Speaker 1: So COVID nineteen is um is a kind of stress
Speaker 1: test for for how economic systems function, and if you
Speaker 1: look at how China and the US have performed in
Speaker 1: the last six months, China is actually doing rather better. Hello,
Speaker 1: and welcome to Stephanomics, the podcast that brings the COVID
Speaker 1: global economy to you. We're all about China this week,
Speaker 1: and that was Tom Aulick, Bloomberg's chief economist and old
Speaker 1: China hand, who has just published a book that helps
Speaker 1: explain why China's economy has not had the big crisis
Speaker 1: that so many experts have confidently predicted over the years,
Speaker 1: and why it also appears to be winning the fight
Speaker 1: against COVID nineteen. But first, you'll remember we spoke to
Speaker 1: Sharon Chen, Bloomberg's Beijing bureau chief, back in April. She
Speaker 1: was in quarantine then in her apartment after a reporting
Speaker 1: trip to Wuhan. That city was just coming out of lockdown.
Speaker 1: Then first into the COVID crisis and first out. We
Speaker 1: spoke to her then about the early signs of recovery
Speaker 1: there and what it might tell us about the road
Speaker 1: ahead for the rest of us. Well three months on,
Speaker 1: I was interested to find out what life has been
Speaker 1: like in China since then, and whether the authorities still
Speaker 1: feel good about the way they've handled the pandemic. Sharon,
Speaker 1: it's great to talk to you again. I know that
Speaker 1: you're planning another trip to Wuhan, but you've been talking
Speaker 1: to businesses there about what's what's happening. When we spoke
Speaker 1: at the beginning, it seemed to show something that we
Speaker 1: have seen in other places, that it's a twin track economy,
Speaker 1: that production side coming back but not so much the
Speaker 1: consumer side. Is that's still true? Yes, so um you know,
Speaker 1: bought the data and the anecdotes kind of indicate that
Speaker 1: that's what's happening. Unfortunately, obviously the data is a bit
Speaker 1: of a lagging indicator, but we have factory production and
Speaker 1: retail sales, exports, fixed st investment up till me UM
Speaker 1: and you know, the economy reopened in April, and even
Speaker 1: in May, we saw that local manufacturers had basically almost recovered.
Speaker 1: You know, industrial production was only zero point four percent UM,
Speaker 1: not lower than the year before in growth, but consumptions
Speaker 1: obviously still lagging UM and exports as well. I mean
Speaker 1: some more recent data, you know, we look at subway
Speaker 1: data and a lot of the cities, and in Buhan
Speaker 1: it shows that traffic passenger traffic has recovered to about
Speaker 1: half the level, which is you know, decent. And also
Speaker 1: it could be one of the reasons which we talked
Speaker 1: about earlier, that people are buying cars and just driving
Speaker 1: themselves instead of taking public transport, so it's not entirely
Speaker 1: reflective of how you know, how much people are out again.
Speaker 1: And we should mention that Wuhan had a flare up
Speaker 1: in May, so it reopened um in early April, and
Speaker 1: then in May and new cluster of cases was discovered,
Speaker 1: and you know, the city reacted very strongly. Obviously, they
Speaker 1: put in place a lot of strict restrictions and then
Speaker 1: they tested the entire population of level million people in
Speaker 1: the span of two weeks and since then they haven't
Speaker 1: reported a single case. So, you know, just based on
Speaker 1: the anecdotes as well, we do see that factories are
Speaker 1: back up a full capacity UM, a lot of the
Speaker 1: exporters are benefiting. Trade did search as soon as the
Speaker 1: city reopened, but of course it depends on what kind
Speaker 1: of product you're making. You know. We spoke to one
Speaker 1: factory manager who they make plastic cups for airlines and
Speaker 1: for hotels, and you know, business has just evaporated because
Speaker 1: the travel industry just collapsed, like they just don't have
Speaker 1: any demand. But then we talked to another factory that
Speaker 1: was making helmets and then pivoted to making more face
Speaker 1: shields and protective gear, and they've seen, you know, demand
Speaker 1: from South America double because the virus cases there keep increasing.
Speaker 1: And then it's the same on the consumption front as well.
Speaker 1: You know, restaurant owners they are struggling because people don't
Speaker 1: really feel safe and also some of the habits like
Speaker 1: eating at home, they've just persisted. Um. But on the
Speaker 1: other hand, you know, we spoke to a factory owner.
Speaker 1: He produces hot dry noodles, but the instant kind like
Speaker 1: instant raman where you add hot water, and you know,
Speaker 1: business is just going through the roof. He's even expanded,
Speaker 1: he's now delivering to the next city because people just
Speaker 1: want to stay at home, but they want to eat
Speaker 1: your favorite food still, so you know, it's just definitely
Speaker 1: a mixed bag. So if you're if you're involved in
Speaker 1: the COVID business or you're providing, you're able to provide
Speaker 1: food that people don't need to be sitting in a
Speaker 1: restaurant to eat. You're doing You're doing all right. That
Speaker 1: was interesting what you said about the exports, because one
Speaker 1: of the concerns looking at China was that we saw
Speaker 1: the sort of early signs of a V shaped recovery,
Speaker 1: at least when it came to production, and then the
Speaker 1: fear was that the terrible things that were going on
Speaker 1: in the rest of the world would then bring China
Speaker 1: down again because of it's dependent on exports. But it's
Speaker 1: so what you're saying is there is that's a twin
Speaker 1: track as well. If you're on the consumption side, you're
Speaker 1: doing badly, but actually some of the core products are exporting.
Speaker 1: Well yeah, I mean, like the supply chain is so
Speaker 1: global and so integrated now as well, right, I mean,
Speaker 1: they also feel the impact on the raw material side,
Speaker 1: but I think you know, the trade story. What's interesting
Speaker 1: has is that it's also kind of shown the limits
Speaker 1: of government intervention on government support. You know, the government
Speaker 1: has rolled out a lot of support for these businesses
Speaker 1: and especially the smaller ones, but until global demand recovers,
Speaker 1: there is a limit to what the government can do.
Speaker 1: And you know, some of the companies that we spoke
Speaker 1: to said that they can apply for loans and they
Speaker 1: can apply for grants, but until their own clients overseas
Speaker 1: are really able to um bring those orders back, you know,
Speaker 1: there's there's really not much they can do. And then
Speaker 1: another option for them is to try to get new clients.
Speaker 1: But then with travel basically understand still, these these trade
Speaker 1: fairs and everything, I mean, those things aren't happening as well.
Speaker 1: You mentioned that they had tried in Wuhan to have
Speaker 1: various measures to stimulate consumption, and of course that's something
Speaker 1: we've had this week. The British government has been trying
Speaker 1: to throw a lot of the economy to to get
Speaker 1: consumers out and about now that the lockdown is easy,
Speaker 1: we've seen lots of consideration of that in the US
Speaker 1: as well. Does it work to be putting more money
Speaker 1: into consumers pockets or is it really all about confidence
Speaker 1: in the virus? I mean, I think it does work.
Speaker 1: They've given out about five hundred million grand or shopping vultures,
Speaker 1: that's about seventy three million U S dollars and you know,
Speaker 1: people that we spoke to said that they regularly use
Speaker 1: those vultures, and I think it does get people spending,
Speaker 1: although it's unclear how much of that spending happens in
Speaker 1: person and how much of it is happening online because
Speaker 1: you know, a lot of transactions in China shop online
Speaker 1: very easily. Um So I don't know how much that
Speaker 1: is really helping encourage people to go outside and to
Speaker 1: do things that they used to do. Interestingly, one of
Speaker 1: the restaurant owners we spoke to said that it was
Speaker 1: the mass testing campaign that Juhan executed that was the
Speaker 1: big confidence booster. You know, he saw the most number
Speaker 1: of customers come in the day after they finished their
Speaker 1: campaign and announced that they had tested every single person
Speaker 1: in the city. And you know, if the city is
Speaker 1: able to pull that off, like, I think that that
Speaker 1: does kind of really reap dividends in terms of making
Speaker 1: people feel confident and making them feel safe. Of course,
Speaker 1: we're also looking ahead wondering how long we're going to
Speaker 1: feel like we're in uh what you described it when
Speaker 1: you came back from Wuhan last time, a sort of
Speaker 1: dystopian post lockdown world where everyone's getting temperature tests or
Speaker 1: where you're being socially distanced. How far when you're in
Speaker 1: your day to laid life and when you go out
Speaker 1: with friends in Beijing. I mean, how far do you
Speaker 1: still feel you are from normal life? Does it feel
Speaker 1: when you have these outbreaks that it's still one step
Speaker 1: forward one step back? Or is it are you starting
Speaker 1: to see the light at the end of the tunnel?
Speaker 1: I mean, personally, I do you like life is pretty
Speaker 1: much back to normal? So we had an outbreak in
Speaker 1: Beijing a couple of weeks ago, and you know, they
Speaker 1: they didn't employ the same kind of city wide lockdown
Speaker 1: that they've used in China and other places, in part
Speaker 1: because you know, the states are just higher in Beijing.
Speaker 1: They can't really bring the city to a stand still
Speaker 1: because there's just so much commerce going on, and then
Speaker 1: also the halls of government are here as well. So
Speaker 1: what they did was that they really took this very
Speaker 1: targeted approach. They broke up the entire city, you know,
Speaker 1: by district by street, and they determined whether each place
Speaker 1: was low risk, high risk, a medium risk, and they
Speaker 1: lockdown areas very specifically, and then they also did huge
Speaker 1: mass mass testing and they restricted people from leaving the
Speaker 1: city depending on you know, how risk of their areas were.
Speaker 1: But they did manage to maintain a large part of
Speaker 1: normal activity. You know, shops and restaurants all remained open.
Speaker 1: The main difference was that UM a lot of housing
Speaker 1: compounds didn't allow visitors in and out, although some did
Speaker 1: continue to do that. UM And also you know, by
Speaker 1: now China's developed a lot of the tools that it
Speaker 1: needs for contact tracing, so everyone has the ability to
Speaker 1: check on their phone whether they've been in contact with
Speaker 1: anyone who's a risk, or they've been to any risky areas,
Speaker 1: or they've traveled. So as long as you're able to
Speaker 1: show that you have that green call, you can basically
Speaker 1: go anywhere. So I do think it's like much less
Speaker 1: dramatic now when there are flare ups, like the government
Speaker 1: has developed the ability to board test and contact trace
Speaker 1: and be more targeted in its restrictions. Do you feel
Speaker 1: I mean we should perhaps say that we were we
Speaker 1: were hoping to play some clips from some of the
Speaker 1: people you spoke to Wan who then said they didn't
Speaker 1: feel comfortable and actually they've been discouraged from talking to
Speaker 1: foreign media after the last time that you went there.
Speaker 1: There's a lot of scrutiny on China at the moment
Speaker 1: in terms of not just what's happened in Hong Kong.
Speaker 1: But how how it's handled the pandemic. Do you feel
Speaker 1: as a reporter that the restrictions are tighter or the
Speaker 1: more limits on what you can do, or is this
Speaker 1: more or less business as usual? I mean, you know,
Speaker 1: for Bloomberg, we focus a lot on economic and financial news,
Speaker 1: and you know, most of the time that's fine, but yeah,
Speaker 1: I mean, the environment is changing. I mean, you look
Speaker 1: at what's happening in Hong Kong obviously, and you know,
Speaker 1: the Chinese government has also taken steps that seemed to
Speaker 1: be moves towards silencing more criticism and being more focused
Speaker 1: on making sure that social unrest doesn't take hold. Um.
Speaker 1: You know, the President Jumping himself has said that social
Speaker 1: stability is a concern in the wake of the virus,
Speaker 1: and I think they are hyper aware of anything that
Speaker 1: may kind of, you know, foment the same amount of
Speaker 1: unhappiness that happened when the virus was really bad. And
Speaker 1: you know about the whistleblowers who are silenced and all that,
Speaker 1: and you know, simultaneously we're seeing this increasing tension between
Speaker 1: China and the US word the media. So China kicked
Speaker 1: out several reporters and the US has also been cracking
Speaker 1: down on American news organizations. Then now we have this
Speaker 1: spat between the UK and c GTN statement media about
Speaker 1: airing force confessions and so, you know, I think as
Speaker 1: China becomes more assertive, yeah, I mean, it definitely is
Speaker 1: narrowing the scope from for us to act freely. Not
Speaker 1: that it was free before, but yeah, well you still
Speaker 1: do you still produce a lot of stories. Will you
Speaker 1: have to do the same quarantine if you go to
Speaker 1: Wuhan or is that now you just you just have
Speaker 1: to show people your at your foot apple and your phone. Yeah.
Speaker 1: And in fact, um, you know, Wuhan is considered a
Speaker 1: low risk area. Now there's no cases and they've tested everybody.
Speaker 1: So actually do you have you were saying they do
Speaker 1: have floods they just can't break. They've now got people
Speaker 1: dying from floods. Yeah, I mean there's floods. There's flooding
Speaker 1: now in southern China. I mean it's a problem every year,
Speaker 1: but this year it's one of it's it's really becoming
Speaker 1: more severe. Um, so it's been tough for people in Well, Sharon,
Speaker 1: I'm sure we might we might check in on you
Speaker 1: again in in a few months, I mean time, Thank
Speaker 1: you very much. Yeah, no problem. M Well, that was
Speaker 1: the view this week from Beijing and Mouhan. Now, as
Speaker 1: I mentioned at the start, we have the long view
Speaker 1: on China from our chief economists, Tom Worlick. He's based
Speaker 1: in Washington now, but he spent eleven years in Beijing,
Speaker 1: and he's just published a book based on his time there,
Speaker 1: at least in part, called China The Bubble That Never Pops. Tom.
Speaker 1: Nice to have you back on the podcast. In your
Speaker 1: recent piece for Business Week about your book, you started
Speaker 1: with this line, don't tell Trump, but China's winning. Is
Speaker 1: China winning everything or just the fight against COVID nineteen.
Speaker 1: So COVID nineteen is is a kind of stress test
Speaker 1: for for how economic systems function. And if you look
Speaker 1: at how China and the US have performed in the
Speaker 1: last six months, China is actually doing rather better. China's
Speaker 1: got the virus under control. The US doesn't have the
Speaker 1: virus under control. China managed to control unemployment, the U
Speaker 1: saw unemployment rise to levels not seen since the Great Depression.
Speaker 1: China's poised to get back to growth. Factories are already
Speaker 1: in a better place than they were a year ago.
Speaker 1: The US is still a long way underwater, so there's
Speaker 1: a broader point there as well. I think the way
Speaker 1: we look at the Chinese model is flawed. We only
Speaker 1: see the downsides and the stresses. We don't see the
Speaker 1: strengths and the sources of resilience well, and the general,
Speaker 1: as you say, the general thesis of your book is
Speaker 1: that China is stronger than it looks economically. Certainly. I
Speaker 1: know when I was working in the investment world and
Speaker 1: people would say, what are your top three or top
Speaker 1: five risks for the year, And when you hear the
Speaker 1: sort of strategist talk about it, if they had sort
Speaker 1: of run out of one, they would just throw in
Speaker 1: China blowing up, because it was sort of a standard
Speaker 1: thing that you would expect China's debt issues and financial
Speaker 1: problems to finally all come home to roost. You're saying
Speaker 1: that we could carry on waiting quite a long time. Yeah,
Speaker 1: so I was in I was in China for eleven years,
Speaker 1: and for that entire time, there was this sort of
Speaker 1: thread of pessimism, thread of doom, almost running through the
Speaker 1: Western commentary on China. Yes, the story went tem percent
Speaker 1: growth looks impressive, but if you pope beneath the surface,
Speaker 1: it's all financed by debt. All the debt is being misallocated.
Speaker 1: It's a bubble and it's going to blow up, and
Speaker 1: of course it doesn't ever blow up. So my motivation
Speaker 1: in putting pen to paper for this book was, of
Speaker 1: course mainly fame and wealth beyond my wildest dreams, but
Speaker 1: beyond that, I also wanted to explain why the bubble
Speaker 1: never pops, and I think an important reason is we
Speaker 1: look at the negatives, we don't consider the positives. And
Speaker 1: on the financial system, what that means is we look
Speaker 1: at the massive build up of debt. We look at
Speaker 1: how the debt has been allocated to zombie firms and
Speaker 1: real estate developers building ghost towns in the desert, and
Speaker 1: those are big problems. But what we forget is for
Speaker 1: bad loans to turn into a financial crisis, you also
Speaker 1: need to have a funding problem for the banks. And
Speaker 1: because China's saving rate is so high, and because it's
Speaker 1: hard to take money out of the country, the funding
Speaker 1: base for the banks is actually really solid. And as
Speaker 1: you say, there's all the things that people identify that
Speaker 1: a weaknesses. You know that debt exists um, But you're
Speaker 1: saying that there is also that there is a corresponding
Speaker 1: strength there which the government has room to support the
Speaker 1: banks in a way they don't in other countries. I
Speaker 1: think you know some one of a couple of your
Speaker 1: other strengths that you point out is that state intervention
Speaker 1: that you have there is actually effective and strength, not
Speaker 1: just a question of of meddling in the economy and
Speaker 1: getting in the way of markets. And you have the
Speaker 1: sheer scale of the economy. That's also an advantage, isn't it. Yeah.
Speaker 1: When we look at the state system in China from
Speaker 1: our perspective here in the West, where we, you know,
Speaker 1: firmly believe that free markets of the answer, we just
Speaker 1: see corruption and we see inefficiency, and those are real problems.
Speaker 1: If you look at return on assets for China's state firms,
Speaker 1: they're much lower than return on assets for private firms.
Speaker 1: But what we miss is that for countries that are
Speaker 1: big and that have somewhat effective industrial planners and which
Speaker 1: are still at an early stage in their development, state
Speaker 1: ownership can be a powerful instrument of development. The state
Speaker 1: banks can finance acquisitions of new technologies, the state and
Speaker 1: enterprises can deploy those technologies at a massive scale, and
Speaker 1: that becomes an instrument which can take China's on me
Speaker 1: as a whole closer to the technology frontier and make
Speaker 1: it more productive, even as the state sector itself is
Speaker 1: inefficient when looked at from a sort of narrow balance
Speaker 1: sheet accounting perspective. No, and obviously that's something we're being
Speaker 1: reminded of in many countries of the important In some areas,
Speaker 1: the government really is the only one that can intervene,
Speaker 1: and boy if they've done so in response to COVID nineteen. Now,
Speaker 1: obviously you've achieved one important thing. You've managed to get
Speaker 1: this book out before the bubble pops, which I'm sure
Speaker 1: was a concern for your publisher, But you probably weren't
Speaker 1: expecting to have it come out in the middle of
Speaker 1: a pandemic, which clearly has meant that you weren't able
Speaker 1: to have any lavish book party. So I'm sorry, not
Speaker 1: that Bloomberg would have thrown you any but has the
Speaker 1: last few months changed your view on any of the
Speaker 1: arguments you've made in your book or put them in
Speaker 1: a different perspective. Perhaps it's it's an emotional roller coaster
Speaker 1: being on this podcast. Stephanitiely, I thought you were offering
Speaker 1: me a lavish book party, and then in the very
Speaker 1: next sentence it was yanked away from me. Um. Fortunately,
Speaker 1: I'm going to be working from home for the foreseeable future,
Speaker 1: so no one will be able to see the disappointment
Speaker 1: on my face. So so so covid' is a stress
Speaker 1: test for the Chinese economy. And let's think about what
Speaker 1: happened in the first six months of the year. So
Speaker 1: real estate developers didn't sell any houses, state owned enterprises
Speaker 1: saw their profits turn into losses. Local governments didn't sell
Speaker 1: any land, and they saw their tax revenue collapse. And
Speaker 1: who are the biggest borrowers in China's economy, Well, it's
Speaker 1: the real estate developers, the state owned enterprises, and the
Speaker 1: local governments. So if there was going to be a
Speaker 1: financial crisis in China, presumably it would have just happened.
Speaker 1: All of the biggest borrowers saw their income collapse, they
Speaker 1: couldn't service their loans. This was the moment when we
Speaker 1: should have seen a financial crisis, and clearly that didn't happen. Um.
Speaker 1: And I think that's a reminder of some of the
Speaker 1: sort of hiding in plain site sources of strength in
Speaker 1: China as economy. In China's financial system, the banks have
Speaker 1: a very strong funding base, and so they don't actually
Speaker 1: need loans to be repaid on time. They can say
Speaker 1: to the borrowers, you know what, we know this is
Speaker 1: a really difficult quarter, maybe even a very difficult year.
Speaker 1: You pay us back in the second half, or even
Speaker 1: you pay us back in one Private businesses are going
Speaker 1: to be letting go of workers and canceling investment projects.
Speaker 1: But China has a massive state sector inefficient, but the
Speaker 1: government can use the state sector as a kind of
Speaker 1: a counter cyclical instrument and say to the state sector,
Speaker 1: you know what, don't let any workers go, and accelerate
Speaker 1: that investment project. And what that means is the economy
Speaker 1: can climb out of the COVID hole a bit quicker
Speaker 1: than it otherwise would. So we have obviously had the
Speaker 1: events in Hong Kong, the passing of the legislation in
Speaker 1: Hong Kong in the last few weeks, and and one
Speaker 1: thing that has been very striking is the way that
Speaker 1: along with the economic success and apparent resilience, the Chinese
Speaker 1: government is sort of doubling down on some of the
Speaker 1: more uncompromising aspects of its economic models. Shall we say,
Speaker 1: you look at China and you know the major change
Speaker 1: it has to have over the next few years, and
Speaker 1: then the government is trying to achieve is to move
Speaker 1: from being an export driven economy to a consumer driven economy.
Speaker 1: And I guess the fond belief of many economists and
Speaker 1: certainly many outside policymakers has always been that it's quite
Speaker 1: hard to be a really successful kind of individualistic, consumer
Speaker 1: driven economy when you're not giving those consumers rights as
Speaker 1: citizens and moving towards a democracy. Is that being proved
Speaker 1: wrong in China? So I don't want to come across
Speaker 1: as um. I don't want to come across as as
Speaker 1: like a Pollyanna on China's social system. Clearly there are
Speaker 1: absolutely enormous costs to China's social system. The question is
Speaker 1: is that going to be Is that going to translate
Speaker 1: into economic costs? And the answer so far has been no.
Speaker 1: And I think there's two reasons for that. Um. So
Speaker 1: the first reason we sort of alluded to Stephanie is
Speaker 1: China's position in the development process. Right, so, when do
Speaker 1: you need freethinking innovators, Well, you really need freethinking innovators
Speaker 1: when you get to the technology frontier and you need
Speaker 1: to innovate, and that's not where China is. China's GDP
Speaker 1: per capita is the third of the level in the
Speaker 1: United States. There are a long way from the technology frontier,
Speaker 1: and that means that for the next foreseeable future, growth
Speaker 1: is going to be a process of catching up and copying,
Speaker 1: not necessarily a process of pushing act and developing innovative
Speaker 1: technologies themselves. The second reason I think is that actually
Speaker 1: we have a somewhat we have a settled view of
Speaker 1: the relationship between social systems and economic progress, which actually
Speaker 1: China is challenging. Right. Um, we think that democracy, markets
Speaker 1: and growth go together, right, And if you have markets,
Speaker 1: then you will grow, and also also if you have markets,
Speaker 1: that will be a driver of democracy. And actually what
Speaker 1: we're seeing in China is that these relationships which seems
Speaker 1: so settled in the West don't actually necessarily hold well.
Speaker 1: These relationships kind of reassert themselves over the long term.
Speaker 1: I think as we get closer to the technology front frontier,
Speaker 1: the chances are that they will Is that going to
Speaker 1: matter for China in the next three for five years
Speaker 1: when g d P per capita is still a third
Speaker 1: of the level in the United States. I think the
Speaker 1: answer is probably no. But isn't the mess lesson of
Speaker 1: the Huawei controversy and some of these others involving China
Speaker 1: technology is that they are closer to that frontier than
Speaker 1: we like to think. And indeed, in that sector that
Speaker 1: they seem to be, they have one company that is
Speaker 1: pretty much dominant. Yeah. I think there's two things there.
Speaker 1: So the first thing is UM, technological progress is unevenly distributed, right, So, Yeah,
Speaker 1: if you look at five G or AI or sustainable
Speaker 1: energy for example, China is at or near or pushing
Speaker 1: back the technology frontier. UM. If you look at other areas,
Speaker 1: China still lags by a considerable margin. China can't make
Speaker 1: competitive semiconductors, China can't make competitive airplanes for example. UM.
Speaker 1: And then the second point I would make is that
Speaker 1: sort of the success of Huawei UM and sort of
Speaker 1: the advances they've made in five G I think goes
Speaker 1: to UM the sort of confused approach that we have
Speaker 1: to thinking about China in the West. Right, on the
Speaker 1: one hand, we say state and enterprise is a huge
Speaker 1: and inefficient and corrupt, and they are an impediment to
Speaker 1: China's growth um And we also say Huawei is pretending
Speaker 1: to be a private company, but secretly it's state and enterprise.
Speaker 1: And then in the same breath we say Huawei is
Speaker 1: dominating the next generation of the most critical technology for
Speaker 1: the future of the world economy. So which is it
Speaker 1: the state and enterprises? These kind of like corrupt, inefficient
Speaker 1: dinosaurs who are dragging China down, or are they technology
Speaker 1: innovators who are going to dominate the future of communication?
Speaker 1: Can't be both right? Either argument stems from fear, and
Speaker 1: I think that's probably the uniting force in in quite
Speaker 1: a lot of the commentary around China these days. But
Speaker 1: we have certainly done the long term view, and I'm
Speaker 1: sure we'll talk about this again. I'm interested, just as
Speaker 1: a final question, if the bubble had popped before you've
Speaker 1: got this book out, had you and your publisher had
Speaker 1: any conversation about changing the title or what what would
Speaker 1: plan b So the bubble that took a long time
Speaker 1: to hop with a quick with a new forward. So
Speaker 1: clearly by publishing a book with this title, Stephanie, I
Speaker 1: have tempted fate and increase the chances that the bubble
Speaker 1: will pop. So what's absolutely critical is that list listeners
Speaker 1: to the Stephonomics podcast go out immediately and buy a
Speaker 1: copy of the book so I can enjoy some royalties
Speaker 1: before my arguments and conclusions are falsified by events. To all,
Speaker 1: thank you very much, Thanks Stephanie, thanks for listening to Stephanomics.
Speaker 1: We'll be back next week with more on how COVID
Speaker 1: nineteen is transforming the global economy. In the meantime, you
Speaker 1: can find us on the Bloomberg Terminal, webs app or
Speaker 1: wherever you get your podcasts, and for more news and
Speaker 1: analysis from Bloomberg Economics, you just have to follow at
Speaker 1: Economics on Twitter. This episode was produced by Magnets Hendrickson
Speaker 1: special thanks to Sharon Chen and Tom Orlick. Lucy Meekin
Speaker 1: is the acting executive producer of Stephonomics and the head
Speaker 1: of Bloomberg Podcast is Francesca Levy.