: compliance than enthusiastic.

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Speaker 1: Keep the government happy, basically.

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Speaker 2: Keep the government. Yep, we're trying our hardest. Yeah, we're

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Speaker 2: really going for it. So what changes? And this is

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Speaker 2: where China's probably China's secret superpower is where are most

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Speaker 2: Where are Apple iPhones built in the.

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Speaker 3: World changin in China, in China, right. So they look

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Speaker 3: around and they go, we have the very.

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Speaker 2: Best smartphone maker in the world manufacturing their products here.

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Speaker 3: How do we get the best, very best e who

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Speaker 3: is Oh wait.

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Speaker 2: A second, there's this company out of California that's ripping

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Speaker 2: it in the US and in Europe, wildly popular, defying

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Speaker 2: all expectations. And they seem to have changed consumers' minds

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Speaker 2: about what an electric vehicle can be. They can be sexy,

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Speaker 2: they can be attractive, they can be fast.

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Speaker 1: You haven't said Tesla yet. I keep waiting for you

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Speaker 1: to say Tesla. So they see Tesla, Yes.

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Speaker 2: You see Tesla, and they go, you ever hear of

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Speaker 2: China red carpet? Yeah, Like they laid out their red

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Speaker 2: carpet for Tesla for the first time. They said, Tesla,

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Speaker 2: we'd love to have you come here to China to

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Speaker 2: sell your cars. By the way, we want you to

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Speaker 2: make manufacture them here, just like we want everyone else

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Speaker 2: to manufacture them here. But we're going to sweeten the deal.

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Speaker 2: You can have one hundred percent ownership, no joint venture.

378
00:20:19,436 --> 00:20:23,236
Speaker 2: You're in charge. You bring their manufacturing capabilities in, your

379
00:20:23,236 --> 00:20:27,036
Speaker 2: suppliers in and you run the show and Elon Musk

380
00:20:27,076 --> 00:20:29,356
Speaker 2: looks around and goes, that looks pretty sweet.

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Speaker 1: What's the catch, Ah.

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00:20:31,956 --> 00:20:32,796
Speaker 3: What's the catch?

383
00:20:35,636 --> 00:20:42,916
Speaker 2: Well, it's never spoken, but it's understood that as soon

384
00:20:42,956 --> 00:20:47,556
Speaker 2: as Tesla sets up operations in China, everything it knows

385
00:20:47,876 --> 00:20:54,516
Speaker 2: will one way or another leak to Chinese automakers, and

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00:20:54,876 --> 00:20:59,996
Speaker 2: they are very quickly. We see five, six, seven companies

387
00:20:59,996 --> 00:21:04,116
Speaker 2: sprout up Like Selmy, we talked about, going, Wow, that's

388
00:21:04,156 --> 00:21:07,036
Speaker 2: a super incredible car. I wonder if we can do

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00:21:07,076 --> 00:21:09,916
Speaker 2: that ourselves here. Oh, by the way, test suppliers are

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Speaker 2: just up the road and I know them because they're

391
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Speaker 2: you know, they know so and so and so and

392
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Speaker 2: so there's Yeah. I talked to one supply chain executive

393
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Speaker 2: at the time and I said how long does that

394
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Speaker 2: take though, like, how quickly? And he said overnight?

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Speaker 1: Overnight, So overnight everybody knows everything. Overnight. Everybody China could

396
00:21:31,476 --> 00:21:35,236
Speaker 1: make a Tesla if they wanted. Yeah, So when does

397
00:21:35,276 --> 00:21:37,516
Speaker 1: Tesla set up in China.

398
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Speaker 2: It sets up in China, It goes into production at

399
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Speaker 2: the very end of twenty nineteen, first weeks of twenty twenty,

400
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Speaker 2: exactly when COVID's happening. So it was not an auspicious start,

401
00:21:51,836 --> 00:21:57,316
Speaker 2: but against all odds, demand for Tesla in China explodes.

402
00:21:58,716 --> 00:22:02,116
Speaker 2: And it wasn't because it was electric necessarily. It was

403
00:22:02,196 --> 00:22:05,676
Speaker 2: because it had all these over there update features, new

404
00:22:05,716 --> 00:22:09,636
Speaker 2: and cool features, and so it changed the Chinese consumer's

405
00:22:09,676 --> 00:22:12,356
Speaker 2: mindset about, oh, what an electric vehicle could be.

406
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Speaker 1: Like it did in the US. Tesla had the same

407
00:22:14,556 --> 00:22:16,476
Speaker 1: effect in the US on exactly.

408
00:22:16,756 --> 00:22:20,636
Speaker 2: And this is the Chinese government saw that said we

409
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Speaker 2: can duplicate the Tesla effect here in China. They bet

410
00:22:24,956 --> 00:22:26,396
Speaker 2: on it and it.

411
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Speaker 1: Worked amazingly fast. Right, Like when I have read about this,

412
00:22:31,236 --> 00:22:35,076
Speaker 1: it seems like there's this key moment just what three

413
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Speaker 1: years after Tesla sets up in China or so the

414
00:22:40,676 --> 00:22:43,396
Speaker 1: is it? The Shanghai Auto Show in twenty twenty three?

415
00:22:43,636 --> 00:22:45,836
Speaker 1: Like tell me, why why do we able to talk

416
00:22:45,836 --> 00:22:48,196
Speaker 1: about that? Why is that such a big moment? And

417
00:22:48,316 --> 00:22:49,076
Speaker 1: were you there?

418
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Speaker 2: I was, I was telling you what happened. I was

419
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Speaker 2: set to meet my good friend Kausmeier, former managing director

420
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Speaker 2: of Mercedes Benz in China. So we agreed we're going

421
00:23:00,156 --> 00:23:02,636
Speaker 2: to meet at the Changhai Auto Show. Being German, he

422
00:23:02,716 --> 00:23:05,556
Speaker 2: wants to be there on day one, early in the morning,

423
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Speaker 2: I'm arriving the next day. So I'm back in the

424
00:23:09,796 --> 00:23:12,356
Speaker 2: United States getting my passport together. I get a call

425
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Speaker 2: from Klaus and he and I said, Klaus, what's going on?

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Speaker 3: Are you in China? And he said, it is a shock?

427
00:23:20,396 --> 00:23:20,876
Speaker 1: Wow?

428
00:23:21,476 --> 00:23:25,036
Speaker 2: Yeah, I said, what are you Okay, I'm telling you

429
00:23:25,196 --> 00:23:28,196
Speaker 2: it is a total shock. I cannot believe my eyes.

430
00:23:28,876 --> 00:23:30,316
Speaker 2: So what's going on, Klaus?

431
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Speaker 3: You okay?

432
00:23:30,836 --> 00:23:33,236
Speaker 2: Yes, I'm That's just a Shanghai auto show and the

433
00:23:33,316 --> 00:23:37,316
Speaker 2: Chinese have taken over. So taken over, it would be

434
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Speaker 2: inconceivable in my mind. What do you mean taking over? No,

435
00:23:40,356 --> 00:23:43,356
Speaker 2: I'm telling you it's the end of the foreign automakers

436
00:23:43,676 --> 00:23:47,916
Speaker 2: in China. So what was he looking at? If you

437
00:23:47,916 --> 00:23:50,156
Speaker 2: can imagine, if you've been to the Chinese auto show,

438
00:23:50,716 --> 00:23:54,116
Speaker 2: they're massive, biggest auto shows in the world. Think football

439
00:23:54,156 --> 00:23:56,556
Speaker 2: fields upon football As far as I can see, just

440
00:23:56,836 --> 00:23:59,716
Speaker 2: cars and people and more cars. And in the old

441
00:23:59,836 --> 00:24:05,236
Speaker 2: for twenty thirty years, it would be Mercedes, BMW, Audi, Buick, Toyota, Honda,

442
00:24:05,316 --> 00:24:08,596
Speaker 2: Hyundai taking center stage. And then if you had time,

443
00:24:08,636 --> 00:24:11,156
Speaker 2: you might want under down a side hall and there's

444
00:24:11,236 --> 00:24:15,556
Speaker 2: this pretty lame looking stand with a Chinese brandy and

445
00:24:16,156 --> 00:24:19,236
Speaker 2: all of a sudden the twenty twenty three, it's the opposite.

446
00:24:19,716 --> 00:24:23,836
Speaker 2: The Chinese are center stage and the foreigners have been

447
00:24:23,876 --> 00:24:27,396
Speaker 2: shunted the side. It's almost like through COVID we went

448
00:24:27,436 --> 00:24:31,476
Speaker 2: through some kind of crazy time machine. Chinese on the ascendancy,

449
00:24:31,996 --> 00:24:34,596
Speaker 2: Foreigners on their way out the door.

450
00:24:35,436 --> 00:24:38,756
Speaker 1: Did you fly in the next day? Did you go yeah? What?

451
00:24:38,756 --> 00:24:41,636
Speaker 1: What was that like? What'd you say?

452
00:24:41,676 --> 00:24:42,156
Speaker 3: Mostly?

453
00:24:42,236 --> 00:24:45,116
Speaker 2: I saw a confidence that I had never seen before

454
00:24:45,156 --> 00:24:49,316
Speaker 2: out of the Chinese. One executive from BYD said to me,

455
00:24:50,716 --> 00:24:53,516
Speaker 2: this is not the company that you've known for twenty years.

456
00:24:54,356 --> 00:24:56,156
Speaker 3: We're a new thing now.

457
00:24:56,916 --> 00:24:59,996
Speaker 2: And ever since that moment, I felt like the Chinese

458
00:25:00,996 --> 00:25:04,396
Speaker 2: really really getting comfortable and confident in their own capabilities.

459
00:25:08,276 --> 00:25:22,076
Speaker 1: We'll be back in just a minute. This segment is

460
00:25:22,116 --> 00:25:24,596
Speaker 1: brought to you by Walmart. Behind every small brand is

461
00:25:24,596 --> 00:25:27,276
Speaker 1: someone with a dream. Today, we're sitting down with one

462
00:25:27,276 --> 00:25:30,076
Speaker 1: of the founders whose products you can discover at Walmart.

463
00:25:30,516 --> 00:25:32,516
Speaker 1: His name is Ben Moore, and he's the CEO of

464
00:25:32,556 --> 00:25:35,396
Speaker 1: the Ugly Company, based in the Central Valley in California.

465
00:25:35,796 --> 00:25:38,756
Speaker 1: The company sells dried fruit that comes largely from produce

466
00:25:38,996 --> 00:25:41,996
Speaker 1: that is too ugly to be sold fresh. Ben told

467
00:25:42,076 --> 00:25:43,756
Speaker 1: me that he got the idea to start the company

468
00:25:43,796 --> 00:25:46,276
Speaker 1: when he was driving a truck and he often wound

469
00:25:46,356 --> 00:25:49,556
Speaker 1: up transporting fruit that packing houses couldn't sell because it

470
00:25:49,596 --> 00:25:52,476
Speaker 1: was blemished, perfectly good fruit that just looked a little

471
00:25:52,596 --> 00:25:54,196
Speaker 1: ugly and it was getting thrown out.

472
00:25:54,636 --> 00:25:57,716
Speaker 4: And so I just was sat there thinking about what

473
00:25:57,756 --> 00:25:58,996
Speaker 4: can we do with this fruit other and dump it

474
00:25:58,996 --> 00:26:00,596
Speaker 4: out right? And I thought that there could be a

475
00:26:00,596 --> 00:26:02,396
Speaker 4: brand solution there, which is where the name the Ugly

476
00:26:02,436 --> 00:26:04,796
Speaker 4: Company came from, was going to get people excited about

477
00:26:04,836 --> 00:26:06,196
Speaker 4: the sustainable nature of the fruit.

478
00:26:06,436 --> 00:26:08,076
Speaker 1: So I understand that at some point you went to

479
00:26:08,116 --> 00:26:12,316
Speaker 1: this something called a Walmart Open Call event. Tell me

480
00:26:12,396 --> 00:26:15,076
Speaker 1: what that is and why it mattered for your business. Yeah.

481
00:26:15,116 --> 00:26:19,676
Speaker 4: So Walmart Open Call is Walmart's initiative to source from

482
00:26:19,716 --> 00:26:22,996
Speaker 4: American manufacturers and small business like ours. We fly out

483
00:26:22,996 --> 00:26:25,196
Speaker 4: and they're kind of sitting there a little bit starstruck.

484
00:26:25,236 --> 00:26:27,116
Speaker 4: When you walk into the event, you're like, oh, my goodness,

485
00:26:27,116 --> 00:26:30,076
Speaker 4: like this really is an enormous event, and you know,

486
00:26:30,236 --> 00:26:32,476
Speaker 4: just like anything else, say here's my PowerPoint, here's my products,

487
00:26:32,476 --> 00:26:34,476
Speaker 4: there's my mission, here's what we're trying to solve, and

488
00:26:34,796 --> 00:26:36,956
Speaker 4: effects you're like hey, like yeah, we want to create

489
00:26:36,996 --> 00:26:39,076
Speaker 4: space for you in our slot. Here's a golden ticket

490
00:26:39,076 --> 00:26:42,476
Speaker 4: and it's like a straight up Willy Waka style golden ticket.

491
00:26:42,356 --> 00:26:45,796
Speaker 1: Literally a physical piece of paper that says you made it.

492
00:26:46,236 --> 00:26:48,596
Speaker 4: Yeah you know, you've been selected. So there's like the

493
00:26:48,636 --> 00:26:50,276
Speaker 4: full day of just craziness. It's like, oh my god,

494
00:26:50,436 --> 00:26:53,476
Speaker 4: I'm now going to be a Walmart supplier, which is amazing.

495
00:26:53,556 --> 00:26:56,196
Speaker 4: So yeah, we, you know, six months later, launched one

496
00:26:56,236 --> 00:26:58,956
Speaker 4: hundred ninety Walmarts and now we've grown into nearly a

497
00:26:59,036 --> 00:27:01,076
Speaker 4: thousand Walmarts since then last year and a half.

498
00:27:01,156 --> 00:27:04,076
Speaker 1: So how did getting onto the shelves at Walmart affect

499
00:27:04,116 --> 00:27:04,796
Speaker 1: your business?

500
00:27:05,076 --> 00:27:08,076
Speaker 4: We hired an additional twenty people to work in our

501
00:27:08,116 --> 00:27:12,196
Speaker 4: manufacturing facility just specifically for the Walmart demand that was created.

502
00:27:12,556 --> 00:27:15,036
Speaker 4: So that's been great because our product sells really well

503
00:27:15,076 --> 00:27:18,076
Speaker 4: in Walmart, whereas as a small brand, it can be

504
00:27:18,076 --> 00:27:20,516
Speaker 4: really tricky working with larger distributors and you know, trying

505
00:27:20,556 --> 00:27:22,396
Speaker 4: to get your product even on the shelves and things

506
00:27:22,476 --> 00:27:25,156
Speaker 4: like that. They have all their different applications where it's

507
00:27:25,156 --> 00:27:29,556
Speaker 4: actually really efficient to market to Walmart customers through the

508
00:27:29,596 --> 00:27:32,636
Speaker 4: Walmart apps of things, and so well, Walmart's helping us

509
00:27:32,636 --> 00:27:35,596
Speaker 4: create demand via their platforms, right, and so it's a

510
00:27:35,636 --> 00:27:36,436
Speaker 4: huge deal for us.

511
00:27:36,876 --> 00:27:39,916
Speaker 1: Congratulations and all your success and I wish you more

512
00:27:39,956 --> 00:27:40,116
Speaker 1: of it.

513
00:27:40,796 --> 00:27:41,396
Speaker 3: I appreciate it.

514
00:27:41,436 --> 00:27:42,196
Speaker 4: Thank you very much.

515
00:27:43,196 --> 00:27:46,196
Speaker 1: This segment was brought to you by Walmart. Explore thousands

516
00:27:46,236 --> 00:27:48,676
Speaker 1: of small brands online at Walmart dot com or at

517
00:27:48,756 --> 00:27:56,636
Speaker 1: your local Walmart store. So let's talk about the role

518
00:27:56,716 --> 00:27:58,916
Speaker 1: of Chinese automakers in the world today.

519
00:27:59,636 --> 00:28:06,516
Speaker 2: So, China's rolling in Chinese cars. I know, numbers are

520
00:28:06,756 --> 00:28:08,916
Speaker 2: often hard, to give me some numbers.

521
00:28:09,276 --> 00:28:10,076
Speaker 3: It was some numbers.

522
00:28:10,116 --> 00:28:14,916
Speaker 2: So five years ago, China exported a total of one

523
00:28:15,076 --> 00:28:18,516
Speaker 2: million cars, which is about less than five percent of

524
00:28:18,516 --> 00:28:21,716
Speaker 2: their total production. They're all geared up for selling in

525
00:28:21,756 --> 00:28:24,836
Speaker 2: the China market. Okay, that was one million five years ago.

526
00:28:24,956 --> 00:28:30,996
Speaker 2: This year that'll be twelve million. Twelve million. That's unprecedented

527
00:28:30,996 --> 00:28:33,476
Speaker 2: in the history of the automobile. Japan at his peak

528
00:28:33,636 --> 00:28:37,236
Speaker 2: was six million. China's already doubled that to twelve million.

529
00:28:37,676 --> 00:28:39,956
Speaker 1: How many cars does the US export every year?

530
00:28:40,476 --> 00:28:42,796
Speaker 3: US exports about it one one million?

531
00:28:43,196 --> 00:28:45,996
Speaker 1: Yeah, and how many does Japan export every year? Now?

532
00:28:46,516 --> 00:28:49,036
Speaker 3: Now about three three million?

533
00:28:49,076 --> 00:28:51,276
Speaker 1: And how many cars is China exporting this year?

534
00:28:51,756 --> 00:28:57,316
Speaker 2: Twelve million cars. It's their exporting is more than the

535
00:28:57,396 --> 00:29:01,796
Speaker 2: United States makes. Now, oh, we manufacturer about ten million cars.

536
00:29:01,796 --> 00:29:05,356
Speaker 2: They're exporting twelve million in addition to their own market,

537
00:29:05,356 --> 00:29:08,596
Speaker 2: which is like twenty five million cars. So China now

538
00:29:08,636 --> 00:29:12,996
Speaker 2: accounts for almost forty percent of global automotive production, almost half,

539
00:29:13,356 --> 00:29:14,156
Speaker 2: getting close to.

540
00:29:14,156 --> 00:29:16,516
Speaker 1: Half of all the cars made in the world are

541
00:29:16,836 --> 00:29:19,116
Speaker 1: made in China, and a big chunk of those are exported.

542
00:29:19,156 --> 00:29:24,156
Speaker 1: They're exporting more than everybody else combined, certainly anybody else combined.

543
00:29:23,796 --> 00:29:26,556
Speaker 2: Yep, exporting more than And here we are in America,

544
00:29:26,916 --> 00:29:29,756
Speaker 2: and where I'm I go to see executive I make

545
00:29:29,836 --> 00:29:32,756
Speaker 2: keynote talks around the country and everybody's like, yeah, okay,

546
00:29:32,756 --> 00:29:35,276
Speaker 2: you are the boy who cried wolf because we don't

547
00:29:35,316 --> 00:29:37,436
Speaker 2: see where where is the Chinese car?

548
00:29:37,476 --> 00:29:37,676
Speaker 3: Here?

549
00:29:37,956 --> 00:29:39,916
Speaker 2: When I give you these presentations, I put a map

550
00:29:39,916 --> 00:29:42,316
Speaker 2: of the world up and I go the map represents

551
00:29:42,356 --> 00:29:46,316
Speaker 2: all countries. You see a globe, Yeah, and I have

552
00:29:46,596 --> 00:29:50,436
Speaker 2: color coded and there's one country in white and everything

553
00:29:50,436 --> 00:29:50,996
Speaker 2: else is red.

554
00:29:51,596 --> 00:29:52,396
Speaker 1: Huh.

555
00:29:52,436 --> 00:29:54,756
Speaker 2: And that gets people in the audience to go, wait

556
00:29:54,756 --> 00:29:58,236
Speaker 2: a second, hold on, we are on an island. If

557
00:29:58,236 --> 00:30:02,316
Speaker 2: you go to Mexico, UK Australia. I was recently in Indonesia,

558
00:30:02,396 --> 00:30:06,796
Speaker 2: South Africa. I visited Chinese cars, Chinese cars, Chinese cars

559
00:30:06,796 --> 00:30:10,996
Speaker 2: pouring in and so we're surrounded and it seems like

560
00:30:11,036 --> 00:30:14,676
Speaker 2: it's inevitable that they also enter the US market.

561
00:30:15,756 --> 00:30:19,076
Speaker 1: And so just to be clear, what's keeping them out?

562
00:30:19,356 --> 00:30:20,436
Speaker 1: Is it just tariffs?

563
00:30:21,476 --> 00:30:24,516
Speaker 2: We have big tariffs in place, more than one hundred

564
00:30:24,556 --> 00:30:28,676
Speaker 2: percent on terraffs. That alone, Even though one hundred percent

565
00:30:28,716 --> 00:30:31,396
Speaker 2: sounds like a lot, Chinese autom manufacturers said, one hundred

566
00:30:31,396 --> 00:30:32,316
Speaker 2: percent won't stop us.

567
00:30:32,916 --> 00:30:36,716
Speaker 1: One hundred percent doubles the price. You're paying a dollar

568
00:30:36,756 --> 00:30:38,956
Speaker 1: in tax for every dollar of car you're buying.

569
00:30:39,516 --> 00:30:43,516
Speaker 2: Yes, and in an industry where the margins are already

570
00:30:43,516 --> 00:30:45,956
Speaker 2: pretty thin, yeah, they're like, yeah, one hundred percent tariff,

571
00:30:46,036 --> 00:30:49,396
Speaker 2: that's not really going to stop us. So the Department

572
00:30:49,396 --> 00:30:54,396
Speaker 2: of Commerce put in place a very strategic extra layer.

573
00:30:54,756 --> 00:30:57,316
Speaker 2: And without going into a lot of detail, it essentially says,

574
00:30:57,796 --> 00:31:01,836
Speaker 2: if a vehicle features any Chinese hardware or software related

575
00:31:01,876 --> 00:31:07,556
Speaker 2: to over there updates or self driving, it cannot legally

576
00:31:07,596 --> 00:31:09,116
Speaker 2: be registered here in the US.

577
00:31:09,996 --> 00:31:14,156
Speaker 1: And is there a security rationale for that?

578
00:31:15,516 --> 00:31:16,556
Speaker 3: There is? There is.

579
00:31:16,596 --> 00:31:20,036
Speaker 2: There's two components. One is to buy time for domestic

580
00:31:20,076 --> 00:31:22,196
Speaker 2: industry because if the Chinese come in, they.

581
00:31:22,276 --> 00:31:26,156
Speaker 1: Just, yeah, it's clearly protectionist at some level, right, Like

582
00:31:26,316 --> 00:31:30,876
Speaker 1: it's plainly protectionist. Yes, is there a valid security rationale

583
00:31:31,276 --> 00:31:33,396
Speaker 1: alongside the protectionism.

584
00:31:33,596 --> 00:31:37,116
Speaker 2: Well, China has all kinds of mechanisms already in place

585
00:31:37,116 --> 00:31:39,956
Speaker 2: in the United States for a surveillance and a mobile

586
00:31:39,996 --> 00:31:44,636
Speaker 2: car that's vacuuming up massive amounts of data about people

587
00:31:44,676 --> 00:31:49,276
Speaker 2: and locations and buildings definitely could be weaponized and we

588
00:31:49,356 --> 00:31:55,196
Speaker 2: shouldn't be naive about that possibility. So I personally feel

589
00:31:55,196 --> 00:32:00,036
Speaker 2: like the Department of Commerce rules are appropriate given the

590
00:32:00,076 --> 00:32:01,836
Speaker 2: tensions between the two countries today.

591
00:32:02,676 --> 00:32:05,516
Speaker 1: Let's talk about evs in the US, right, because substantially

592
00:32:05,596 --> 00:32:07,676
Speaker 1: all of what China is exporting to everyone in the

593
00:32:07,676 --> 00:32:12,756
Speaker 1: world is electric vehicles, create electric vehicles. But it seems

594
00:32:12,796 --> 00:32:18,036
Speaker 1: like US companies made a genuine effort to build electric vehicles.

595
00:32:18,076 --> 00:32:21,916
Speaker 1: And you have pointed out that the big US automakers

596
00:32:22,356 --> 00:32:27,236
Speaker 1: combined GM Ford Stilantis, which owns Chrysler, have written down

597
00:32:27,276 --> 00:32:31,516
Speaker 1: something like fifty billion dollars of investments they made into

598
00:32:31,516 --> 00:32:35,516
Speaker 1: EV's because they just weren't that popular with American buyers.

599
00:32:35,636 --> 00:32:39,756
Speaker 1: And so I don't know. One could make different inferences

600
00:32:39,796 --> 00:32:42,876
Speaker 1: from that, like maybe people in this country wouldn't want

601
00:32:42,956 --> 00:32:45,036
Speaker 1: Chinese EV's because we don't want EV's. I don't know,

602
00:32:45,156 --> 00:32:47,596
Speaker 1: Like what do you make of that fact?

603
00:32:48,356 --> 00:32:53,076
Speaker 2: Okay, so China's ex sports. I wanted to mention this

604
00:32:53,196 --> 00:32:56,476
Speaker 2: important point. Of that twelve million that will go overseas

605
00:32:56,516 --> 00:33:01,516
Speaker 2: this year, half of those are not EV's. Oh interesting, okay.

606
00:33:01,596 --> 00:33:04,716
Speaker 2: So what we're facing is not only a challenge on

607
00:33:04,796 --> 00:33:08,396
Speaker 2: the EV front, which most people say, oh, China EV's, Okay,

608
00:33:08,396 --> 00:33:11,556
Speaker 2: we'll give them that because we own gasoline. The trouble

609
00:33:11,636 --> 00:33:15,436
Speaker 2: is they're competitive across the board, now, okay, okay, So

610
00:33:15,476 --> 00:33:19,876
Speaker 2: that's one second thing. Just like China struggled to get

611
00:33:19,916 --> 00:33:23,716
Speaker 2: his consumers to fall in love with EV's, so do

612
00:33:23,836 --> 00:33:27,716
Speaker 2: we here in the United States. You know, last year

613
00:33:28,236 --> 00:33:30,996
Speaker 2: less than ten percent of car sales in the United

614
00:33:31,036 --> 00:33:34,676
Speaker 2: States were evs. People just we tend to drive long distances,

615
00:33:34,716 --> 00:33:37,796
Speaker 2: big vehicles at high speeds, which is the antithesis of

616
00:33:37,836 --> 00:33:40,596
Speaker 2: what an EV is ideal for. You want city commuting,

617
00:33:40,636 --> 00:33:44,956
Speaker 2: short range and lower speeds. So that's a genuine sort

618
00:33:44,996 --> 00:33:48,356
Speaker 2: of American exceptionalism problem. And I'm not an advocate of

619
00:33:48,596 --> 00:33:50,636
Speaker 2: I don't think EV's will take over the United States.

620
00:33:50,676 --> 00:33:53,956
Speaker 3: I don't think they should, but there is a role

621
00:33:53,996 --> 00:33:54,396
Speaker 3: to play.

622
00:33:54,436 --> 00:33:56,916
Speaker 2: I think twenty twenty five percent of the market in

623
00:33:56,996 --> 00:34:00,036
Speaker 2: a normal market here in the nice it makes sense

624
00:34:00,716 --> 00:34:01,236
Speaker 2: for America.

625
00:34:01,356 --> 00:34:04,596
Speaker 1: I mean, we haven't talked about subsidies and the persistence

626
00:34:04,596 --> 00:34:07,836
Speaker 1: of subsidies. Right there were subsidies for evs a few

627
00:34:07,916 --> 00:34:10,956
Speaker 1: years ago. Now there are not. I mean in terms

628
00:34:11,036 --> 00:34:14,996
Speaker 1: of China in particular and the rise of their automakers

629
00:34:15,036 --> 00:34:17,396
Speaker 1: and their persistence. Like, what is the story of subsidies?

630
00:34:17,436 --> 00:34:25,156
Speaker 2: There huge still huge still and it's not in people

631
00:34:25,276 --> 00:34:27,396
Speaker 2: when you we need to invent a new word for

632
00:34:27,436 --> 00:34:30,516
Speaker 2: subsidies when it comes to China. Because here in the

633
00:34:30,556 --> 00:34:33,196
Speaker 2: United States we had a seventy five hundred dollars tax credit.

634
00:34:33,236 --> 00:34:36,276
Speaker 2: That's a subsidy in ev We had that for you

635
00:34:36,916 --> 00:34:38,876
Speaker 2: for evs right until the end of last year.

636
00:34:39,956 --> 00:34:40,836
Speaker 3: Think of China.

637
00:34:41,836 --> 00:34:47,356
Speaker 2: Imagine China as this massive manufacturing machine, and it says,

638
00:34:47,756 --> 00:34:50,236
Speaker 2: we want to dominate a given industry. How do we

639
00:34:50,276 --> 00:34:56,996
Speaker 2: dominate that. We invest in enormous amounts of capacity. We

640
00:34:57,076 --> 00:35:01,316
Speaker 2: throw all kinds of zero interest loans. You need free land.

641
00:35:01,356 --> 00:35:06,156
Speaker 2: How about training for your employees, energy, it discounted, whatever

642
00:35:06,196 --> 00:35:09,556
Speaker 2: the tools necessary for us to dominate an industry, We

643
00:35:09,676 --> 00:35:12,316
Speaker 2: the government of China, are ready to do that. We're

644
00:35:12,356 --> 00:35:14,636
Speaker 2: going to win the auto industry, just like we want

645
00:35:14,636 --> 00:35:17,556
Speaker 2: solar panels, just like we want shipbuilding, just like we

646
00:35:17,636 --> 00:35:21,596
Speaker 2: want steel and so on and so on. Today it's autos.

647
00:35:21,796 --> 00:35:25,316
Speaker 2: So when Americans go, well, China has some substance, do

648
00:35:25,396 --> 00:35:30,756
Speaker 2: they have some subsidy doesn't begin to describe the ferocity

649
00:35:30,836 --> 00:35:34,516
Speaker 2: with which the Chinese government will say, that's a national objective.

650
00:35:34,796 --> 00:35:35,596
Speaker 2: We're going to win.

651
00:35:36,476 --> 00:35:39,036
Speaker 1: So do you even compete with that? Like there is

652
00:35:39,076 --> 00:35:42,036
Speaker 1: the question of should we just let them have it?

653
00:35:42,596 --> 00:35:44,996
Speaker 1: They're basically giving us cars at a discount, like they

654
00:35:44,996 --> 00:35:47,796
Speaker 1: want to spend their own money to give us cars

655
00:35:47,876 --> 00:35:51,676
Speaker 1: cheaper than they would sell in a market without their intervention.

656
00:35:52,556 --> 00:35:55,156
Speaker 1: Is there a universe where that's just like good for us?

657
00:35:55,196 --> 00:35:59,116
Speaker 1: Like great, we will take that and we'll make other things.

658
00:35:59,156 --> 00:36:01,956
Speaker 3: In no universe that I know of, is it good

659
00:36:01,956 --> 00:36:02,476
Speaker 3: for us?

660
00:36:02,596 --> 00:36:02,916
Speaker 1: Okay?

661
00:36:03,996 --> 00:36:04,436
Speaker 3: Okay?

662
00:36:04,476 --> 00:36:04,836
Speaker 1: Why?

663
00:36:05,556 --> 00:36:09,476
Speaker 3: I because it's a short term gain for.

664
00:36:09,436 --> 00:36:12,236
Speaker 2: The United States at the expense of our long term

665
00:36:12,436 --> 00:36:15,076
Speaker 2: viability as a competitive economy.

666
00:36:15,236 --> 00:36:17,996
Speaker 1: Why is a car industry essential? There's another way of

667
00:36:17,996 --> 00:36:19,916
Speaker 1: asking the same question, why.

668
00:36:19,756 --> 00:36:22,756
Speaker 2: Is the car industry essential? So the United States today has,

669
00:36:22,916 --> 00:36:25,876
Speaker 2: in my view, two car industries that are operating in parallel.

670
00:36:25,876 --> 00:36:28,676
Speaker 2: One is the old car industry out of Detroit that

671
00:36:28,836 --> 00:36:34,276
Speaker 2: brings capabilities in manufacturing that are really crucial to national

672
00:36:34,316 --> 00:36:37,556
Speaker 2: defense and security and weapons systems. You need to have

673
00:36:38,036 --> 00:36:43,036
Speaker 2: a basis of capabilities of manufacturing. So that's that brings.

674
00:36:43,436 --> 00:36:46,556
Speaker 2: West Coast is the second auto industry. That's your Tesla's,

675
00:36:46,596 --> 00:36:50,796
Speaker 2: your way Mos, your ubers, your tech companies. They're bringing

676
00:36:50,916 --> 00:36:56,636
Speaker 2: software AI chips to build the cars of the future.

677
00:36:57,236 --> 00:37:01,036
Speaker 2: And if we forfeit the capabilities of having our own

678
00:37:01,076 --> 00:37:06,276
Speaker 2: auto industry, we suddenly become very vulnerable to China in

679
00:37:06,356 --> 00:37:08,116
Speaker 2: terms of our own national defense.

680
00:37:08,556 --> 00:37:11,556
Speaker 1: So you may to have a kind of frontier military,

681
00:37:12,196 --> 00:37:14,356
Speaker 1: you basically need to have a car industry. Is that

682
00:37:14,436 --> 00:37:15,596
Speaker 1: the core argument you're making.

683
00:37:15,796 --> 00:37:19,516
Speaker 2: Yes, Yes, the volume. That's where the volume comes from.

684
00:37:19,556 --> 00:37:22,836
Speaker 2: That's where the ecosystems come from. Many of the components

685
00:37:23,156 --> 00:37:26,796
Speaker 2: that define the future technologies in military applications are the

686
00:37:26,876 --> 00:37:29,436
Speaker 2: same ones that go into cars. If we don't have

687
00:37:29,636 --> 00:37:35,716
Speaker 2: those at home, we're extremely vulnerable to Chinese whims.

688
00:37:36,876 --> 00:37:39,676
Speaker 1: We haven't talked explicitly about batteries. But there is this

689
00:37:39,796 --> 00:37:44,076
Speaker 1: interesting idea, right that like, batteries are sort of analogous

690
00:37:44,156 --> 00:37:46,956
Speaker 1: to oil, right in evs, but they also are essential

691
00:37:46,996 --> 00:37:49,076
Speaker 1: for drones, which of course we've heard a ton about,

692
00:37:49,076 --> 00:37:50,916
Speaker 1: say in the Iran war. And so this notion that

693
00:37:51,516 --> 00:37:54,636
Speaker 1: batteries are an essential frontier technology, that there's this kind

694
00:37:54,636 --> 00:37:59,596
Speaker 1: of electric stack, right that includes batteries, that includes permanent

695
00:37:59,596 --> 00:38:02,716
Speaker 1: magnets made with a rare Earth's right, that the EV

696
00:38:02,876 --> 00:38:07,036
Speaker 1: is sort of the the representative thing you make with

697
00:38:07,116 --> 00:38:10,236
Speaker 1: this stack. But you also make drones, you also make missiles.

698
00:38:10,356 --> 00:38:15,276
Speaker 3: Right, Batteries are the future engines.

699
00:38:15,196 --> 00:38:18,716
Speaker 1: And China is winning batteries by a lot, right.

700
00:38:18,596 --> 00:38:21,596
Speaker 3: They're just killing it. They're killing it.

701
00:38:21,676 --> 00:38:25,236
Speaker 2: They own not only the ability to manufacture seventy percent

702
00:38:25,276 --> 00:38:30,836
Speaker 2: of batteries worldwide, but they also control the supply chain

703
00:38:30,916 --> 00:38:34,916
Speaker 2: into those batteries, most importantly the refining of the materials

704
00:38:34,956 --> 00:38:37,756
Speaker 2: that go into the cells that make the batteries. So

705
00:38:37,996 --> 00:38:42,196
Speaker 2: ninety percent of graphite today is processed in China. That's

706
00:38:42,236 --> 00:38:45,276
Speaker 2: another choke point. We don't have those capabilities at home.

707
00:38:45,396 --> 00:38:47,716
Speaker 2: So not only do we have to have the batteries,

708
00:38:47,716 --> 00:38:49,956
Speaker 2: but we also have to develop our own and how

709
00:38:49,956 --> 00:38:52,916
Speaker 2: do we get here? It was just negligence I think

710
00:38:52,996 --> 00:38:55,716
Speaker 2: on the part of American leadership at the government level

711
00:38:55,876 --> 00:38:59,796
Speaker 2: and the corporate level. It was cheaper to manufacturer regulatory

712
00:39:00,276 --> 00:39:02,276
Speaker 2: point of view, it's easier to do it in China.

713
00:39:02,356 --> 00:39:06,996
Speaker 2: We just blindly shipped so much to China. And now

714
00:39:06,996 --> 00:39:08,556
Speaker 2: we look and go, well, how did that happen?

715
00:39:09,276 --> 00:39:11,796
Speaker 1: Okay, guys, I mean there was a lot of upside

716
00:39:12,116 --> 00:39:15,116
Speaker 1: right Like, there was a notion if you go back

717
00:39:15,436 --> 00:39:17,676
Speaker 1: twenty five years, there was a notion like, oh, China

718
00:39:17,676 --> 00:39:21,596
Speaker 1: will join the WTO, they'll get richer, they'll they'll democratize.

719
00:39:21,596 --> 00:39:24,836
Speaker 1: We've never had a big, rich, market based country that

720
00:39:24,956 --> 00:39:29,196
Speaker 1: had an authoritarian regime right like it. I don't think

721
00:39:29,196 --> 00:39:31,116
Speaker 1: that people were necessarily dumb at the time. It just

722
00:39:31,116 --> 00:39:33,636
Speaker 1: didn't work out the way reasonable people thought it would

723
00:39:33,676 --> 00:39:38,356
Speaker 1: work out. One might say, did you know all along?

724
00:39:38,516 --> 00:39:39,396
Speaker 1: Was it obvious to you.

725
00:39:41,036 --> 00:39:46,076
Speaker 2: There's a tendency in the West to underestimate China and

726
00:39:46,116 --> 00:39:50,796
Speaker 2: its ambitions. Yeah, so what we hoped to see was

727
00:39:50,876 --> 00:39:54,276
Speaker 2: not what was real. Yeah, And in the short term

728
00:39:54,356 --> 00:39:56,356
Speaker 2: China said we'll take care of this for you, will

729
00:39:56,396 --> 00:39:58,676
Speaker 2: manufacture it half the cost and ship it back to

730
00:39:58,716 --> 00:39:59,316
Speaker 2: your margins.

731
00:39:59,396 --> 00:40:00,196
Speaker 3: Go up, look at this.

732
00:40:00,276 --> 00:40:04,716
Speaker 2: Beautiful Yeah, and we're all getting along until the point

733
00:40:04,756 --> 00:40:09,116
Speaker 2: at which China said, we might not need these guys anyway.

734
00:40:10,436 --> 00:40:16,876
Speaker 1: What should the US do about cars?

735
00:40:17,516 --> 00:40:20,636
Speaker 2: I would the starting point would be I'd have a

736
00:40:20,716 --> 00:40:25,036
Speaker 2: national campaign and say, first of all, have everybody understand

737
00:40:25,036 --> 00:40:29,036
Speaker 2: that cars and the car manufacturing industry and technology around

738
00:40:29,316 --> 00:40:32,156
Speaker 2: future of cars is crucial to our independence and our

739
00:40:32,196 --> 00:40:34,716
Speaker 2: way of life. So put that message out there. It

740
00:40:34,716 --> 00:40:37,276
Speaker 2: may not resonate today but over time.

741
00:40:37,556 --> 00:40:40,716
Speaker 1: But I feel like people love the domestic car industry, right.

742
00:40:40,756 --> 00:40:42,996
Speaker 1: I mean when you think of like mid twentieth century

743
00:40:43,076 --> 00:40:46,476
Speaker 1: meat and potatoes America, like GM was maybe the biggest

744
00:40:46,476 --> 00:40:48,796
Speaker 1: company in the world, it was certainly the biggest manufacturer,

745
00:40:48,876 --> 00:40:55,836
Speaker 1: the biggest car maker. Like that's like Glory Day's America heartland, right, Yes,

746
00:40:55,916 --> 00:40:58,436
Speaker 1: except that geographies as time have to change.

747
00:40:58,796 --> 00:41:03,756
Speaker 2: Yeah, I'm I'd love to be enthusiastic and optimistic about

748
00:41:03,756 --> 00:41:09,076
Speaker 2: Detroit's ability to pivot to this new era of chip

749
00:41:09,556 --> 00:41:11,596
Speaker 2: and software and.

750
00:41:11,836 --> 00:41:15,756
Speaker 1: AI software as they talk about the software defined vehicle. Right,

751
00:41:15,796 --> 00:41:18,596
Speaker 1: This idea that new cars are like software with a

752
00:41:18,716 --> 00:41:20,516
Speaker 1: car wrapped around it is the way to think of

753
00:41:20,556 --> 00:41:20,836
Speaker 1: a car.

754
00:41:20,956 --> 00:41:24,276
Speaker 2: Now, yeah, yes, start with software and then wrap the

755
00:41:24,356 --> 00:41:26,476
Speaker 2: metal in the glass and the rubber around it. It's

756
00:41:26,516 --> 00:41:28,636
Speaker 2: the heart of the car is software in the computer.

757
00:41:29,356 --> 00:41:31,916
Speaker 2: This is where the West Coast thrives. So the new

758
00:41:32,196 --> 00:41:37,836
Speaker 2: American auto industry must rise from the West. That's my Yeah,

759
00:41:37,916 --> 00:41:40,516
Speaker 2: that's where if I were in charge of the US government,

760
00:41:40,796 --> 00:41:43,116
Speaker 2: in charge of that, I'd say throw all of our

761
00:41:43,156 --> 00:41:48,476
Speaker 2: support behind your Tesla's and Waymos and ubers like logistics.

762
00:41:48,876 --> 00:41:52,036
Speaker 2: Think of it as mobility less about the old business

763
00:41:52,116 --> 00:41:55,076
Speaker 2: of hammering out a vehicle from a production line like

764
00:41:55,116 --> 00:41:55,796
Speaker 2: Ford and GM.

765
00:41:56,276 --> 00:41:59,196
Speaker 1: First thing is get everybody to believe that we need

766
00:41:59,196 --> 00:42:01,716
Speaker 1: a car industry and a new kind of car industry,

767
00:42:02,676 --> 00:42:04,516
Speaker 1: probably in a new place. The new place is going

768
00:42:04,596 --> 00:42:05,876
Speaker 1: to be hard politically, but keep going.

769
00:42:06,796 --> 00:42:09,116
Speaker 2: But both of them, both of them have roles to play.

770
00:42:09,316 --> 00:42:11,676
Speaker 2: I would say Detroit won't play the leading role. If

771
00:42:11,676 --> 00:42:15,236
Speaker 2: we hope to compete against China, we need the brains

772
00:42:15,396 --> 00:42:18,436
Speaker 2: and the innovation and then and the risk taking a

773
00:42:18,556 --> 00:42:19,476
Speaker 2: West Coast companies.

774
00:42:19,636 --> 00:42:21,036
Speaker 3: That's number one. Geography.

775
00:42:21,516 --> 00:42:25,636
Speaker 2: Second, autonomy autonomous cars, self driving cars. You've heard of

776
00:42:25,676 --> 00:42:29,916
Speaker 2: the Tesla, cyber cabs. Weimo's running in about a dozen

777
00:42:29,996 --> 00:42:32,876
Speaker 2: cities around the United States. I was just in San Francisco.

778
00:42:33,276 --> 00:42:40,076
Speaker 2: So autonomy. Whoever wins autonomy wins the new global auto industry.

779
00:42:40,316 --> 00:42:44,076
Speaker 1: How we haven't talked about autonomy in China, Like, how

780
00:42:44,236 --> 00:42:46,636
Speaker 1: how is China doing on autonomous vehicles?

781
00:42:47,676 --> 00:42:51,916
Speaker 2: Comparable in a few cities you'll see autonomous cars running around.

782
00:42:52,716 --> 00:42:56,716
Speaker 2: Not they're not as advanced as weimo, but they're getting

783
00:42:56,756 --> 00:42:57,676
Speaker 2: closer and closer.

784
00:42:57,836 --> 00:43:01,156
Speaker 1: Yeah, okay, so we're all so not to be reductive

785
00:43:01,236 --> 00:43:04,076
Speaker 1: or jinguistic, but we're a little bit ahead on autonomous cars.

786
00:43:04,596 --> 00:43:09,076
Speaker 3: Yes, we have some leadership still in autonomous cars.

787
00:43:09,476 --> 00:43:12,756
Speaker 1: Why is it so important? Why is autonomy so important

788
00:43:12,796 --> 00:43:16,796
Speaker 1: in this particular context of this kind of great powers

789
00:43:16,796 --> 00:43:19,756
Speaker 1: competition between the US and China? Is the notion that

790
00:43:19,836 --> 00:43:24,676
Speaker 1: if the US gets to autonomous cars at scale everywhere

791
00:43:25,076 --> 00:43:27,516
Speaker 1: in a way that we can sell around the world,

792
00:43:27,636 --> 00:43:31,116
Speaker 1: et cetera. That's that's a way we could beat China. Because,

793
00:43:31,156 --> 00:43:33,636
Speaker 1: of course, someone would rather have a truly autonomous car

794
00:43:33,756 --> 00:43:36,836
Speaker 1: than not. I mean, is that the core reason autonomy.

795
00:43:36,356 --> 00:43:37,636
Speaker 3: Is that's the core reason.

796
00:43:37,716 --> 00:43:42,876
Speaker 2: Yeah that people was recently in Indonesia, sales of new

797
00:43:42,916 --> 00:43:46,876
Speaker 2: cars in Indonesia and Thailand are down in the last

798
00:43:46,916 --> 00:43:50,876
Speaker 2: five years, like forty fifty percent, and the economies aren't

799
00:43:50,916 --> 00:43:53,596
Speaker 2: doing great. But even if they're holding even you think

800
00:43:53,796 --> 00:43:57,996
Speaker 2: they're going to sustain people are opting for ride share.

801
00:43:58,196 --> 00:44:00,916
Speaker 2: Like those interesting venients of not owning a car and

802
00:44:01,076 --> 00:44:04,436
Speaker 2: just having vehicles show up in this case with drivers.

803
00:44:04,876 --> 00:44:08,236
Speaker 1: Huh. Well, and it's rather like a lot of people

804
00:44:08,236 --> 00:44:11,996
Speaker 1: clustered in urban places where ridesha is particularly convenient and economical,

805
00:44:12,036 --> 00:44:14,716
Speaker 1: and having a car is less convenient and less economical.

806
00:44:15,356 --> 00:44:15,716
Speaker 3: That's it.

807
00:44:16,196 --> 00:44:19,756
Speaker 2: Jakarta thirty million people who owning a car is a paint.

808
00:44:20,436 --> 00:44:24,036
Speaker 2: So you're seeing this trend. Okay, younger people don't need,

809
00:44:24,156 --> 00:44:27,276
Speaker 2: don't value, don't want. There's inconvenience is expensive.

810
00:44:27,476 --> 00:44:30,356
Speaker 1: Huh So if it's autonomous, you could have fewer cars

811
00:44:30,396 --> 00:44:33,316
Speaker 1: by far, it would be profoundly cheaper to do ride sharing.

812
00:44:33,396 --> 00:44:35,916
Speaker 1: That's that's the old dream of autonomous cars. We just

813
00:44:35,956 --> 00:44:38,196
Speaker 1: sort of stopped talking about it because it's taken so

814
00:44:38,276 --> 00:44:38,956
Speaker 1: long to get here.

815
00:44:39,236 --> 00:44:42,036
Speaker 2: Taken so long, and today when I talk to people

816
00:44:42,076 --> 00:44:45,316
Speaker 2: in the industry, they feel they feel as though they've

817
00:44:45,316 --> 00:44:47,996
Speaker 2: gone through that drought that and then they're back up

818
00:44:48,036 --> 00:44:48,516
Speaker 2: and they're.

819
00:44:48,356 --> 00:44:52,236
Speaker 1: Five years away for the last twenty years problem. Yeah,

820
00:44:52,276 --> 00:44:55,356
Speaker 1: So okay, So one is get everybody excited about EVS.

821
00:44:55,436 --> 00:44:58,116
Speaker 1: Two is we are autonomy. Is that the whole.

822
00:44:57,916 --> 00:45:04,556
Speaker 2: List jobs jobs, tens of thousands, hundreds of thousands of jobs.

823
00:45:04,596 --> 00:45:08,676
Speaker 3: So where do those go if we're not manufacturing.

824
00:45:08,276 --> 00:45:11,036
Speaker 2: And related to jobs, there's this thing like when there's

825
00:45:11,076 --> 00:45:14,676
Speaker 2: concentrations of manufacturing, you're learning as you go, you're innovating

826
00:45:15,156 --> 00:45:17,076
Speaker 2: if you outsource that. That's one of the reasons why

827
00:45:17,716 --> 00:45:21,316
Speaker 2: Elon Musk loves to vertically integrate. I mean his whole company.

828
00:45:21,396 --> 00:45:23,436
Speaker 2: He's trying to do everything in the oar, he's doing

829
00:45:23,436 --> 00:45:26,156
Speaker 2: the superstargar station, he's doing the batteries, he's doing everything,

830
00:45:26,436 --> 00:45:31,756
Speaker 2: trying to do the AI, doing everything. Why, he says,

831
00:45:31,836 --> 00:45:36,436
Speaker 2: because when I outsource, that innovation in my company stops.

832
00:45:36,876 --> 00:45:39,756
Speaker 2: Now I'm dependent on someone else to innovate. I love

833
00:45:39,836 --> 00:45:44,116
Speaker 2: that insight. And so when if America just outsources in

834
00:45:44,196 --> 00:45:46,476
Speaker 2: order to have a cheaper end product for us, it's

835
00:45:46,516 --> 00:45:49,436
Speaker 2: like it's a little bit like the farmer who sells

836
00:45:49,436 --> 00:45:53,116
Speaker 2: his land to buy stuff for his family. Eventually we're

837
00:45:53,116 --> 00:45:56,436
Speaker 2: out of We're not doing anything anymore, we're not learning

838
00:45:56,516 --> 00:45:59,236
Speaker 2: we're not innovating, We're just burning.

839
00:46:00,116 --> 00:46:04,796
Speaker 1: Is there some broader lesson the US can learn from China.

840
00:46:08,716 --> 00:46:12,796
Speaker 2: One of the lessons is, for years, the United States

841
00:46:12,796 --> 00:46:16,716
Speaker 2: has been hopeful that China would change, come around, be

842
00:46:16,836 --> 00:46:19,796
Speaker 2: more like us. So one of the lessons is we

843
00:46:19,916 --> 00:46:24,716
Speaker 2: better put that aside. China doesn't change for anybody. So

844
00:46:24,796 --> 00:46:27,876
Speaker 2: if our hope is China's going to collapse or come

845
00:46:27,916 --> 00:46:30,756
Speaker 2: around and be a democracy in a short term, or

846
00:46:30,876 --> 00:46:34,876
Speaker 2: be a good trading partner, ally, let's dismiss that fantasy.

847
00:46:35,036 --> 00:46:36,956
Speaker 3: It's not happening. Okay.

848
00:46:37,156 --> 00:46:41,676
Speaker 2: Number two, we have to maybe have to get comfortable

849
00:46:41,716 --> 00:46:44,956
Speaker 2: with the idea that another country is bigger than we are.

850
00:46:45,036 --> 00:46:48,316
Speaker 2: Their industries are bigger than ours. We're not necessarily the

851
00:46:48,356 --> 00:46:52,316
Speaker 2: world leader in stuff. Okay, So what we have to

852
00:46:52,316 --> 00:46:53,996
Speaker 2: be smarter, we have to work harder, we have to

853
00:46:54,036 --> 00:46:58,156
Speaker 2: be more innovative. And Third, probably the most important one

854
00:46:58,156 --> 00:47:01,396
Speaker 2: I should have made it first is at a certain point,

855
00:47:01,436 --> 00:47:04,476
Speaker 2: if we look at the Manhattan Project or the United

856
00:47:04,516 --> 00:47:10,516
Speaker 2: States after Pearl Harbor or the Spotnick moment, there has

857
00:47:10,596 --> 00:47:15,116
Speaker 2: to be a mission that brings us all together and saying,

858
00:47:15,476 --> 00:47:18,116
Speaker 2: you know what, our future is genuinely at risk. Our

859
00:47:18,196 --> 00:47:22,436
Speaker 2: future is genuinely in jeopardy if we don't act together

860
00:47:22,836 --> 00:47:26,556
Speaker 2: to pursue a national mission. This is what China does

861
00:47:26,796 --> 00:47:29,516
Speaker 2: really well. The government set out the mission Made in

862
00:47:29,556 --> 00:47:33,276
Speaker 2: China twenty twenty five. We will lead in next generation technologies,

863
00:47:33,516 --> 00:47:36,916
Speaker 2: will dominate. We'll use it as leverage against other countries.

864
00:47:37,956 --> 00:47:39,076
Speaker 2: The US should learn from that.

865
00:47:44,036 --> 00:47:55,636
Speaker 5: We'll be back in a minute with the lightning round.

866
00:47:57,036 --> 00:48:00,836
Speaker 1: Let's finish with the lightning round. Okay, it's going to

867
00:48:00,876 --> 00:48:06,596
Speaker 1: be a little silly, just so you know. I understand

868
00:48:06,596 --> 00:48:12,156
Speaker 1: that Chinese cars typically have karaoke app installed, and so

869
00:48:12,196 --> 00:48:16,476
Speaker 1: I'm curious, do you have a go to car karaoke song?

870
00:48:18,316 --> 00:48:22,076
Speaker 2: It would be a famous song by Dunley June and

871
00:48:22,596 --> 00:48:27,796
Speaker 2: China is probably China's most famous singer, a woman actually

872
00:48:27,796 --> 00:48:31,556
Speaker 2: she's Taiwanese, but the Chinese love her too, and it

873
00:48:31,556 --> 00:48:35,916
Speaker 2: would be Uh, well, I don't want to break.

874
00:48:36,036 --> 00:48:38,076
Speaker 1: Give me a line. You have to sing a line. Sorry,

875
00:48:38,476 --> 00:48:47,316
Speaker 1: w e yo doors shun, fantastic, thank you? What what

876
00:48:47,436 --> 00:48:48,476
Speaker 1: did you? What does that mean?

877
00:48:48,596 --> 00:48:53,756
Speaker 3: By the way, uh you asked? You asked me how

878
00:48:53,836 --> 00:48:54,836
Speaker 3: deeply do I love you?

879
00:48:56,036 --> 00:48:56,916
Speaker 1: What's the answer?

880
00:48:57,716 --> 00:48:59,436
Speaker 3: As deep as the fullest moon?

881
00:49:00,436 --> 00:49:04,796
Speaker 1: Lovely ah what's one thing that's different about driving in

882
00:49:04,996 --> 00:49:06,836
Speaker 1: China compared to driving in the US.

883
00:49:07,356 --> 00:49:12,476
Speaker 2: Chaos chaos, So think of it as like a road

884
00:49:12,596 --> 00:49:18,436
Speaker 2: rally and cars coming wrong direction, lanes not respected, cars

885
00:49:18,516 --> 00:49:20,756
Speaker 2: coming into your lane, you going into their lanes.

886
00:49:20,956 --> 00:49:21,516
Speaker 3: In fact, when I.

887
00:49:21,516 --> 00:49:24,396
Speaker 1: From New York, Baby come to New York, New York.

888
00:49:24,316 --> 00:49:28,356
Speaker 2: Looks like a kindergarten compared to chiy Like whoa. So

889
00:49:28,476 --> 00:49:30,116
Speaker 2: when I first came back to the United States, I'm

890
00:49:30,156 --> 00:49:33,236
Speaker 2: driving around here and I would in Asia. When you

891
00:49:33,316 --> 00:49:36,236
Speaker 2: pass a car, as soon as you get your nose

892
00:49:36,276 --> 00:49:38,916
Speaker 2: ahead of it, you just start easing into that lane.

893
00:49:38,916 --> 00:49:40,996
Speaker 2: You just start like nosing into that lane and they

894
00:49:41,076 --> 00:49:44,196
Speaker 2: go yeah, okay, and they they kind of allow you

895
00:49:44,316 --> 00:49:48,796
Speaker 2: to and or not, and it's it's it's it's sort

896
00:49:48,836 --> 00:49:53,036
Speaker 2: of to bemin full contact, full contact. So in here

897
00:49:53,116 --> 00:49:55,596
Speaker 2: in California, I did that a couple of times. People

898
00:49:55,596 --> 00:49:57,916
Speaker 2: are on the horn, like you what are you doing?

899
00:49:58,276 --> 00:49:58,996
Speaker 1: Not cool? Bro?

900
00:49:59,916 --> 00:50:04,396
Speaker 2: Everything is so tight and chaotic, there so many cars,

901
00:50:04,436 --> 00:50:07,516
Speaker 2: so much congestion that you've got you got to bring

902
00:50:07,596 --> 00:50:09,796
Speaker 2: your game. So when people would visit me in China,

903
00:50:09,796 --> 00:50:11,756
Speaker 2: they're like, oh my God, get me out of this car.

904
00:50:12,236 --> 00:50:14,476
Speaker 2: As soon as you get this is terrifying.

905
00:50:17,316 --> 00:50:21,876
Speaker 1: So you mentioned that you studied Chinese in college. I'm curious,

906
00:50:21,916 --> 00:50:24,596
Speaker 1: do you have a favorite Chinese author? You know, I

907
00:50:24,596 --> 00:50:26,476
Speaker 1: don't know, fiction, poetry, whatever.

908
00:50:27,516 --> 00:50:28,756
Speaker 3: It would probably be.

909
00:50:29,156 --> 00:50:34,316
Speaker 2: So favorites would be the Tong dynasty poets, and the

910
00:50:34,396 --> 00:50:35,796
Speaker 2: most famous one is le Bi.

911
00:50:36,636 --> 00:50:39,036
Speaker 3: So, in fact, that's the thing that drew me.

912
00:50:39,076 --> 00:50:42,036
Speaker 2: To China initially, as I studied ancient Chinese poetry from

913
00:50:42,076 --> 00:50:45,716
Speaker 2: that era, which was around eleven hundred eleven thirteen hundred.

914
00:50:45,916 --> 00:50:51,156
Speaker 2: Phenomenal poets, just phenomenal, and I'm not into poetry per se,

915
00:50:51,276 --> 00:50:56,236
Speaker 2: but the way they put characters together made you feel,

916
00:50:56,276 --> 00:51:00,796
Speaker 2: it made you feel something exceptional. So Lebi would be

917
00:51:00,876 --> 00:51:03,116
Speaker 2: at the top of that list. And then more recently

918
00:51:03,116 --> 00:51:05,236
Speaker 2: in the twentieth century, it was a guy named Lushun

919
00:51:05,716 --> 00:51:09,796
Speaker 2: whose every Chinese nos he was lived in the early

920
00:51:09,916 --> 00:51:13,836
Speaker 2: part of the century, and you had really perceptive takes

921
00:51:13,956 --> 00:51:17,556
Speaker 2: on where China was historically and what's what made China

922
00:51:17,676 --> 00:51:21,916
Speaker 2: different and maybe what China needed to do to really

923
00:51:22,036 --> 00:51:24,516
Speaker 2: join the world. So one of his most famous lines

924
00:51:24,676 --> 00:51:31,916
Speaker 2: was Chinese people see foreigners as either gods or barbarians,

925
00:51:32,436 --> 00:51:37,996
Speaker 2: never as equals. This is profound. This is really really

926
00:51:38,436 --> 00:51:40,796
Speaker 2: helpful to understand where the Chinese are coming from. So

927
00:51:40,916 --> 00:51:45,436
Speaker 2: in my early years, foreigners were gods. Now we're tending

928
00:51:45,556 --> 00:51:49,356
Speaker 2: to be seen as the barbarians, never as equals. And

929
00:51:49,476 --> 00:51:52,476
Speaker 2: this is important because if China is going to integrate

930
00:51:52,596 --> 00:51:56,516
Speaker 2: with the world, its view is it should be in charge.

931
00:51:58,116 --> 00:52:00,916
Speaker 2: It's not joining an American led system or a Western

932
00:52:00,996 --> 00:52:04,156
Speaker 2: No China in charge.

933
00:52:05,836 --> 00:52:09,516
Speaker 1: So you've talked about these sort of big macro chaines

934
00:52:09,916 --> 00:52:12,956
Speaker 1: that you've seen in the decades you've been going to China.

935
00:52:13,476 --> 00:52:16,196
Speaker 1: I'm curious, is there is there anything on the more

936
00:52:16,356 --> 00:52:18,716
Speaker 1: subtle end, something that's changed in a kind of less

937
00:52:18,916 --> 00:52:21,436
Speaker 1: obvious or small but still interesting.

938
00:52:21,116 --> 00:52:28,156
Speaker 2: Way generation generational change. The younger people I meet now,

939
00:52:28,396 --> 00:52:31,996
Speaker 2: they tend to be single children, one child policy, they

940
00:52:32,076 --> 00:52:34,636
Speaker 2: tend to be more affluent, and they tend to be

941
00:52:34,796 --> 00:52:40,276
Speaker 2: less driven than their parents, so almost entitled. So it's

942
00:52:40,396 --> 00:52:44,476
Speaker 2: fascinating to see the hunger and the ambition. And now

943
00:52:44,596 --> 00:52:47,636
Speaker 2: this next generation looks like, yeah, they have this thing

944
00:52:47,716 --> 00:52:53,276
Speaker 2: called the lying down, lie down phenomenon in China. Like

945
00:52:53,396 --> 00:52:55,556
Speaker 2: the younger people going, why am I going to work

946
00:52:56,756 --> 00:52:58,476
Speaker 2: six days a week, nine am to night?

947
00:52:58,596 --> 00:53:00,956
Speaker 3: What's the point do I need to be doing this

948
00:53:01,116 --> 00:53:02,476
Speaker 3: so that.

949
00:53:03,116 --> 00:53:06,836
Speaker 1: Means we have a shot at catching China maybe, But.

950
00:53:06,916 --> 00:53:09,876
Speaker 2: Then Jack Bob comes out Ali Baba go goes. Don't

951
00:53:09,956 --> 00:53:13,356
Speaker 2: listen to that, that's garbage. We need to keep working hard.

952
00:53:13,956 --> 00:53:17,116
Speaker 2: So there's a tension there in the society. Where's it

953
00:53:17,156 --> 00:53:17,516
Speaker 2: gonna go?

954
00:53:18,236 --> 00:53:20,076
Speaker 1: Thanks for your time. It was great to talk with you.

955
00:53:20,876 --> 00:53:22,676
Speaker 3: Fabulous conversation.

956
00:53:22,956 --> 00:53:34,396
Speaker 1: Thank you. Michael Dunn is the CEO of Done Insights.

957
00:53:35,236 --> 00:53:37,796
Speaker 1: Please let us know what you think of the show,

958
00:53:38,276 --> 00:53:39,556
Speaker 1: which you want to hear more of, which you want

959
00:53:39,596 --> 00:53:43,596
Speaker 1: to hear less of particular guest ideas. You can email

960
00:53:43,676 --> 00:53:46,596
Speaker 1: us at problem at Pushkin dot fm. I read all

961
00:53:46,596 --> 00:53:51,076
Speaker 1: the emails. You can also find me on x rom LinkedIn.

962
00:53:51,796 --> 00:53:55,396
Speaker 1: Really do appreciate all the messages that we get. Today's

963
00:53:55,436 --> 00:53:58,116
Speaker 1: show was produced by Gabriel Hunter Chang and Trinamnino. It

964
00:53:58,236 --> 00:54:01,156
Speaker 1: was engineered by Hans Dale She and edited by Lydia

965
00:54:01,236 --> 00:54:04,236
Speaker 1: jen Kott. I'm Jacob Goldstein and we'll be back next

966
00:54:04,276 --> 00:54:10,876
Speaker 1: week with another episode of What's Your Problems Man.