Latest / The Fourcast / How China could beat America in tech war

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How China could beat America in tech war · The Fourcast

0:00
The weaponry that the Americans are developing is more advanced,
0:03
but of course the People's Liberation Army is massive and
0:06
the Chinese are building up a huge fleet.
0:10
That is the next thing we are going to get into and that I
0:13
think is really scary because we're into high tech warfare.
0:16
Given that China is building up militarily in the way that
0:18
Germany did, you know, at the end of the 19th century, is this
0:21
a military buildup with the idea that that military power will be
0:26
used at some stage or just, you know, this is Our Calling card.
0:29
We are powerful. We're here to be reckoned with.
0:32
Well, calling cards only work if you're willing to play it.
0:37
Hello and welcome to the forecast.
0:38
China is in an age of breakneck technological development.
0:42
AI, robots, drones, electrical vehicles, you name it.
0:46
But at the same time, the young people are resisting
0:49
progression, or many of them at least.
0:51
They call it tongue ping lying flat.
0:53
Our international editor, Lindsay Hilsum, has returned
0:55
from her first China trip since she was Channel 4 News
0:58
correspondent there in the late 2000s.
1:00
But also she was there again in 2013.
1:03
She was wowed by technological progress, but also found a
1:07
generation exhausted and overwhelmed by overwork,
1:10
depression and, of course, political pressure.
1:13
Joining Lindsay me to discuss today's China is economist Dan
1:16
Wong, author of Breakneck, who argues that China's system has
1:19
unique strengths and dangerous weaknesses in the race for
1:22
technological supremacy. Welcome to you both.
1:25
Hi, Lindsay, Let me start with you.
1:28
So you hadn't been there for over a decade?
1:30
Yep. What was the thing that
1:32
surprised you most? Well, obviously going up in a
1:35
pilotless drone, an air taxi above Guangzhou by myself alone
1:41
in this in this vehicle looking down on the the city.
1:46
Terrified or overjoyed? I wasn't that scared because I
1:49
thought they wouldn't let me do it if it was really dangerous,
1:52
but it was impressive. I mean, and they they talk about
1:54
the low altitude economy, the idea that these air taxes will
1:58
take people to the airport and obviously that is impressive.
2:03
I suppose also the air is much cleaner.
2:06
All these electric vehicles, EVs that weren't around when I was
2:10
there, and high speed rail. I went from Hangzhou to Beijing,
2:15
that's 1200 kilometres in 4 1/2 hours.
2:19
So all of those things, I had to be impressed by that.
2:22
But then also, you know, all those shopping malls, the sort
2:27
of Japanification of China. And I had to really look for the
2:32
China which I had grown to love when I was there, a sort of old
2:37
China. I wondered if they were ripping
2:39
the soul out of the planet. Is that you speaking as a
2:41
nostalgia kind of obsessed foreigner?
2:46
Maybe. Or is it you know, Or is it, are
2:48
you genuine about the soul being ripped out of China?
2:50
I'm genuine about the soul because as you know, you've just
2:54
said, you know, a lot of young people are are depressed and
2:57
don't feel that this progress necessarily is going to to
3:01
benefit them. There's a sort of lackadaisical
3:04
generation. But I think that if everything
3:07
is about progress, technology, you know, the white speed of it
3:13
all, then I wonder, you know, what is left of identity.
3:18
I don't know what what do you think that?
3:20
I agree with you very much about the soul.
3:22
I describe China in part as a the modern Beijing, as engineers
3:27
of the soul, which is a term from Marshall Joseph Stalin that
3:31
Xi Jinping decided to repeat a few years ago.
3:34
And so I think that China is absolutely losing a lot.
3:37
At the same time, it is gaining a lot when you have new bridges,
3:40
being able to connect people to bigger markets, at the same time
3:44
as you're getting new subway systems as well as new parks,
3:46
while many people are creatively exhausted by everything
3:50
happening undersea. Before we talk about the social
3:53
engineering and the exhaustion, I just want to, you know, home
3:55
in on the, the technological progress because we in the West
3:59
like to think of China as the world's factory, but it turns
4:02
out it's the world's factory and the world's laboratory, isn't
4:05
it? I mean, they're, they're just
4:06
inventing stuff that might be invented in Silicon Valley on
4:09
parts of the US, but probably not in Europe anymore.
4:12
So tell us about that transition from a country that makes stuff
4:16
to a country that invents stuff. I think that China is very much
4:19
both a laboratory and a factory at this point.
4:22
So if we think about something that the US invented, something
4:25
like solar photovoltaic panels or even something like
4:27
semiconductors, that is something that was created by
4:30
the Americans that the Americans are no longer very good at
4:33
making. And when I'm in Silicon Valley,
4:35
when I'm in the United States, I'm constantly challenging
4:38
Americans to ask them, but what is the greater glory to be able
4:41
to claim in the history books that you invented something like
4:44
the first solar photovoltaic cell or to actually own the
4:47
industry in the present day? And so China has very much
4:49
blurred these practices because factories are often cutting edge
4:53
laboratories and themselves people are able to work on
4:56
cutting edge things. They're on the bleeding edge and
4:59
they're able to figure out where the technology is going next.
5:01
And the people who invent this stuff, I guess many of whom were
5:05
educated in the United States, are they inventing this stuff in
5:09
order to make money for the greater good of China or maybe a
5:14
little bit of both to beat the United States at their at their
5:17
own game? I think the answer is yes, that
5:19
it is an element of both, that I think that what is really
5:23
distinguishing Chinese entrepreneurs as well as
5:25
American entrepreneurs is that they have a lot of appetite to
5:28
make doughnuts now. They're really big hustlers.
5:31
They're really interested in making a big bucks.
5:33
At the same time, I think there is an element of nationalism
5:37
that exists more within Chinese society for having felt that
5:40
they were behind for too long, that they really want to catch
5:43
up, and now they want to surpass the US as well as the UKI.
5:46
Think also one of the things which really struck me when I
5:48
was in Shenzhen is about, you know, the supply chain and the
5:52
system. So if you take E VS electric
5:55
vehicles. So yes, China controls the rare
5:58
earths and the rare earths go into the batteries and the
6:02
batteries are in the electric vehicles and a company like BYD,
6:07
they, they're controlling all of that supply chain.
6:09
There's none of that kind of fragmentation which you get in
6:12
Western capitalism now. And you know, I went to, I was,
6:16
you know, you go around Shenzhen with it's nice clean air and you
6:19
look at all the, the green number plates on the cars.
6:22
And then I was in a charging station and battery change
6:25
station. You drive in, you go to the
6:28
place where it's like a carport and the ground open up beneath
6:33
you. The battery drops out.
6:35
It's taken away on one side, the new battery comes in, up it is
6:38
and off you go. So in 3 minutes you have changed
6:41
the battery in your car and the largest BYD vehicle that goes
6:46
620 kilometres on one charge or you can charge it up, you know,
6:51
and that takes you an hour. And so the system actually works
6:54
because it's tied up together. Whereas when it comes to
6:57
electric vehicles, certainly in the UK and I think in America as
7:00
well, it isn't all tied up together like that.
7:02
And so it's much harder to make it work.
7:05
One of the interesting things I read up on recently was that in
7:08
America in the early noughties, they had rare earth metals
7:11
mines, I think in New Mexico and Arizona.
7:13
And basically these mines kept going bust.
7:16
So they decided to, it was much easier just to buy the stuff
7:18
from China. In China, What is the thinking?
7:21
Is it that industrial policy kicks in and the Chinese
7:24
government says we need rare earth mines, we need the best
7:27
batteries in the world for our cars.
7:29
You know, we need the best AI and we're going to basically
7:32
help the companies to get there. And the ones that fail, they can
7:34
fail. And the ones that succeed, we
7:36
shall support. And we want some of that money
7:38
for ourselves. Like how does it work?
7:41
They simply have the hunger to make a lot of these things.
7:43
You know, Matt, I was the. Government and the engineers.
7:46
The government and the engineers, the entire civil
7:48
society, the entire system. A month ago I visited America's
7:51
only rare earth magnet factory in Fort Worth, TX, and it is
7:55
coming up with new batteries as well as the the rare earth
7:59
magnets themselves. They have access to a mine in
8:03
around Nevada and California's border, a little bit outside of
8:06
Las Vegas, which really feels like one of the most naturally
8:09
blessed mines in the world. It's just all of the rare earths
8:12
are really on the surface. But what do the Chinese bring to
8:14
the table? Well, they had a hunger to make
8:16
a lot of these minerals which they own in on the home soil,
8:20
but also these red mining rare earths is so energy intensive
8:24
and so polluting that only the Chinese have the stomach for
8:27
doing something like this. And so they have they're willing
8:29
to pay these costs in order to win technological supremacy.
8:33
And if we go down and look throughout the supply chain, as
8:35
Lindsay says, it's not just one thing.
8:37
They really think about everything.
8:38
It's so much more systems wide thinking over there.
8:41
Also, can I just add because I went to a rare earth mine in
8:44
Inner Mongolia in 2011 and it was unbelievably polluting.
8:48
It was horrendous and I presume that the processes have improved
8:50
since then. But what struck me then was
8:53
again, this long term thinking. So back then they were already
8:57
thinking, right, we are going to dominate the rare earth market
9:02
worldwide. And they set about doing that.
9:05
And you can talk about they and they is the government.
9:07
So the government will, you know, sponsor and support the
9:11
companies which are going to to do that.
9:14
Whereas in America, you know, the rarer thing, as you said,
9:17
Matt, you know, it sort of comes and goes.
9:19
Molly Corp in California, it goes bust, doesn't get
9:22
government support. This.
9:23
The system in China is designed to make everything work
9:27
together. Right.
9:29
But one of the other reasons why, you know, rare earth metal
9:31
mines fail in America is because there are lawsuits from
9:33
environmentalists that shut them down or, or the the cost is too
9:36
expensive to keep them open. So, you know, in in your book,
9:40
you have this wonderful analogy, you know, a country of lawyers,
9:43
America versus a country of engineers, China.
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I mean, there's a reason why America is a country of lawyers
9:48
because it's, it was founded by, you know, a bunch of lawyers and
9:51
philosophers and it was founded on ideas.
9:53
And the idea of America, I guess, is that you start from
9:56
the bottom and you go up. Whereas in China, it seems to be
9:59
the other way around. And I mean, this is we should
10:01
really ask this at the end of the podcast.
10:03
I'll ask it now, which is the more durable system do you
10:06
think? I think both are durable, both
10:08
have strengths and weaknesses. I will say a word of defence for
10:10
the lawyers I'm coming from that's.
10:12
That's a rare thing to hear. That the lawyerly society has
10:15
some. For the lawyers, come on.
10:16
Dad, you got you got you got me on the record saying this now,
10:18
but there is something special about the United States.
10:22
I'm coming to you from the West Coast.
10:23
And the West Coast is the only region in the world that has not
10:26
only created a company worth over a trillion dollars, has
10:29
created several companies worth over several trillions of
10:31
dollars. The rich feel comfortable to
10:33
create their businesses in America.
10:35
They feel protected to do something like that.
10:37
And that is not something that the Chinese have been able to do
10:39
very well either. But so the rich feel comfortable
10:42
to invent stuff and make money from it in America?
10:45
How does it work in China then? I think that there is still
10:47
quite a lot of hunger to be rich.
10:49
You can see this sort of pulsing through everywhere.
10:51
There's a lot of petty entrepreneurialism.
10:53
People really want to make doughnuts, and that is true for
10:55
both the Americans as well as the Chinese.
10:57
But there is kind of this overbearing hand at the
11:00
government that sometimes helps out, that sometimes offers very
11:03
useful industrial subsidies, which sometimes decides to smack
11:06
around a lot of tech founders like Jack Ma, who got a little
11:09
bit big for his speeches. And so that is kind of this
11:11
precarity of living in the engineering state.
11:14
Things might go very well if the government decides to build your
11:17
factory, but what if they decide to take it all away?
11:19
Yeah. Well, Donald Trump is trying to
11:21
do something rather similar. You could argue that if you get
11:23
too big for your boots or you don't kiss his ring, you might
11:25
also be in trouble. Absolutely.
11:27
But you know what, it's baked into the system in China.
11:31
And certainly, I mean, Dan would know much more about this than I
11:34
would in China, that some of the most senior and the richest
11:37
people have ended up, they've sort of gone abroad, haven't
11:40
they, because. They to London.
11:41
Yeah, because they don't feel secure.
11:44
But having said that, I did meet quite a lot of entrepreneurs,
11:47
particularly in Hangzhou, which is like the sort of seen as the
11:50
Silicon Valley of of China, a lot of young people who had AI
11:56
startups. And you have the six little
11:58
Dragons there, including DeepSeek, which is of course the
12:02
the AI large language model, which surprised the world back
12:06
in January. By making something really great
12:08
for very little money compared to its American competition.
12:11
Exactly. And then there's, you know,
12:12
video, you know, computer games, game sciences there with a very,
12:16
very popular game based on Chinese myth and legend and one
12:20
which had AI glasses, which I, which I tried on.
12:23
And what was interesting to me was quite a few of the people I
12:26
met were Chinese who had been in Silicon Valley, didn't feel that
12:31
they had had enough opportunity there and had gone back to China
12:34
and were getting government support or looking for
12:36
government support, but found a conducive environment there for
12:40
their startups and said that they could be creative there.
12:43
And they felt that there was more opportunity there than they
12:46
had found in America. Do you think that the market is
12:49
more cruel than the Chinese government?
12:51
The American market is more cruel than the Chinese
12:53
government when it comes to supporting new.
12:56
Businesses certainly there is competition red in tooth and
12:59
claw over in China that there is the, I think the, the, the rule
13:02
of thumb that we have is that a Japanese, German, American
13:05
automaker takes about 6 years to conceptualize a new auto model
13:09
and then release it in the market.
13:10
In China it's much closer to 18 months or two years, which is.
13:14
Astonishing isn't? It they're moving three times
13:16
faster and no one is hypnotizing the Americans to just move very
13:19
slowly, that is because the Chinese are just so darn
13:21
competitive. It is a ruthless market logic
13:23
over there. And describe that
13:24
competitiveness. And I want to hear from you
13:26
what, you know, whether you say that, because we're going to
13:28
talk about the lying down generation, but that
13:30
competitiveness, what does it look like at, you know, the
13:32
university level, at the professional level?
13:34
One of the core facts about China is that you are sorted in
13:38
all of these quite challenging competitions starting from a
13:41
very young age. Many Chinese students will have
13:44
awful memories of being labeled at the bottom half the bottom
13:47
quintile of class, and some people might still be very proud
13:51
of having the. Opposite to We're all winners.
13:53
Yes, that's right. All shall have prizes.
13:55
All shall have prizes. And in China it is very clear
13:57
that the top five people have prizes and everyone else is not
13:59
going to be very well regarded by the parents.
14:01
And so this sort of ruthless logic exists throughout the
14:04
formal system in China. But then the business logic is
14:07
if anything far more demanding because if you release products,
14:10
if you release taxis and in the air that collapse pretty quickly
14:13
afterwards, you're not going to be very competitive in the
14:15
market for very long and. You can make that money.
14:18
You can write to to the top of that tree and you can thrive and
14:22
keep your money and live a beautiful lifestyle as long as
14:24
you don't challenge the government.
14:27
And that is very challenging because you don't know where
14:29
what might be challenging the government.
14:31
Jack Moss certainly didn't know where all the lines were at the
14:33
time that he would try to move things around.
14:35
And so things are always shifting.
14:36
The winds are always changing in China.
14:38
But I think there's can I come up with something here?
14:40
Because I think the other thing about, you know, going from
14:44
conception to manufacture in 18 months, that's also about the
14:48
seamlessness of the system. So in Shenzhen, you go to that
14:52
huge electronics market in the middle of the city, which you
14:54
will know very well. So if you, you know, if I have
14:57
an idea for some kind of widget or AI something and I, and I, I
15:02
try, it doesn't quite work. I can just go to that market and
15:05
I can find 10 different parts and I can try each of them and
15:08
within a day or a week I can work out this works and this
15:11
doesn't work and so on. But if I'm American, I probably
15:14
have to order those parts from China.
15:16
And so there's there's a very practical way in which you can
15:20
do trial and error and see whether your product is going to
15:23
work. And that speeds up the whole
15:26
process. Which is extraordinary.
15:28
So just to describe this a little bit more.
15:29
So there's literally like a shopping now for.
15:32
It's a shopping mall. It's five, it's five stories.
15:35
I can't remember. It's you know, it's more than AI
15:37
think. It's three square kilometres.
15:39
It's absolutely. Like an industrial park.
15:41
Yes, it's absolutely massive and you can find people there who
15:45
are just, you know, trying to buy a new pair of Airpods or a
15:48
knock off pair of Airpods or you can find all sorts of
15:51
semiconductors. But then that's the thing,
15:53
because of course on semiconductors, America still
15:57
has the edge on chips. America and obviously Taiwan,
16:01
TSMC, which is the, the big semiconductor manufacturer in
16:06
the world and their chips are far in advance of the Chinese
16:11
chips. Now I was told that, you know,
16:13
you could find the very advanced NVIDIA chips there, that they're
16:18
smuggled in via Japan and Hong Kong.
16:21
And of course, a chip is a very small thing.
16:22
So, you know, under the, under the, the, the counter you, you
16:26
can find them. So you can buy almost anything
16:29
there, but when it comes to that very, very high tech, the
16:33
Americans still are ahead. When I was walking through some
16:36
of that market about almost a decade ago now, and I went to
16:40
buy a little cell phone case with a white whale because my
16:44
favorite novel is Moby Dick. Yes, the people ask me, do you
16:47
want one or 1000? How about 1000?
16:49
And I said one is enough. Thank you.
16:52
And why is NVIDIA still able to produce better microchips than
16:55
any Chinese equivalent company? I think that the Chinese are
16:58
still relatively weak on two big technological sectors.
17:01
The first is semiconductors, the second is aviation.
17:04
And so there is still something quite challenging about the
17:06
integration of many different scientific disciplines when it
17:09
comes to semiconductors. That's the integration of
17:11
computer science and chemistry and electrical engineering.
17:14
When it comes to aviation, the reason that Rolls Royce still
17:17
has this edge is that it is really good at integrating
17:20
mechanical engineering and aerodynamics, material science.
17:23
The Chinese are still catching up in anything where the science
17:26
is relatively mature but the manufacturing is quite settled.
17:29
The Chinese are by measure ahead, but where the science is
17:32
still challenged, I think they're still quite behind.
17:34
So to Lindsays point, right, So it's the integration of a new
17:38
idea and the way that it's manufactured and then the kind
17:40
of various, you know, manufacturing lines and and
17:43
distribution lines that you need around it.
17:44
That's right. But they are getting better.
17:46
And so Chinese universities are rising through the ranks in all
17:48
sorts of ways. China is doing more science and
17:51
I expect that they will be doing getting more Nobel Prizes as
17:54
well as other recognition sometime soon.
17:55
And do the Chinese have a bankruptcy law that if you try
17:58
something out and it doesn't work, that you didn't get bailed
18:00
out? I mean it it rather like in
18:01
America you can do Chapter 11 and have another life.
18:03
And there is still some of that, although it is much less
18:06
forgiving. If you get into personal
18:09
bankruptcy, it's possible that you can't book and fancy a
18:11
hotel, you can't take vacations anymore, You can't really go on
18:15
the airplane. Sometimes you have to go on the
18:17
trains instead. And so and.
18:19
You can't go shocking forward. The high.
18:20
Speed train. Listen, going on the high speed
18:23
train, I'd choose out over the plane any day.
18:25
I mean, you know, I'm sure the words bus replacement service I
18:27
never heard in China. They're very common in this
18:30
country. So, OK, let's go to the social
18:32
side of this then. So with all this competition
18:35
that you've described down from an early age on, and as you
18:39
know, your excellent piece from China, Lindsay, you know, one of
18:42
them was all about those people who decided to do a bit of Tan
18:44
Ping or just they just, they kind of checked out.
18:47
Is that a, is that their form of rebellion?
18:49
They can't do politics, but what they can do is apathy.
18:52
Well, it's so interesting because when I lived in China in
18:54
the mid 2000s, you know, the the younger generation were very
18:57
aware of being privileged, you know, that their grandparents
19:00
had survived the Great Leap Forward, their parents had
19:02
survived the Cultural Revolution.
19:03
And now they were a very lucky generation and they were going
19:07
for it. But this next generation, Gen.
19:09
Z, which seems to have problems all over the world, they're like
19:13
Nah. And so one of the concepts which
19:15
I learnt when I was there. Was their generation.
19:17
Yeah, it was, it was this American concept of garbage
19:20
time. So garbage time is the end of an
19:23
American football or basketball game when it's it's a foregone
19:26
conclusion which side is going to win.
19:28
And So what is the point of the last five or 10 minutes?
19:31
And so it was a young woman who I met in a cafe.
19:34
I just learnt about this concept.
19:36
And I, yeah, I just asked her a completely different question.
19:38
She said, oh, have you heard about garbage time?
19:41
She said. I said, yes.
19:42
She said, this is garbage time in Chinese history.
19:45
And what they feel is that there's no point in trying.
19:48
And there's a huge graduate unemployment problem.
19:51
You've got 12 million graduates every year.
19:54
And you know if you if you order your meal from May Twin, which
19:59
is the equivalent to Deliveroo. Chances are it's going to be a
20:02
graduate delivering it. At least 30% of the people
20:04
working there are graduates because they just aren't
20:06
graduate level jobs. And this is causing a huge
20:10
amount of of disillusion. And so, you know, there's a sort
20:15
of mental, I suppose you could call it a mental health crisis.
20:17
I don't know, Dan, how would you see it?
20:18
A. Civilizational crisis, perhaps
20:20
civilization. I would go that this is that it
20:24
is. I think it is an indictment that
20:26
people in China, as well as most of the rest of East Asia, don't
20:29
want to have kids, not in part because their TFR is so low, in
20:32
part because there is. They're living through this
20:35
garbage time. They don't have great hopes for
20:37
the future and I think that this is an indictment for them.
20:40
And this is despite, you know, supposedly family values, you
20:43
know, all these sort of traditional Chinese values which
20:45
may or may not still exist or. May or may not still exist,
20:48
because I think a lot of women in particular are a little bit
20:51
distressed about being told and being asked all the time when
20:54
they plan to have children. I think that's something like a
20:56
Lunar New Year is a distressing time for many women because
21:00
there's only one question they can expect from their extended
21:02
aunts and uncles and grandmothers, which is when are
21:05
you going to marry to the single and when are you having kids to
21:07
the childless? And that seems like that is all
21:09
their value. And there's more than that
21:11
because of course, you had the one child policy.
21:12
And so Chinese women were told one child only for all of these
21:15
years. And then suddenly the party
21:17
says, actually, you're supposed to have two children.
21:20
And now suddenly you're supposed to have three children.
21:22
Excuse me, Is this not our business?
21:25
Well, apparently not. I was told a young Chinese woman
21:28
who I met there said, oh, you know, sometimes the party, you
21:31
know, the local party authorities will ring you up and
21:33
ask, have you had your period this month?
21:35
Seriously. I mean, yes, that level of
21:37
intrusion into women's lives. And you know what?
21:40
Women don't like that. Yeah.
21:41
And are they rebelling against it?
21:42
They're not picking up the phone or they're lying or they're,
21:44
well, they're giving the wrong answer.
21:45
Whatever. They're not having children, No,
21:47
because they're because they're not interested and they don't
21:50
see why they should be pushed into it, either by their parents
21:53
or by their aunties or by the local party secretary.
21:56
So these are the limits of social engineering.
21:58
Yeah, I can't imagine what's more scary, the the aunties or
22:00
the local party secretaries. Both are pretty frightening,
22:03
aren't they? Does the does the party know,
22:05
does the government know that it's got a problem with social
22:07
engineering or do they not get it?
22:08
I think they get it and they're willing to pay the costs.
22:10
I think that they have consistently decided that's the
22:13
one child policy was something that they needed to pursue that
22:16
0 COVID was something that they needed to pursue.
22:19
Look at these plans, the numbers right there in the name.
22:21
There's no ambiguity about what these things could possibly
22:23
mean. And they're thinking that by
22:25
pressuring women that they are able to produce some sort of
22:28
coerced copulation. Now, I don't believe that is the
22:31
sort of thing that makes more children, but I think that they
22:34
they feel like this the only thing they can do.
22:36
And I mean, what are they going to do?
22:38
What's the government going to do about the lying down?
22:40
How will they infuse people again?
22:42
Well, I think that by inciting a lot of Xi Jinping thought at
22:45
them, which I also believe is not going to that's.
22:47
Going to make you fall fast asleep isn't?
22:49
It that that makes me fall fast asleep.
22:51
Very, very much so. You know, Xi Jinping is not a
22:53
very humorous guy. I don't love listening to him.
22:56
And so when he denounces the people for we're not going to
22:59
give them too much more money, that might create welfarism,
23:02
that might make them be very lazy.
23:04
That's something that's those are words that he has used.
23:06
He sounds a little bit like Ronald Reagan to me.
23:09
But I think there is another thing though, and this one I
23:11
found very interesting, which is that there was a survey done
23:13
recently, which is that that between 83 and 87% of Chinese
23:17
people are very enthusiastic about artificial intelligence,
23:20
about AI, which is very different from here in the West
23:22
where we're rather afraid of it. And I did find in Liangju, which
23:27
was a kind of sort of Silicon Valley area.
23:29
I mean, my young woman who, you know, told me about garbage
23:34
time. She was developing an AI app for
23:36
depressed young people. And then I found these other
23:39
young entrepreneurs. One of them had a new app, which
23:42
was called Second Me, where your AI avatar meets somebody else's
23:48
AI avatar. I mean for.
23:49
People, how is that working? I'm not quite.
23:51
Sure, maybe they'll have kids, but I don't think they'll have
23:53
real kids. Exactly.
23:54
That's right. They'll have Avatar kids.
23:56
But but there, there is an interest in technology and
23:59
particularly in AI amongst young people, even those who are a bit
24:03
apathetic. And so I think that there is
24:04
some hope in the party that this is a technology which might
24:08
infuse young people. I don't know whether that's
24:11
likely or not. Well, I think that's something
24:12
that is unites both the Chinese as well as the Americans is that
24:16
at least the broader population are interested in growth.
24:19
I think that they have an interest in making doughnuts and
24:22
I think that the elites are also very interested.
24:24
Interesting growth. When I look across at much of
24:27
the European Union, much of Europe, much of the UK, it
24:32
doesn't even seem like people aren't necessarily very
24:34
interested in growth anymore. And so that is something that
24:36
it's pretty similar about. But it's a difference between,
24:39
you know, our young generation and Chinese young generation is
24:41
that in, you know, here we worry about or young people worry
24:44
about AI replacing the jobs that they thought they were going to
24:47
do. Is the case in China that AI
24:50
might do all these jobs. And young Chinese people are
24:52
saying, go for it, go for a computer, do that job for me,
24:55
and I'll do something else. I'll play a video game or watch
24:57
a movie. Well, one of the things that's
24:58
very challenging for US manufacturing is that might hope
25:01
that AI and automation is going to solve all of America's
25:03
manufacturing problems. The challenge is that the
25:06
Chinese are much more automated already.
25:08
They're much better at the algorithms.
25:10
They're much better at using robots.
25:11
And so it doesn't even seem like they are that much against using
25:15
AI to do all their critical tasks.
25:17
And, and just do you think think that this lying down generation
25:21
phenomena will continue or will there be a kind of natural
25:24
entrance at some stage when even young people get bored of lying
25:27
down and they will just panic And now that there'll be a
25:29
political eruption or there'll be, or they'll try and get back
25:32
into the job market. I think it's hard.
25:34
Obviously, you know, I can't predict the future.
25:36
One of the things I think is really interesting to see, you
25:38
cannot oppose the government politically.
25:41
You know, if you talk about human rights, LGBTQ rights,
25:44
women's rights, then you're in prison.
25:46
You know, your head's chopped off.
25:47
That's it. It's not going to happen.
25:49
But if you talk about mental health and happiness, well,
25:52
that's a different thing. And the Chinese Communist Party
25:54
has said it is by us to seek happiness for the Chinese
25:57
people. So in that sense, you know,
26:00
saying that you're unhappy is a is a form of, of rebellion and
26:05
the language of human rights, I think has morphed into the
26:08
language of well-being and, and mental health.
26:11
So I think the real question is when and if the party sees this
26:16
generation as a new kind of challenge or threat.
26:20
I mean, Gentlemen Square is quite obvious.
26:22
There's a bloke standing there with his plastic bag in front of
26:24
a tank lying down is its own form of resistance.
26:28
And at some point I fear that the the Chinese government will
26:31
try and do something about it. And that of course could be more
26:34
repression, that could be even more repressive.
26:36
I don't know. What do you?
26:37
Think I wonder the how about the the opportunities available to
26:41
young people. There's no job opportunities,
26:43
but there are excellent phone opportunities for them to keep
26:45
themselves very entertained. When Xi Jinping denounced TikTok
26:49
as spiritual opium a couple of years ago, I think he's right.
26:53
He's absolutely right. These things are spiritual
26:54
opium. And if all of us are going to be
26:56
hanging out with our AI friends because they always text you
26:59
back and they will always provide you some cheer, I'm a
27:01
little bit worried that many of them will just choose to lie
27:04
forever. Dan, do you think the Chinese
27:07
government is more afraid of its own people than it is of
27:11
anything else? I think that is the scariest
27:13
thing to the Chinese government, and This is why you can see that
27:16
China's domestic budget for security spending is even
27:19
greater than its military spending for the People's
27:21
Liberation Army, that there is so much constructed in China to
27:25
make sure that the people don't rebel and that there is still so
27:28
much repressiveness, really to try to keep a lid on social
27:32
tensions. I.
27:32
Remember when I was in Beijing when they got the Olympics in
27:35
the year 2000, They celebrated and there were armored vehicles
27:38
on the streets of Beijing. And I said to my Chinese, fix a
27:41
minder, what's going on here? He said the government is afraid
27:44
of people even when they're, you know, in the spirit of
27:47
jubilation, you know, for the greater good of the nation, They
27:50
just distrust large numbers of people showing up with any kind
27:54
of show of emotion. This is something that they feel
27:56
they have to control right now. China is in a big tiff with the
27:59
country of Japan, which they are spend this kind of totally
28:02
insane spat that the two countries are going.
28:05
And I think that they have to be a little bit nervous about the
28:07
sort of nationalism that they release because if they fan up
28:10
the national flames against Tokyo, who knows if that might
28:13
spread someday to Beijing. OK, couple.
28:15
Of things to end on getting back to the kind of race between the
28:18
state of engineers and the state of lawyers, Who is winning that
28:22
race at the moment? No one is winning and I think
28:24
that the race will not be won. There is no gold medal at the
28:28
end that there is no because we don't know what it's like to
28:31
win. That it's not going to be quite
28:32
like the Cold War, in which, as President George HW Bush
28:36
declared, the end state is that we win, they lose.
28:39
And I think we don't know what winning the AI race will look
28:42
like. I think that we don't know what
28:43
winning the broader race will look like.
28:44
What I want is for the US and China just to be the best
28:47
versions of themselves, the level more for the people.
28:50
To me, that is winning. But when Chinese, you know,
28:52
government officials, scholars, students, engineers are looking
28:56
over the water to America, they see a government that is taking
28:59
down the the great institutions of American learning is cutting
29:02
the funding, you know, of technological, you know,
29:05
citadels of excellence. I mean, what are they thinking
29:09
is happening? You know, are they saying this
29:11
can't be true? The Chinese are helping us out
29:13
here. I mean, the Americans are doing
29:14
the, you know, our work for them.
29:16
To some extent, yes, And I think that is a viewpoint from
29:18
Beijing. But I think also the young
29:20
people are seeing that the Americans are still building up
29:23
all sorts of great tech companies, that there is still
29:25
tremendous liberty available to people in the US And that is
29:29
still why many young Chinese want to move away, that they
29:31
want to move to the US, they want to move to the UK, they
29:34
want to move to Chiang Mai to smoke trucks that would be legal
29:36
in the state of California because they find that there's
29:39
still a little bit too much exhaustion in XI Jinping's
29:41
China. Did you find young people who
29:43
said to you any chance of coming back with you to the UK or or
29:46
moving to America? No, I didn't.
29:48
The young people I saw were the ones who tended to be the ones
29:51
who had gone from America back to to China.
29:53
But on the race, I think that there's two things.
29:55
I mean, obviously the Donald Trump is sort of obsessed with
29:58
manufacture and he's not in time entirely wrong.
30:00
You know when you. Look, but he's a century out
30:03
you. Could say he's a century out,
30:04
but I think that where he he has a point is on the issue of
30:08
robotics. You know, I went to a car
30:10
factory, a Gili factory in Ningbo, which is pretty much
30:14
automated now that's not going to something like that will not
30:17
bring jobs back to America. But you know that kind of
30:21
manufacture you know it is important for a country to to do
30:25
that. It's important for China, and I
30:27
can see why you would want that, why America would.
30:29
I can see why this country would want that too.
30:31
I mean, we're always trying to get car factories here from the
30:33
Japanese or whatever. But the real issue, I think on
30:36
tech is going to be when it comes to the military.
30:39
And this is where, you know, the the very advanced chips are
30:44
important because those are used in precision weapons.
30:46
And that means that the weaponry that the Americans are
30:49
developing is more advanced. But of course, the People's
30:52
Liberation Army is massive and the Chinese are building up a
30:55
huge fleet of, you know, for their, their naval fleet.
31:01
And so that is the next thing we are going to get into.
31:04
And that I think is really scary because we're into high tech
31:07
warfare. And.
31:09
Reluctant to quote Stalin again, but quantity is a quality all
31:13
its own, is something that Stalin said.
31:15
And this is something that, you know, when the Chinese are
31:17
building right now around 1500 ships, the Americans are
31:20
building something like 3. We get these giant disparities.
31:23
And I think that that is going to be benefiting the engineering
31:26
state. But this is the final question
31:27
then. You know, given that China's
31:29
building up militarily in the way that, you know, Germany did,
31:33
you know, the end of the 19th century, the way that Britain
31:35
did just before that, the way that America's done, you know,
31:38
right about the Second World War, You know, is this a
31:41
military buildup with the idea that that military power will be
31:45
used kinetically, as they like to say, in the Pentagon at some
31:49
stage? Or just, you know, this is Our
31:51
Calling card, We are powerful. We had to be reckoned with.
31:54
Well, calling cards only work if you're willing to play it.
31:56
And so I think that they are they want to be able to deter
31:59
the Americans from doing anything they don't like around
32:01
the island of Taiwan. And so I think that this is
32:03
something that the Americans also had to feel like they
32:05
developed their own calling cards to be able to deter the
32:08
Chinese. And let's just hope that things
32:10
do not go kinetic and on neither country place they're calling
32:13
cards. Lindsay, when you were there,
32:15
did you did Did anyone, whether they were young or old, did
32:17
they, did you get the impression that they thought they were on a
32:20
kind of path towards some kind of civilizational clash with the
32:23
West, with America? I got the feeling that they
32:27
thought that they were on a technological roll.
32:30
But you know that in the Politburo, you know the decline
32:34
and fall of the Roman Empire. Everybody has to read it, and
32:37
certainly in the party. Is that true?
32:40
They. Yeah, they always read that.
32:42
They always, they're always fascinated by the decline of
32:44
they're. Not reading it in Trump's white.
32:46
House. No, they're not they.
32:46
Should be maybe? And that's the point because
32:49
certainly within the party, they believe that there is an
32:53
inevitability that America is in decline and China is on the rise
32:59
again, as it was, you know, centuries ago.
33:02
And that is how they see history unfolding.
33:06
I suspect that it will take long enough that, well, maybe Dan
33:09
will be here to see it. I don't know if you and I will.
33:11
Be but never underestimate lawyers.
33:13
No. OK.
33:15
Dan Lindsay Hilson, thank you very much to both of you for
33:17
coming in. That's it for the forecast.
33:19
I hope you enjoyed it. We'll see you next time.