1 00:00:12,119 --> 00:00:15,560 Speaker 1: Hello, and welcome to another episode of the Odd Thoughts Podcast. 2 00:00:15,680 --> 00:00:20,360 Speaker 1: I'm Tracy Allaway and I'm Joe. Wisn'tal Joe? Do you 3 00:00:20,400 --> 00:00:23,200 Speaker 1: like science fiction? You know, it's one of those things 4 00:00:23,239 --> 00:00:26,079 Speaker 1: where I like it more in theory than in practice. 5 00:00:26,239 --> 00:00:28,640 Speaker 1: And by that, I mean I like the What does 6 00:00:28,680 --> 00:00:31,440 Speaker 1: that mean by that? I mean I like the idea 7 00:00:31,440 --> 00:00:34,160 Speaker 1: of being into science fiction, and I try to get 8 00:00:34,200 --> 00:00:36,720 Speaker 1: into it every once in a while, and then I 9 00:00:36,840 --> 00:00:38,720 Speaker 1: forget about it, and I'm like, oh, I should read 10 00:00:38,720 --> 00:00:42,680 Speaker 1: more science fiction, and it never seems to happen. Does 11 00:00:42,720 --> 00:00:46,199 Speaker 1: that make sense? You know, most people don't like the 12 00:00:46,240 --> 00:00:49,720 Speaker 1: idea of being into science fiction but secretly actually like 13 00:00:49,840 --> 00:00:52,760 Speaker 1: it and really read or watch a lot of science fiction. Yeah. 14 00:00:52,760 --> 00:00:54,800 Speaker 1: I didn't know that. You're the opposite that, because it's 15 00:00:54,800 --> 00:00:57,520 Speaker 1: like seeing this like dorky or geeky or something like that. 16 00:00:57,720 --> 00:01:00,160 Speaker 1: Or yeah no, I could see that, Yeah exactly. No, 17 00:01:00,360 --> 00:01:02,440 Speaker 1: Like I I every once in a while, I try, 18 00:01:02,520 --> 00:01:05,760 Speaker 1: but then I just like forget. Okay, But you know 19 00:01:05,880 --> 00:01:08,200 Speaker 1: Star Trek, right, Yeah, yeah, I used to watch it 20 00:01:08,200 --> 00:01:12,880 Speaker 1: pretty regularly. Oh okay, So then do you remember what 21 00:01:13,080 --> 00:01:17,880 Speaker 1: the mission or the prime directive of the Star Trek 22 00:01:18,480 --> 00:01:26,720 Speaker 1: Star Fleet was no, no, no, I don't think so. 23 00:01:27,240 --> 00:01:29,920 Speaker 1: All right, well, I'm going to read it off Wikipedia. 24 00:01:30,040 --> 00:01:31,640 Speaker 1: I don't want people to think that I know this 25 00:01:31,920 --> 00:01:36,600 Speaker 1: like by memory. Um So, the prime directive is a 26 00:01:36,640 --> 00:01:40,720 Speaker 1: guiding principle of star Fleet, prohibiting its members from interfering 27 00:01:40,720 --> 00:01:44,840 Speaker 1: with the internal and natural development of alien civilizations. The 28 00:01:44,880 --> 00:01:49,080 Speaker 1: Prime directive applies particularly to civilizations which are below a 29 00:01:49,120 --> 00:01:54,440 Speaker 1: certain threshold of technological, scientific, and cultural development. So basically, 30 00:01:54,840 --> 00:01:58,480 Speaker 1: you know, the more advanced civilization that is, star Fleet 31 00:01:58,520 --> 00:02:04,480 Speaker 1: shouldn't go around bullying or influencing less developed civilizations during 32 00:02:04,520 --> 00:02:08,080 Speaker 1: their space exploration. So at first I was about to 33 00:02:08,120 --> 00:02:10,520 Speaker 1: ask what on earth this had anything to do with 34 00:02:10,560 --> 00:02:14,280 Speaker 1: the markets or economics or anything that we normally talk about, 35 00:02:14,800 --> 00:02:19,160 Speaker 1: But that last point kind of makes me think that 36 00:02:19,200 --> 00:02:22,440 Speaker 1: there might be an analogy to some developments that we're 37 00:02:22,440 --> 00:02:25,960 Speaker 1: seeing today. Yeah, I think you know where we're going 38 00:02:26,000 --> 00:02:28,639 Speaker 1: to go with this, and that is, of course, the 39 00:02:28,720 --> 00:02:32,880 Speaker 1: technological war. I guess you could say between the US 40 00:02:32,960 --> 00:02:36,800 Speaker 1: and China, right, And we've talked about this before on 41 00:02:37,040 --> 00:02:42,440 Speaker 1: the show, but the implications are so massive. These tech fights, 42 00:02:43,040 --> 00:02:48,359 Speaker 1: the rays to control certain important technologies so critical that 43 00:02:48,720 --> 00:02:52,519 Speaker 1: we really probably can't talk about it enough. Yeah, and 44 00:02:52,760 --> 00:02:54,600 Speaker 1: the person that we're going to speak to you on 45 00:02:54,639 --> 00:02:57,360 Speaker 1: this is Uh, as far as I can tell, a 46 00:02:57,440 --> 00:03:00,040 Speaker 1: science fiction fan. And I have to say one of 47 00:03:00,200 --> 00:03:04,680 Speaker 1: the more unusual analysts that I have met in my 48 00:03:04,960 --> 00:03:09,760 Speaker 1: entire career in financial journalism. Before I came onto the show, 49 00:03:09,960 --> 00:03:12,760 Speaker 1: I actually just looked up his profile because I wanted 50 00:03:12,800 --> 00:03:14,520 Speaker 1: to make sure that I got the job title right. 51 00:03:15,080 --> 00:03:20,639 Speaker 1: And his job description on LinkedIn is Galactic Energy Commodities, 52 00:03:20,720 --> 00:03:26,760 Speaker 1: space mining and unobtanium research at Jefferies. So uh, that's 53 00:03:27,440 --> 00:03:30,240 Speaker 1: that gives you some idea. I can't wait. So who 54 00:03:30,320 --> 00:03:32,239 Speaker 1: is this we're talking to? Who is such an awesome 55 00:03:32,320 --> 00:03:37,040 Speaker 1: job title? All right, it's a Leiban you. He is 56 00:03:37,080 --> 00:03:41,360 Speaker 1: an analyst over at Jeffrey's actually an energy analyst, I believe, 57 00:03:41,600 --> 00:03:46,520 Speaker 1: but writes a lot about broader issues in China. So Leban, 58 00:03:46,720 --> 00:03:50,080 Speaker 1: it's really good to have you on the show. Yeah, 59 00:03:50,120 --> 00:03:52,720 Speaker 1: thank you for having me. Thank you for that introduction. 60 00:03:53,400 --> 00:03:55,520 Speaker 1: I have to say that wasn't the only job title 61 00:03:55,560 --> 00:03:59,400 Speaker 1: on your LinkedIn. I also saw Galley slave at mcquarie 62 00:04:00,160 --> 00:04:06,120 Speaker 1: and Padawan learner at Lehman Brothers. Yes, I guess my 63 00:04:06,240 --> 00:04:13,120 Speaker 1: LinkedIn profile was a bit of my um my little 64 00:04:13,200 --> 00:04:17,440 Speaker 1: joke against LinkedIn for using our content for their profits. 65 00:04:17,520 --> 00:04:20,599 Speaker 1: So I did have a little laugh at their expense. 66 00:04:20,640 --> 00:04:25,440 Speaker 1: I guess. So are you a science fiction fan? I 67 00:04:25,440 --> 00:04:27,680 Speaker 1: have to say I am. I don't think I am 68 00:04:27,720 --> 00:04:31,160 Speaker 1: a raging science fiction fan, but I I do follow it. 69 00:04:31,680 --> 00:04:35,440 Speaker 1: And uh and and you know, it's it's important more 70 00:04:35,440 --> 00:04:37,600 Speaker 1: and more because there's a lot of things in science 71 00:04:37,600 --> 00:04:41,360 Speaker 1: fiction now that really pertained what we what we see 72 00:04:41,400 --> 00:04:44,800 Speaker 1: happening in the world. What are the key things that 73 00:04:44,880 --> 00:04:47,960 Speaker 1: you read and think about in the science fiction realm 74 00:04:47,960 --> 00:04:51,200 Speaker 1: that you see happening in the world. Obviously, Tracy brought 75 00:04:51,279 --> 00:04:55,279 Speaker 1: up the Star Trek Prime directive and the US inner 76 00:04:55,440 --> 00:05:00,160 Speaker 1: attempting to interfere with Chinese technological development. What are sort 77 00:05:00,160 --> 00:05:03,320 Speaker 1: of the big themes in sci fi that influence you're 78 00:05:03,360 --> 00:05:05,279 Speaker 1: thinking right now on what we see in the world. 79 00:05:06,000 --> 00:05:08,839 Speaker 1: The one thing is we have to introduce this Chinese 80 00:05:08,880 --> 00:05:11,760 Speaker 1: science fiction writer. He's probably right now the most popular 81 00:05:11,920 --> 00:05:14,880 Speaker 1: science fiction writer in China. He wrote a series of 82 00:05:14,920 --> 00:05:20,000 Speaker 1: books that everybody reads in China as kind of a 83 00:05:20,320 --> 00:05:25,839 Speaker 1: representative of the cultural, facivilizational craft clash between the US 84 00:05:25,880 --> 00:05:31,119 Speaker 1: and China, and in his book. He has one civilization, 85 00:05:31,680 --> 00:05:36,000 Speaker 1: which is a Trice Lawrence civilization, and they figured that 86 00:05:36,040 --> 00:05:39,000 Speaker 1: they're gonna take over Earth, and one of the ways 87 00:05:39,000 --> 00:05:44,200 Speaker 1: that they are going to accomplish this is by sabotaging 88 00:05:44,760 --> 00:05:49,719 Speaker 1: all the scientific progress on Earth. So when um, the 89 00:05:49,839 --> 00:05:54,440 Speaker 1: US put the export ban on Huawei, that came to 90 00:05:54,520 --> 00:05:57,320 Speaker 1: mind of a lot of people who have been, you know, 91 00:05:57,440 --> 00:06:01,720 Speaker 1: following the situation, have been fans of the seeing where wow, 92 00:06:01,800 --> 00:06:05,680 Speaker 1: this is actually happening in real life. It's never quite 93 00:06:05,760 --> 00:06:08,720 Speaker 1: been done. I don't know if there's ever been a 94 00:06:08,760 --> 00:06:14,359 Speaker 1: historical president where one nation tries to hinder the scientific 95 00:06:14,600 --> 00:06:18,880 Speaker 1: progress of another. H It's just kind of new. So 96 00:06:18,960 --> 00:06:24,560 Speaker 1: that therefore, I think as technology developed so quickly, this 97 00:06:24,720 --> 00:06:29,799 Speaker 1: becomes kind of a new way that the conflicting nations 98 00:06:29,839 --> 00:06:34,960 Speaker 1: will present itself. So you used the allegory of the 99 00:06:35,120 --> 00:06:38,400 Speaker 1: Chinese science fiction writer, Um, I think the name of 100 00:06:38,440 --> 00:06:42,240 Speaker 1: the first book is the Three Body Problem. Is that right? 101 00:06:43,120 --> 00:06:46,480 Speaker 1: That's correct? You use that as an allegory for the 102 00:06:46,600 --> 00:06:52,200 Speaker 1: US trying to basically stymy technological progress in China. But 103 00:06:52,279 --> 00:06:55,160 Speaker 1: I guess my question is do you think that is 104 00:06:55,279 --> 00:06:59,040 Speaker 1: ultimately the goal of the US's trade policies and what 105 00:06:59,080 --> 00:07:01,960 Speaker 1: they're doing with things like Huawei. Is it that strategic? 106 00:07:02,839 --> 00:07:08,039 Speaker 1: I actually personally don't really think so. I think it's 107 00:07:08,080 --> 00:07:12,640 Speaker 1: actually just a you know, panicked anxiety, let's do something. 108 00:07:13,400 --> 00:07:17,960 Speaker 1: It's uh, it's a function of ignorance and anxiety and 109 00:07:18,000 --> 00:07:22,440 Speaker 1: with some truth all mixed in there. However, there is 110 00:07:22,560 --> 00:07:28,000 Speaker 1: the Department of Energies Business Advisory Board. They actually came 111 00:07:28,040 --> 00:07:32,200 Speaker 1: out with a policy paper that actually tried to think 112 00:07:32,280 --> 00:07:35,640 Speaker 1: through all of this. And when they thought throughout this, 113 00:07:35,720 --> 00:07:39,880 Speaker 1: they still advise that the US be very aggressive with 114 00:07:40,160 --> 00:07:44,480 Speaker 1: export bands of China to steiny Huawei, even if it 115 00:07:44,680 --> 00:07:50,920 Speaker 1: will ultimately result in the the acceleration of technologlogical catch 116 00:07:51,000 --> 00:07:54,840 Speaker 1: up of China. And they still said this is the 117 00:07:55,000 --> 00:07:58,680 Speaker 1: correct policy to take the themes like, there are some 118 00:07:58,880 --> 00:08:05,480 Speaker 1: parts of the American policy apparatus that has thought through 119 00:08:05,520 --> 00:08:10,280 Speaker 1: this and has made this recommendation. Now, whether it's in 120 00:08:10,400 --> 00:08:16,760 Speaker 1: everybody's head, it's unclear. You're reading through your notes and 121 00:08:16,800 --> 00:08:20,400 Speaker 1: you sort of talked about the two prongs of Trump's 122 00:08:20,440 --> 00:08:24,960 Speaker 1: trade approach. One on the tariff side, you say, you know, 123 00:08:25,000 --> 00:08:27,760 Speaker 1: that might actually be sort of brilliant and it might 124 00:08:27,880 --> 00:08:33,079 Speaker 1: actually begin to cause global multinationals to move their supply 125 00:08:33,200 --> 00:08:36,880 Speaker 1: chains out of China, uh, and that might have some effect, 126 00:08:37,280 --> 00:08:41,439 Speaker 1: whereas on the other hand, the export band to Huawei, 127 00:08:41,440 --> 00:08:44,640 Speaker 1: which as of right now when we're recording this, which 128 00:08:44,720 --> 00:08:48,800 Speaker 1: is in early July, has been softened a little bit, 129 00:08:49,360 --> 00:08:52,400 Speaker 1: as you put it, well, may have the perverse effect 130 00:08:52,440 --> 00:08:54,920 Speaker 1: where the supply chains move out of the US so 131 00:08:54,960 --> 00:08:59,320 Speaker 1: that companies can export technology to Huawei, and also will 132 00:09:00,040 --> 00:09:03,240 Speaker 1: have the effect of accelerating China's own efforts to build 133 00:09:03,240 --> 00:09:08,600 Speaker 1: its homegrown technology. Yeah. So so that is where um, 134 00:09:08,679 --> 00:09:12,439 Speaker 1: once I saw these policies come through, you scratch, scratching 135 00:09:12,440 --> 00:09:15,920 Speaker 1: your head to think how well thought through a lot 136 00:09:15,960 --> 00:09:19,440 Speaker 1: of these policies were. Because once the export band was 137 00:09:19,440 --> 00:09:23,360 Speaker 1: put in place, especially the extra territorial parts of it, 138 00:09:24,040 --> 00:09:29,640 Speaker 1: immediately I thought, this is exactly the opposite of putting 139 00:09:29,720 --> 00:09:34,480 Speaker 1: tariffs on Chinese exports, because now all of a sudden, 140 00:09:35,320 --> 00:09:40,640 Speaker 1: anything with US origin in it becomes kind of tainted. 141 00:09:41,559 --> 00:09:45,520 Speaker 1: So a lot of the tech development that needs to 142 00:09:45,559 --> 00:09:48,960 Speaker 1: find a Chinese market, because China's market is now the 143 00:09:49,080 --> 00:09:53,120 Speaker 1: largest semiconductor mark in the world, it will try to 144 00:09:53,280 --> 00:09:56,839 Speaker 1: move out of the US either. You know, there are 145 00:09:57,040 --> 00:09:59,800 Speaker 1: the minimus rules for the products if you're below twenty 146 00:09:59,840 --> 00:10:04,960 Speaker 1: five percent. So if for example, some product had US 147 00:10:05,040 --> 00:10:08,720 Speaker 1: content in there, all kinds of efforts will be made 148 00:10:08,800 --> 00:10:13,920 Speaker 1: to make that below. In recent weeks, we have heard 149 00:10:13,960 --> 00:10:19,479 Speaker 1: that a lot of US companies are still supplying Huawei 150 00:10:19,920 --> 00:10:24,680 Speaker 1: because they are manufacturing outside the US. Those kinds of 151 00:10:24,720 --> 00:10:28,520 Speaker 1: efforts will continue if the export ban is remains in place. 152 00:10:29,040 --> 00:10:32,600 Speaker 1: I think one of the reasons that Donald Trump ultimately 153 00:10:32,679 --> 00:10:37,520 Speaker 1: relaxed the export ban is because of very heavy lobbying 154 00:10:37,640 --> 00:10:44,120 Speaker 1: from these American companies trying to explain this point to him. Right, So, 155 00:10:44,240 --> 00:10:47,480 Speaker 1: Bloomberg has actually reported that there are companies like Intel 156 00:10:47,559 --> 00:10:51,240 Speaker 1: who think that they found a legal I don't want 157 00:10:51,240 --> 00:10:53,560 Speaker 1: to call it a loophole, but you know, the illegal 158 00:10:53,640 --> 00:10:56,400 Speaker 1: thing that does allow them, to your point, to ship 159 00:10:56,480 --> 00:10:59,480 Speaker 1: to Huawei. Joe just mentioned this, But talk to us 160 00:10:59,520 --> 00:11:04,920 Speaker 1: about self reliance, notion when it comes to developing China's 161 00:11:04,960 --> 00:11:09,959 Speaker 1: own domestic technology capability, because again that's where the sci 162 00:11:10,040 --> 00:11:13,360 Speaker 1: fi analogy sort of comes in again, and that's where 163 00:11:13,400 --> 00:11:16,800 Speaker 1: people start talking about the three body problem and what 164 00:11:16,960 --> 00:11:21,599 Speaker 1: happened to Earth when basically the alien civilization tried to 165 00:11:21,640 --> 00:11:25,520 Speaker 1: stop them from developing technology. Right, So we're right, right 166 00:11:25,520 --> 00:11:29,719 Speaker 1: when uh right, when a civilization is under threat in 167 00:11:29,880 --> 00:11:33,880 Speaker 1: this way, now, developing on technology isn't just an economic problem, 168 00:11:33,920 --> 00:11:37,559 Speaker 1: it's a national security problem. China, which had already been 169 00:11:38,240 --> 00:11:41,559 Speaker 1: throwing all kinds of resources into developing its in my 170 00:11:41,640 --> 00:11:45,520 Speaker 1: conductor industry, um, we think right after the Huaweidan, whatever 171 00:11:45,920 --> 00:11:49,000 Speaker 1: huge amount of resources they already committed, there is now 172 00:11:49,200 --> 00:11:52,160 Speaker 1: very likely a multiple on that. I don't know what 173 00:11:52,280 --> 00:11:55,320 Speaker 1: multiple it is. But the US has pushed China the 174 00:11:55,360 --> 00:11:58,840 Speaker 1: direction to try to stop China from doing something, it 175 00:11:58,920 --> 00:12:03,600 Speaker 1: has actually you know, accelerated that process. So the long 176 00:12:03,720 --> 00:12:08,080 Speaker 1: term likely ramification of the US threatening Huawei with this 177 00:12:08,320 --> 00:12:13,480 Speaker 1: UH technology export limitations is China then doubles down or 178 00:12:14,160 --> 00:12:18,840 Speaker 1: really increases its investment on domestic technology. What about the 179 00:12:18,880 --> 00:12:22,560 Speaker 1: short term gains, Because one of the concerns among many 180 00:12:22,600 --> 00:12:25,839 Speaker 1: people in the US government and industry is just who 181 00:12:25,880 --> 00:12:29,800 Speaker 1: wins the race to five G rollout. And there's a 182 00:12:29,840 --> 00:12:33,520 Speaker 1: perception out there in your own research at Jefferies has 183 00:12:33,800 --> 00:12:35,920 Speaker 1: talked about this that there are big gains from the 184 00:12:35,960 --> 00:12:40,199 Speaker 1: first country that really rolls out five G wireless technology, 185 00:12:40,320 --> 00:12:43,440 Speaker 1: all kinds of revenue advantages, the ability to set all 186 00:12:43,559 --> 00:12:47,360 Speaker 1: kinds of standards and so on. Is there an advantage 187 00:12:47,440 --> 00:12:51,160 Speaker 1: just in the short term win if the US can 188 00:12:51,200 --> 00:12:55,600 Speaker 1: slow down Chinese technological dominance right now in this area, 189 00:12:56,160 --> 00:12:59,679 Speaker 1: I suppose there is some, But the most the US 190 00:12:59,720 --> 00:13:03,200 Speaker 1: will get out of it is UM technology will catch 191 00:13:03,280 --> 00:13:07,640 Speaker 1: up on the u S side itself. So whereas right now, 192 00:13:08,120 --> 00:13:11,720 Speaker 1: if beings standards they are, China can't quite do five 193 00:13:11,760 --> 00:13:14,200 Speaker 1: G because it needs a lot of the US parts, 194 00:13:14,880 --> 00:13:17,320 Speaker 1: and the US can't quite do five G either because 195 00:13:17,440 --> 00:13:21,160 Speaker 1: it needs a lot of the Huawei technology. So both 196 00:13:21,200 --> 00:13:25,440 Speaker 1: sides have kind of hobbled each other. I guess if 197 00:13:25,520 --> 00:13:29,120 Speaker 1: this was the u S strategy from being well ahead 198 00:13:29,120 --> 00:13:32,280 Speaker 1: of the pack, then now the race is kind of 199 00:13:32,360 --> 00:13:36,719 Speaker 1: even if you will, so the short term there might 200 00:13:36,720 --> 00:13:40,480 Speaker 1: be some benefit in one very specific industry. I think 201 00:13:40,520 --> 00:13:45,360 Speaker 1: the problem with all this is that in the longer term, 202 00:13:45,559 --> 00:13:51,200 Speaker 1: the trust that technology developed in the US will have 203 00:13:51,320 --> 00:13:58,800 Speaker 1: a global market has been damaged. So in the longer term, 204 00:13:58,920 --> 00:14:02,199 Speaker 1: all kinds of R and D that was that would 205 00:14:02,200 --> 00:14:05,400 Speaker 1: have been carried out in the US might now have 206 00:14:05,480 --> 00:14:10,600 Speaker 1: to be either relocated from the US or replicated elsewhere. 207 00:14:11,120 --> 00:14:16,040 Speaker 1: It's hugely inefficient UM, and it's damaging to everybody but 208 00:14:16,280 --> 00:14:38,440 Speaker 1: mostly damages actually the US if that happens the long term. 209 00:14:38,480 --> 00:14:42,160 Speaker 1: So speaking of inefficiencies and and just going back to 210 00:14:42,160 --> 00:14:46,160 Speaker 1: the notion of China accelerating its own technological progress because 211 00:14:46,200 --> 00:14:49,280 Speaker 1: of what the US is doing. I mean, we've seen 212 00:14:49,440 --> 00:14:54,240 Speaker 1: China try to develop its own semiconductor industry before and 213 00:14:54,400 --> 00:14:58,680 Speaker 1: they haven't been that successful. So what are the chances 214 00:14:58,920 --> 00:15:01,800 Speaker 1: that there are six festival in doing this now and 215 00:15:01,840 --> 00:15:05,480 Speaker 1: what are the chances that they avoid, you know, ramping 216 00:15:05,600 --> 00:15:11,880 Speaker 1: up technological capacity to the point of ridiculousness or mass inefficiency. 217 00:15:12,600 --> 00:15:18,080 Speaker 1: China has taken multiple stabs at developing its semiconduct industry 218 00:15:18,080 --> 00:15:20,480 Speaker 1: and has never done a very good job. In the 219 00:15:20,560 --> 00:15:24,560 Speaker 1: late nineties at at an effort, and in the early 220 00:15:24,600 --> 00:15:28,360 Speaker 1: two thousands had an effort. There's two major reasons why 221 00:15:28,480 --> 00:15:31,640 Speaker 1: it did not succeed in the past. One of the 222 00:15:31,680 --> 00:15:35,480 Speaker 1: major reasons is that China just did not have the 223 00:15:35,640 --> 00:15:39,440 Speaker 1: human capital at that time. At that time, China had 224 00:15:39,640 --> 00:15:42,600 Speaker 1: but a third or in the in the early part 225 00:15:42,640 --> 00:15:46,080 Speaker 1: of the two thousands, half the number of engineers as 226 00:15:46,120 --> 00:15:51,520 Speaker 1: the US. However, over these years, the Chinda's graduates of 227 00:15:51,600 --> 00:15:54,880 Speaker 1: engineers from the year two thousand on where they graduated 228 00:15:55,000 --> 00:16:00,000 Speaker 1: about as many engineers every year as the US to two. Today, 229 00:16:00,360 --> 00:16:05,160 Speaker 1: China graduates eight times the number of science and engineering 230 00:16:05,720 --> 00:16:11,240 Speaker 1: students every year, and the researcher the stock of talent 231 00:16:11,640 --> 00:16:16,040 Speaker 1: has now surpassed the US. So now there's a lot 232 00:16:16,200 --> 00:16:20,920 Speaker 1: of human capital in the market that can do this 233 00:16:21,040 --> 00:16:24,000 Speaker 1: kind of work. So there is the resources to throw 234 00:16:24,080 --> 00:16:28,880 Speaker 1: at this problem. The other thing is that the thing 235 00:16:28,920 --> 00:16:31,040 Speaker 1: that held everything up is that there was no real 236 00:16:31,240 --> 00:16:35,240 Speaker 1: market for the chips made in China. The chips made 237 00:16:35,280 --> 00:16:38,880 Speaker 1: in China was subsidized products, and they were always somewhat 238 00:16:38,920 --> 00:16:42,360 Speaker 1: behind what was already available stuff made by Intel or 239 00:16:42,360 --> 00:16:46,760 Speaker 1: am D, and they were probably more expensive and performed worse. 240 00:16:47,000 --> 00:16:51,440 Speaker 1: So nobody bought them except for the defense industry in 241 00:16:51,480 --> 00:16:55,200 Speaker 1: China that was required to buy them. But now that 242 00:16:55,280 --> 00:16:58,400 Speaker 1: you have a company like Huawei and UM, you have 243 00:16:58,560 --> 00:17:03,640 Speaker 1: also the threat of you know, further export bands. I 244 00:17:03,720 --> 00:17:05,960 Speaker 1: read an article a while back that now a lot 245 00:17:06,000 --> 00:17:10,560 Speaker 1: of companies they described suppliers UM from the US as 246 00:17:10,600 --> 00:17:14,920 Speaker 1: suppliers of the last resort. I mean, first you buy domestic, 247 00:17:15,040 --> 00:17:19,560 Speaker 1: then you buy from the US if all else fails. 248 00:17:19,760 --> 00:17:24,040 Speaker 1: So now because of the engineers there and now all 249 00:17:24,119 --> 00:17:28,200 Speaker 1: of a sudden a market has been created, so that 250 00:17:28,640 --> 00:17:32,640 Speaker 1: chips are sold, revenue is generated, and R and D 251 00:17:33,000 --> 00:17:37,240 Speaker 1: in the semi conduct industry is just a function of revenue. 252 00:17:37,240 --> 00:17:40,560 Speaker 1: If the revenue is there, about your revenue spent on 253 00:17:40,680 --> 00:17:45,040 Speaker 1: R and D, So that creates a virtuous circle. So 254 00:17:45,119 --> 00:17:49,800 Speaker 1: there's a much higher chance of success this time around, 255 00:17:49,840 --> 00:17:53,040 Speaker 1: just because you have two pieces in place. Now, which 256 00:17:53,119 --> 00:17:57,800 Speaker 1: is the human capital, and then now which is a 257 00:17:57,920 --> 00:18:01,880 Speaker 1: market has been created. How far behind right now would 258 00:18:01,920 --> 00:18:06,240 Speaker 1: you say still the Chinese semiconductor industry is so kind 259 00:18:06,240 --> 00:18:10,600 Speaker 1: of a thumb in the air is about six years now. 260 00:18:10,640 --> 00:18:13,840 Speaker 1: The six years you've gotta be somewhat careful on that. 261 00:18:13,920 --> 00:18:20,960 Speaker 1: This assumes a static situation, assumes that the US stops 262 00:18:21,600 --> 00:18:27,520 Speaker 1: technological advancing, and then, based on prior track record, how 263 00:18:27,600 --> 00:18:30,600 Speaker 1: long it will take China to catch up in the 264 00:18:31,119 --> 00:18:36,359 Speaker 1: different generations of chip manumating process. However, you can't quite 265 00:18:36,359 --> 00:18:41,080 Speaker 1: assume that the US will stop advancing. But also something 266 00:18:41,119 --> 00:18:45,080 Speaker 1: else has changed now. Now what we believe is that 267 00:18:45,560 --> 00:18:50,840 Speaker 1: the prior rates that China was catching up on has 268 00:18:50,880 --> 00:18:54,520 Speaker 1: now been thrown out the window because of all the 269 00:18:54,640 --> 00:18:59,240 Speaker 1: resources that China will throw at the semiconductor industry, and 270 00:18:59,280 --> 00:19:04,520 Speaker 1: also the rate of advance for the U S semiconductor industry. 271 00:19:04,520 --> 00:19:08,920 Speaker 1: There's a big question mark on that now because China 272 00:19:09,119 --> 00:19:12,800 Speaker 1: is the world's largest market for semiconductors. If that world's 273 00:19:12,840 --> 00:19:15,239 Speaker 1: largest market has a big question mark where there will 274 00:19:15,280 --> 00:19:18,320 Speaker 1: be export bands on, it will be R and D 275 00:19:18,720 --> 00:19:21,840 Speaker 1: be done in the US to to service that market. 276 00:19:22,400 --> 00:19:27,280 Speaker 1: So the advance of the US technology could slow down 277 00:19:28,240 --> 00:19:33,480 Speaker 1: and the catch up speed of China's technology could accelerate. 278 00:19:34,000 --> 00:19:37,399 Speaker 1: But you know, in a static environment it's about six years, 279 00:19:38,000 --> 00:19:40,800 Speaker 1: but you know, we we think it could be less 280 00:19:40,840 --> 00:19:45,600 Speaker 1: than that. Let's talk about the pure tariff side of 281 00:19:45,760 --> 00:19:48,840 Speaker 1: the tensions that are going on right now, and again 282 00:19:48,880 --> 00:19:52,720 Speaker 1: we don't know exactly what the final trading relationship is 283 00:19:52,760 --> 00:19:56,720 Speaker 1: going to look like between the US and China as 284 00:19:56,760 --> 00:19:59,679 Speaker 1: of right now. The more stepped up tariffs are on 285 00:19:59,720 --> 00:20:01,680 Speaker 1: the whole old a lot of analysts expect that maybe 286 00:20:01,720 --> 00:20:05,320 Speaker 1: there will be some deal later in the year. You've 287 00:20:05,359 --> 00:20:10,120 Speaker 1: written somewhat positively about Trump's tariff strategy, so I'm curious 288 00:20:10,280 --> 00:20:13,199 Speaker 1: what potential gain you see from it. We touched on 289 00:20:13,240 --> 00:20:15,639 Speaker 1: it in the beginning, and how you see how the 290 00:20:15,720 --> 00:20:19,160 Speaker 1: Chinese government is going to play its cards in response, 291 00:20:20,560 --> 00:20:25,760 Speaker 1: I'm not too sure. I'm all that positive on Trump's strategy. 292 00:20:26,080 --> 00:20:29,880 Speaker 1: What I think is that he he is quite innovative 293 00:20:29,960 --> 00:20:32,600 Speaker 1: in using tariffs. Tariffs I've never really been used in 294 00:20:32,640 --> 00:20:36,440 Speaker 1: this way before. Tariffs historically have been used to protect 295 00:20:36,480 --> 00:20:42,080 Speaker 1: the domestic industry, where you know there's a domestic beneficiary. 296 00:20:42,160 --> 00:20:45,040 Speaker 1: When he used this tariff, domestic consumers are heard, but 297 00:20:45,119 --> 00:20:50,000 Speaker 1: you actually have a domestic beneficiary. In Donald Trump's case, 298 00:20:50,440 --> 00:20:55,160 Speaker 1: he has no domestic beneficiary really in mind. All he 299 00:20:55,240 --> 00:20:59,840 Speaker 1: has is a foreign businesses that he really wants to 300 00:21:00,000 --> 00:21:03,080 Speaker 1: cause some pain on. At the same time he's causing 301 00:21:03,119 --> 00:21:10,520 Speaker 1: pain on domestic consumers. However, if this foreign adversary caves, 302 00:21:10,960 --> 00:21:14,400 Speaker 1: then there is no harm done to domestic consumers because 303 00:21:14,400 --> 00:21:16,960 Speaker 1: the terrorists will be lifted and then the US will 304 00:21:17,040 --> 00:21:21,520 Speaker 1: collect the trade concession from whichever foreign adversary cave. And 305 00:21:21,840 --> 00:21:30,040 Speaker 1: this strategy works extremely well with small economies South Korea, Mexico, Canada. 306 00:21:30,160 --> 00:21:34,440 Speaker 1: They all caved and the US collects its concession. However 307 00:21:34,480 --> 00:21:38,439 Speaker 1: minor they are concession concession concession. However, if you have 308 00:21:38,560 --> 00:21:42,520 Speaker 1: an adversary that is not small and that is not caving, 309 00:21:43,240 --> 00:21:48,359 Speaker 1: then your tariffs are causing harm for your domestic consumers. 310 00:21:48,560 --> 00:21:52,280 Speaker 1: You may be hurting the suppliers from the foreign country, 311 00:21:52,800 --> 00:21:56,600 Speaker 1: but your consumers are being hurt. So then I think, 312 00:21:56,960 --> 00:21:59,520 Speaker 1: me personally, I think it's the the level of pain 313 00:21:59,560 --> 00:22:03,400 Speaker 1: and both It's almost symmetric, So then it just becomes 314 00:22:03,520 --> 00:22:09,080 Speaker 1: a game of who can withstand more pain. So as 315 00:22:09,160 --> 00:22:14,399 Speaker 1: it's playing out, I think both sides right now think 316 00:22:14,960 --> 00:22:18,359 Speaker 1: that they can stand more pain than the other. China, 317 00:22:18,480 --> 00:22:21,320 Speaker 1: I think, believes that the US will cave because special 318 00:22:21,359 --> 00:22:24,920 Speaker 1: interests will force Donald Trump to throw in the towel. 319 00:22:24,960 --> 00:22:28,960 Speaker 1: Whether it's the farm lobby, the consumer lobby, or whatever. 320 00:22:29,080 --> 00:22:32,520 Speaker 1: The politician China believe that the US is controlled by 321 00:22:32,520 --> 00:22:39,760 Speaker 1: special interests. Donald Trump's strategy is probably betting on their 322 00:22:39,960 --> 00:22:46,520 Speaker 1: belief that China's economy is pottering because of the huge 323 00:22:46,640 --> 00:22:50,240 Speaker 1: debt that China is built up in recent years. Without 324 00:22:50,280 --> 00:22:55,919 Speaker 1: that being true, China will not cave, and then it 325 00:22:55,920 --> 00:22:59,679 Speaker 1: will just be a long drawn out trade war before 326 00:23:00,200 --> 00:23:07,040 Speaker 1: someone realizes which side is suffering more pain. So I've 327 00:23:07,040 --> 00:23:11,320 Speaker 1: always wondered this, but the Trump administration seems to simultaneously 328 00:23:11,400 --> 00:23:15,040 Speaker 1: believe that China is on the brink of a massive 329 00:23:15,160 --> 00:23:18,480 Speaker 1: financial meltdown. Or economic slowdown of some sort. But at 330 00:23:18,480 --> 00:23:21,840 Speaker 1: the same time they seem to be very, very scared 331 00:23:22,080 --> 00:23:28,199 Speaker 1: of the potential for economic progress and eventually strength in 332 00:23:28,240 --> 00:23:31,959 Speaker 1: the country. How how did they square those two positions 333 00:23:32,000 --> 00:23:34,560 Speaker 1: in their minds? Do you think? Yeah, I, from from 334 00:23:34,560 --> 00:23:37,879 Speaker 1: what I see a lot of UH commentary out of 335 00:23:37,920 --> 00:23:41,400 Speaker 1: the US does hold like a schizophrenic view of China. 336 00:23:41,520 --> 00:23:44,080 Speaker 1: At the same time, they think China is advancing at 337 00:23:44,080 --> 00:23:48,040 Speaker 1: such a pace that it will dominate everything and things 338 00:23:48,119 --> 00:23:52,359 Speaker 1: must be done now, otherwise nothing can be done in 339 00:23:52,920 --> 00:23:56,520 Speaker 1: five ten years time when China controls everything. But also 340 00:23:56,680 --> 00:23:59,720 Speaker 1: at the same time, they also believe that China's economy 341 00:24:00,119 --> 00:24:05,160 Speaker 1: um so over leverage, overstretched, that it's on the brink 342 00:24:05,160 --> 00:24:10,399 Speaker 1: of collapse. And those two kind of opinions exists almost 343 00:24:10,440 --> 00:24:15,480 Speaker 1: simultaneously in the minds of a lot of American policymakers. 344 00:24:15,520 --> 00:24:20,639 Speaker 1: I think, and I'm not too sure that that is 345 00:24:21,600 --> 00:24:25,200 Speaker 1: healthy or correct and will lead to any kind of 346 00:24:25,680 --> 00:24:29,920 Speaker 1: intelligent strategy. I just want to go back to what 347 00:24:30,000 --> 00:24:34,600 Speaker 1: you said about the Chinese perception that the US can't 348 00:24:34,640 --> 00:24:38,879 Speaker 1: win the trade war because special interests will ultimately force 349 00:24:38,960 --> 00:24:42,520 Speaker 1: the administration or force the government to relent in some way. 350 00:24:42,520 --> 00:24:47,520 Speaker 1: I mean, arguably that view was somewhat vindicated just by 351 00:24:47,640 --> 00:24:52,200 Speaker 1: the recent actions with Huawei in which chip companies came 352 00:24:52,240 --> 00:24:56,600 Speaker 1: and said and urged the administration to relax the export controls, 353 00:24:56,600 --> 00:25:01,240 Speaker 1: and that's exactly what happened. But more big sure, does 354 00:25:01,320 --> 00:25:06,240 Speaker 1: this essentially represent a fundamentally pessimistic view on the state 355 00:25:06,400 --> 00:25:10,199 Speaker 1: of US politics right now that our government sort of 356 00:25:10,200 --> 00:25:14,040 Speaker 1: regardless of who is in control, is incapable of doing 357 00:25:14,080 --> 00:25:18,080 Speaker 1: anything long term strategic because there will be these powerful 358 00:25:18,160 --> 00:25:22,359 Speaker 1: special interests that will demand that be undermined for short 359 00:25:22,480 --> 00:25:27,600 Speaker 1: term profits. I think that is the opinion of the 360 00:25:27,760 --> 00:25:32,359 Speaker 1: leadership in China. Rightfully or wrongfully, I think that is opinion. 361 00:25:32,680 --> 00:25:36,360 Speaker 1: There is a man by the name of Wang hu Ning. 362 00:25:37,080 --> 00:25:42,240 Speaker 1: He just recently ascended to the Standing Committee of the Politburo. 363 00:25:42,720 --> 00:25:45,720 Speaker 1: You know, these are the seven people who pretty much 364 00:25:45,800 --> 00:25:50,760 Speaker 1: run China. He has a very interesting background. He was 365 00:25:51,040 --> 00:25:54,600 Speaker 1: never a politician. He never ran a province, he never 366 00:25:54,680 --> 00:25:58,040 Speaker 1: ran an s V, he never ran any ministries. He 367 00:25:58,560 --> 00:26:05,240 Speaker 1: just extended the bureaucracy from academia and as advisors for 368 00:26:05,320 --> 00:26:09,840 Speaker 1: the last three presidents, from John Zaming to Hoo Jing 369 00:26:09,840 --> 00:26:15,600 Speaker 1: Tao and now Shi Jing King. He is the ideological 370 00:26:15,760 --> 00:26:20,760 Speaker 1: theorist for China, and he wrote a book about I 371 00:26:20,760 --> 00:26:23,399 Speaker 1: Don't Know fifteen twenty years ago. He's spent a number 372 00:26:23,400 --> 00:26:27,879 Speaker 1: of years in the US studying in universities and researching universities, 373 00:26:27,920 --> 00:26:32,959 Speaker 1: and he wrote a book titled America against America, pretty 374 00:26:33,040 --> 00:26:36,919 Speaker 1: much saying that the US is controlled by what he 375 00:26:37,000 --> 00:26:43,840 Speaker 1: calls minority shareholders and special interests control all of US 376 00:26:43,920 --> 00:26:48,600 Speaker 1: politics and therefore it leads to gridlock and nothing that 377 00:26:48,680 --> 00:26:51,840 Speaker 1: can be done with um, you know, where big money 378 00:26:51,880 --> 00:26:57,040 Speaker 1: controlled things. This is not at all a very unique analysis. 379 00:26:57,640 --> 00:27:02,199 Speaker 1: People like Manser Olson in the US political scientists and 380 00:27:02,240 --> 00:27:05,639 Speaker 1: Francis Fukuyama, who more or less come out with the 381 00:27:05,680 --> 00:27:12,399 Speaker 1: same conclusion. Where Francis Fukiyama calls it re patrimonialization with 382 00:27:13,000 --> 00:27:16,320 Speaker 1: it's a long drawn out phrase that he coined, which 383 00:27:16,640 --> 00:27:21,840 Speaker 1: is the late stage democracies he will develop in such 384 00:27:21,840 --> 00:27:26,600 Speaker 1: a way that special interest control everything. And that's Manser 385 00:27:26,680 --> 00:27:32,400 Speaker 1: Olsen's theory as well, where what he calls distributional coalitions, 386 00:27:32,440 --> 00:27:36,560 Speaker 1: which is special interests will dominate the political landscape. And 387 00:27:36,720 --> 00:27:41,360 Speaker 1: both Manser Olson and Francis Fukuyama, their conclusion is that 388 00:27:41,800 --> 00:27:47,200 Speaker 1: once it happens. They can't think of any way that 389 00:27:47,359 --> 00:27:51,359 Speaker 1: it can be resolved. This is kind of a steady state. 390 00:27:52,480 --> 00:27:54,920 Speaker 1: I have to ask, who do you think is ultimately 391 00:27:55,200 --> 00:27:57,360 Speaker 1: going to be able to withstand the most pain when 392 00:27:57,359 --> 00:27:59,840 Speaker 1: it comes to the trade war. Is it the U 393 00:28:00,119 --> 00:28:04,879 Speaker 1: US with you know, a fractured political system, beholden to 394 00:28:05,119 --> 00:28:07,800 Speaker 1: lots of interest groups, but that is coming from a 395 00:28:07,840 --> 00:28:11,320 Speaker 1: position of strength and power to some degree. Or is 396 00:28:11,320 --> 00:28:15,680 Speaker 1: it China with its command economy, able to develop industries 397 00:28:15,760 --> 00:28:18,520 Speaker 1: very quickly, but coming from a lower base, which one 398 00:28:19,080 --> 00:28:22,119 Speaker 1: I have to say, China. You know, time is on 399 00:28:22,320 --> 00:28:27,359 Speaker 1: China's side. China's government has much a lot more tools 400 00:28:27,400 --> 00:28:30,320 Speaker 1: that it can use if the community really were to, 401 00:28:31,040 --> 00:28:33,959 Speaker 1: you know, enter a really weak patch. They can do 402 00:28:34,040 --> 00:28:37,560 Speaker 1: a lot of things that the US cannot. Can stimulate 403 00:28:38,280 --> 00:28:41,400 Speaker 1: their banks, they can cut taxes like they already have. 404 00:28:42,320 --> 00:28:45,480 Speaker 1: And you know, kind of the magic thing with China 405 00:28:45,760 --> 00:28:49,760 Speaker 1: is it still has reform in its back pocket. Can 406 00:28:49,800 --> 00:28:54,400 Speaker 1: always do reforms and privatize it so easy. There is 407 00:28:54,560 --> 00:28:58,200 Speaker 1: an effort right now to more or less pushed toward 408 00:28:58,680 --> 00:29:02,280 Speaker 1: the privatization of s SO ease, which is probably going 409 00:29:02,320 --> 00:29:05,000 Speaker 1: to force s o s to pay a lot more dividends, 410 00:29:05,040 --> 00:29:07,640 Speaker 1: pretty much distributing the capital from the s o E 411 00:29:07,760 --> 00:29:10,600 Speaker 1: to the larger economy through tax cuts. There's a lot 412 00:29:10,640 --> 00:29:15,360 Speaker 1: of tools that China has. China also has the benefit 413 00:29:15,440 --> 00:29:18,719 Speaker 1: that they more or less control the media. As this 414 00:29:18,840 --> 00:29:22,440 Speaker 1: trade war is being raised, they have already been preparing 415 00:29:22,560 --> 00:29:28,440 Speaker 1: the population with propaganda linking this to the Korean War, 416 00:29:29,800 --> 00:29:33,719 Speaker 1: linking the trade war to the Long March. Now in 417 00:29:33,800 --> 00:29:39,680 Speaker 1: the US there has been very little preparation for the fallout. 418 00:29:40,280 --> 00:29:42,400 Speaker 1: I guess they're hoping a deal will be cut and 419 00:29:42,400 --> 00:29:45,880 Speaker 1: there won't be any fallout. But right when prices really 420 00:29:45,920 --> 00:29:52,320 Speaker 1: start rising for American consumers, right when the farmers really start, 421 00:29:52,640 --> 00:29:55,760 Speaker 1: you know, losing a lot of sales, these interest groups 422 00:29:55,760 --> 00:29:58,840 Speaker 1: will you know, start their lobbying efforts and start pushing back. 423 00:29:59,480 --> 00:30:03,680 Speaker 1: China is a economy is probably could take you know, 424 00:30:04,240 --> 00:30:09,400 Speaker 1: the damaged Chinese commune the short term could be larger 425 00:30:09,720 --> 00:30:13,400 Speaker 1: on a percentage basis. It's not about who is damaged 426 00:30:13,480 --> 00:30:19,360 Speaker 1: more more about who can take more pain. So even 427 00:30:19,520 --> 00:30:24,720 Speaker 1: if the US economy suffers less, it's unclear whether they 428 00:30:24,760 --> 00:30:30,200 Speaker 1: will be able to withstand that amount of suffering. Laban 429 00:30:30,280 --> 00:30:33,520 Speaker 1: you ahead of Hong Kong, China Research at Jeffreys. Thank 430 00:30:33,560 --> 00:30:35,640 Speaker 1: you so much for joining us. Thank you. That was 431 00:30:35,680 --> 00:30:39,200 Speaker 1: so great. I really enjoyed that. Oh you're welcome. Thank 432 00:30:39,200 --> 00:30:55,080 Speaker 1: you for having me so, Joe. I have a secret confession, 433 00:30:55,360 --> 00:30:59,160 Speaker 1: which is that I started reading The Three Body Problem 434 00:30:59,200 --> 00:31:03,080 Speaker 1: after reading one of Laban's notes a few weeks ago. See. 435 00:31:03,200 --> 00:31:06,680 Speaker 1: Remember I actually started reading that like two years ago. Now, 436 00:31:06,720 --> 00:31:10,240 Speaker 1: I gotta star you beat me, no, but I didn't 437 00:31:10,240 --> 00:31:12,000 Speaker 1: finish it. You'll probably be to beat me to it, 438 00:31:12,080 --> 00:31:14,840 Speaker 1: but I'll reach. I do want to restart reading it now. 439 00:31:15,160 --> 00:31:18,680 Speaker 1: It's good, although I mean Laban has kind of ruined 440 00:31:18,680 --> 00:31:21,040 Speaker 1: the plot a little bit because now we know that 441 00:31:21,080 --> 00:31:24,800 Speaker 1: the alien civilization tries to suppress technology on Earth, and 442 00:31:24,840 --> 00:31:28,760 Speaker 1: in doing so, they encourage Earth to basically ramp up 443 00:31:28,800 --> 00:31:33,160 Speaker 1: their technological prowess, and years and years of intergalactic warfare 444 00:31:33,320 --> 00:31:36,560 Speaker 1: kind of ensue. So I wonder if that's going to 445 00:31:36,560 --> 00:31:39,480 Speaker 1: be what happens to the U. S And China. Wait, 446 00:31:39,520 --> 00:31:42,200 Speaker 1: aliens are going to come and no, oh no, no, 447 00:31:42,280 --> 00:31:44,400 Speaker 1: the US are the aliens in this one, right? No? 448 00:31:44,560 --> 00:31:47,640 Speaker 1: I think if aliens actually came to Earth, I think 449 00:31:47,680 --> 00:31:49,560 Speaker 1: there's a chance that the U. S. And China might 450 00:31:49,680 --> 00:31:53,360 Speaker 1: unite right against a common enemy. Oh yeah, so let's 451 00:31:53,360 --> 00:31:56,920 Speaker 1: say we should root for that outcome and avoid avoid 452 00:31:57,000 --> 00:32:02,800 Speaker 1: domestic earthbound strife. Yeah, exactly. All right. On a serious note, though, 453 00:32:03,120 --> 00:32:06,440 Speaker 1: I really enjoy um having Laban come on and talk 454 00:32:06,520 --> 00:32:09,160 Speaker 1: about this, and I think he does point out some 455 00:32:09,360 --> 00:32:12,960 Speaker 1: very interesting things, especially when it comes to the differences 456 00:32:13,080 --> 00:32:17,560 Speaker 1: in the respective political systems of the U. S And China. Yeah, 457 00:32:17,560 --> 00:32:19,400 Speaker 1: that's what that was really one of the things that 458 00:32:19,520 --> 00:32:22,680 Speaker 1: struck me. And now I want to read that guy's book, 459 00:32:22,680 --> 00:32:26,680 Speaker 1: America Versus America. But you know, it's funny thinking about 460 00:32:26,720 --> 00:32:29,719 Speaker 1: it from that lens, because in a way, it suggests 461 00:32:29,760 --> 00:32:32,320 Speaker 1: that the election of Donald Trump, while we sort of 462 00:32:32,320 --> 00:32:35,560 Speaker 1: think of it as this major event that sort of 463 00:32:35,640 --> 00:32:38,360 Speaker 1: changes everything, if you think about it through sort of 464 00:32:38,360 --> 00:32:41,479 Speaker 1: like stages of democracy and we're at this captured stage 465 00:32:41,520 --> 00:32:45,640 Speaker 1: in which long term strategic planning isn't even really something 466 00:32:45,640 --> 00:32:47,680 Speaker 1: that we don't we don't really even have the muscle 467 00:32:47,840 --> 00:32:50,480 Speaker 1: for it anymore. Then it makes you sort of wonder 468 00:32:50,520 --> 00:32:53,959 Speaker 1: whether Trump is just sort of a an artifact or 469 00:32:54,360 --> 00:32:57,400 Speaker 1: just a something along the road of a path that 470 00:32:57,440 --> 00:33:01,320 Speaker 1: we've already long gone down on. Right. It also puts 471 00:33:01,360 --> 00:33:04,200 Speaker 1: me in mind of one of the earliest Odd Lots 472 00:33:04,240 --> 00:33:07,520 Speaker 1: episodes that we ever did, which was with the archaeologist 473 00:33:07,840 --> 00:33:12,520 Speaker 1: Arthur Demorrist, where he talked about how or why civilizations 474 00:33:12,520 --> 00:33:15,120 Speaker 1: are prone to collapse, and he basically argued that it's 475 00:33:15,160 --> 00:33:18,040 Speaker 1: when they become too complex that things start to go 476 00:33:18,120 --> 00:33:20,200 Speaker 1: pear shaped. And you can see that a little bit 477 00:33:20,440 --> 00:33:23,720 Speaker 1: when we start talking about trade and interest groups and 478 00:33:23,760 --> 00:33:25,760 Speaker 1: the notion that you're going to have to hire dozens 479 00:33:25,760 --> 00:33:28,200 Speaker 1: and dozens of lawyers to figure out whether or not 480 00:33:28,400 --> 00:33:31,840 Speaker 1: you can you sell into China. You can see that 481 00:33:31,920 --> 00:33:37,320 Speaker 1: complexity really clearly. Yeah. Absolutely, we should have him back 482 00:33:37,360 --> 00:33:40,360 Speaker 1: on soon. It was I love that. That was one 483 00:33:40,400 --> 00:33:44,240 Speaker 1: of my favorite episodes. Alright, this has been another episode 484 00:33:44,320 --> 00:33:47,080 Speaker 1: of the Odd Loots podcast. I'm Tracy Alloway. You can 485 00:33:47,080 --> 00:33:51,560 Speaker 1: follow me on Twitter at Tracy Alloway, and I'm Joe Wisenthal. 486 00:33:51,640 --> 00:33:55,040 Speaker 1: You can follow me on Twitter at the Stalwart, and 487 00:33:55,120 --> 00:33:59,000 Speaker 1: you should follow our producer on Twitter, Laura Carlson. She's 488 00:33:59,080 --> 00:34:02,400 Speaker 1: at Laura and Carlson, and you should follow the head 489 00:34:02,400 --> 00:34:07,000 Speaker 1: of podcasts at Bloomberg, Francesca Levy at Francesca Today, and 490 00:34:07,480 --> 00:34:13,600 Speaker 1: follow Bloomberg's podcasts overall on Twitter. At podcast, Thanks for listening,