WEBVTT - Why the World Keeps Getting Shocked by China's Technological Progress 0:00:02.480 --> 0:00:16.520 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:18.040 --> 0:00:21.960 Hello and welcome to another episode of the Odd Lots podcast. 0:00:22.040 --> 0:00:24.360 I'm Joe Wisenthal and I'm Tracy Alloway. 0:00:24.640 --> 0:00:28.200 Tracy, we talk a lot about the tech competition between 0:00:28.360 --> 0:00:30.840 the US and China, but I still think we talked 0:00:30.840 --> 0:00:32.800 about it in sort of broad strokes. We talked about 0:00:32.800 --> 0:00:35.560 some of the policies obviously made in twenty twenty five, 0:00:35.840 --> 0:00:40.720 but actually how the process of tech innovation in China 0:00:41.000 --> 0:00:44.240 still seems like important. There's more to learn about there. 0:00:44.440 --> 0:00:47.520 I totally agree. And actually we have a really good 0:00:47.520 --> 0:00:51.440 example recently in the form of deep Seek, right, and 0:00:51.479 --> 0:00:54.680 this thing that people acted like it came out of nowhere, 0:00:55.000 --> 0:00:57.840 but actually a lot of the papers had been published 0:00:57.880 --> 0:01:01.000 over the course of months, but it seemed to surper right. 0:01:01.240 --> 0:01:04.600 I don't know if it's true, you know, the story that, oh, 0:01:04.720 --> 0:01:07.160 is just the side project of a quantitative hedge fund, 0:01:07.520 --> 0:01:10.640 Like that's such a good story. I'm not entirely sure 0:01:10.640 --> 0:01:12.560 if that's true. And they made it so like, oh yeah, 0:01:12.760 --> 0:01:14.800 well they were doing this quant fun they built deep 0:01:14.840 --> 0:01:17.280 Seek on the side, like such a it's such an 0:01:17.319 --> 0:01:18.119 alluring story. 0:01:18.319 --> 0:01:21.319 Well, not just a quant hedge fund. Isn't the story 0:01:21.440 --> 0:01:25.600 supposedly that the founder decided to go into AI after 0:01:25.800 --> 0:01:29.279 she Shinping was kind of complaining, Yeah, how much talent 0:01:29.319 --> 0:01:32.720 and resources is being wasted on finance in various ways. 0:01:33.120 --> 0:01:33.880 Yeah, heard that. 0:01:34.040 --> 0:01:37.200 People like these are like great stories, right, and of 0:01:37.240 --> 0:01:39.160 course there is a lot of truth to them in 0:01:39.240 --> 0:01:42.160 the particularly in the broad sense that we know that 0:01:42.280 --> 0:01:44.840 and we talked about this at the time. Several years 0:01:44.840 --> 0:01:48.720 ago there was this sort of announced hard pivot away 0:01:48.920 --> 0:01:52.000 from the sort of like consumer internet tech and they 0:01:52.040 --> 0:01:54.040 sort of had their legs cut out from under them 0:01:54.320 --> 0:01:59.320 towards these more like serious capital t tech hardware, hardware, 0:02:00.360 --> 0:02:03.400 things like that, things that have more stakes than say 0:02:03.600 --> 0:02:06.720 social networking or something like that. So like, how do 0:02:06.720 --> 0:02:07.440 you actually do that? 0:02:07.480 --> 0:02:07.640 Though? 0:02:07.680 --> 0:02:11.440 How do you actually like direct talent in certain ways? 0:02:11.480 --> 0:02:13.919 You know, I think that if President Trump came out 0:02:13.919 --> 0:02:16.200 tomorrow and said, we want people to and you guys 0:02:16.200 --> 0:02:18.120 actually talked about this, but then we want to do 0:02:18.120 --> 0:02:20.720 more hard tech, I don't think there's like a real easy, 0:02:20.760 --> 0:02:25.799 straightforward mechanism and how do you transmit certain ambitions into 0:02:25.880 --> 0:02:28.560 the actual landscape. I think there's more to be learned 0:02:28.560 --> 0:02:29.120 on that well. 0:02:29.160 --> 0:02:32.680 I think also We in America are very used to 0:02:32.680 --> 0:02:36.920 thinking about technology as this like very creative process and 0:02:36.960 --> 0:02:40.519 the outcome of Jeff Bezos working in his garage, Yeah, 0:02:40.720 --> 0:02:44.040 something like that, And it's hard to imagine often the 0:02:44.120 --> 0:02:47.800 same environment existing in China. I think that's just like 0:02:47.880 --> 0:02:51.200 a cultural difference perhaps between Americans and Chinese. 0:02:51.200 --> 0:02:53.560 So we should talk about it totally. Well, I'm really 0:02:53.600 --> 0:02:55.919 excited to say we're gonna be talking to one of 0:02:55.919 --> 0:02:58.480 the best China watchers there is who has a lot 0:02:58.480 --> 0:03:01.360 of interesting thoughts on this time topic, someone we've never 0:03:01.440 --> 0:03:04.000 had on the podcast. We're going to be speaking with 0:03:04.120 --> 0:03:07.320 Kaiser quote. He is the host of the Seneca Podcast, 0:03:07.560 --> 0:03:09.160 which has been around since twenty ten. 0:03:09.440 --> 0:03:09.720 Wow. 0:03:09.919 --> 0:03:12.000 Yeah, we've been doing this for about little less than 0:03:12.000 --> 0:03:16.040 ten years, so it's very impressive this sort of longevity. 0:03:16.160 --> 0:03:18.240 Someone who spent a lot of time in China, splits 0:03:18.240 --> 0:03:20.200 his time between the US and China, lived there for 0:03:20.320 --> 0:03:24.400 several years. Kaiser, thank you so much for coming on Outlocks. 0:03:24.800 --> 0:03:27.120 Hi Joe, and Hey Tracy, This is a huge honor 0:03:27.120 --> 0:03:28.799 for me. Thanks, thanks so much for having me. 0:03:29.120 --> 0:03:31.760 Thank you for coming on. What is the Seneca podcast? 0:03:31.919 --> 0:03:35.320 What has been your project in the last fifteen years. 0:03:36.040 --> 0:03:39.600 Yeah, So Sinica is an hour longer, sometimes much longer, 0:03:39.800 --> 0:03:44.480 interview format show. We bring on academics and policymakers occasionally. 0:03:44.480 --> 0:03:46.880 I've had a number of the former assistant Secretaries of State, 0:03:46.920 --> 0:03:49.720 Free Stasia Pacific on. I've had no ambassadors and so 0:03:49.760 --> 0:03:53.080 forth on. But it's changed the mission. It initially started 0:03:53.080 --> 0:03:56.280 off as being sort of more here's what's in the news, 0:03:56.320 --> 0:03:57.960 and here's a couple of people who can talk about 0:03:58.000 --> 0:04:01.880 it intelligently having to do with China. Since twenty sixteen, 0:04:01.880 --> 0:04:04.400 when I moved to the States, the focus has really 0:04:04.400 --> 0:04:08.240 been on US China relations, and it's got more American 0:04:08.280 --> 0:04:10.800 guests on than previously. We're but we tuckle everything under 0:04:10.800 --> 0:04:16.479 the sun. I mean US China relations, China, India, China, Russia, China, India, China, 0:04:16.520 --> 0:04:20.279 what have you, and the Chinese macroeconomy. Technology. Lots on 0:04:20.360 --> 0:04:23.680 technology and culture. But the idea is that it's it's 0:04:23.680 --> 0:04:26.120 supposed to look at the way that we think and 0:04:26.320 --> 0:04:29.200 talk about China. Now it's really evolved into something with 0:04:29.440 --> 0:04:31.240 which I think has a longer shelf life. 0:04:31.720 --> 0:04:34.680 Wait, why did you decide to start it? Because you 0:04:34.760 --> 0:04:37.440 were in a band, right, that was your main gig. 0:04:38.320 --> 0:04:41.680 Yeah, that's correct. Something for some reason, everyone knows about me. 0:04:42.080 --> 0:04:45.720 I mean I transitioned. I went out. I left that 0:04:45.839 --> 0:04:50.080 band in nineteen ninety nine, and like other people who 0:04:50.080 --> 0:04:51.760 didn't have many marketable skills, I. 0:04:51.760 --> 0:04:53.240 Went into podcasting. 0:04:54.600 --> 0:04:56.840 Well not right away. I mean I worked for internet 0:04:56.839 --> 0:04:59.040 companies for a number of years, and I worked as 0:04:59.040 --> 0:05:02.040 a reporter for quite number of years, and then in 0:05:02.320 --> 0:05:03.960 twenty ten it was just sort of on a lark. 0:05:04.279 --> 0:05:06.600 I was about to start a job at bay Do 0:05:07.120 --> 0:05:10.320 as they're head of international comms, and a very good 0:05:10.320 --> 0:05:13.159 friend of mine in Beijing. We've gotten conversation about what 0:05:13.240 --> 0:05:15.760 podcasts we're listening to, and I, you know, I said, oh, 0:05:15.800 --> 0:05:18.200 you know, the usual, this American Life and Radio Lab 0:05:18.200 --> 0:05:20.400 and whatnot, and he had a few, and then we 0:05:20.480 --> 0:05:22.920 just sort of said, why don't we start a podcast. 0:05:23.000 --> 0:05:25.839 We're both talkers, we both know everybody. Let's just do 0:05:26.000 --> 0:05:28.520 one and see what happens. And we did and it 0:05:28.560 --> 0:05:31.040 took off. It did pretty well. We got acquired in 0:05:31.160 --> 0:05:33.839 twenty sixteen, right around the time I was moving to 0:05:33.880 --> 0:05:36.760 the States, and the company that bought us folded in 0:05:36.800 --> 0:05:39.680 twenty twenty three, and I just sort of struck out 0:05:39.680 --> 0:05:43.000 on my own doing a sub stack, and I've stuck 0:05:43.040 --> 0:05:44.960 with it, managed to find a little bit of support 0:05:45.200 --> 0:05:49.680 and those few and hopefully after this more subscribers. But 0:05:49.760 --> 0:05:52.000 we're continuing to put them out every week. It's just 0:05:52.080 --> 0:05:54.320 me solo, but it's a group effort. 0:05:54.520 --> 0:05:56.640 I'm in a band. I'm trying to go the other direction. 0:05:57.040 --> 0:05:59.320 I have a country music band, and maybe one day 0:05:59.360 --> 0:06:02.640 I'll leave casting. No, no, no, I've never got to 0:06:02.800 --> 0:06:04.119 leave podcasting behind. 0:06:04.279 --> 0:06:06.479 You know, I'm actually not going to leave podcasting, but 0:06:06.560 --> 0:06:09.200 I've gotten back into my old band Reform when I 0:06:09.240 --> 0:06:11.640 was back in China recently. So are you on Spotify 0:06:11.640 --> 0:06:13.880 as of this summer? We are. Yeah, you can look 0:06:13.960 --> 0:06:17.000 up Twins show C h U and Qiu. You've got 0:06:17.040 --> 0:06:19.599 to put a space in between them for okays. It's 0:06:19.640 --> 0:06:20.920 springing autumn in English. 0:06:21.000 --> 0:06:24.000 I'm going to start with like a really super broad 0:06:24.080 --> 0:06:27.080 based question that maybe it's not even really that it's 0:06:27.120 --> 0:06:30.440 probably a full hour long or too our long episode, 0:06:30.440 --> 0:06:34.000 but in your years of covering China from a journalistic 0:06:34.080 --> 0:06:36.760 perspective or at least from a sort of conversational perspective, 0:06:37.120 --> 0:06:41.120 and watching American media or American pundit to talk about China, 0:06:41.320 --> 0:06:44.479 is there like a persistent blind spot or a thing 0:06:44.520 --> 0:06:47.760 that stands out to you as something that people talk 0:06:47.800 --> 0:06:51.520 about China that does not accord with your experience of 0:06:51.800 --> 0:06:54.200 having lived there and having reported on it yourself. 0:06:55.000 --> 0:06:56.640 Are There's so many I don't even know where to 0:06:56.600 --> 0:06:58.960 start one that I would usually focus on. I mean, 0:06:59.080 --> 0:07:02.040 and it's a whole cluster of issues that are related 0:07:02.040 --> 0:07:04.920 to this. But I think that people aren't mindful of 0:07:05.040 --> 0:07:09.760 just how compressed and how rapid China's transformation has been, 0:07:09.840 --> 0:07:12.720 what has happened in the course of one working lifetime. 0:07:12.760 --> 0:07:15.000 I mean, I like to tell people that if you 0:07:15.000 --> 0:07:19.200 can imagine graduating junior high or high school in nineteen 0:07:19.240 --> 0:07:22.240 seventy nine on the eve of reform and opening, and 0:07:22.280 --> 0:07:25.280 then forty years later, at the end of your life, 0:07:25.560 --> 0:07:27.840 the end of your working life, you're thinking about retiring, 0:07:28.120 --> 0:07:31.240 and you've seen the per capitaal GDP go from about 0:07:31.240 --> 0:07:33.400 one hundred and seventy five dollars at the beginning of 0:07:33.400 --> 0:07:37.680 your working life till thirteen thousand dollars. Now, that transformation 0:07:37.800 --> 0:07:40.240 is just profound and it's just so quick. So I 0:07:40.240 --> 0:07:42.720 think that what people get wrong is that they don't 0:07:42.760 --> 0:07:48.400 see that the hardware that's visibly advanced has done so, 0:07:48.600 --> 0:07:51.720 just at a much faster pace than the software. People 0:07:51.920 --> 0:07:54.440 don't change overnight. I mean, I like to that movie 0:07:54.600 --> 0:07:57.560 I don't know, Joe, if you and Tracy have seen Big. 0:07:57.440 --> 0:08:01.120 With Ti Hang with My kids, keep going, yeah. 0:08:00.960 --> 0:08:04.040 Yeah, great movie. It's actually aged well. But you know, 0:08:04.320 --> 0:08:06.880 Tom Hanks makes a wish and goes to bed at 0:08:06.880 --> 0:08:08.720 what he's like eleven, and he wakes up and he's 0:08:08.720 --> 0:08:11.040 in his thirties, right, And that's kind of China, right. 0:08:11.400 --> 0:08:14.280 It's like the mind is still out of that eleven 0:08:14.360 --> 0:08:16.080 year old in a lot of ways, but it's in 0:08:16.120 --> 0:08:18.440 the body with thirty. So we look at this fully 0:08:18.480 --> 0:08:22.520 grown adult and expect it to behave as a fully 0:08:22.560 --> 0:08:24.040 grown adult. 0:08:24.360 --> 0:08:27.240 That's what people get wrong, you know how I measure 0:08:27.600 --> 0:08:31.400 China's technological progress go on. So I remember in the 0:08:31.400 --> 0:08:34.480 early two thousands, I was on a trip in the 0:08:34.520 --> 0:08:39.360 countryside and I experienced one of the worst toilets I've 0:08:39.400 --> 0:08:42.440 ever experienced in my entire life, like basically just a 0:08:42.480 --> 0:08:45.120 hole in the ground. And then I went back in 0:08:45.480 --> 0:08:49.000 twenty nineteen to Beijing and I went to one of 0:08:49.040 --> 0:08:52.560 the nicest bathrooms that I've ever been in in like 0:08:52.679 --> 0:08:56.480 a luxury shopping mall, and I thought, wow, things have changed. 0:08:57.640 --> 0:08:59.959 Yeah, Yeah, that's a good measure. It's a good propit. 0:09:00.240 --> 0:09:02.680 Yeah, I should do that all the time. Okay, So 0:09:03.679 --> 0:09:06.760 I guess I'll just jump into the technology aspect of this. 0:09:06.880 --> 0:09:10.240 But does technology come from a different place in China 0:09:10.400 --> 0:09:13.560 versus the US? Kind of getting back to the intro, 0:09:14.120 --> 0:09:17.760 there's this sense in America that technology is the product 0:09:17.840 --> 0:09:22.120 of freedom and creativity, and you have the ability to 0:09:22.440 --> 0:09:25.640 start a new company in your garage, whereas in China 0:09:26.280 --> 0:09:29.920 maybe there's a different sense of how tech actually gets started. 0:09:31.080 --> 0:09:34.120 Yeah, so there's that American myth about the loan genius 0:09:34.200 --> 0:09:37.800 toiling inbscurity in his garage, either in Menlo Park, New 0:09:37.880 --> 0:09:41.320 Jersey or Menlo Park, California. Right. I think there's some 0:09:41.360 --> 0:09:44.040 of that's definitely that mythology in China, but I think 0:09:44.120 --> 0:09:47.920 the reality is very, very different. I think China does 0:09:48.000 --> 0:09:50.679 place a premium on that kind of ex nilo kind 0:09:50.679 --> 0:09:54.079 of from scratch zero to one innovation, but I think 0:09:54.080 --> 0:09:56.679 it places more of a premium on the scaling up 0:09:56.800 --> 0:10:00.880 of technology and the diffusion of technology in a way 0:10:00.880 --> 0:10:04.800 that I think the American mythology has sort of blinded 0:10:04.880 --> 0:10:07.960 us to Yeah, we're constantly caught off guard by Chinese 0:10:08.040 --> 0:10:09.280 technological advances. 0:10:09.480 --> 0:10:09.720 Yeah. 0:10:10.160 --> 0:10:13.240 I think we keep seeing this tech momentum despite all 0:10:13.240 --> 0:10:16.280 the decoupling, despite the chip bands, in spite of all 0:10:16.320 --> 0:10:20.480 the economic headwinds that China is obviously facing. And I 0:10:20.480 --> 0:10:24.160 think that the reasons are pretty deep. They're actually societal 0:10:24.280 --> 0:10:26.720 and even cultural, so that I think that gets to 0:10:27.120 --> 0:10:29.920 part of the way that technology is conceived of in China. 0:10:30.440 --> 0:10:34.439 You'll find pockets, of course, in America where people are 0:10:34.520 --> 0:10:38.640 still really really techno optimistic. There's still very solutionists, they're 0:10:38.640 --> 0:10:44.080 still very accelerationist, right, but it's incredibly common in China, 0:10:44.160 --> 0:10:48.560 whereas it's only here in pockets. I think American society now, 0:10:48.679 --> 0:10:50.880 and I think the West more broadly has for some 0:10:51.040 --> 0:10:53.960 time now had a fear. If you look at our 0:10:54.000 --> 0:10:56.320 science fiction, if you look at the way technology is 0:10:56.360 --> 0:11:00.319 thought about broadly in society, there's a real anxiety over it. Right. 0:11:01.320 --> 0:11:04.920 Our leading technologists, are leading natural scientists talk all the 0:11:04.960 --> 0:11:08.760 time about the existential threat that AI pose is. I 0:11:08.800 --> 0:11:11.480 don't want to diminish that threat, but I have to 0:11:11.480 --> 0:11:14.520 say that in China, you just do not hear that conversation, 0:11:15.040 --> 0:11:18.720 certainly not nearly as frequently, and not coming from the 0:11:18.800 --> 0:11:22.080 leading technologists themselves. So it's very different. 0:11:22.320 --> 0:11:24.160 Why is it different? You know, I'm thinking about your 0:11:24.200 --> 0:11:27.599 big analogy. Actually I'm going to extend the metaphor a 0:11:27.640 --> 0:11:30.680 little bit too far. But you know, my phone. I 0:11:30.720 --> 0:11:33.600 have a love hate relationship with my phone. I'm on 0:11:33.679 --> 0:11:36.080 it all the time, but I also think it's doing 0:11:36.120 --> 0:11:39.920 significant damage to my mental health. Whereas if I were to, like, 0:11:40.040 --> 0:11:42.400 you know, my daughter wants a phone, and if I 0:11:42.440 --> 0:11:44.200 were to give her one, she would probably be thrilled 0:11:44.240 --> 0:11:45.560 for a long time. I'm not going to let her 0:11:45.600 --> 0:11:47.200 have a phone for a long time, but she would 0:11:47.200 --> 0:11:49.960 be like thrilled, and this is an incredible addition to 0:11:50.040 --> 0:11:52.480 my life that she would be very excited about. Again, 0:11:52.960 --> 0:11:57.400 do people have the same love hate relationships with gadgets 0:11:57.400 --> 0:11:59.200 and new technologies that we seem to have here? 0:12:00.120 --> 0:12:01.600 I mean, there are some people, of course who have 0:12:01.600 --> 0:12:04.559 anxieties over it, but no, I think broadly speaking, you know, 0:12:04.600 --> 0:12:07.520 when I've sat on the sidelines of a soccer game 0:12:07.760 --> 0:12:09.400 watching our kids play, and I'm trying to talk to 0:12:09.440 --> 0:12:12.080 the other parent about how they limit screen time he's 0:12:12.120 --> 0:12:14.400 there scrolling on his device, going, hey, I secon let 0:12:14.400 --> 0:12:16.320 me asker this email. What we're saying just now about 0:12:16.360 --> 0:12:19.800 screen time? What I mean, It's like the question doesn't compute. 0:12:20.559 --> 0:12:23.480 They don't see it as such a threat. I think 0:12:23.480 --> 0:12:25.760 part of that, of course, is because the social media 0:12:25.840 --> 0:12:29.640 environment in China is a lot more sanitized. There isn't 0:12:29.640 --> 0:12:31.400 the threat that Junior is going to be scrolling porn 0:12:31.440 --> 0:12:33.480 all day, right, That's part of it. But I think 0:12:34.320 --> 0:12:37.480 really more to the point is that for these many 0:12:37.559 --> 0:12:42.960 years now, ordinary Chinese people have seen their lives, their 0:12:43.120 --> 0:12:47.640 material lives just improve pretty much in lockstep with the 0:12:47.760 --> 0:12:49.760 quality of the technology they have in their hand or 0:12:49.760 --> 0:12:52.840 in their purse or in their pocket. Right. Their bandwidth 0:12:52.880 --> 0:12:56.000 at home, how fast their network speed is, and how 0:12:56.800 --> 0:13:03.880 powerful their handheld device is basically tracked with their livelihood. Right. 0:13:04.160 --> 0:13:07.720 So there's not that reason for suspicion. Now, that isn't 0:13:07.760 --> 0:13:10.440 to say that everyone in China has experienced It's certainly not, 0:13:10.920 --> 0:13:14.240 but I think for the vast majority, and not just 0:13:14.240 --> 0:13:17.120 of urbanites, but the vast majority of people have seen 0:13:17.120 --> 0:13:17.800 this correlation. 0:13:18.520 --> 0:13:22.880 Wait, but there is some negative feeling towards some technology 0:13:23.160 --> 0:13:26.040 in China and I'm thinking specifically of She shin ping 0:13:26.120 --> 0:13:30.240 and his big crackdown on consumer online tech. And he's 0:13:30.280 --> 0:13:33.240 not a fan of video games precisely because he thinks 0:13:33.240 --> 0:13:36.040 it's a waste of time and kids are staring at 0:13:36.040 --> 0:13:38.959 the screen too much. So there is an element. 0:13:38.600 --> 0:13:41.880 Of that that also tracks with the Chinese parent thing, right, 0:13:43.080 --> 0:13:44.880 they all want us to be really good on computers, 0:13:44.880 --> 0:13:46.800 but not to waste our time playing video games or 0:13:46.880 --> 0:13:49.920 just chatting up people. Yeah, I think you were saying 0:13:49.920 --> 0:13:51.360 it in your intro, and I thought that was really 0:13:51.440 --> 0:13:53.960 interesting how Donald Trump he wouldn't be able to just 0:13:53.960 --> 0:13:57.320 simply order everyone, the physicists to start doing physics and 0:13:57.360 --> 0:14:00.840 not go work for quantitative hedge funds in China, you 0:14:00.920 --> 0:14:04.800 kind of can, It's not. I mean, again, that's an exaggeration. 0:14:05.080 --> 0:14:07.040 There isn't a way. I mean, there are still plenty 0:14:07.040 --> 0:14:09.400 of people who go to school and study the social sciences, 0:14:09.559 --> 0:14:13.080 or who graduate with engineering degrees and then go to 0:14:13.160 --> 0:14:16.160 work for a major social media company or go to 0:14:16.200 --> 0:14:20.160 work designing complicated financial derivatives or whatever. But he doesn't 0:14:20.240 --> 0:14:23.080 like that. He thinks that that's been one of the 0:14:23.080 --> 0:14:26.560 pathologies of the United States is that it's over financialized, 0:14:26.640 --> 0:14:29.480 and that our best and brightest here in the US 0:14:30.040 --> 0:14:33.200 have gone to work for these companies that basically don't 0:14:33.240 --> 0:14:36.320 make anything and just suck at people's time and create 0:14:36.360 --> 0:14:39.760 polarization in the country. So they're worried about that and 0:14:39.880 --> 0:14:44.120 they have more wherewithal to direct people. It's not coercive, though, 0:14:44.200 --> 0:14:47.000 let me be clear about that. They have ways to 0:14:47.040 --> 0:14:49.360 incentivize it. And I think that this again, this is 0:14:49.480 --> 0:14:51.840 part of the popular culture. There's all sorts of reasons. 0:14:51.880 --> 0:14:53.360 I mean, we can start at the top. If you 0:14:53.400 --> 0:14:55.920 look at the composition of the Chinese leadership, I mean, 0:14:55.960 --> 0:14:58.400 what do we have in Congress, Who do we have 0:14:58.520 --> 0:15:02.800 heading major agencies. It's almost all lawyers, people with illegal training. 0:15:02.840 --> 0:15:05.880 And that's good in a country that really prizes rule 0:15:05.920 --> 0:15:08.840 of law, and it's good for many reasons. But in China, 0:15:08.960 --> 0:15:12.000 the analogy is that you look at the senior leadership. 0:15:12.000 --> 0:15:14.320 If you look at you know, who runs the provinces, 0:15:14.360 --> 0:15:16.600 whether the party or the state. You look at who 0:15:16.640 --> 0:15:19.160 are the mayors or the party secretaries of cities of 0:15:19.160 --> 0:15:22.320 a million people or more, and you're almost all going 0:15:22.400 --> 0:15:24.960 to find engineers. They're going to be like seventy eighty 0:15:25.000 --> 0:15:29.720 percent engineers. If the ladder of success, if the people 0:15:29.760 --> 0:15:33.240 who are top it all did one thing in common, 0:15:33.880 --> 0:15:36.120 they did a four year degree in the natural sciences 0:15:36.240 --> 0:15:39.280 or in engineering, there's a good chance that you're going 0:15:39.320 --> 0:15:41.880 to tell your kids to do the same, or your 0:15:41.960 --> 0:15:45.040 kid is the case, maybe yeah, to do the same. 0:15:45.120 --> 0:15:48.120 So I think there's a lot of pressure that way 0:15:48.120 --> 0:15:50.880 in terms just of social mobility, in terms of what 0:15:50.960 --> 0:15:53.040 the perceived path of mobility is. 0:15:53.800 --> 0:15:59.080 By the way, this point about engineers and lawyers or 0:15:59.240 --> 0:16:01.560 regular odd law I guess. Dan Wong has a book 0:16:01.600 --> 0:16:04.320 coming out August twenty sixth, twenty twenty five. It's up 0:16:04.320 --> 0:16:07.160 for sale on Amazon right now. You can pre order 0:16:07.200 --> 0:16:10.280 it about exactly this dimension of a sort of lawyer 0:16:10.360 --> 0:16:13.680 society versusn engineering society. I'm looking forward to reading that. 0:16:13.800 --> 0:16:14.840 I'm looking forward to having this. 0:16:15.480 --> 0:16:17.960 Dan Wong is great. So I interviewed him for this 0:16:18.960 --> 0:16:21.800 Nova documentary that I did called Inside China's Tech Boom, 0:16:22.160 --> 0:16:24.480 and the whole thesis of it was really, I mean, 0:16:24.520 --> 0:16:27.520 in many ways inspired by some of Dan's ideas about 0:16:27.520 --> 0:16:31.440 the importance of process knowledge. How the fact that China 0:16:31.480 --> 0:16:34.000 has not stopped manifacted there was not for a maker's 0:16:34.040 --> 0:16:36.160 movement to China because they didn't need to be one. 0:16:36.240 --> 0:16:38.720 They are always making stuff right the fact that they 0:16:38.760 --> 0:16:41.840 still have all the hardware there. It creates this sort 0:16:41.880 --> 0:16:44.840 of frictionless ecosystem of innovation where you know, if you're 0:16:44.840 --> 0:16:48.320 a guy with an idea for some gadget and you're 0:16:48.320 --> 0:16:52.480 in Shinjin, you can have your designer just send you 0:16:52.520 --> 0:16:54.960 over on we Chat his latest design. You can take 0:16:54.960 --> 0:16:57.400 it to your ODM, which is just a quick bike 0:16:57.480 --> 0:16:59.960 ride down the street. They can have you a proto 0:17:00.120 --> 0:17:02.880 type by the afternoon. You can make some tweaks and iterate, 0:17:02.880 --> 0:17:05.399 and they'll just keep changing the thing over tight and 0:17:05.440 --> 0:17:08.840 it's practically frictionless. And I think that's a huge piece 0:17:08.880 --> 0:17:10.760 of China's innovation success as well. 0:17:11.119 --> 0:17:14.879 But what happens when hesion ping comes out and says, 0:17:14.960 --> 0:17:18.600 you know what, we're not as into social networking anymore, 0:17:18.800 --> 0:17:21.480 We're not as into video games. We really want to 0:17:21.480 --> 0:17:24.800 focus on other areas of hard tech, important tech, something 0:17:24.840 --> 0:17:27.639 like that. What is the process of here is this 0:17:27.800 --> 0:17:31.720 national priority and then the transmission and diffusion of these 0:17:31.760 --> 0:17:35.840 priorities into choices that maybe students make or technologists make. 0:17:36.720 --> 0:17:38.879 That's a great question. I think it's actually one that 0:17:38.880 --> 0:17:44.200 I can answer with three letters KPI. Right. What happens 0:17:44.240 --> 0:17:47.520 when you have these kind of abstract directives the will 0:17:47.520 --> 0:17:49.760 of the leader from on high is that they get 0:17:49.760 --> 0:17:55.320 translated not into specific policies, not right away certainly, but 0:17:55.480 --> 0:17:59.399 into this expectation set you know, from the leadership on 0:17:59.480 --> 0:18:01.800 down that this is how I'm going to score my 0:18:01.840 --> 0:18:03.600 brownie points, this is how I am going to get 0:18:03.600 --> 0:18:06.920 promoted within the party, is if I tick these boxes, 0:18:06.960 --> 0:18:09.000 if I do these things. Let's say, you know, we 0:18:09.119 --> 0:18:11.240 decide that the thing is we all need to have 0:18:11.400 --> 0:18:15.159 data centers. So suddenly every municipality in every province is 0:18:15.200 --> 0:18:17.480 going to want to build data centers. They're going to 0:18:17.720 --> 0:18:19.280 fight each other for it. They're going to figure out, 0:18:19.280 --> 0:18:21.439 here's the best place for us to build ours, and 0:18:21.480 --> 0:18:23.359 here's all this money that we're going to put into that. 0:18:23.440 --> 0:18:25.240 I mean, they're going to want to tick that box. 0:18:25.320 --> 0:18:27.520 This is the sort of the way that everything gets 0:18:27.560 --> 0:18:31.679 done in China. When recently, when She'sing Ping announced that 0:18:31.680 --> 0:18:33.399 they were going to be and this is director that 0:18:33.400 --> 0:18:35.240 came not out of just the State Council but out 0:18:35.280 --> 0:18:38.159 of the party as well, that they were going to 0:18:38.160 --> 0:18:41.440 boost consumption. A lot of people just sort of sneered 0:18:41.440 --> 0:18:43.480 and said, yeah, I don't see a lot of policy 0:18:43.520 --> 0:18:46.080 here in place to do that. But you can bet 0:18:46.080 --> 0:18:49.840 your bottom dollar that every one on down they took 0:18:49.960 --> 0:18:52.720 this very very seriously, and they're all figuring out ways 0:18:52.760 --> 0:18:55.600 where in their little patch of dirt they're going to 0:18:55.640 --> 0:18:58.840 figure out how we can boost consumption because that's the 0:18:58.880 --> 0:19:00.520 way that I'm going to get promote. They did the 0:19:00.560 --> 0:19:03.760 same thing with cleaning up air pollution. They do the 0:19:03.760 --> 0:19:06.520 same thing with cleaning up rivers. They make it part 0:19:06.640 --> 0:19:09.240 of your KPI. That's what they're going to do with 0:19:09.280 --> 0:19:11.320 this as well. That's what they did. I mean the 0:19:11.400 --> 0:19:13.640 question that you asked about how they made sure these 0:19:13.640 --> 0:19:16.480 physicists were doing physics. It's much the same. 0:19:17.240 --> 0:19:20.880 There's also, I feel like a sense of clarity in 0:19:20.960 --> 0:19:26.119 some of these policy directives. So China very often explicitly 0:19:26.119 --> 0:19:28.080 will say where it's investing. 0:19:28.240 --> 0:19:28.480 Right. 0:19:28.600 --> 0:19:32.840 So when we have the consumer tech crackdown, it came 0:19:33.119 --> 0:19:38.119 with a simultaneous announcement that everyone should go into hardware basically, 0:19:38.160 --> 0:19:40.960 and we saw that repeated in various ways. I remember 0:19:41.080 --> 0:19:45.239 Chairman Rabbit was tweeting that people should go to the 0:19:45.280 --> 0:19:49.199 industries that actually fit the central government's general policies. So 0:19:49.280 --> 0:19:52.320 I feel like it's just very clear as well, and 0:19:52.359 --> 0:19:54.920 the messaging is kind of on point. 0:19:55.320 --> 0:19:58.400 We have a word in Chinese phone call which literally 0:19:58.600 --> 0:20:01.800 means sort of wind mouth. It's the place where the 0:20:01.840 --> 0:20:04.280 wind will be will be blowing. It's like that little 0:20:04.320 --> 0:20:07.679 wind tunnel, and they telegraph that. They tell you, you know, 0:20:07.760 --> 0:20:09.720 well in advance, here is where we're going to. This 0:20:10.520 --> 0:20:12.639 in the fourteenth five year plan. This you know, in 0:20:12.640 --> 0:20:15.160 the fifteenth five year Plan they say exactly which industries 0:20:15.200 --> 0:20:18.240 are going to not only receive a lot of government investment, 0:20:18.520 --> 0:20:20.880 but where the paths are going to be cleared. There's 0:20:20.920 --> 0:20:23.600 going to be removal of a lot of regulatory hurdles, 0:20:24.000 --> 0:20:27.679 there's going to be favorable policy for you if you 0:20:27.720 --> 0:20:31.280 get into this, and if you're an investor, that's where 0:20:31.280 --> 0:20:32.760 you're going to put your money. That's what you're going 0:20:32.800 --> 0:20:34.920