WEBVTT - What the World Doesn’t Understand About China’s Ambitions 0:00:04.840 --> 0:00:08.520 Hello, Steponomics here, and this week a special insight on 0:00:08.720 --> 0:00:12.080 China from someone who has a quite different perspective on 0:00:12.119 --> 0:00:15.520 the country than many of the economists and policymakers we've 0:00:15.560 --> 0:00:18.960 had pontificating about it on this show. K Eu Jin, 0:00:19.200 --> 0:00:21.799 a professor at the London School of Economics who's lived 0:00:21.880 --> 0:00:24.400 some time in London but grew up in China and 0:00:24.480 --> 0:00:27.120 still spend part of the year there. That she's in 0:00:27.200 --> 0:00:30.400 Beijing now, but she's kindly joined me for a conversation 0:00:30.480 --> 0:00:34.800 about her new book, The New China Playbook. K Eujin, 0:00:34.960 --> 0:00:39.680 thank you so much for being with us. As I said, 0:00:39.720 --> 0:00:42.720 it's sort of relatively rare to have someone with both 0:00:42.760 --> 0:00:47.240 feet so firmly planted in both China and the West. 0:00:47.840 --> 0:00:50.280 And I think the other sort of particular thing about 0:00:50.280 --> 0:00:54.240 you is that you have personally experienced, you and your 0:00:54.280 --> 0:01:01.440 family the extraordinary transformation of China's society and economy over 0:01:01.480 --> 0:01:04.200 the past thirty or forty years. And you start and 0:01:04.280 --> 0:01:07.040 you end the book with that. So I think, before 0:01:07.080 --> 0:01:09.560 we talk about some of the themes in your book, 0:01:09.680 --> 0:01:12.560 tell us a little bit about your personal story of 0:01:12.640 --> 0:01:15.280 your family and how different things might have been for 0:01:15.400 --> 0:01:18.920 them if you hadn't had the kind of changes in 0:01:19.000 --> 0:01:19.880 China that we've seen. 0:01:20.560 --> 0:01:22.920 Well, first of all, great to be with you, Stephanie. Thanks, 0:01:23.240 --> 0:01:28.280 thanks for this opportunity. Yes, I think me my family, 0:01:28.600 --> 0:01:32.680 but it's only really one of so many Chinese families 0:01:32.720 --> 0:01:38.399 who have gone through this incredible economic transformation in China. 0:01:38.480 --> 0:01:42.840 My parents worked in the fields during the Cultural Revolution. 0:01:44.000 --> 0:01:48.800 They were able to move to Beijing and create this 0:01:48.920 --> 0:01:54.280 life for me because of the amazing meritocracy and the 0:01:54.400 --> 0:01:59.200 Donzhelping's reform and opening up since the late nineteen seventies 0:01:59.240 --> 0:02:02.520 that afford us so many Chinese really an economic opportunity, 0:02:03.680 --> 0:02:06.760 and so my parents would be the first, again among 0:02:06.800 --> 0:02:10.680 many in their generation, to have really seen their future 0:02:11.600 --> 0:02:15.720 and their fate go from you know, just from the 0:02:15.800 --> 0:02:20.960 farms to the city and even to the West. I 0:02:21.000 --> 0:02:25.520 grew up in China, but I was an exchange student 0:02:25.919 --> 0:02:28.320 in high school in the US. And when I went 0:02:28.360 --> 0:02:31.160 to the US, it was very interesting because everyone knew 0:02:31.160 --> 0:02:33.840 I was from China in high school and they could 0:02:34.040 --> 0:02:37.799 only talk about or ask me about I want that 0:02:38.280 --> 0:02:41.520 human rights. But by the time I got to college 0:02:41.760 --> 0:02:44.360 a few years later, people were learning Mandarin and a 0:02:44.360 --> 0:02:46.520 few years later when we were graduating, people moved to 0:02:46.600 --> 0:02:50.080 China even to look for jobs. So that was a 0:02:50.120 --> 0:02:53.880 personal experience, but again so typical among so many Chinese. 0:02:54.040 --> 0:02:56.000 You start the book to sort of talking about the 0:02:56.320 --> 0:02:58.960 house that you were first born into, and also you 0:02:59.040 --> 0:03:02.600 mentioned I think it and that it was really sort 0:03:02.600 --> 0:03:06.800 of luck or and I guess the good performance of 0:03:06.840 --> 0:03:10.000 your father in his exams that meant that you left 0:03:10.040 --> 0:03:11.079 the countryside at all. 0:03:11.639 --> 0:03:16.079 Yes, I was born in an eleven square a meter apartment, 0:03:16.440 --> 0:03:19.200 which at that time was really a luxury, and we 0:03:19.320 --> 0:03:23.600 had communal kitchens. And my father had absolutely no family background. 0:03:24.240 --> 0:03:28.520 He was the son of factory workers, you know, in 0:03:28.600 --> 0:03:31.840 down in South and he had he was among the 0:03:31.880 --> 0:03:37.400 first generation to take the Graduate examine examination National Graduate Examination, 0:03:37.520 --> 0:03:42.800 which Denselping reinstalled and got himself into Beijing. And then 0:03:43.000 --> 0:03:44.280 you know, the rest is history. 0:03:44.560 --> 0:03:46.720 And we're all used to our own sort of parents 0:03:46.760 --> 0:03:49.880 or grandparents saying I remember when. But it's the drama 0:03:50.120 --> 0:03:54.120 that when you're talking about the pace of change in China, 0:03:54.280 --> 0:03:57.560 is it something that that you talk about around the 0:03:57.600 --> 0:04:00.440 dinner table or is it just passed without comment this point? 0:04:00.880 --> 0:04:03.120 What we do talk about often that my parents like 0:04:03.200 --> 0:04:06.560 to remind me is how grateful I should be and 0:04:06.600 --> 0:04:10.840 we should all be to Don't helping's policies and economic 0:04:10.920 --> 0:04:13.960 and opening up, and how difficult it was for the Chinese, 0:04:14.040 --> 0:04:17.279 and really how grateful they should be to the country 0:04:17.320 --> 0:04:21.000 and to the great leaders that have given everybody an opportunity. 0:04:21.040 --> 0:04:24.440 And I think that is a very you know, kind 0:04:24.480 --> 0:04:30.000 of a common feature in the discussion of all Chinese families. 0:04:30.720 --> 0:04:32.839 And it's interesting even in the way you say that, 0:04:33.040 --> 0:04:36.800 you have pointed up one of the great things that 0:04:37.200 --> 0:04:41.080 people outside China find so hard to understand. That sort 0:04:41.080 --> 0:04:44.599 of deep sense of deference and gratitude that is so 0:04:44.720 --> 0:04:47.640 widely shared by people across China is kind of one 0:04:47.640 --> 0:04:49.960 of those you know, we don't spend on We don't 0:04:50.000 --> 0:04:53.360 spend very much of our time giving thanks for our 0:04:53.480 --> 0:04:56.680 leaders and their great decision. And just in terms of 0:04:56.720 --> 0:04:59.120 the numbers, you had a great stat it was just 0:04:59.160 --> 0:05:01.200 a good way of summer rising. You mentioned that over 0:05:01.240 --> 0:05:04.520 the years of the Industrial Revolution were considered to be 0:05:04.640 --> 0:05:08.039 amazing because they improved the standard of living by seventy 0:05:08.080 --> 0:05:11.479 five percent within a single lifetime. But the growth rates 0:05:11.520 --> 0:05:13.839 in China, as you point out, mean that many Chinese 0:05:13.880 --> 0:05:17.320 will see living standards rise seventy five fold, so seven 0:05:17.920 --> 0:05:20.720 five hundred percent. I thought that just really kind of 0:05:20.720 --> 0:05:24.120 put it into perspective. Okay, So your book, you mentioned 0:05:24.120 --> 0:05:28.279 the phrase several times reading China in the original that 0:05:28.760 --> 0:05:31.440 what do we miss by not doing that, by not 0:05:32.640 --> 0:05:34.520 seeing China through Chinese eyes? 0:05:35.080 --> 0:05:38.200 You know, you know, culturally, historically, China comes from a 0:05:38.240 --> 0:05:41.920 very different place, and we keep on judging China for 0:05:42.080 --> 0:05:46.040 what it is through the Western lens, will get China wrong, 0:05:46.080 --> 0:05:49.560 will predict China wrong, as we have many times, We 0:05:49.600 --> 0:05:54.400 will not see their view of the Chinese people. And so, 0:05:54.560 --> 0:05:58.040 whether you're a policy maker or a student learning about 0:05:58.160 --> 0:06:03.480 China or business is wanting to engage or disengage with China, 0:06:03.960 --> 0:06:06.839 just having that bit of a cultural and historical nuance 0:06:06.880 --> 0:06:10.880 and understanding how that really vastly different economic model political 0:06:10.960 --> 0:06:15.160 economy model works would be just so important. 0:06:15.440 --> 0:06:22.240 So what's an example of a misunderstanding of China that 0:06:22.400 --> 0:06:24.800 is potentially dangerous at the current time. 0:06:25.240 --> 0:06:29.839 Well, I think it starts from the misunderstanding of China's 0:06:29.839 --> 0:06:33.559 ambitions and goals in the world. There is a view 0:06:33.640 --> 0:06:37.720 that China is trying to displace the US, for example, 0:06:38.320 --> 0:06:41.960 but it is actually trying to overcome a middle income trap. 0:06:42.279 --> 0:06:46.080 We're talking about its economic goal in the next fifteen 0:06:46.160 --> 0:06:49.920 years or so to be reaching twenty three thousand dollars 0:06:49.960 --> 0:06:53.080 of per capita income. We're talking about six hundred million 0:06:53.120 --> 0:06:56.920 people who's living under three hundred dollars of monthly income, 0:06:57.480 --> 0:07:03.640 still needing to reach international standards middle income. And I 0:07:03.640 --> 0:07:05.720 think for the Chinese, they believe, well, first of all, 0:07:05.760 --> 0:07:08.240 if the Chinese people have a right to prosperity, have 0:07:08.320 --> 0:07:12.880 a right to attain the technolog technological prowess that all 0:07:13.000 --> 0:07:17.000 developing countries and emerging countries, emerging markets want to have 0:07:17.080 --> 0:07:20.720 some day. I don't think it's stupid enough to want 0:07:20.760 --> 0:07:25.320 to displace the US for some reason, because it's not 0:07:25.480 --> 0:07:31.680 really currently feasible. But also, you know, I'm less dangerous, 0:07:31.720 --> 0:07:34.520 but just so important and interesting. And every time I 0:07:34.600 --> 0:07:37.160 mentioned this, I think people are just so surprised, even 0:07:37.360 --> 0:07:42.320 extremely cosmopolitan while educated people. Is how the political economy 0:07:42.400 --> 0:07:46.480 works in China. People think about China as a centralized 0:07:47.720 --> 0:07:53.160 state with you know, with almighty control, but actually the 0:07:53.760 --> 0:07:56.880 economic model is a very decentralized model. I call this 0:07:56.960 --> 0:08:02.320 the Mayor economy in my book, and it just goes 0:08:02.360 --> 0:08:06.440 to show that all the economic transformation reforms we talked about, 0:08:06.480 --> 0:08:12.040 the innovation, controlling pollution and really just building these amazing unicorns, 0:08:12.200 --> 0:08:15.040 so many unicorns, hundreds of unicorns a year in China 0:08:15.080 --> 0:08:19.040 are scattered all throughout China rather than just focused on 0:08:19.200 --> 0:08:22.600 Beijing and Shanjin and Shagha all because of the mayors, 0:08:23.360 --> 0:08:28.119 so to speak, that economic decentralization is so far none 0:08:28.120 --> 0:08:31.360 of you know, my friends have have understood. 0:08:31.360 --> 0:08:33.960 Of course, what people look at and what they think 0:08:34.000 --> 0:08:36.600 of when they're sort of focused on the control of 0:08:36.640 --> 0:08:42.520 the power of the state is the control over political 0:08:43.080 --> 0:08:48.280 activity and to some extent, the power control of individual thought. 0:08:48.400 --> 0:08:51.360 When you think of all the surveillance the Great Fire 0:08:51.440 --> 0:08:54.720 will preventing people in China from from seeing everything on 0:08:54.760 --> 0:08:59.200 the on the internet from outside China, I mean, it's 0:08:59.400 --> 0:09:02.160 it's hard to argue that it isn't a strong central. 0:09:01.800 --> 0:09:07.480 State politically, it's a very strong central state. But I 0:09:07.520 --> 0:09:09.680 think the question that you've raised here there's also a 0:09:09.679 --> 0:09:13.680 bit of misunderstanding. There's actually a very very dynamic, more 0:09:13.720 --> 0:09:17.840 than we believe dynamic, civic debate on social media in China, 0:09:18.520 --> 0:09:25.080 and apart from a few Tiboo issues. There are things 0:09:25.200 --> 0:09:31.040 ranging from organizing protests around China. You know, as an example, 0:09:31.040 --> 0:09:33.520 there was something like more than eleven thousand protests just 0:09:33.559 --> 0:09:36.920 over land use rights, not to mention so many other protests, 0:09:37.200 --> 0:09:41.280 and they allow that there is criticism. One of the 0:09:41.360 --> 0:09:46.400 top key hot issues is criticisms of local officials calling 0:09:46.440 --> 0:09:49.319 them out in corruption or if they had a mistress 0:09:49.360 --> 0:09:53.640 that was found somewhere, that was spotted somewhere, or expensive watches. 0:09:54.559 --> 0:09:58.400 There's a huge amount of pushback. Again, these stories don't 0:09:58.400 --> 0:10:02.280 get reported. But for instance, in the city of Hungo 0:10:02.800 --> 0:10:07.920 down south, you know, people complained about the data collection 0:10:08.160 --> 0:10:12.640 and data privacy issues from a public park and then 0:10:12.640 --> 0:10:15.800 they canceled the whole thing. They canceled the facial recognition 0:10:16.000 --> 0:10:19.640 ticket system. So you're actually able to push the local 0:10:19.640 --> 0:10:24.679 officials to change and relatively rapidly if there's wide discontent. Now, 0:10:24.679 --> 0:10:27.080 of course there's some things that you don't hear, and 0:10:27.240 --> 0:10:30.599 there is a censorship on the social media platform the 0:10:30.679 --> 0:10:35.120 highly highly sensitive political issues which not every single Chinese 0:10:35.160 --> 0:10:38.600 citizen talks about. But again there are also loopholes. You know, 0:10:38.720 --> 0:10:42.800 some of them would post during the midnight and then 0:10:42.920 --> 0:10:45.440 by the time the officials in charge will wake up. 0:10:45.800 --> 0:10:48.840 It was already you know, everywhere on the internet, so 0:10:48.880 --> 0:10:52.959 it's not that easy to implement. But I agree with you, Stephanie. 0:10:53.280 --> 0:10:58.959 There has been tighter control and more surveillance in the years, 0:10:58.960 --> 0:11:02.080 that's for sure true. But to see the complete picture, 0:11:02.200 --> 0:11:04.560 we have to recognize that it's not a bunch of 0:11:04.640 --> 0:11:07.160 just one point four billion people having no voice at all. 0:11:13.880 --> 0:11:16.400 We've had a situation where over thirty or forty years, 0:11:16.480 --> 0:11:20.920 China has made itself, as we discovered recently, indispensable to 0:11:21.520 --> 0:11:28.160 global manufacturing production. Even people who don't think they're dependent 0:11:28.240 --> 0:11:30.760 on China have found, you know, actually there's you know, 0:11:30.880 --> 0:11:34.040 some number of parts that come through China or are 0:11:34.040 --> 0:11:38.160 made in China, and that's obviously animated President Biden's push 0:11:38.280 --> 0:11:44.480 to diversify production globally and to some extent decouple. I'm 0:11:44.480 --> 0:11:47.959 sort of fascinating when China obviously would be proud of 0:11:48.880 --> 0:11:53.880 what it's achieved, is it does it think that the 0:11:53.920 --> 0:11:56.160 rest of the world was a bit foolish to allow 0:11:56.200 --> 0:12:01.000 themselves so easily to become hooked on Chinese production? Does 0:12:01.000 --> 0:12:05.600 it inculcate a sort of lack of respect? It sort 0:12:05.640 --> 0:12:08.439 of sometimes feels we sort of wonder whether China's kind 0:12:08.480 --> 0:12:10.520 of laughing at us behind our backs, but having got 0:12:10.520 --> 0:12:11.600 ourselves in this situation. 0:12:12.720 --> 0:12:16.240 Oh no, no, absolutely not. I think globalization was the 0:12:16.280 --> 0:12:19.559 best thing that happened to China and allowing China to 0:12:20.200 --> 0:12:23.680 embrace it unless we really kind of believe that somehow 0:12:23.760 --> 0:12:26.280 we ought to have three quarters of the people in 0:12:26.320 --> 0:12:29.280 the world living in an abject poverty. I just don't 0:12:29.280 --> 0:12:35.800 see any rationale against this view of deglobalization and decoupling. 0:12:36.000 --> 0:12:38.680 And we can't forget about the eighty percent of the 0:12:38.679 --> 0:12:41.280 people still living and developing world. 0:12:42.600 --> 0:12:48.040 In today's world thinking about China right now, and obviously 0:12:48.120 --> 0:12:52.640 people are looking at China's economy being feeling a bit 0:12:52.720 --> 0:12:55.679 concerned about the slowdown we've seen in the last few months, 0:12:55.679 --> 0:12:59.400 and some of the very deep seated challenges that the 0:12:59.440 --> 0:13:03.600 government fail is, for example, that the real estate trying 0:13:03.600 --> 0:13:08.600 to reduce the amount of investment in real estate without 0:13:09.040 --> 0:13:12.000 seriously undermining the economy given that the property has been 0:13:12.040 --> 0:13:15.200 such a big play puts a big part in growth. 0:13:16.040 --> 0:13:19.760 How do you judge the way Si Jinping and his 0:13:19.920 --> 0:13:24.959 new administration are sort of handling those challenges facing the economy. 0:13:24.880 --> 0:13:29.840 Well, First of all the overarching mood is a return 0:13:29.920 --> 0:13:35.880 of pragmatism. Pragmatism just the basic principle for Chinese people 0:13:36.240 --> 0:13:40.120 all these years and still not regarten. It's still most important. 0:13:40.240 --> 0:13:45.920 Despite everything we think about security and nationalism, pragmatism is 0:13:45.920 --> 0:13:50.000 actually what the Chinese people want the most. So it's 0:13:50.040 --> 0:13:52.720 kind of ironic that the economy has to suffer that 0:13:52.880 --> 0:13:56.800 much before the return of pragmaticals. Once again, keep your 0:13:56.800 --> 0:14:01.320 head down, make GDP great jobs, and that's what the 0:14:01.360 --> 0:14:02.679 government is focused on. 0:14:02.840 --> 0:14:05.240 Sorry, just to interrupt when you say the return of practice, 0:14:05.240 --> 0:14:09.000 and so what was it returning from what have we've seen? 0:14:09.400 --> 0:14:13.080 Well, we had a lot of yeah, we especially in 0:14:13.120 --> 0:14:15.520 the last year or so during COVID and during the 0:14:15.559 --> 0:14:17.960 Party Congress, there was a lot of mention of security. 0:14:19.080 --> 0:14:22.160 There was a lot of mention of the threats that 0:14:22.240 --> 0:14:29.600 have encircled China, external, internal pandemic, and how security was 0:14:29.720 --> 0:14:35.680 really the most important thing for China. And we're going 0:14:35.760 --> 0:14:38.520 to see security being continued to be important, but it 0:14:38.520 --> 0:14:42.960 will be a pendulum swing between the economy and security, 0:14:43.000 --> 0:14:46.920 and sometimes economics wares and as you mentioned, Stephanie could 0:14:46.920 --> 0:14:51.000 correctly pointed out the real economics difficulty right now is 0:14:51.040 --> 0:14:55.800 to find something to replace the property sector, which broadly 0:14:55.800 --> 0:14:59.720 accounted for a third of China's GDP. And even though 0:14:59.760 --> 0:15:03.520 recent ursus are directed towards now hard tech, now the 0:15:03.600 --> 0:15:08.359 high tech, now towards you know, things like evs and renewables, 0:15:08.680 --> 0:15:11.160 that's just not enough in the short term to get 0:15:11.200 --> 0:15:14.240 the GDP numbers to create the kind of jobs that 0:15:16.320 --> 0:15:21.440 are required for social stability, but to reduce youth unemployment, 0:15:21.480 --> 0:15:25.080 which is north of twenty percent currently, So what could 0:15:25.080 --> 0:15:27.200 that be. They're still finding the way. So the short 0:15:27.280 --> 0:15:31.280 term we really might see a slow economy. I don't 0:15:31.280 --> 0:15:33.240 think there's going to be a collapse or at any sort. 0:15:33.320 --> 0:15:35.680 I think the government will do enough to reach the 0:15:35.720 --> 0:15:38.040 goal of reaching twothout and twenty three thousand dollars per 0:15:38.120 --> 0:15:41.040 capita income in twenty thirty five, but I wouldn't my 0:15:41.120 --> 0:15:43.400 hopes up for really spectacular performance. 0:15:43.840 --> 0:15:48.240 Well, it's interesting you mentioned that our chief economist Tom 0:15:48.240 --> 0:15:50.440 Morlig was saying, you know, just a few years ago, 0:15:50.520 --> 0:15:54.160 it was very difficult to imagine China not rapidly overtaking 0:15:54.280 --> 0:15:56.920 the US as the world's biggest economy. But we're now 0:15:56.960 --> 0:15:59.440 seeing as we update our new forecasts and think about 0:15:59.520 --> 0:16:03.680 downside and upside scenarios, and there's there's lots of scenarios 0:16:03.760 --> 0:16:09.560 under which that great moment of China overtaking the US 0:16:09.640 --> 0:16:14.080 is delayed a long time and somewhere it doesn't happen 0:16:14.120 --> 0:16:14.480 at all. 0:16:15.000 --> 0:16:17.680 Well, Stephanie, I think it's true with these scenarios, but 0:16:17.920 --> 0:16:21.040 China needs to only only needs to grow one point 0:16:21.040 --> 0:16:25.080 five percentage points faster than the US to overtake it 0:16:25.240 --> 0:16:27.160 in a little more than ten years. And I think 0:16:27.320 --> 0:16:32.240 is actually pretty plausible given that it's all about relative performance. 0:16:32.280 --> 0:16:35.360 But I think it really depends on how how you 0:16:35.440 --> 0:16:38.920 get there, right, So, just in terms of nominally achieving 0:16:38.960 --> 0:16:41.200 a size that's larger than the US, I'm actually more 0:16:41.240 --> 0:16:46.360 optimistic than those projections, but I don't think it necessarily 0:16:46.480 --> 0:16:50.400 means all that much unless you really raise the standards 0:16:50.400 --> 0:16:55.840 of living and less China really really is able to 0:16:56.520 --> 0:17:00.320 come up with its own, you know, high tech independence again, 0:17:00.360 --> 0:17:01.840 I think is going to be the story of the 0:17:01.880 --> 0:17:06.600 next decade, and that you know they can't economic growth 0:17:06.680 --> 0:17:10.040 is actually real rather than just the macro numbers. 0:17:10.560 --> 0:17:13.720 You talk quite a lot about the crucial importance for 0:17:13.760 --> 0:17:19.240 the continued support for the government and for the party 0:17:19.800 --> 0:17:26.320 is that it delivers stability, that it deliver rising prosperity 0:17:25.680 --> 0:17:30.399 is the government, and as is China ready for a 0:17:30.480 --> 0:17:34.400 situation in which we don't see the kind of dramatic 0:17:34.440 --> 0:17:36.959 economic growth we've seen, or indeed we may see, you know, 0:17:37.320 --> 0:17:40.639 quite meager growth over the next few years. 0:17:40.800 --> 0:17:44.400 I think one one group to watch is the younger generation. 0:17:44.720 --> 0:17:47.720 You know. Imagine that you've done everything in your life, 0:17:47.720 --> 0:17:50.760 and your family has spent every penny of their savings 0:17:50.840 --> 0:17:55.280 on your education, and you get a bachelor's degree and 0:17:55.320 --> 0:17:58.480 you're in trentees and you don't even have a first job. 0:17:59.080 --> 0:18:04.639 I mean, that's seriously concerning, uh, for the Chinese families 0:18:04.880 --> 0:18:10.760 and therefore for the government. Uh. And so how do 0:18:10.840 --> 0:18:14.639 you solve that high youth unemployment problem? I think comes 0:18:14.680 --> 0:18:18.200 before and many other things because remember that Chinese family 0:18:18.280 --> 0:18:21.600 is Another cultural misunderstanding that I highlight in my book 0:18:22.240 --> 0:18:25.800 is that it's a dynastic you know family. It's not 0:18:25.880 --> 0:18:31.120 about maximizing one's individual consumption, as the Western canonical economic 0:18:31.280 --> 0:18:37.359 model always assumes, but it's about you know, intergenerational altruism, 0:18:37.920 --> 0:18:44.000 household maximizing household consumption or saving for your children or 0:18:44.600 --> 0:18:46.760 saving so that you can support your parents in an 0:18:46.840 --> 0:18:49.240 older age. None of that, very little of that is 0:18:49.320 --> 0:18:54.480 featured uh in the in the in these basic workhorse 0:18:54.520 --> 0:18:57.320 frameworks in the in the Western economics. But that is 0:18:57.600 --> 0:19:01.560 just the basic foundation. So when the Chinese families are 0:19:01.640 --> 0:19:05.080 unhappy collectively, then I think it's a potential threat to 0:19:05.119 --> 0:19:09.080 social stability. Now, we saw how rapid things changed at 0:19:09.119 --> 0:19:13.359 the end of last year during the pandemic, when China 0:19:13.440 --> 0:19:18.119 opened up so much earlier than expected as of resistance. 0:19:18.280 --> 0:19:22.080 I mean that just goes to show the people has 0:19:22.680 --> 0:19:27.040 enormous power, and the sea of the people is really 0:19:27.040 --> 0:19:30.600 what keeps the float of leadership, keeps that boat of 0:19:30.960 --> 0:19:35.920 leadership afloat. We're not seeing necessary signs of social instability 0:19:36.200 --> 0:19:39.560 because of the economy. Yet it really depends on whether 0:19:39.600 --> 0:19:44.480 that pragmatic attitude will hold in the coming years. There 0:19:44.560 --> 0:19:48.800 is a gap of twenty five million jobs in manufacturing 0:19:48.840 --> 0:19:51.520 the next three years needing to be filled. There is 0:19:51.560 --> 0:19:56.119 a three hundred thousand talent gap just in semiconductor sectors alone. 0:19:56.920 --> 0:19:59.920 But the real chasm is that there's you know, there's 0:20:00.119 --> 0:20:04.040 difference between expectations and reality in the Chinese students and 0:20:04.160 --> 0:20:06.160 getting this bachelors degree, who wants to have a high 0:20:06.200 --> 0:20:09.880 earning job in finance and real estate, except that they're 0:20:09.880 --> 0:20:12.040 not that many jobs in finance and real estate. 0:20:12.240 --> 0:20:16.080 You talk about the new generation and them having different 0:20:16.160 --> 0:20:22.800 expectations and potentially just very different individual experiences from their family. 0:20:23.000 --> 0:20:25.720 One of the things, the basic things that the West 0:20:25.760 --> 0:20:29.200 has been surprised about, rightly or wrongly, is that there 0:20:29.240 --> 0:20:34.399 hasn't been more of a move towards more democratic, more 0:20:34.440 --> 0:20:39.600 individualistic society as a market economy has taken hold in China. 0:20:39.760 --> 0:20:42.240 At the bottom of that is a sort of continued 0:20:42.280 --> 0:20:45.679 belief that as you move to a more service oriented, 0:20:45.760 --> 0:20:49.400 so service sector based economy, which structurally they have to do, 0:20:49.960 --> 0:20:52.959 and as they move to having more of the growth 0:20:52.960 --> 0:20:56.080 of the economy driven by consumption not investment, which I 0:20:56.119 --> 0:21:00.600 think the government also recognizes a country, and certainly as 0:21:00.600 --> 0:21:05.560 you try and develop more and more technological innovation and 0:21:05.640 --> 0:21:08.920 you are more on the kind of frontier of technology 0:21:09.000 --> 0:21:12.080 rather than catching up to the rest of the world, 0:21:12.600 --> 0:21:19.000 that to us spells a need for a more individualistic society, 0:21:19.200 --> 0:21:21.840 one where people will feel I'm more likely to feel 0:21:21.840 --> 0:21:26.359 oppressed by a very strong single party government, So do 0:21:26.480 --> 0:21:29.040 not recognize that as a possibility that some of those 0:21:29.040 --> 0:21:33.480 cultural traditions will come right up against just the economy 0:21:33.560 --> 0:21:35.560 as it is today and will be in the next 0:21:35.560 --> 0:21:36.600 ten twenty years. 0:21:37.200 --> 0:21:40.919 The relationship with authority is something that is very different 0:21:41.080 --> 0:21:43.920 from the West, and it's kind of ingrained in the 0:21:44.000 --> 0:21:47.600 Chinese people since we were young. The relationship with our 0:21:47.640 --> 0:21:51.720 parents and our Confucian family, the relationship with our teachers, 0:21:52.359 --> 0:21:56.600 you know, and of course the relationship with authorities, the government. 0:21:57.240 --> 0:21:59.760 The Chinese people have always had to learn to balance 0:22:00.080 --> 0:22:06.080 at a desire of exerting one's individual free will and 0:22:06.160 --> 0:22:11.320 behaving in a community deference in collaboration and cooperation with 0:22:11.400 --> 0:22:15.879 the government or with your authorities. But I think, Stephanie, 0:22:16.480 --> 0:22:18.560 at the bottom line, if you're asking, you know, if 0:22:18.560 --> 0:22:21.119 the question is if the Chinese people want to have 0:22:21.160 --> 0:22:25.400 a more free and open society, I think the answer 0:22:25.560 --> 0:22:28.960 is a resounding yes. And I think whether it's the 0:22:29.000 --> 0:22:32.160 new generation and even much more so the older generation 0:22:32.320 --> 0:22:37.879 like those in the nineteen sixties, they aspire democratic values. 0:22:38.600 --> 0:22:41.119 But I also have to say they're not that inspired 0:22:41.200 --> 0:22:47.000 by its Western incarnation, Western incarnation of democracy, because they 0:22:47.080 --> 0:22:50.280 would be, you know, observing the fact that there's so 0:22:50.400 --> 0:22:53.679 much bickering. And for the US, they'd be wondering why 0:22:53.800 --> 0:22:57.640 a society that champions rights don't give all the women 0:22:57.760 --> 0:23:02.000 rights to end unwanted pregnancies. And they would be, you know, 0:23:02.080 --> 0:23:04.960 looking at the gun violence and the potholes on the 0:23:04.960 --> 0:23:07.760 streets in the US, and they would be they're be wondering. Now, 0:23:07.840 --> 0:23:11.280 that was not necessarily cased. In the eighties and nineties, 0:23:11.320 --> 0:23:14.480 when the Chinese people was more mesmerized by the US, 0:23:15.240 --> 0:23:18.280 people were very deeply impressed. So at that point you 0:23:18.359 --> 0:23:22.600 saw many Chinese people asparring to that society and that 0:23:22.680 --> 0:23:26.640 openness and that freedom, et cetera. But I think less 0:23:26.640 --> 0:23:28.720 and less so, and this is very clear from the surveys, 0:23:28.800 --> 0:23:33.280 international surveys of the different generations. The new generations has 0:23:33.359 --> 0:23:37.600 no appetite to have overhauled their own system. And yes, 0:23:37.680 --> 0:23:41.639 I think things have become difficult in the last few years, 0:23:41.680 --> 0:23:44.359 the last two years, especially by the end of the pandemic. 0:23:45.320 --> 0:23:48.360 But over the last decade the Chinese people have been 0:23:48.359 --> 0:23:51.360 more proud, not less proud, and more sure of their 0:23:51.400 --> 0:23:55.800 system the power of their system, than compared to many 0:23:55.840 --> 0:23:59.160 years ago. Again, I'm not saying what is good and wrong, 0:23:59.280 --> 0:24:01.840 right or wrong. But this is understating the facts of 0:24:01.840 --> 0:24:04.600 how the Chinese people feel and when they look at 0:24:04.680 --> 0:24:07.120 democracies for inspiration outside of China. 0:24:13.640 --> 0:24:17.400 I mean, you say in your book that understanding Chinese 0:24:17.400 --> 0:24:21.159 thinking doesn't mean endorsing it in its entirety. I have 0:24:21.200 --> 0:24:23.560 to admit kind of, as you read it, it sort 0:24:23.600 --> 0:24:27.240 of feels like you do pretty much endorse it its entirety. 0:24:27.520 --> 0:24:31.359 I mean you even the mistakes that you identify, all 0:24:31.440 --> 0:24:35.240 the economic problems that you identify, you know, you then 0:24:35.440 --> 0:24:37.440 sort of later in the book explain how they have 0:24:37.560 --> 0:24:42.080 been reversed or remedied by a very agile and flexible 0:24:43.160 --> 0:24:46.399 response by the state. So I guess I'm just wondering, 0:24:46.760 --> 0:24:50.760 do you what do you think that the other countries 0:24:50.760 --> 0:24:52.840 have done better than China? Where do you think China 0:24:52.920 --> 0:24:54.640 should needs to learn lessons? 0:24:55.240 --> 0:24:57.840 I think if you felt a sense of endorsement, it 0:24:57.960 --> 0:25:01.359 was an endorsement. It was certain kind to model in 0:25:01.400 --> 0:25:07.520 the early stages of developments, not eternally. And if there's 0:25:07.600 --> 0:25:09.919 one thing I think there, it is important. It is 0:25:09.960 --> 0:25:13.960 important and proved to be repeatedly crucial for countries to 0:25:14.440 --> 0:25:17.280 jump out of poverty and slowly tread on the middle 0:25:17.320 --> 0:25:21.160 income path towards rich to rich income. It's high quality 0:25:21.240 --> 0:25:26.560 state capacity. And China's model was a form one form 0:25:26.800 --> 0:25:30.399 of delivering high quality state capacity, not the only and 0:25:30.520 --> 0:25:34.760 unique form, but I think it does have certain developmental lessons. 0:25:35.440 --> 0:25:38.639 And just take a solid example. Recently, China became the 0:25:38.720 --> 0:25:42.120 largest producer and consumer of evs within a decade. How 0:25:42.320 --> 0:25:44.960 was it able to do that? Well, it wasn't able 0:25:44.960 --> 0:25:46.479 to It wasn't. It wouldn't have been able to do 0:25:46.520 --> 0:25:50.479 that without the government installing four million EV charging stations 0:25:50.520 --> 0:25:53.119 around the country. Compared to China, the US is one 0:25:53.200 --> 0:25:55.440