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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 2: Tracy, we talk a lot about the tech competition between

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Speaker 2: the US and China, but I still think we talked

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Speaker 2: about it in sort of broad strokes. We talked about

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Speaker 2: some of the policies obviously made in twenty twenty five,

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Speaker 2: but actually how the process of tech innovation in China

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Speaker 2: still seems like important. There's more to learn about there.

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Speaker 3: I totally agree. And actually we have a really good

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Speaker 3: example recently in the form of deep Seek, right, and

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Speaker 3: this thing that people acted like it came out of nowhere,

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Speaker 3: but actually a lot of the papers had been published

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Speaker 3: over the course of months, but it seemed to surper right.

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Speaker 2: I don't know if it's true, you know, the story that, oh,

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Speaker 2: is just the side project of a quantitative hedge fund,

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Speaker 2: Like that's such a good story. I'm not entirely sure

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Speaker 2: if that's true. And they made it so like, oh yeah,

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Speaker 2: well they were doing this quant fun they built deep

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Speaker 2: Seek on the side, like such a it's such an

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Speaker 2: alluring story.

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Speaker 3: Well, not just a quant hedge fund. Isn't the story

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Speaker 3: supposedly that the founder decided to go into AI after

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Speaker 3: she Shinping was kind of complaining, Yeah, how much talent

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Speaker 3: and resources is being wasted on finance in various ways.

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Speaker 4: Yeah, heard that.

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Speaker 2: People like these are like great stories, right, and of

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Speaker 2: course there is a lot of truth to them in

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Speaker 2: the particularly in the broad sense that we know that

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Speaker 2: and we talked about this at the time. Several years

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Speaker 2: ago there was this sort of announced hard pivot away

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Speaker 2: from the sort of like consumer internet tech and they

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Speaker 2: sort of had their legs cut out from under them

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Speaker 2: towards these more like serious capital t tech hardware, hardware,

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Speaker 2: things like that, things that have more stakes than say

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Speaker 2: social networking or something like that. So like, how do

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Speaker 2: you actually do that?

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Speaker 4: Though?

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Speaker 2: How do you actually like direct talent in certain ways?

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Speaker 2: You know, I think that if President Trump came out

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Speaker 2: tomorrow and said, we want people to and you guys

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Speaker 2: actually talked about this, but then we want to do

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Speaker 2: more hard tech, I don't think there's like a real easy,

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Speaker 2: straightforward mechanism and how do you transmit certain ambitions into

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Speaker 2: the actual landscape. I think there's more to be learned

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Speaker 2: on that well.

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Speaker 3: I think also We in America are very used to

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Speaker 3: thinking about technology as this like very creative process and

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Speaker 3: the outcome of Jeff Bezos working in his garage, Yeah,

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Speaker 3: something like that, And it's hard to imagine often the

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Speaker 3: same environment existing in China. I think that's just like

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Speaker 3: a cultural difference perhaps between Americans and Chinese.

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Speaker 2: So we should talk about it totally. Well, I'm really

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Speaker 2: excited to say we're gonna be talking to one of

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Speaker 2: the best China watchers there is who has a lot

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Speaker 2: of interesting thoughts on this time topic, someone we've never

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Speaker 2: had on the podcast. We're going to be speaking with

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Speaker 2: Kaiser quote. He is the host of the Seneca Podcast,

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Speaker 2: which has been around since twenty ten.

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Speaker 4: Wow.

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Speaker 2: Yeah, we've been doing this for about little less than

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Speaker 2: ten years, so it's very impressive this sort of longevity.

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Speaker 2: Someone who spent a lot of time in China, splits

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Speaker 2: his time between the US and China, lived there for

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Speaker 2: several years. Kaiser, thank you so much for coming on Outlocks.

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Speaker 4: Hi Joe, and Hey Tracy, This is a huge honor

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Speaker 4: for me. Thanks, thanks so much for having me.

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Speaker 2: Thank you for coming on. What is the Seneca podcast?

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Speaker 2: What has been your project in the last fifteen years.

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Speaker 4: Yeah, So Sinica is an hour longer, sometimes much longer,

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Speaker 4: interview format show. We bring on academics and policymakers occasionally.

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Speaker 4: I've had a number of the former assistant Secretaries of State,

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Speaker 4: Free Stasia Pacific on. I've had no ambassadors and so

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Speaker 4: forth on. But it's changed the mission. It initially started

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Speaker 4: off as being sort of more here's what's in the news,

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Speaker 4: and here's a couple of people who can talk about

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Speaker 4: it intelligently having to do with China. Since twenty sixteen,

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Speaker 4: when I moved to the States, the focus has really

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Speaker 4: been on US China relations, and it's got more American

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Speaker 4: guests on than previously. We're but we tuckle everything under

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Speaker 4: the sun. I mean US China relations, China, India, China, Russia, China, India, China,

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Speaker 4: what have you, and the Chinese macroeconomy. Technology. Lots on

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Speaker 4: technology and culture. But the idea is that it's it's

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Speaker 4: supposed to look at the way that we think and

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Speaker 4: talk about China. Now it's really evolved into something with

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Speaker 4: which I think has a longer shelf life.

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Speaker 3: Wait, why did you decide to start it? Because you

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Speaker 3: were in a band, right, that was your main gig.

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Speaker 4: Yeah, that's correct. Something for some reason, everyone knows about me.

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Speaker 4: I mean I transitioned. I went out. I left that

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Speaker 4: band in nineteen ninety nine, and like other people who

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Speaker 4: didn't have many marketable skills, I.

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Speaker 3: Went into podcasting.

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Speaker 4: Well not right away. I mean I worked for internet

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Speaker 4: companies for a number of years, and I worked as

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Speaker 4: a reporter for quite number of years, and then in

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Speaker 4: twenty ten it was just sort of on a lark.

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Speaker 4: I was about to start a job at bay Do

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Speaker 4: as they're head of international comms, and a very good

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Speaker 4: friend of mine in Beijing. We've gotten conversation about what

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Speaker 4: podcasts we're listening to, and I, you know, I said, oh,

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Speaker 4: you know, the usual, this American Life and Radio Lab

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Speaker 4: and whatnot, and he had a few, and then we

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Speaker 4: just sort of said, why don't we start a podcast.

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Speaker 4: We're both talkers, we both know everybody. Let's just do

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Speaker 4: one and see what happens. And we did and it

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Speaker 4: took off. It did pretty well. We got acquired in

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Speaker 4: twenty sixteen, right around the time I was moving to

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Speaker 4: the States, and the company that bought us folded in

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Speaker 4: twenty twenty three, and I just sort of struck out

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Speaker 4: on my own doing a sub stack, and I've stuck

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Speaker 4: with it, managed to find a little bit of support

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Speaker 4: and those few and hopefully after this more subscribers. But

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Speaker 4: we're continuing to put them out every week. It's just

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Speaker 4: me solo, but it's a group effort.

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Speaker 2: I'm in a band. I'm trying to go the other direction.

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Speaker 2: I have a country music band, and maybe one day

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Speaker 2: I'll leave casting. No, no, no, I've never got to

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Speaker 2: leave podcasting behind.

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Speaker 4: You know, I'm actually not going to leave podcasting, but

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Speaker 4: I've gotten back into my old band Reform when I

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Speaker 4: was back in China recently. So are you on Spotify

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Speaker 4: as of this summer? We are. Yeah, you can look

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Speaker 4: up Twins show C h U and Qiu. You've got

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Speaker 4: to put a space in between them for okays. It's

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Speaker 4: springing autumn in English.

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Speaker 2: I'm going to start with like a really super broad

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Speaker 2: based question that maybe it's not even really that it's

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Speaker 2: probably a full hour long or too our long episode,

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Speaker 2: but in your years of covering China from a journalistic

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Speaker 2: perspective or at least from a sort of conversational perspective,

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Speaker 2: and watching American media or American pundit to talk about China,

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Speaker 2: is there like a persistent blind spot or a thing

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Speaker 2: that stands out to you as something that people talk

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Speaker 2: about China that does not accord with your experience of

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Speaker 2: having lived there and having reported on it yourself.

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Speaker 4: Are There's so many I don't even know where to

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Speaker 4: start one that I would usually focus on. I mean,

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Speaker 4: and it's a whole cluster of issues that are related

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Speaker 4: to this. But I think that people aren't mindful of

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Speaker 4: just how compressed and how rapid China's transformation has been,

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Speaker 4: what has happened in the course of one working lifetime.

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Speaker 4: I mean, I like to tell people that if you

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Speaker 4: can imagine graduating junior high or high school in nineteen

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Speaker 4: seventy nine on the eve of reform and opening, and

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Speaker 4: then forty years later, at the end of your life,

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Speaker 4: the end of your working life, you're thinking about retiring,

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Speaker 4: and you've seen the per capitaal GDP go from about

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Speaker 4: one hundred and seventy five dollars at the beginning of

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Speaker 4: your working life till thirteen thousand dollars. Now, that transformation

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Speaker 4: is just profound and it's just so quick. So I

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Speaker 4: think that what people get wrong is that they don't

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Speaker 4: see that the hardware that's visibly advanced has done so,

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Speaker 4: just at a much faster pace than the software. People

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Speaker 4: don't change overnight. I mean, I like to that movie

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Speaker 4: I don't know, Joe, if you and Tracy have seen Big.

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Speaker 2: With Ti Hang with My kids, keep going, yeah.

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Speaker 4: Yeah, great movie. It's actually aged well. But you know,

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Speaker 4: Tom Hanks makes a wish and goes to bed at

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Speaker 4: what he's like eleven, and he wakes up and he's

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Speaker 4: in his thirties, right, And that's kind of China, right.

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Speaker 4: It's like the mind is still out of that eleven

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Speaker 4: year old in a lot of ways, but it's in

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Speaker 4: the body with thirty. So we look at this fully

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Speaker 4: grown adult and expect it to behave as a fully

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Speaker 4: grown adult.

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Speaker 3: That's what people get wrong, you know how I measure

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Speaker 3: China's technological progress go on. So I remember in the

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Speaker 3: early two thousands, I was on a trip in the

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Speaker 3: countryside and I experienced one of the worst toilets I've

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Speaker 3: ever experienced in my entire life, like basically just a

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Speaker 3: hole in the ground. And then I went back in

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Speaker 3: twenty nineteen to Beijing and I went to one of

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Speaker 3: the nicest bathrooms that I've ever been in in like

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Speaker 3: a luxury shopping mall, and I thought, wow, things have changed.

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Speaker 4: Yeah, Yeah, that's a good measure. It's a good propit.

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Speaker 3: Yeah, I should do that all the time. Okay, So

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Speaker 3: I guess I'll just jump into the technology aspect of this.

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Speaker 3: But does technology come from a different place in China

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Speaker 3: versus the US? Kind of getting back to the intro,

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Speaker 3: there's this sense in America that technology is the product

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Speaker 3: of freedom and creativity, and you have the ability to

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Speaker 3: start a new company in your garage, whereas in China

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Speaker 3: maybe there's a different sense of how tech actually gets started.

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Speaker 4: Yeah, so there's that American myth about the loan genius

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Speaker 4: toiling inbscurity in his garage, either in Menlo Park, New

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Speaker 4: Jersey or Menlo Park, California. Right. I think there's some

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Speaker 4: of that's definitely that mythology in China, but I think

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Speaker 4: the reality is very, very different. I think China does

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Speaker 4: place a premium on that kind of ex nilo kind

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Speaker 4: of from scratch zero to one innovation, but I think

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Speaker 4: it places more of a premium on the scaling up

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Speaker 4: of technology and the diffusion of technology in a way

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Speaker 4: that I think the American mythology has sort of blinded

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Speaker 4: us to Yeah, we're constantly caught off guard by Chinese

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Speaker 4: technological advances.

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Speaker 2: Yeah.

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Speaker 4: I think we keep seeing this tech momentum despite all

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Speaker 4: the decoupling, despite the chip bands, in spite of all

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Speaker 4: the economic headwinds that China is obviously facing. And I

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Speaker 4: think that the reasons are pretty deep. They're actually societal

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Speaker 4: and even cultural, so that I think that gets to

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Speaker 4: part of the way that technology is conceived of in China.

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Speaker 4: You'll find pockets, of course, in America where people are

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Speaker 4: still really really techno optimistic. There's still very solutionists, they're

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Speaker 4: still very accelerationist, right, but it's incredibly common in China,

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Speaker 4: whereas it's only here in pockets. I think American society now,

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Speaker 4: and I think the West more broadly has for some

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Speaker 4: time now had a fear. If you look at our

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Speaker 4: science fiction, if you look at the way technology is

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Speaker 4: thought about broadly in society, there's a real anxiety over it. Right.

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Speaker 4: Our leading technologists, are leading natural scientists talk all the

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Speaker 4: time about the existential threat that AI pose is. I

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Speaker 4: don't want to diminish that threat, but I have to

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Speaker 4: say that in China, you just do not hear that conversation,

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Speaker 4: certainly not nearly as frequently, and not coming from the

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Speaker 4: leading technologists themselves. So it's very different.

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Speaker 2: Why is it different? You know, I'm thinking about your

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Speaker 2: big analogy. Actually I'm going to extend the metaphor a

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Speaker 2: little bit too far. But you know, my phone. I

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Speaker 2: have a love hate relationship with my phone. I'm on

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Speaker 2: it all the time, but I also think it's doing

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Speaker 2: significant damage to my mental health. Whereas if I were to, like,

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Speaker 2: you know, my daughter wants a phone, and if I

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Speaker 2: were to give her one, she would probably be thrilled

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Speaker 2: for a long time. I'm not going to let her

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Speaker 2: have a phone for a long time, but she would

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Speaker 2: be like thrilled, and this is an incredible addition to

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Speaker 2: my life that she would be very excited about. Again,

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Speaker 2: do people have the same love hate relationships with gadgets

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Speaker 2: and new technologies that we seem to have here?

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Speaker 4: I mean, there are some people, of course who have

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Speaker 4: anxieties over it, but no, I think broadly speaking, you know,

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Speaker 4: when I've sat on the sidelines of a soccer game

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Speaker 4: watching our kids play, and I'm trying to talk to

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Speaker 4: the other parent about how they limit screen time he's

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Speaker 4: there scrolling on his device, going, hey, I secon let

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Speaker 4: me asker this email. What we're saying just now about

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Speaker 4: screen time? What I mean, It's like the question doesn't compute.

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Speaker 4: They don't see it as such a threat. I think

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Speaker 4: part of that, of course, is because the social media

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Speaker 4: environment in China is a lot more sanitized. There isn't

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Speaker 4: the threat that Junior is going to be scrolling porn

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Speaker 4: all day, right, That's part of it. But I think

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Speaker 4: really more to the point is that for these many

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Speaker 4: years now, ordinary Chinese people have seen their lives, their

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Speaker 4: material lives just improve pretty much in lockstep with the

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Speaker 4: quality of the technology they have in their hand or

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Speaker 4: in their purse or in their pocket. Right. Their bandwidth

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Speaker 4: at home, how fast their network speed is, and how

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Speaker 4: powerful their handheld device is basically tracked with their livelihood. Right.

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Speaker 4: So there's not that reason for suspicion. Now, that isn't

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Speaker 4: to say that everyone in China has experienced It's certainly not,

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Speaker 4: but I think for the vast majority, and not just

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Speaker 4: of urbanites, but the vast majority of people have seen

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Speaker 4: this correlation.

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Speaker 3: Wait, but there is some negative feeling towards some technology

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Speaker 3: in China and I'm thinking specifically of She shin ping

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Speaker 3: and his big crackdown on consumer online tech. And he's

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Speaker 3: not a fan of video games precisely because he thinks

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Speaker 3: it's a waste of time and kids are staring at

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Speaker 3: the screen too much. So there is an element.

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Speaker 4: Of that that also tracks with the Chinese parent thing, right,

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Speaker 4: they all want us to be really good on computers,

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Speaker 4: but not to waste our time playing video games or

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Speaker 4: just chatting up people. Yeah, I think you were saying

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Speaker 4: it in your intro, and I thought that was really

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Speaker 4: interesting how Donald Trump he wouldn't be able to just

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Speaker 4: simply order everyone, the physicists to start doing physics and

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Speaker 4: not go work for quantitative hedge funds in China, you

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Speaker 4: kind of can, It's not. I mean, again, that's an exaggeration.

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Speaker 4: There isn't a way. I mean, there are still plenty

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Speaker 4: of people who go to school and study the social sciences,

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Speaker 4: or who graduate with engineering degrees and then go to

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Speaker 4: work for a major social media company or go to

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Speaker 4: work designing complicated financial derivatives or whatever. But he doesn't

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Speaker 4: like that. He thinks that that's been one of the

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Speaker 4: pathologies of the United States is that it's over financialized,

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Speaker 4: and that our best and brightest here in the US

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Speaker 4: have gone to work for these companies that basically don't

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Speaker 4: make anything and just suck at people's time and create

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Speaker 4: polarization in the country. So they're worried about that and

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Speaker 4: they have more wherewithal to direct people. It's not coercive, though,

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Speaker 4: let me be clear about that. They have ways to

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Speaker 4: incentivize it. And I think that this again, this is

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Speaker 4: part of the popular culture. There's all sorts of reasons.

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Speaker 4: I mean, we can start at the top. If you

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Speaker 4: look at the composition of the Chinese leadership, I mean,

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Speaker 4: what do we have in Congress, Who do we have

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Speaker 4: heading major agencies. It's almost all lawyers, people with illegal training.

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Speaker 4: And that's good in a country that really prizes rule

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Speaker 4: of law, and it's good for many reasons. But in China,

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Speaker 4: the analogy is that you look at the senior leadership.

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Speaker 4: If you look at you know, who runs the provinces,

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Speaker 4: whether the party or the state. You look at who

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Speaker 4: are the mayors or the party secretaries of cities of

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Speaker 4: a million people or more, and you're almost all going

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Speaker 4: to find engineers. They're going to be like seventy eighty

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Speaker 4: percent engineers. If the ladder of success, if the people

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Speaker 4: who are top it all did one thing in common,

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Speaker 4: they did a four year degree in the natural sciences

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Speaker 4: or in engineering, there's a good chance that you're going

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Speaker 4: to tell your kids to do the same, or your

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Speaker 4: kid is the case, maybe yeah, to do the same.

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Speaker 4: So I think there's a lot of pressure that way

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Speaker 4: in terms just of social mobility, in terms of what

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Speaker 4: the perceived path of mobility is.

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Speaker 2: By the way, this point about engineers and lawyers or

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Speaker 2: regular odd law I guess. Dan Wong has a book

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Speaker 2: coming out August twenty sixth, twenty twenty five. It's up

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Speaker 2: for sale on Amazon right now. You can pre order

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Speaker 2: it about exactly this dimension of a sort of lawyer

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Speaker 2: society versusn engineering society. I'm looking forward to reading that.

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Speaker 2: I'm looking forward to having this.

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Speaker 4: Dan Wong is great. So I interviewed him for this

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Speaker 4: Nova documentary that I did called Inside China's Tech Boom,

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Speaker 4: and the whole thesis of it was really, I mean,

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Speaker 4: in many ways inspired by some of Dan's ideas about

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Speaker 4: the importance of process knowledge. How the fact that China

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Speaker 4: has not stopped manifacted there was not for a maker's

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Speaker 4: movement to China because they didn't need to be one.

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Speaker 4: They are always making stuff right the fact that they

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Speaker 4: still have all the hardware there. It creates this sort

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Speaker 4: of frictionless ecosystem of innovation where you know, if you're

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Speaker 4: a guy with an idea for some gadget and you're

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Speaker 4: in Shinjin, you can have your designer just send you

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Speaker 4: over on we Chat his latest design. You can take

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Speaker 4: it to your ODM, which is just a quick bike

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Speaker 4: ride down the street. They can have you a proto

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Speaker 4: type by the afternoon. You can make some tweaks and iterate,

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Speaker 4: and they'll just keep changing the thing over tight and

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Speaker 4: it's practically frictionless. And I think that's a huge piece

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Speaker 4: of China's innovation success as well.

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Speaker 2: But what happens when hesion ping comes out and says,

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Speaker 2: you know what, we're not as into social networking anymore,

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Speaker 2: We're not as into video games. We really want to

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Speaker 2: focus on other areas of hard tech, important tech, something

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Speaker 2: like that. What is the process of here is this

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Speaker 2: national priority and then the transmission and diffusion of these

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Speaker 2: priorities into choices that maybe students make or technologists make.

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Speaker 4: That's a great question. I think it's actually one that

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Speaker 4: I can answer with three letters KPI. Right. What happens

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Speaker 4: when you have these kind of abstract directives the will

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Speaker 4: of the leader from on high is that they get

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Speaker 4: translated not into specific policies, not right away certainly, but

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Speaker 4: into this expectation set you know, from the leadership on

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Speaker 4: down that this is how I'm going to score my

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Speaker 4: brownie points, this is how I am going to get

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Speaker 4: promoted within the party, is if I tick these boxes,

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Speaker 4: if I do these things. Let's say, you know, we

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Speaker 4: decide that the thing is we all need to have

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Speaker 4: data centers. So suddenly every municipality in every province is

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Speaker 4: going to want to build data centers. They're going to

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Speaker 4: fight each other for it. They're going to figure out,

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Speaker 4: here's the best place for us to build ours, and

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Speaker 4: here's all this money that we're going to put into that.

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Speaker 4: I mean, they're going to want to tick that box.

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Speaker 4: This is the sort of the way that everything gets

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Speaker 4: done in China. When recently, when She'sing Ping announced that

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Speaker 4: they were going to be and this is director that

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Speaker 4: came not out of just the State Council but out

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Speaker 4: of the party as well, that they were going to

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Speaker 4: boost consumption. A lot of people just sort of sneered

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Speaker 4: and said, yeah, I don't see a lot of policy

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Speaker 4: here in place to do that. But you can bet

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Speaker 4: your bottom dollar that every one on down they took

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Speaker 4: this very very seriously, and they're all figuring out ways

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Speaker 4: where in their little patch of dirt they're going to

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Speaker 4: figure out how we can boost consumption because that's the

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Speaker 4: way that I'm going to get promote. They did the

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Speaker 4: same thing with cleaning up air pollution. They do the

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Speaker 4: same thing with cleaning up rivers. They make it part

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Speaker 4: of your KPI. That's what they're going to do with

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Speaker 4: this as well. That's what they did. I mean the

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Speaker 4: question that you asked about how they made sure these

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Speaker 4: physicists were doing physics. It's much the same.

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Speaker 3: There's also, I feel like a sense of clarity in

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Speaker 3: some of these policy directives. So China very often explicitly

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Speaker 3: will say where it's investing.

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Speaker 1: Right.

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Speaker 3: So when we have the consumer tech crackdown, it came

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Speaker 3: with a simultaneous announcement that everyone should go into hardware basically,

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Speaker 3: and we saw that repeated in various ways. I remember

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Speaker 3: Chairman Rabbit was tweeting that people should go to the

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Speaker 3: industries that actually fit the central government's general policies. So

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Speaker 3: I feel like it's just very clear as well, and

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Speaker 3: the messaging is kind of on point.

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Speaker 4: We have a word in Chinese phone call which literally

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Speaker 4: means sort of wind mouth. It's the place where the

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Speaker 4: wind will be will be blowing. It's like that little

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Speaker 4: wind tunnel, and they telegraph that. They tell you, you know,

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Speaker 4: well in advance, here is where we're going to. This

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Speaker 4: in the fourteenth five year plan. This you know, in

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Speaker 4: the fifteenth five year Plan they say exactly which industries

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Speaker 4: are going to not only receive a lot of government investment,

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Speaker 4: but where the paths are going to be cleared. There's

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Speaker 4: going to be removal of a lot of regulatory hurdles,

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Speaker 4: there's going to be favorable policy for you if you

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Speaker 4: get into this, and if you're an investor, that's where

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Speaker 4: you're going to put your money. That's what you're going

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Speaker 4: to do. You're going to you know, it doesn't take

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Speaker 4: a genius. You need to read the important documents and

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Speaker 4: you figure out exactly what their priorities are. Just as

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Speaker 4: you say, there's that clarity.

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Speaker 2: I have to admit, you know, like when I say

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Speaker 2: a sheson ping speech translated into English, or maybe I

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Speaker 2: just have a chat GPT translated Like, there is often

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Speaker 2: not a lot of like specifics or arguably even substance

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Speaker 2: in them. There's a lot of like really sort of

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Speaker 2: high level grand things. But this sort of makes sense now. Granted,

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Speaker 2: the leaders around the world often don't get into a

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Speaker 2: lot of specifics, but it makes a little bit more

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Speaker 2: sense to me in the context of Okay, these priorities

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Speaker 2: are announced and immediately on down I have to you know,

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Speaker 2: imagine provincial leaders, leaders of school systems, universities then immediately

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Speaker 2: get the message that their futures and their success in

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Speaker 2: their careers will be about who can show the best

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Speaker 2: results on what maybe sounds like some sort of vague priority.

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Speaker 4: And you're missing the biggest piece of it, which is parents. Oh,

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Speaker 4: they're getting this message as well. They're the ones who

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Speaker 4: are ultimately deciding, No, you're not going to be in

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Speaker 4: a life actual historian if you're going to study yeah,

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Speaker 4: you know, you're going to study engineering physics, Sorry, buddy,

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Speaker 4: because you're going to get a job at ten Center,

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Speaker 4: at UID or at Huawei when you graduate. Yeah. So

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Speaker 4: I think that's the thing. A friend of mine once

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Speaker 4: joked that a lot of people in the West have

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Speaker 4: a great deal of difficulty imagining how the leader of

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Speaker 4: an authoritarian nation can do all these things that seem

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Speaker 4: so apparently cruel, arbitrary, but actually have your best interests

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Speaker 4: in mind. But for anyone who grew up with Chinese parents,

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Speaker 4: they know exactly how it works.

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Speaker 3: Wait, so, just on the authoritarian point, I know you

434
00:22:38,160 --> 00:22:40,600
Speaker 3: touched on this already, but just to press on this,

435
00:22:41,280 --> 00:22:44,720
Speaker 3: would you say authoritarianism is a net positive or a

436
00:22:44,760 --> 00:22:47,480
Speaker 3: net negative for technological development?

437
00:22:48,600 --> 00:22:51,040
Speaker 4: I think it's a wash in most stays. I mean, look,

438
00:22:51,119 --> 00:22:53,159
Speaker 4: maybe this is my upbringing talking, but you know, I

439
00:22:53,200 --> 00:22:56,680
Speaker 4: am not willing to discard the idea that a lack

440
00:22:56,800 --> 00:23:00,399
Speaker 4: of intellectual freedom, of academic freedom, of freedom to query

441
00:23:00,440 --> 00:23:05,399
Speaker 4: into to experiment without any ideological fetters, that if you

442
00:23:05,440 --> 00:23:08,240
Speaker 4: don't have that, in the long run, you are hobbled.

443
00:23:08,440 --> 00:23:11,280
Speaker 4: I think that's probably still the case. But I think

444
00:23:11,320 --> 00:23:14,600
Speaker 4: in America we've taken it too far. We have this idea.

445
00:23:14,640 --> 00:23:17,080
Speaker 4: I mean, do you remember back in twenty thirteen, twenty fourteen,

446
00:23:17,119 --> 00:23:20,240
Speaker 4: when Joe Biden and even Carly Fiorina, who really ought

447
00:23:20,240 --> 00:23:21,800
Speaker 4: to have known better. I mean, she was the see

448
00:23:21,880 --> 00:23:24,280
Speaker 4: of a major technology company. They were going around and

449
00:23:24,280 --> 00:23:26,280
Speaker 4: they were making these speeches. You know, Biden was making

450
00:23:26,280 --> 00:23:29,760
Speaker 4: these graduation speeches. Furina was on the campaign trail and

451
00:23:29,840 --> 00:23:31,840
Speaker 4: she was talking about that Biden was talking about. They

452
00:23:31,880 --> 00:23:34,040
Speaker 4: said the same talking point. It's like, show me one

453
00:23:34,040 --> 00:23:37,120
Speaker 4: thing that China's ever innovated. You know, as long as

454
00:23:37,200 --> 00:23:40,400
Speaker 4: we have freedom, we will always be in the lead

455
00:23:40,600 --> 00:23:43,239
Speaker 4: of innovation. And I mean I think that takes it

456
00:23:43,520 --> 00:23:46,440
Speaker 4: from a necessary condition, which I even have quibbles with.

457
00:23:46,680 --> 00:23:49,240
Speaker 4: In fact, I don't believe that it's a necessary Freedom

458
00:23:49,359 --> 00:23:53,000
Speaker 4: is a necessary condition for technological innovation, but it even

459
00:23:53,040 --> 00:23:56,320
Speaker 4: elevates it to sufficient condition. Yeah, where you know, it's

460
00:23:56,359 --> 00:23:58,600
Speaker 4: like just because we're free, we're always going to be

461
00:23:58,640 --> 00:24:01,080
Speaker 4: ahead in innovation. So I mean that's part of the

462
00:24:01,080 --> 00:24:05,400
Speaker 4: reason why we're constantly just being just sideswiped, just completely

463
00:24:05,480 --> 00:24:08,439
Speaker 4: just blindsided by Chinese tech advances.

464
00:24:08,920 --> 00:24:11,760
Speaker 2: It's you hear that to this day. I think you

465
00:24:11,840 --> 00:24:14,639
Speaker 2: hear less of it, but it is less remarkable the

466
00:24:14,680 --> 00:24:17,439
Speaker 2: degree to which you still hear that. What's your version

467
00:24:17,720 --> 00:24:20,639
Speaker 2: of deep seek? Where did it come from? And how

468
00:24:20,720 --> 00:24:22,920
Speaker 2: much does it fit this story of like, oh, they

469
00:24:22,920 --> 00:24:25,640
Speaker 2: were doing quant stuff and then suddenly they're like, oh,

470
00:24:25,640 --> 00:24:27,920
Speaker 2: we should pivot to AI, Like, what's the deep Seek story?

471
00:24:28,600 --> 00:24:30,719
Speaker 4: Well, I mean the biography of Young one film is

472
00:24:30,800 --> 00:24:33,320
Speaker 4: not in question. I mean he ran a quant fund

473
00:24:33,760 --> 00:24:37,520
Speaker 4: called high Flyer, right, and he pivoted. Now to what

474
00:24:37,680 --> 00:24:40,679
Speaker 4: extent they were just developing this as a sideline hobby

475
00:24:40,760 --> 00:24:43,720
Speaker 4: or I mean I think more likely they were developing

476
00:24:44,160 --> 00:24:48,120
Speaker 4: AI that would help them in trades, right, help them

477
00:24:48,160 --> 00:24:52,320
Speaker 4: in high frequency, high velocity trading. Right. But the pivot

478
00:24:52,840 --> 00:24:56,479
Speaker 4: being you know, attributed to Seizing making this policy changed.

479
00:24:56,640 --> 00:24:59,760
Speaker 4: It makes that totally tracks. I don't know the precise details,

480
00:24:59,800 --> 00:25:02,280
Speaker 4: but it totally tracks. It doesn't seem suspicious to me.

481
00:25:02,680 --> 00:25:05,320
Speaker 4: I have no reason to doubt that that's the case.

482
00:25:05,880 --> 00:25:08,119
Speaker 4: I mean, plenty of people have made that kind of

483
00:25:08,119 --> 00:25:10,600
Speaker 4: a pivot. I mean, maybe not all of them have

484
00:25:11,119 --> 00:25:14,560
Speaker 4: enjoyed the kind of world striding success that Deep Sea has,

485
00:25:14,600 --> 00:25:16,359
Speaker 4: but it certainly tracks.

486
00:25:16,680 --> 00:25:17,399
Speaker 2: I want to talk.

487
00:25:17,240 --> 00:25:20,760
Speaker 3: About the export controls from the Biden administration. So what

488
00:25:20,920 --> 00:25:25,560
Speaker 3: role would you say those have played in China's technological progress?

489
00:25:25,600 --> 00:25:29,280
Speaker 3: Because one thing I sometimes hear people used to use

490
00:25:29,320 --> 00:25:32,480
Speaker 3: the analogy of the three body problem. I don't know,

491
00:25:32,600 --> 00:25:33,800
Speaker 3: did you ever read that joke.

492
00:25:33,760 --> 00:25:34,320
Speaker 2: I never read.

493
00:25:34,359 --> 00:25:34,680
Speaker 4: I did.

494
00:25:34,760 --> 00:25:37,920
Speaker 3: Yeah, oh sorry, Amfeizer, Yeah, oh yeah, for sure.

495
00:25:38,040 --> 00:25:41,120
Speaker 4: Neil Ferguson actually used that at Davos a few years ago.

496
00:25:41,560 --> 00:25:43,480
Speaker 4: I was there. I was, you know, working this little

497
00:25:43,480 --> 00:25:45,240
Speaker 4: side hustle on. It's kind of a note taker for

498
00:25:45,280 --> 00:25:49,679
Speaker 4: the World economic for him. But he actually, without explaining anything,

499
00:25:50,040 --> 00:25:52,200
Speaker 4: he just simply said, you know, what the United States

500
00:25:52,240 --> 00:25:54,320
Speaker 4: is trying to do to China right now is exactly

501
00:25:54,400 --> 00:25:57,200
Speaker 4: what the Tri Solarians were trying to do earthbody help,

502
00:25:57,280 --> 00:25:59,320
Speaker 4: and without explaining what he meant, but just don the

503
00:25:59,359 --> 00:26:01,720
Speaker 4: assumption that when the audience had read it, and probably

504
00:26:01,880 --> 00:26:06,920
Speaker 4: most people had, but yeah, trying to basically stemy technological advance, right.

505
00:26:07,280 --> 00:26:09,680
Speaker 3: Right, So I feel like we should explain it now.

506
00:26:09,760 --> 00:26:12,360
Speaker 3: But I guess it's the idea that in the three

507
00:26:12,400 --> 00:26:15,920
Speaker 3: body problem, Earth is threatened by this alien species and

508
00:26:15,960 --> 00:26:20,200
Speaker 3: because of that, humanity kind of reorganizes itself and technological

509
00:26:20,240 --> 00:26:22,800
Speaker 3: progress thrives, at least for a while.

510
00:26:23,800 --> 00:26:26,400
Speaker 4: Yeah, And I think that that's kind of what we've

511
00:26:26,440 --> 00:26:29,240
Speaker 4: seen happen. I mean, I use a more Quotitian metaphor,

512
00:26:29,640 --> 00:26:32,120
Speaker 4: the one that I think not everyone has have read

513
00:26:32,119 --> 00:26:35,399
Speaker 4: this really really long turgid science fiction classic form. But

514
00:26:35,960 --> 00:26:40,280
Speaker 4: I think we've basically compelled the frog to leap again.

515
00:26:40,400 --> 00:26:42,440
Speaker 4: And it was happy enough just sort of hopping along

516
00:26:42,520 --> 00:26:45,680
Speaker 4: well behind the US when it came to cutting edge semiconductors.

517
00:26:46,000 --> 00:26:50,679
Speaker 4: But now it may leap the United States as the frog,

518
00:26:51,080 --> 00:26:54,239
Speaker 4: you know, our metaphoric frog did in five G or

519
00:26:54,280 --> 00:26:58,600
Speaker 4: in renewable energy like solar and and electric vehicles. Right,

520
00:26:58,880 --> 00:27:03,159
Speaker 4: So we have now given China both the kind of

521
00:27:03,359 --> 00:27:06,480
Speaker 4: urgency and the sense of imminent threat that was needed

522
00:27:06,480 --> 00:27:10,000
Speaker 4: to light a fire to that that frog's posterior and

523
00:27:10,080 --> 00:27:11,240
Speaker 4: now it's you know, it's in the air.

524
00:27:11,280 --> 00:27:14,280
Speaker 5: It's maybe directly over our heads, maybe gon't land in

525
00:27:14,320 --> 00:27:26,640
Speaker 5: front of us.

526
00:27:31,080 --> 00:27:35,080
Speaker 2: One of the things that's really elemental to us tech

527
00:27:35,800 --> 00:27:40,720
Speaker 2: is the vision in dreams of gigantic monopoly profits. This

528
00:27:40,880 --> 00:27:42,960
Speaker 2: is sort of like the Peterteel idea. It's like the

529
00:27:43,040 --> 00:27:45,920
Speaker 2: goal is to like build a monopoly and get insanely

530
00:27:46,119 --> 00:27:48,680
Speaker 2: rich doing it, and the people who go into tech

531
00:27:49,160 --> 00:27:52,360
Speaker 2: dreams of fortunes, et cetera. There is this huge liquid

532
00:27:52,400 --> 00:27:56,120
Speaker 2: stock market that becomes the destination either for I pos

533
00:27:56,240 --> 00:28:00,000
Speaker 2: or acquisitions. Talk to us about the capital markets component

534
00:28:00,320 --> 00:28:03,480
Speaker 2: of Chinese tech is it the same like path to

535
00:28:03,520 --> 00:28:07,560
Speaker 2: getting super rich that American technologists see here? Like what

536
00:28:07,680 --> 00:28:11,640
Speaker 2: incentivizes and motivate the technologists in China.

537
00:28:12,680 --> 00:28:15,520
Speaker 4: Well, I think that they're exactly the same. I think

538
00:28:15,600 --> 00:28:18,520
Speaker 4: that there's very little daylight between. Well, first of all,

539
00:28:18,520 --> 00:28:22,000
Speaker 4: I mean in the nineties, in that first technology boom

540
00:28:22,000 --> 00:28:24,359
Speaker 4: in China came right on the heel of what you

541
00:28:24,400 --> 00:28:27,600
Speaker 4: saw in the United States. All these people Charles Jong

542
00:28:27,640 --> 00:28:31,000
Speaker 4: who left MIT and went back to China, and I

543
00:28:31,040 --> 00:28:32,760
Speaker 4: think it was like ninety seven or ninety eight to

544
00:28:32,800 --> 00:28:36,359
Speaker 4: start this company. So who all these other entrepreneurs, Robin

545
00:28:36,440 --> 00:28:37,800
Speaker 4: Lee who I used to work for it by do,

546
00:28:37,960 --> 00:28:40,440
Speaker 4: A lot of them were returneys from the United States,

547
00:28:40,480 --> 00:28:42,560
Speaker 4: and they had the same glint in their eye. And

548
00:28:42,600 --> 00:28:45,480
Speaker 4: you have to remember these guys, they had American business

549
00:28:45,680 --> 00:28:50,080
Speaker 4: business models. Essentially, they went to American vcs from Sandhill

550
00:28:50,160 --> 00:28:53,959
Speaker 4: Road to raise their money. They went to American capital

551
00:28:54,040 --> 00:28:56,440
Speaker 4: markets right when they wanted to list. Their exits were

552
00:28:56,480 --> 00:28:59,840
Speaker 4: always on Nasdaq or on New York Stock Exchange, only

553
00:29:00,440 --> 00:29:04,160
Speaker 4: in rare exceptions where they actually not ten cents. An exception,

554
00:29:04,280 --> 00:29:06,719
Speaker 4: Ali Baba is a little bit of an exception. But

555
00:29:06,920 --> 00:29:09,640
Speaker 4: most of them, I mean, hundreds of them went to

556
00:29:10,120 --> 00:29:13,240
Speaker 4: the United States forces, right, And yeah, I think it's

557
00:29:13,480 --> 00:29:17,560
Speaker 4: it's the same, it's the same motivating force. The cultures

558
00:29:17,560 --> 00:29:21,040
Speaker 4: are remarkably or were remarkably similar. So that was like

559
00:29:21,080 --> 00:29:23,720
Speaker 4: the only thing I felt comfortable working. I mean, as

560
00:29:23,760 --> 00:29:26,440
Speaker 4: a guileless American who just had my I would just

561
00:29:26,560 --> 00:29:30,480
Speaker 4: have my my, my posterior handed to me in any

562
00:29:30,560 --> 00:29:34,640
Speaker 4: kind of corporate setting except in the Internet, where you know,

563
00:29:34,880 --> 00:29:38,960
Speaker 4: the same kind of Silicon Valley egalitarianism and that kind

564
00:29:39,000 --> 00:29:41,720
Speaker 4: of enterprise culture prevailed. So that was like one of

565
00:29:41,720 --> 00:29:45,200
Speaker 4: the only safe places for people who you know, were

566
00:29:45,280 --> 00:29:48,200
Speaker 4: clueless like me. Since you mentioned so, I think they're

567
00:29:48,240 --> 00:29:49,280
Speaker 4: the same. I think they're the same.

568
00:29:49,680 --> 00:29:53,240
Speaker 3: Since you mentioned culture, can I ask a slightly random question,

569
00:29:53,440 --> 00:29:55,520
Speaker 3: but I think I think you're a good person to

570
00:29:55,640 --> 00:29:59,320
Speaker 3: ask about it, given your background as a musician. But

571
00:29:59,720 --> 00:30:04,239
Speaker 3: China kah has been very successful in exporting technology, so

572
00:30:04,480 --> 00:30:08,880
Speaker 3: you know, whether it's byd cars or TikTok or whatever,

573
00:30:08,880 --> 00:30:10,960
Speaker 3: I think we can all agree that it's come from

574
00:30:11,040 --> 00:30:15,560
Speaker 3: nowhere basically and is now certainly a major player. Meanwhile,

575
00:30:15,920 --> 00:30:21,120
Speaker 3: in sort of pop cultural exports, the lack of Chinese

576
00:30:21,200 --> 00:30:24,520
Speaker 3: pop culture exports has been a sort of long running

577
00:30:24,680 --> 00:30:28,160
Speaker 3: discussion point now, and if you compare China to a

578
00:30:28,200 --> 00:30:32,960
Speaker 3: place like Japan where there's jpop, or Korea where there's

579
00:30:33,120 --> 00:30:36,400
Speaker 3: k pop, it does feel like something is kind of

580
00:30:36,960 --> 00:30:39,520
Speaker 3: lacking there. I guess my question is is it fair

581
00:30:39,560 --> 00:30:43,600
Speaker 3: to say that China has fallen down on cultural exports

582
00:30:43,760 --> 00:30:47,160
Speaker 3: at least compared to technology, and then b why is that?

583
00:30:48,440 --> 00:30:50,600
Speaker 4: Yeah, No, that's a great question. It's something I've pondered

584
00:30:50,640 --> 00:30:52,240
Speaker 4: for a very long time too. I mean, I think

585
00:30:52,560 --> 00:30:56,880
Speaker 4: there's no arguing that China's got a gigantic gap. It's

586
00:30:56,920 --> 00:30:59,239
Speaker 4: not punching at its weight. But let's figure out how

587
00:30:59,240 --> 00:31:01,680
Speaker 4: we calculate that way. Because you know, when you look

588
00:31:01,720 --> 00:31:04,040
Speaker 4: at when did we all start eating sushi and watching

589
00:31:04,080 --> 00:31:07,239
Speaker 4: the Cure Kurosawa films like in the eighties? Right, So

590
00:31:07,400 --> 00:31:10,400
Speaker 4: that's when Japan's soft power starts to really really peak, right,

591
00:31:10,400 --> 00:31:12,960
Speaker 4: we all start driving Japanese cars. This is at a

592
00:31:13,000 --> 00:31:17,120
Speaker 4: point where Japan's per captain GDP was about seventy five

593
00:31:17,200 --> 00:31:19,840
Speaker 4: percent of what the United States was at that time,

594
00:31:20,480 --> 00:31:24,320
Speaker 4: and Koreas similarly, around the time where we start all

595
00:31:24,360 --> 00:31:26,959
Speaker 4: listening to Gongnam style and then you know, all our

596
00:31:27,080 --> 00:31:30,400
Speaker 4: daughters or whatever posters of bts on their walls, as

597
00:31:30,480 --> 00:31:33,760
Speaker 4: mon still does. This was at a time when South

598
00:31:33,840 --> 00:31:37,480
Speaker 4: Korea's per capita GDP it's like seventy two, seventy three

599
00:31:37,520 --> 00:31:41,160
Speaker 4: percent of America's GDP per capita. I think that has

600
00:31:41,160 --> 00:31:43,280
Speaker 4: something to do with it. I think that per capita

601
00:31:43,360 --> 00:31:46,200
Speaker 4: GDP kind of shows what a nation's priorities are going

602
00:31:46,240 --> 00:31:48,080
Speaker 4: to be. When it's low, it's still going to be

603
00:31:48,120 --> 00:31:50,400
Speaker 4: in that stage of we've got to work really, really hard.

604
00:31:50,440 --> 00:31:52,840
Speaker 4: Just this is why I mean in China. I mean,

605
00:31:52,880 --> 00:31:56,200
Speaker 4: I play music, so I'm constantly frustrated by the fact

606
00:31:56,200 --> 00:31:59,400
Speaker 4: that for most people, for the overwhelming number of people,

607
00:32:00,160 --> 00:32:02,440
Speaker 4: it is just entertainment. There's nobody who thinks of it

608
00:32:02,480 --> 00:32:05,360
Speaker 4: as an art form anymore, I mean, or if there

609
00:32:05,360 --> 00:32:07,320
Speaker 4: ever was. I think that it has to do with that.

610
00:32:07,960 --> 00:32:10,520
Speaker 4: But I think there's also and it's obvious to me

611
00:32:10,840 --> 00:32:13,960
Speaker 4: that the first rule of soft power should just be

612
00:32:14,080 --> 00:32:18,920
Speaker 4: don't talk about soft power. That China's government's obsession with

613
00:32:19,040 --> 00:32:21,640
Speaker 4: trying to create soft power is one of the big

614
00:32:21,680 --> 00:32:24,920
Speaker 4: impediments to it actually having soft power. Again, let me

615
00:32:25,000 --> 00:32:28,200
Speaker 4: let me be very very clear, it has plenty of

616
00:32:28,240 --> 00:32:30,800
Speaker 4: soft power in the developing world. I mean, if you

617
00:32:30,840 --> 00:32:33,560
Speaker 4: look in Southeast Asia, a lot of people are watching

618
00:32:33,560 --> 00:32:37,000
Speaker 4: these insufferable costume dramas about you know, the palace intrigue

619
00:32:37,000 --> 00:32:37,600
Speaker 4: in the Qing.

620
00:32:37,480 --> 00:32:43,960
Speaker 3: Dynasty ones, a bunch of them nowadays.

621
00:32:44,480 --> 00:32:46,760
Speaker 4: Yeah, yeah, I guess the Thai ones are really popular

622
00:32:46,800 --> 00:32:47,280
Speaker 4: these days.

623
00:32:48,040 --> 00:32:52,080
Speaker 2: That's interesting, so that that's actually popular content in Southeast Asia.

624
00:32:52,280 --> 00:32:55,760
Speaker 4: Yeah, it's huge. It's absolutely huge all over Southeast Asia,

625
00:32:55,840 --> 00:32:58,440
Speaker 4: in Indonesia and Malaysia and Thailand and the Philippines, even

626
00:32:58,520 --> 00:33:02,120
Speaker 4: in Vietnam anyway where in Southeast Asia, Ego, there's a

627
00:33:02,200 --> 00:33:05,160
Speaker 4: lot of this stuff. But yeah, but no, to your point,

628
00:33:05,200 --> 00:33:08,520
Speaker 4: in Europe and the United States, no, it's not really registering.

629
00:33:08,600 --> 00:33:10,840
Speaker 4: And I think there's that's one of the reasons. But

630
00:33:10,880 --> 00:33:14,960
Speaker 4: I think ultimately the reason is, well, soft power tends

631
00:33:15,000 --> 00:33:17,760
Speaker 4: to be created on the periphery. It creeps in through

632
00:33:17,760 --> 00:33:19,920
Speaker 4: the cracks, you know. It's a grassroots thing. It's not

633
00:33:19,960 --> 00:33:22,680
Speaker 4: supposed to be created top down. And yeah, you can

634
00:33:22,760 --> 00:33:24,640
Speaker 4: look at South Korea and say there was a lot

635
00:33:24,680 --> 00:33:27,680
Speaker 4: of government, you know, and a lot of these gigantic

636
00:33:28,200 --> 00:33:31,840
Speaker 4: conglomerates who created Korean soft power boy bands and stuff,

637
00:33:31,880 --> 00:33:35,400
Speaker 4: But that may be sort of the anomaly Kaiser.

638
00:33:35,440 --> 00:33:36,800
Speaker 2: We could go on a long time. There are just

639
00:33:36,840 --> 00:33:39,040
Speaker 2: so many questions, but I think that's a good spot

640
00:33:39,080 --> 00:33:41,760
Speaker 2: to ramp it. Thank you so much for coming on, Odlocks.

641
00:33:41,760 --> 00:33:43,320
Speaker 2: We'll have to have you back on again soon.

642
00:33:44,200 --> 00:33:45,720
Speaker 4: I would love to come back on. Thank you so

643
00:33:45,800 --> 00:33:46,960
Speaker 4: much for having me than you.

644
00:33:48,040 --> 00:33:48,560
Speaker 3: That was fun.

645
00:34:01,160 --> 00:34:03,200
Speaker 2: I thought it was really interesting. I like the point

646
00:34:03,240 --> 00:34:06,600
Speaker 2: about everyone getting the message and then everyone doing their

647
00:34:06,640 --> 00:34:10,280
Speaker 2: own thing to sort of prove that they're getting a message.

648
00:34:10,440 --> 00:34:13,400
Speaker 2: And we talked about this on our episode with Sam Damico,

649
00:34:13,680 --> 00:34:17,040
Speaker 2: the Impulse Labs guy. This idea of Okay, there's some priority,

650
00:34:17,080 --> 00:34:19,799
Speaker 2: and then all the different provinces compete on how well

651
00:34:19,880 --> 00:34:22,919
Speaker 2: they're doing and fulfilling their priority. It makes a lot

652
00:34:22,920 --> 00:34:26,480
Speaker 2: of sense that that's a very broadly applicable lesson to

653
00:34:26,520 --> 00:34:28,960
Speaker 2: like different sectors and different parts of the economy.

654
00:34:29,080 --> 00:34:32,319
Speaker 3: Totally, I really think the messaging is kind of key here. Yeah,

655
00:34:32,600 --> 00:34:36,759
Speaker 3: the message is very clear. It's if you choose this

656
00:34:37,120 --> 00:34:40,640
Speaker 3: route that the Chinese government is encouraging you to take,

657
00:34:40,719 --> 00:34:42,480
Speaker 3: your life is going to be a lot easier than

658
00:34:42,840 --> 00:34:44,960
Speaker 3: if you take another route. And I think that's kind

659
00:34:44,960 --> 00:34:48,640
Speaker 3: of different to the way industrial policy, I guess works

660
00:34:49,120 --> 00:34:53,360
Speaker 3: in the States, where you know, even if a president

661
00:34:53,640 --> 00:34:56,840
Speaker 3: stands up and says we want a lot more semiconductors

662
00:34:56,960 --> 00:34:59,759
Speaker 3: in the US, there's still a lot of bureaucracy, a

663
00:34:59,800 --> 00:35:04,240
Speaker 3: lot of uncertainty, a lot of paperwork attached to getting

664
00:35:04,280 --> 00:35:07,560
Speaker 3: support from the government for a semiconductor project. And so

665
00:35:07,680 --> 00:35:12,400
Speaker 3: I think that uncertainty like still feeds into the US certainly.

666
00:35:13,040 --> 00:35:17,560
Speaker 2: Yeah. Prisident Trump recently gave a speech at University of Alabama,

667
00:35:17,600 --> 00:35:20,239
Speaker 2: I think it was their graduation ceremony, and he said

668
00:35:20,239 --> 00:35:22,120
Speaker 2: that he was like, to the business students here, don't

669
00:35:22,160 --> 00:35:25,480
Speaker 2: just think about your portfolios, think about your country. And

670
00:35:25,760 --> 00:35:27,880
Speaker 2: I like that message, but I don't know, like, what

671
00:35:28,000 --> 00:35:34,480
Speaker 2: are the levers that actually get towards that. And so oh, also, Tracey,

672
00:35:34,520 --> 00:35:35,040
Speaker 2: I have a take?

673
00:35:35,440 --> 00:35:36,839
Speaker 3: Oh oh really, just one?

674
00:35:37,000 --> 00:35:37,919
Speaker 2: Yeah, just one take?

675
00:35:38,040 --> 00:35:38,800
Speaker 3: Okay, hit me.

676
00:35:38,960 --> 00:35:41,680
Speaker 2: This is something I've been workshopping, and so I'm leaving

677
00:35:41,719 --> 00:35:42,440
Speaker 2: it to the end.

678
00:35:42,640 --> 00:35:45,000
Speaker 3: I can't believe you're not tweeting it. Are you going

679
00:35:45,080 --> 00:35:47,120
Speaker 3: to tweet it? Are you workshopping for a tweet?

680
00:35:47,160 --> 00:35:49,560
Speaker 2: I'm workshopping it for you here. I figured a lot

681
00:35:49,560 --> 00:35:51,480
Speaker 2: of people aren't listening by this point, so I can

682
00:35:51,640 --> 00:35:53,760
Speaker 2: drop it here, which is I'm kind of coming around

683
00:35:53,800 --> 00:35:57,880
Speaker 2: to this idea that like complex financial products, that they

684
00:35:57,920 --> 00:35:59,000
Speaker 2: have a bad rep.

685
00:35:59,480 --> 00:36:01,160
Speaker 3: They have a bad they are bad.

686
00:36:01,400 --> 00:36:03,799
Speaker 2: Know that they have a bad rep. That actually, this

687
00:36:03,920 --> 00:36:06,360
Speaker 2: is like a sort of contra to a lot of

688
00:36:06,400 --> 00:36:10,520
Speaker 2: popular thing. It's like, oh, complex semiconductor is good, complex

689
00:36:10,600 --> 00:36:15,319
Speaker 2: financial products bad. I'm just throwing it out there that

690
00:36:15,440 --> 00:36:19,080
Speaker 2: maybe we should talk more about why people get paid

691
00:36:19,120 --> 00:36:22,760
Speaker 2: so much to design complex financial products in a market

692
00:36:22,800 --> 00:36:25,560
Speaker 2: economy and why they're so highly valued. I'm just throwing

693
00:36:25,560 --> 00:36:26,080
Speaker 2: it out there.

694
00:36:26,520 --> 00:36:28,400
Speaker 3: We should do an episode on Ray Dalio and the

695
00:36:28,480 --> 00:36:29,919
Speaker 3: chicken nugget again.

696
00:36:29,680 --> 00:36:33,120
Speaker 2: That's exactly right. That's exactly right. Derivatives gave us the

697
00:36:33,160 --> 00:36:36,840
Speaker 2: chicken nugget. Anyway, talking to Kaiser about this just reminded

698
00:36:36,880 --> 00:36:38,680
Speaker 2: me of that that I want to explore this idea,

699
00:36:38,880 --> 00:36:41,279
Speaker 2: and I'm saying it here now kind of as a

700
00:36:41,320 --> 00:36:44,840
Speaker 2: remind myself, reminder of myself to think about this one.

701
00:36:44,960 --> 00:36:49,319
Speaker 3: Chicken nuggets is the ultimate example of American technological and

702
00:36:49,880 --> 00:36:51,719
Speaker 3: financial supremacy.

703
00:36:52,120 --> 00:36:55,680
Speaker 2: We do great, complicated things in the United States, but

704
00:36:55,800 --> 00:36:59,400
Speaker 2: because we have this bias against finance as being extractive

705
00:36:59,800 --> 00:37:03,799
Speaker 2: or or something, I think we don't sufficiently recognize where

706
00:37:03,800 --> 00:37:04,800
Speaker 2: we're at the cutting edge.

707
00:37:04,840 --> 00:37:07,920
Speaker 3: It is true that in China finance and industry are

708
00:37:07,960 --> 00:37:11,200
Speaker 3: often working hand in hand. And if the government says that,

709
00:37:11,600 --> 00:37:14,720
Speaker 3: for instance, hardware is now very important, you will see

710
00:37:15,000 --> 00:37:17,600
Speaker 3: the banks start to loosen up on lending standards and

711
00:37:17,640 --> 00:37:20,640
Speaker 3: things like that. So a valid point, Joe.

712
00:37:20,400 --> 00:37:23,480
Speaker 2: What is a supply chain but a payment chain in reverse?

713
00:37:24,160 --> 00:37:25,640
Speaker 3: That's Sultan Posar's line.

714
00:37:25,680 --> 00:37:28,560
Speaker 2: Oh he said, stole that, Yeah, I stole it from Sultan.

715
00:37:28,640 --> 00:37:31,160
Speaker 2: All right, that's right, Yeah, credit to Sultan. But you know,

716
00:37:31,239 --> 00:37:32,600
Speaker 2: maybe we should think about this a little more.

717
00:37:32,719 --> 00:37:34,239
Speaker 3: Yeah, all right, shall we leave it there?

718
00:37:34,400 --> 00:37:35,080
Speaker 2: Let's leave it there.

719
00:37:35,280 --> 00:37:37,640
Speaker 3: This has been another episode of the Odd Lots Podcast.

720
00:37:37,760 --> 00:37:40,920
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway and.

721
00:37:40,880 --> 00:37:43,719
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart.

722
00:37:43,960 --> 00:37:46,480
Speaker 2: Check out our guest, Kaiser Quote. He's at Kaiser Quo,

723
00:37:46,640 --> 00:37:49,839
Speaker 2: and check out the Cineca podcast and substack. Follow our

724
00:37:49,840 --> 00:37:53,160
Speaker 2: producers Kerman Rodriguez at Kerman Ermann, dash Ol Bennett at

725
00:37:53,200 --> 00:37:56,840
Speaker 2: Dashbot and Kale Brooks at Kale Brooks. For more Oddlots content,

726
00:37:56,840 --> 00:37:59,360
Speaker 2: go to Bloomberg dot com slash Odd Lots where we

727
00:37:59,400 --> 00:38:01,960
Speaker 2: have a daily newsletter and all of our episodes, and

728
00:38:02,040 --> 00:38:03,960
Speaker 2: you can chaut about all of these topics twenty four

729
00:38:04,000 --> 00:38:07,880
Speaker 2: to seven in our discord discord dot gg slash odlines.

730
00:38:08,200 --> 00:38:10,560
Speaker 3: And if you enjoy Odd Lots, if you like it

731
00:38:10,600 --> 00:38:13,080
Speaker 3: when we check in on Chinese technology and how it

732
00:38:13,280 --> 00:38:16,160
Speaker 3: actually develops, then please leave us a positive review on

733
00:38:16,200 --> 00:38:19,239
Speaker 3: your favorite podcast platform. And remember, if you are a

734
00:38:19,320 --> 00:38:22,360
Speaker 3: Bloomberg subscriber, you can listen to all of our episodes

735
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736
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Speaker 3: the Bloomberg channel on Apple Podcasts and follow the instructions there.

737
00:38:29,160 --> 00:38:30,000
Speaker 3: Thanks for listening

738
00:39:00,040 --> 00:39:00,440
Speaker 1: And