Latest / UK Column Radio / Why the West is Suddenly TERRIFIED of China's Manufacturing Boom | Silk and Steel

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Why the West is Suddenly TERRIFIED of China's Manufacturing Boom | Silk and Steel · UK Column Radio

• 0:01
  Speaker 1: Okay, and we are live. Welcome to another episode, episode five,
• 0:07
  Speaker 1: where we're gonna be reacting to various things on Twitter
• 0:12
  Speaker 1: and beyond. I'm Daniel Dumbrel and we have Carlsa with us.
• 0:15
  Speaker 1: Carl how are you doing today?
• 0:17
  Speaker 2: How are you, Daniel?
• 0:18
  Speaker 3: I'm good, good, all good.
• 0:21
  Speaker 1: Oh a second, yeah.
• 0:25
  Speaker 3: We go almost forgot this.
• 0:31
  Speaker 2: Yeah, you can't. We can't start without this shirt. Guys.
• 0:33
  Speaker 2: Oh yeah, this is this. This is a Multipolarity shirt podcast.
• 0:42
  Speaker 1: Yes, yes it is. This is my last new one.
• 0:45
  Speaker 1: I've gotten the tank. Now I'm gonna start especially.
• 0:50
  Speaker 2: Yeah, you gotta you gotta order on those.
• 0:53
  Speaker 3: Yeah, really like twenty.
• 0:56
  Speaker 1: Twenty seven remenb thirty five Remenber you can get them
• 0:59
  Speaker 1: four It's amazing, It's so good.
• 1:02
  Speaker 3: Yeah, and then.
• 1:03
  Speaker 2: Deliver it everywhere, so you can't even get it on
• 1:05
  Speaker 2: the road if you're staying one place more than a day.
• 1:08
  Speaker 3: That is true.
• 1:09
  Speaker 1: That is true, with the exception of Shinja and Shinjong,
• 1:12
  Speaker 1: usually takes a much longer time. It's just so far
• 1:15
  Speaker 1: away free days.
• 1:16
  Speaker 2: Yeah.
• 1:17
  Speaker 1: Yeah, So we're gonna be We're gonna be trying to
• 1:20
  Speaker 1: do this show from the road too. I've got some
• 1:22
  Speaker 1: equipment and I'm going to be bringing that along with us.
• 1:26
  Speaker 1: I probably we're probably gonna skip next week's show because
• 1:29
  Speaker 1: that'll be right when I'm on the road, but after
• 1:30
  Speaker 1: that it should be good. Now for this week, we
• 1:32
  Speaker 1: have a bunch of stuff loaded up, but because I've
• 1:34
  Speaker 1: been preparing a lot for my trip, I didn't contribute
• 1:37
  Speaker 1: too much to what's in here. So most of it's
• 1:39
  Speaker 1: going to be your stuff. And then we kind of
• 1:43
  Speaker 1: you can lead it and I'll react to it together,
• 1:44
  Speaker 1: and I'll just kind of facilitate this. So welcome everybody.
• 1:49
  Speaker 1: I see there's a few people already showing up here.
• 1:52
  Speaker 1: Let's just jump right into this. Okay, Actually we will
• 1:57
  Speaker 1: start with one that's mine, and that is Uh.
• 2:01
  Speaker 3: I just want to address this. I get this quite
• 2:04
  Speaker 3: a lot.
• 2:05
  Speaker 1: It says, you know, you're supposed to be calling the
• 2:08
  Speaker 1: the CPC, not the CCP. I'm aware of that, but
• 2:11
  Speaker 1: I just like, I feel like I not get your
• 2:13
  Speaker 1: opinion on this after Carl, but I feel like the
• 2:17
  Speaker 1: priority for me is just getting people to understand the
• 2:22
  Speaker 1: actual real China, and the people I want to speak
• 2:25
  Speaker 1: to are people who are using this language. They can
• 2:28
  Speaker 1: figure out that out on their own later It's not
• 2:30
  Speaker 1: really a big deal to me. But I can understand
• 2:33
  Speaker 1: for somebody who wants people to start using the correct terminology.
• 2:37
  Speaker 1: That may annoy them, but I feel like that is
• 2:40
  Speaker 1: a I feel like I can reach more middle ground
• 2:44
  Speaker 1: people too if I'm using their language. If they're like, oh,
• 2:46
  Speaker 1: you're using that very strictly. You know, it's supposed to
• 2:49
  Speaker 1: be CPC. Oh, you can't call it you know, you're
• 2:53
  Speaker 1: you're like the other guys. You can't call it Tibet anymore.
• 2:55
  Speaker 1: You have to call it Shizan. It's like, just that's
• 2:57
  Speaker 1: that's that's not that's not my priority. I can understand
• 3:01
  Speaker 1: for somebody who is a stickler for details and they
• 3:04
  Speaker 1: really want you to use the correct terminology, but again,
• 3:08
  Speaker 1: not just not my porty. What what's your thoughts on that, Karl?
• 3:11
  Speaker 2: Well, yeah, it's I mean, actually, it doesn't really matter
• 3:15
  Speaker 2: if it's in Chinese because Chinese is just zoom zum
• 3:18
  Speaker 2: goog tanda, right. I mean, how you translate it into English?
• 3:22
  Speaker 2: Is there as Communist part the Chinese Communist Party or
• 3:27
  Speaker 2: Communist Party of China, you know, like the official I
• 3:31
  Speaker 2: guess the official translation by the government is not the
• 3:34
  Speaker 2: Communist Party of China, but they also have used before
• 3:38
  Speaker 2: Chinese Communist Party. I think it's a matter of kind
• 3:42
  Speaker 2: of the evolved evolution of language because it's a CCP
• 3:47
  Speaker 2: is being used overwhelmingly by people who who like talk
• 3:52
  Speaker 2: bad about China, and in some some people's view that
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  Speaker 2: becomes kind of a derocratory term. But I, you know,
• 3:59
  Speaker 2: I don't mind reclaiming language and only mind mind reclaiming words. Right,
• 4:05
  Speaker 2: So and again I think I think what you're doing,
• 4:08
  Speaker 2: correct you. A lot of work we're doing is we're
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  Speaker 2: debunking or deconstructing all the China narrative by the people
• 4:15
  Speaker 2: who use that language CCP. So I you know, I'm
• 4:19
  Speaker 2: not a stickler of words anyway, So yeah.
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  Speaker 1: Yeah, I appreciate, uh, I appreciate the point being made.
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  Speaker 1: But that's I just wanted to kind of, yeah, give
• 4:28
  Speaker 1: some context behind why I not only doesn't necessarily care
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  Speaker 1: as much, but also in some ways prefer using the
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  Speaker 1: language of the people who you know.
• 4:40
  Speaker 2: I mean, it's not like we're dropping the and word
• 4:43
  Speaker 2: bomb here.
• 4:44
  Speaker 1: Yeah yeah, yeah, yeah, yeah, I mean we're trying to
• 4:48
  Speaker 1: reach those people. But yeah, all right, So we'll jump
• 4:52
  Speaker 1: into a couple of economic tweets that you have highlighted
• 4:56
  Speaker 1: for discussion here. That's good's but you take it away.
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  Speaker 2: Okay, So right now, this is an article from the
• 5:07
  Speaker 2: Atlantic by Michael Schuman. By the way, Michael Schuman is
• 5:11
  Speaker 2: a guy who wrote a tweet, an infamous tweet who said, hijip,
• 5:17
  Speaker 2: you really really watched Hamilton. You know, they in order
• 5:21
  Speaker 2: to understand American democracy, And maybe if you actually watch Hamilton,
• 5:27
  Speaker 2: you will actually understand how to interact with uh with
• 5:31
  Speaker 2: with democratic government. And that allowed him to win friends
• 5:35
  Speaker 2: rather than alienate them. I mean, like that's such a
• 5:38
  Speaker 2: ridiculous tweet. But anyway, so so it's not surprising that
• 5:41
  Speaker 2: he is giving this like brain dead. Hey, and the
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  Speaker 2: the idea of this article is that the over capacity
• 5:50
  Speaker 2: of the Chinese economy is bad for everybody. It's bad
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  Speaker 2: for the people in the West, bad for the consumers
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  Speaker 2: who somehow now have to purchase those cheap, affordable goods,
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  Speaker 2: and it's bad for the Chinese worker. I mean, this
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  Speaker 2: is just gaslighting now, like like it's like I saw
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  Speaker 2: the qts, the quoting tweets and the comments. It's over
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  Speaker 2: like overwhelming. People are just making fun of him because
• 6:16
  Speaker 2: this is I mean, like, how do you come up
• 6:18
  Speaker 2: with this? Right? Like like like this guy says, just
• 6:21
  Speaker 2: just uh, it's it's it's this this This guy says,
• 6:24
  Speaker 2: it's fascinating watching US elite and policy makers try to
• 6:28
  Speaker 2: navigate the following contradiction. China's AI feel productivity boom is
• 6:33
  Speaker 2: taking everyone down. Number one. Number two, the common US
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  Speaker 2: A I feel productive book productivity boom that is driving
• 6:41
  Speaker 2: the US stock boom won't hurt the US employment at all, Right,
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  Speaker 2: So so you know, it's a lot of this. By
• 6:51
  Speaker 2: the way, a lot of this China bad narrative, including
• 6:55
  Speaker 2: talking shit about Chinese AI, actually is funded by US
• 7:01
  Speaker 2: AI Open AI, who are paying people to say bad
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  Speaker 2: stuff about Chinese AI. At the same time, they want
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  Speaker 2: you to believe that somehow the American AI, you know,
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  Speaker 2: once it's cheap super intelligence, it's gonna be great for everybody,
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  Speaker 2: great for American worker, which is completely bullshit because the
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  Speaker 2: whole premise of American AI is based on the premise
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  Speaker 2: they're going to replace millions of white collar jobs and work.
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  Speaker 2: As a good take, it says these clans pay abundance
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  Speaker 2: as a deny its capital and political elite with a
• 7:37
  Speaker 2: capacity to extract further rent. And this is the difference
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  Speaker 2: between the Chinese model and an American model, by the way,
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  Speaker 2: because American model, especially in the latest AI bubble, the
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  Speaker 2: idea is we will innovate in order to build a
• 7:54
  Speaker 2: monopoly and then we can click rent. That that's a
• 7:57
  Speaker 2: whole model of open AI. They they plan to AI
• 8:02
  Speaker 2: into everything, but eventually they'll just get a charge charge
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  Speaker 2: rent on top of all economic activity. What Chinese doing
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  Speaker 2: is they're using AI in everyday applications that makes things,
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  Speaker 2: you know, they're they're they're making manufacturing cheaper. Uh, therefore
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  Speaker 2: the manufacturer goods more affordable, and and they're handing out
• 8:24
  Speaker 2: uh you know, open source AI in order for the
• 8:27
  Speaker 2: global cells AI developers to be able to access and
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  Speaker 2: develop their own product, which is not open AI is
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  Speaker 2: doing because like open AI, they're gonna charge charge their
• 8:38
  Speaker 2: arm on the leg and tropics also.
• 8:42
  Speaker 1: Yeah, that's right, I mean they said openly. They said
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  Speaker 1: that they want to collect the data, human data that
• 8:48
  Speaker 1: was you know, created by other people and then resell
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  Speaker 1: it to us like a utility, like reselling intelligence, like electricity.
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  Speaker 1: And it's interesting, you know that they're going back to
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  Speaker 1: the first tweet this. You know, China played the game
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  Speaker 1: on the international stage according to Western rules and Western
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  Speaker 1: rules before were let the best man win, Let the
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  Speaker 1: most innovative product, Let the product that consumers want to
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  Speaker 1: choose win. But as soon as China starts winning at
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  Speaker 1: that game, then all of a sudden, it's a problem
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  Speaker 1: that China's playing the game exactly like how they invented it.
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  Speaker 1: And then with AI, when you talk about AI and
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  Speaker 1: what it's going to do in the West, it's always about, oh,
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  Speaker 1: it's going to increase our productivity so much. And then
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  Speaker 1: when China is supposedly using it the same way they are,
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  Speaker 1: which they're not, then all of a sudden it's a disaster,
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  Speaker 1: saying this is going to affect everybody, and this is
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  Speaker 1: like they want to get the best use out of
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  Speaker 1: you know, all of this stuff. But when actuality, the
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  Speaker 1: Chinese government has started to come out with rules, for example,
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  Speaker 1: saying that you cannot use AI to replace workers. You can't,
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  Speaker 1: that's that's against the rules here. Obviously that's going to
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  Speaker 1: be really hard to control because it's like with AI,
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  Speaker 1: then you know, maybe it will stunt new job creation.
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  Speaker 1: They're not necessarily letting existing employees go. But the point
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  Speaker 1: is is even with those challenges, which are challenges all
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  Speaker 1: around the world, they're actively thinking about what can we
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  Speaker 1: do to protect the worker, where it's the completely opposite
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  Speaker 1: philosophy in the West. But they're treating they're treating China
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  Speaker 1: like the villain by first pretending that China is doing
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  Speaker 1: exactly what they're doing, which is an indictment of what
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  Speaker 1: they are doing. You know, even if it was true,
• 10:32
  Speaker 1: and you know, actually it is an indictment of what
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  Speaker 1: they're doing, but that's not not actually what's happening on
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  Speaker 1: the ground.
• 10:39
  Speaker 2: Every accusation is a confession, you know what they say. Yeah,
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  Speaker 2: always projection.
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  Speaker 3: But economic related. Also here we go you take it away.
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  Speaker 2: Yeah, I think this might be the same article or
• 10:53
  Speaker 2: related artist. All right, this is again for the Atlantic.
• 10:57
  Speaker 2: You know, c gmp's running off China as a government
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  Speaker 2: to subsidized export driven manufacturing jargonnaut It's not just bad
• 11:05
  Speaker 2: for the whole industry around the world, it's also distorting
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  Speaker 2: China's economy and alienating tradeing partners. And this person he
• 11:14
  Speaker 2: has actually a screenshot of what actually they wrote in detail,
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  Speaker 2: Chinese manufacturer, Chinese manufacturer will be competitive without she's help.
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  Speaker 2: He provides massive aid anyway, directly with handouts and tax breaks,
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  Speaker 2: indirectly by suppressing wages of factory workers and the value
• 11:32
  Speaker 2: of China's currency to make the country's export artificially cheap.
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  Speaker 2: The result is an economic mode model that favors producers,
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  Speaker 2: restraint consumers, and flood international markets with super cheap export,
• 11:46
  Speaker 2: including steel, solar panels, electric vehicles. Foreign companies simply cannot compete.
• 11:52
  Speaker 2: Chinese competition is costing Germany ten thousand manufacturing jobs a month,
• 11:57
  Speaker 2: and could stript Indonesia, could could is strip Indonesia of
• 12:02
  Speaker 2: hundreds of thousands garment worker jobs. China's trade surplus balloon
• 12:07
  Speaker 2: to a record one point to trollian last year. As
• 12:10
  Speaker 2: a share of global economy, Chinese surplass manufacturing goods is
• 12:14
  Speaker 2: the largest amassed by any country ever. And this is
• 12:19
  Speaker 2: a again this they kind of try to reframe this
• 12:24
  Speaker 2: as how, somehow this is bad, when what actually China
• 12:28
  Speaker 2: is doing is China is making everything affordable to everyone,
• 12:34
  Speaker 2: and and and and and again. You know, if your
• 12:37
  Speaker 2: argument is that somehow this is unfair, somehow Chinese is subsidizing,
• 12:42
  Speaker 2: Chinese garment is subsidizing with these goods, then you should
• 12:46
  Speaker 2: enjoy Chinese subsidies, you know, at the expenses of the
• 12:51
  Speaker 2: Chinese taxpayers. You know, it's a it's a free gift
• 12:55
  Speaker 2: handed to you by Shimshiji Fing. You're like, like, this
• 13:00
  Speaker 2: doesn't make sense. Like, for example, solar panels, Right, once
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  Speaker 2: you install those solar panels, there's no more dependency. You
• 13:08
  Speaker 2: are now those solar panels who will set there and
• 13:11
  Speaker 2: generate energy for you Fong the Sung. You don't have
• 13:15
  Speaker 2: any further dependency on China anymore after you have installed
• 13:19
  Speaker 2: those those solar panels. So if if Chipin is subsidizing
• 13:23
  Speaker 2: solar panels making it cheaper to install cheap electric power generation,
• 13:29
  Speaker 2: then you should do it. You should buy all means
• 13:32
  Speaker 2: do it. But you know that's that's how how of course,
• 13:34
  Speaker 2: I'm not gonna say that, but you know, it's just ridiculous.
• 13:38
  Speaker 3: Yeah, that's interesting. That's an interesting point.
• 13:40
  Speaker 1: Like if they were subsidizing things that got you, you know,
• 13:44
  Speaker 1: reliant on their system, that would be a little bit
• 13:47
  Speaker 1: you know, like the Western capital model. Gillette will sell
• 13:51
  Speaker 1: their razor handles for really cheap, but when you're ready
• 13:53
  Speaker 1: for replacement cartridges, damn do they get you you know,
• 13:57
  Speaker 1: like this is like you said, you install the solar
• 14:00
  Speaker 1: panels and they're gonna work for years and years and years.
• 14:02
  Speaker 1: They're going to take away revenues from the local energy companies,
• 14:05
  Speaker 1: which probably is the bigger problem than anything, you know,
• 14:08
  Speaker 1: bigger problem than anything else for the West. But if
• 14:10
  Speaker 1: it's a really good point, I think we've got some
• 14:14
  Speaker 1: more economic related stuff. Let's continue on here. This one
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  Speaker 1: I think is yours as well.
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  Speaker 2: Okay, so this this guy say, in the sixteenth century
• 14:23
  Speaker 2: Spain confronted with Mean dynasty overwhelming production, this is this again.
• 14:27
  Speaker 2: It's the same pocking.
• 14:28
  Speaker 4: Point, but they're bringing the history now. In the sixteenth
• 14:32
  Speaker 4: century of Spain, confronted with Mean dynasty's overwhelming production capacity
• 14:37
  Speaker 4: in silk and ceramics, they could only watch a silver
• 14:41
  Speaker 4: plunder from the New World was suck sucked away, with
• 14:45
  Speaker 4: no decent trade goods of their own to sell. Nineteenth
• 14:48
  Speaker 4: century Britain faced a similar plight. The East India Company
• 14:53
  Speaker 4: wrapped up deficit in tea import and with nothing to
• 14:57
  Speaker 4: sell the smuggling for bitten poison of opium. When the
• 15:01
  Speaker 4: Chin dynasty cracked down, they throw a tantrum, claiming it
• 15:05
  Speaker 4: violated the trade and fired off their cannons. And now
• 15:08
  Speaker 4: the United States and you are utterly defeated by China's
• 15:12
  Speaker 4: overwhelming supply chain and cost structure in the production of
• 15:17
  Speaker 4: TV solar.
• 15:17
  Speaker 2: Panels and next generation infrastructure. When Mark and Dreson and
• 15:22
  Speaker 2: other tech optimists staged their reality show claiming Silicon Valley
• 15:27
  Speaker 2: innovation could conquer the world, the foundation of the Western
• 15:32
  Speaker 2: manufacturing has been completely hollowed out, unable to win on
• 15:37
  Speaker 2: their own merits, with nothing to sell their Precisely, this
• 15:41
  Speaker 2: is precisely why they invoke the Roy Cohen school of
• 15:45
  Speaker 2: iron clad rules, the who never admit defeat under any circumstances,
• 15:53
  Speaker 2: right the rule uh, and framed the opponent as the criminal.
• 16:00
  Speaker 2: And they now trying to trying to embit this comically uh,
• 16:06
  Speaker 2: this comically over the top logic into international law that
• 16:11
  Speaker 2: overproduction threatens global peace and it is a crime. I
• 16:15
  Speaker 2: mean it's well said, very well said.
• 16:19
  Speaker 1: Yeah, I mean, planning for an export market is a
• 16:24
  Speaker 1: reasonable thing. And you know what isn't isn't the US
• 16:28
  Speaker 1: their Chips Act, their Inflation Act. It's all subsidizing their
• 16:34
  Speaker 1: local domestic production. Also, they're trying to do the same thing,
• 16:38
  Speaker 1: but probably on a far smaller scale because too much
• 16:40
  Speaker 1: of their national GDP is dedicated towards the military. Now,
• 16:43
  Speaker 1: imagine if they changed their priorities, like China, instead of
• 16:46
  Speaker 1: going around the world and fighting war, say okay, all right,
• 16:49
  Speaker 1: we'll we'll compete at the same game and we'll play
• 16:51
  Speaker 1: this game. Obviously they're making it sustainable somehow, but yeah,
• 16:55
  Speaker 1: it's uh, it's a good response there. Now we have
• 17:01
  Speaker 1: still economic related China high tech here we go.
• 17:05
  Speaker 2: Okay, so this this is a this is funny the economists,
• 17:09
  Speaker 2: which is another you know, imperialless apology rang and he
• 17:14
  Speaker 2: says China's high tech boom is leaving much of the
• 17:18
  Speaker 2: country behind. That could make starkly unequal country even more so, Like,
• 17:24
  Speaker 2: are you kidding me? And this guy tweeting out Jonathan
• 17:27
  Speaker 2: Chan I think he works for Wall Street Journal. I mean,
• 17:29
  Speaker 2: it's incredible for American to tweet something like this, you know,
• 17:35
  Speaker 2: like especially when the whole premise of American AI is
• 17:41
  Speaker 2: gonna make the American society even more unequal by having
• 17:45
  Speaker 2: a bunch of tech overlords ruling over a basically a
• 17:51
  Speaker 2: feudal techno. Uh uh, basically ruling over tech feudalism. So
• 17:57
  Speaker 2: I I just I was in like little little facetious
• 18:02
  Speaker 2: that just says change the wording from China to America.
• 18:05
  Speaker 2: You would bee hundred percent correct. You know again it's projection,
• 18:10
  Speaker 2: one hundred percent projection.
• 18:12
  Speaker 1: Well that is a Carl's You know you are known
• 18:14
  Speaker 1: as the ultimate ex ship poster. But you know you
• 18:17
  Speaker 1: should post with facts. There is I think is this
• 18:22
  Speaker 1: next one from let me see here?
• 18:23
  Speaker 3: What is it? It's related?
• 18:26
  Speaker 1: Oh yeah, here we go, you can it's I think
• 18:29
  Speaker 1: it's commenting on the same article.
• 18:30
  Speaker 2: Is it probably parocialism of taking everyone down? Yet so
• 18:36
  Speaker 2: this is the anstalantic article. What you're saying the Chinese
• 18:39
  Speaker 2: economy is taking everyone down? Poverty, perfected yourself alone in prosperity,
• 18:44
  Speaker 2: bring benefit to all under heaven. Mention. You know that
• 18:49
  Speaker 2: mention is the second stage of the Confucianism. The title
• 18:53
  Speaker 2: of Michael Schumann's piece in The Atlantic is not analysis.
• 18:57
  Speaker 2: It's an anxiety dressed up as argument. A reflects masquerading
• 19:03
  Speaker 2: as insight before engaging in its claims. It's worth noting
• 19:08
  Speaker 2: asking the question he refused to post taking everyone down
• 19:11
  Speaker 2: from what exactly and compared to when the historical record
• 19:16
  Speaker 2: is unambiguous. For roughly eighteen of the past twenty centuries,
• 19:21
  Speaker 2: the land constitute present day China was among the top
• 19:25
  Speaker 2: one of the two was among the top one or
• 19:29
  Speaker 2: two economies on Earth. And what follow was a development
• 19:33
  Speaker 2: strategy of a remarkable discipline, China investing education, health, infrastructure,
• 19:39
  Speaker 2: creating a foundation upon which it later transformed. The later
• 19:45
  Speaker 2: transformation with rest result is beyond serious dispute. China lifted
• 19:50
  Speaker 2: more people from extreme poverty in less than any other
• 19:54
  Speaker 2: economy in human history. Its rate of extreme poverty now
• 19:58
  Speaker 2: rivals that of the United the States. Its cities contains
• 20:02
  Speaker 2: some of the world's most educated young workforce, with sixteen
• 20:07
  Speaker 2: years of school in common major urban hubs. It's university
• 20:11
  Speaker 2: is ranked by methodology, with those stakes in Chinese prestige
• 20:17
  Speaker 2: appearing regularly among world's best stem field. China is not
• 20:22
  Speaker 2: merely manufacturing chief goods. It's producing scientists, engineers, and innovator
• 20:27
  Speaker 2: at a scale that reflects aspirations. At one point four
• 20:31
  Speaker 2: billion people who have every historical reasons to reclaim their place.
• 20:36
  Speaker 2: The honest question for the Atlantic reader is not why
• 20:39
  Speaker 2: China is rising, but why that rise produced such re
• 20:44
  Speaker 2: reflexive alarm among those who benefit the most from the
• 20:49
  Speaker 2: century of its humiliation. Mentions offers appropriate council, perfect yourself
• 20:56
  Speaker 2: before presuming to instruct others the United States, which is okay,
• 21:00
  Speaker 2: this goes on, I can't read the okay the other part.
• 21:03
  Speaker 2: But but but people get the point. But people get
• 21:05
  Speaker 2: the point.
• 21:07
  Speaker 1: Yeah, yeah, yeah. And then of course we had our
• 21:10
  Speaker 1: We we mentioned him last time last week, Noah Smith.
• 21:17
  Speaker 1: It seems like he's rage baiting, but it's actually really him.
• 21:22
  Speaker 3: It's you know you, let's let's see here, here we go.
• 21:28
  Speaker 2: Uh yeah. So so this again, like one person posting
• 21:33
  Speaker 2: the excerpt for the Economist article China's high tech prices
• 21:37
  Speaker 2: leaving much of the country behind, and Noah Smith just
• 21:41
  Speaker 2: decided to put in his two cents. He said, she can.
• 21:43
  Speaker 2: Bean's economy does not exist for the benefit of regular
• 21:46
  Speaker 2: Chinese people. It exists for national greatness. Now this is
• 21:50
  Speaker 2: coming for a guy who have never set foot on
• 21:54
  Speaker 2: to mainland China. He admitted this to me in our
• 21:57
  Speaker 2: debate five years ago before you know, during COVID he
• 22:01
  Speaker 2: said he has been to Hong Kong, but he never
• 22:02
  Speaker 2: set foot on mainland China. He does not speak Chinese.
• 22:06
  Speaker 2: And as far as I know, he has not since
• 22:09
  Speaker 2: set for mainland China. So this guy has never been
• 22:13
  Speaker 2: to China, yet continuously pontificating on Chinese culture, politics, et cetera,
• 22:20
  Speaker 2: and posing as a public American public intellectual, you know, China,
• 22:26
  Speaker 2: joining the China debate and the saying that he's saying
• 22:30
  Speaker 2: that China's economy is not for the for the regular
• 22:35
  Speaker 2: Chinese speed on, this is just preposterous. For anyone who
• 22:38
  Speaker 2: has been to China, who has lived in China for
• 22:41
  Speaker 2: extended period of time, you will see the tremendous progress
• 22:46
  Speaker 2: China has made and the dramatic improvement in the quality
• 22:52
  Speaker 2: of life. I lived in China in the nineteen eighties.
• 22:55
  Speaker 2: You know, I remember the days when we need ration
• 22:58
  Speaker 2: papers to buy anything, to buy cooking oil or clothed
• 23:04
  Speaker 2: or food. I mean, like the level of abundance that
• 23:09
  Speaker 2: exist in China today, which is not imaginable back when
• 23:13
  Speaker 2: I was growing up. So to say that somehow the
• 23:16
  Speaker 2: Chinese economic growth is not for the regular Chinese people,
• 23:20
  Speaker 2: this is just bullshit. Man like that. That just means
• 23:22
  Speaker 2: he has never interacted with any real Chinese people in China.
• 23:28
  Speaker 3: Percent it is the average person. It is the middle class.
• 23:30
  Speaker 1: It is a lower class that actually he has the
• 23:33
  Speaker 1: highest approval rating with. These are the people who love
• 23:37
  Speaker 1: what he's doing. And on the contrary, it is the
• 23:41
  Speaker 1: ultra rich who are far more concerned or worried because
• 23:46
  Speaker 1: they know that there's more scrutiny under them for corruption,
• 23:50
  Speaker 1: for all this stuff. And they also know that if
• 23:51
  Speaker 1: they had the same amount of wealth in any Western country,
• 23:55
  Speaker 1: they would be allowed to rule over society. I mean,
• 23:58
  Speaker 1: look at Occupy Wall Street. That's what the whole thing
• 24:00
  Speaker 1: was about, was about the wealth gap, was about the inequality.
• 24:04
  Speaker 1: And what happened since then, nothing happens with protests there.
• 24:07
  Speaker 1: It got worse since then. So it is it is
• 24:11
  Speaker 1: the complete opposite of what they're talking about. And I mean,
• 24:13
  Speaker 1: this is exactly what I know it's getting old to say,
• 24:15
  Speaker 1: but every accusation, that's exactly what this is as well.
• 24:19
  Speaker 1: Yeah we have so that was Noah Smith's one number eight.
• 24:25
  Speaker 1: Still economic here we go. I think this is commenting
• 24:30
  Speaker 1: on the same thing.
• 24:32
  Speaker 2: Uh yeah, I mean these these these articles are so outrageous.
• 24:36
  Speaker 2: It generated a lot of response, and and Josine haig
• 24:43
  Speaker 2: Houg he said, I broadly agree with uh uh so
• 24:48
  Speaker 2: and he said, the last part of her response is
• 24:50
  Speaker 2: very important. So is this is actually she's responding, Okay, no,
• 24:54
  Speaker 2: this is this is responding to an interview with Jessica
• 24:57
  Speaker 2: Chang wise and so Jessica Chen why original article he wrote,
• 25:02
  Speaker 2: I'm very much of the view that the drive towards
• 25:05
  Speaker 2: self reliance was not an effort to dominate other countries
• 25:09
  Speaker 2: or even uh these supply chains, but rather to secure
• 25:13
  Speaker 2: a position that was unsaleable, and that the means of
• 25:17
  Speaker 2: achieving security was not being so dependent on others. And
• 25:21
  Speaker 2: you know, uh and and you know it's a in
• 25:25
  Speaker 2: China's economy, there are many different actors that often overperform
• 25:30
  Speaker 2: in search of particular target and it's whilely in efficient
• 25:34
  Speaker 2: system where we can see that in their investment in
• 25:36
  Speaker 2: semiconductors or in their ev right now, where you know,
• 25:40
  Speaker 2: every locality have their own kind of EV company. So
• 25:44
  Speaker 2: this now, there's there's this vast over supply of things
• 25:50
  Speaker 2: that the central government has sort of targeted and so
• 25:53
  Speaker 2: in some cases that have been targets that were set
• 25:57
  Speaker 2: sometimes that have overshot. But I do not think that
• 26:00
  Speaker 2: emphasis or intention really was to weaponize them against the
• 26:04
  Speaker 2: rest of the world. Although you know, I will say
• 26:06
  Speaker 2: the Chinese government has very much learned from the United
• 26:10
  Speaker 2: States application of extra territorial export control in building export
• 26:14
  Speaker 2: control system that they have now began to roll out.
• 26:19
  Speaker 2: She's talking about the rare earth and it's true. I
• 26:22
  Speaker 2: mean this, this couldn't be more obvious right now in
• 26:26
  Speaker 2: the Chinese drive to where self sufficiency has really paid
• 26:30
  Speaker 2: off in the in the time when the strade or
• 26:33
  Speaker 2: her Muso has been choked off. You know this because
• 26:37
  Speaker 2: the China's massive overcapacity in solar and when in hydro
• 26:42
  Speaker 2: in UH and and so nuclear, China is being able
• 26:46
  Speaker 2: to provide eighty six percent of its own primary energy.
• 26:51
  Speaker 2: Chinese oil import actually dropped. This and this at the
• 26:56
  Speaker 2: same time with the production has kept going and the
• 27:00
  Speaker 2: this is this is a this is going to be
• 27:02
  Speaker 2: the year where China's oil consumption is probably peaking. And
• 27:05
  Speaker 2: this is actually saving the rest of the world. When
• 27:08
  Speaker 2: China is not buying as much oil in the world market,
• 27:12
  Speaker 2: it's making it cheaper for other countries like India, Indonesia
• 27:16
  Speaker 2: and other countries that depend on oil imports, and and
• 27:20
  Speaker 2: and and again like it's this is nothing about UH
• 27:25
  Speaker 2: trying to weaponize against the rest of the world. It's
• 27:28
  Speaker 2: everything about building self sufficiency, so China cannot be choked
• 27:33
  Speaker 2: off like as the US Navy often claimed with like
• 27:36
  Speaker 2: a chokehold on Chinese energy supply through the Strait of Malacca.
• 27:40
  Speaker 2: Everything in China is centered around self sufficiency and security.
• 27:46
  Speaker 2: And this is why I was explaining people why China
• 27:49
  Speaker 2: did this massive drive to popularize evs, because China do
• 27:54
  Speaker 2: not want to be dependent on foreign oil imports forever.
• 27:59
  Speaker 2: By having ev is, China can generate those electricity for
• 28:02
  Speaker 2: those ev internally, because China have massive power generation that's
• 28:07
  Speaker 2: not dependent on oil and gas and and and so
• 28:10
  Speaker 2: it makes sense to have them to build all those
• 28:12
  Speaker 2: high speed rail that's powered by electricity, makes sense to
• 28:16
  Speaker 2: have them run transport on evs. And now they transitioning
• 28:20
  Speaker 2: to to to even trucks to to to to electric trucks.
• 28:25
  Speaker 2: So this is this this the idea that somehow China
• 28:29
  Speaker 2: is doing this to weaponize against the reservoir. Again, this
• 28:32
  Speaker 2: is one hundred percent projection, right.
• 28:36
  Speaker 1: Yeah, you know, China was never trya never really prioritized
• 28:42
  Speaker 1: turning their economy into a weapon, turning parts of its
• 28:46
  Speaker 1: economy into a weapon. But you can be sure as
• 28:50
  Speaker 1: hell that the US is incentivizing that. They're incentivizing that
• 28:54
  Speaker 1: so that they have retaliatory measures, like they don't really
• 28:58
  Speaker 1: have much of their disposal of rare earths as a
• 29:00
  Speaker 1: big one, but that came out only after they were
• 29:03
  Speaker 1: being attacked, and lucky they had at least something because
• 29:06
  Speaker 1: it allowed the US to back off of it. I
• 29:08
  Speaker 1: think what's perhaps an even bigger problem than that is
• 29:12
  Speaker 1: China's production and the types of products they're doing, is
• 29:15
  Speaker 1: they are giving other countries a way to exit from
• 29:19
  Speaker 1: America's economic weapons across the board. I mean the fact
• 29:23
  Speaker 1: that so many people are looking, so many countries are
• 29:25
  Speaker 1: looking at EVS now because of the crisis that was
• 29:27
  Speaker 1: caused by the US. This is going to release the
• 29:31
  Speaker 1: reduce their reliance on an oil market that in many
• 29:34
  Speaker 1: ways is largely controlled by the US. They were able
• 29:37
  Speaker 1: to affect the price of oil around the world by
• 29:39
  Speaker 1: their actions really easily. Obviously, you also have more countries
• 29:44
  Speaker 1: looking at the REM and B as a trade settlement
• 29:47
  Speaker 1: option that is also going to be an exit from
• 29:52
  Speaker 1: a highly weaponized US dominated system. That's probably the bigger issue,
• 29:57
  Speaker 1: But you know, they have to frame it as China's
• 30:00
  Speaker 1: building economic you know, weapons, but the bigger issue is
• 30:04
  Speaker 1: that China is building an exit from US economic weapons.
• 30:08
  Speaker 1: I think that's uh what I think is going on.
• 30:11
  Speaker 1: Do you what do you think exactly?
• 30:13
  Speaker 2: You nailed it because right now a lot of the
• 30:17
  Speaker 2: countries are experiencing economic issues like where I am Indudesia,
• 30:21
  Speaker 2: where the currency is falling, uh, depreciating, specially in relationship
• 30:28
  Speaker 2: to US dollars. And yet countries like Indonesia, which needed
• 30:32
  Speaker 2: those dollars to do their imports, see their their import
• 30:37
  Speaker 2: costs resin and so so what you're going to have
• 30:40
  Speaker 2: is devaluation of the local currencies, inflation, and people's livelihood
• 30:46
  Speaker 2: is getting impacted, like they if they had what China had,
• 30:51
  Speaker 2: you know, like this is why China's productive uh productive
• 30:56
  Speaker 2: capacity is actually what insulated it from the crisis that
• 31:01
  Speaker 2: that that that just happened. And uh and you know,
• 31:05
  Speaker 2: if this country, for example, didn't have to deal with
• 31:10
  Speaker 2: the US dollars, they would have avoided a lot of
• 31:14
  Speaker 2: these current problems that that there be said it with.
• 31:17
  Speaker 2: But you're right, like the United States is really alarmed
• 31:20
  Speaker 2: that there might be a drive away from the US
• 31:24
  Speaker 2: dollar due to the policies that United government itself is
• 31:28
  Speaker 2: pushing and so they wanted to shift the focus to China.
• 31:34
  Speaker 2: Ban Yeah, don't be like China.
• 31:36
  Speaker 3: Absolutely.
• 31:38
  Speaker 1: I'm not sure this is a repeat because I see
• 31:39
  Speaker 1: I've gotten another Noah Smith one here.
• 31:43
  Speaker 3: Let's see.
• 31:44
  Speaker 2: I think it's a common number, Noah Smith.
• 31:47
  Speaker 3: Right, yeah, so yeah, he just.
• 31:49
  Speaker 2: He just said saying, like, look, this is one of
• 31:52
  Speaker 2: the most off targeted criticisms of she I can't think of,
• 31:55
  Speaker 2: and he just corresponded to what you you said earlier.
• 31:58
  Speaker 2: She is actually more popular a working class people and
• 32:01
  Speaker 2: those in the rural area and urban elite. I can
• 32:04
  Speaker 2: come firm, you know, just through my own network of
• 32:07
  Speaker 2: friends and families. This is because his heavy focus on
• 32:10
  Speaker 2: poverty alleviation, rural development, and bringing the wealthy. Yes, like
• 32:16
  Speaker 2: a lot of the rich Chinese, I know they don't
• 32:19
  Speaker 2: like sheg Pin, but she is a lot more popular
• 32:22
  Speaker 2: among the working class people.
• 32:24
  Speaker 1: Yeah, yeah, it you know, probably what's driving chinamaxing. Also, well,
• 32:32
  Speaker 1: I'll start off with saying, do you remember when MPR
• 32:36
  Speaker 1: and CGTM worked together on a poverty alleviation documentary that
• 32:39
  Speaker 1: really went into depth into how China solved China's poverty
• 32:46
  Speaker 1: problem and had one of the biggest upliftings from poverty
• 32:49
  Speaker 1: ever in the history of our planet.
• 32:51
  Speaker 3: And it really is amazing.
• 32:52
  Speaker 1: I mean, it was so well planned out how they
• 32:55
  Speaker 1: had different government workers going into these villages and also
• 32:59
  Speaker 1: giving not only just giving handouts, but giving villagers the
• 33:03
  Speaker 1: tools for sustainability. And you know what happened to that
• 33:07
  Speaker 1: documentary Right when it was scheduled to air in the US.
• 33:10
  Speaker 2: Yeah, God can the US politician went up in arms
• 33:15
  Speaker 2: and like, these are actually a really well made documentary.
• 33:18
  Speaker 2: I learned a lot from that. I saw, like they
• 33:20
  Speaker 2: have like the I think there was a segment on
• 33:24
  Speaker 2: like a rural county around home Jing, and they have
• 33:27
  Speaker 2: these university students found home Jing. They actually travel to
• 33:31
  Speaker 2: these remote villages to act as monitors making sure those
• 33:36
  Speaker 2: officials are doing their job in the poverty alleviation. They
• 33:40
  Speaker 2: actually audit them, make sure they're you know, not pocketing
• 33:43
  Speaker 2: the funds or like or like say they're doing things
• 33:46
  Speaker 2: but actually not doing following up. And so it was
• 33:50
  Speaker 2: very quite enlightening, how you know, to understand in concrete
• 33:54
  Speaker 2: steps how Chinese garment was able to lift eight hundred
• 33:58
  Speaker 2: million people out of the extreme But again again that's
• 34:01
  Speaker 2: something they you know, they do not want to show
• 34:04
  Speaker 2: it to American people because you might get the wrong ideas.
• 34:09
  Speaker 1: Not only you get the wrong idea, but China and
• 34:14
  Speaker 1: Shiji Ping is actually applying and addressing all of the
• 34:19
  Speaker 1: things that the people in the West want addressed. Cracking
• 34:22
  Speaker 1: down on tech billionaires, lifting people out of poverty, focusing
• 34:26
  Speaker 1: on the lower class or the middle class, you know,
• 34:29
  Speaker 1: that being the priority. Like he's literally answering the dreams
• 34:33
  Speaker 1: and hopes that Westerners have and hope that their government
• 34:36
  Speaker 1: will address. And imagine, I mean, imagine how devastating that
• 34:39
  Speaker 1: would be, saying, hold on a second. The country you're
• 34:42
  Speaker 1: telling us to hate is doing all the things for
• 34:44
  Speaker 1: us that we want you to do for us. You know,
• 34:47
  Speaker 1: then then these campaigns against China all of a sudden
• 34:50
  Speaker 1: start making sense.
• 34:53
  Speaker 2: Yeah, we have I mean, this is why China maxine
• 34:56
  Speaker 2: is a thing. Among those youngers, among those zuomers, this
• 35:00
  Speaker 2: is mostly a reaction against what they see this krupp
• 35:04
  Speaker 2: Epstein government is like squeezing their uh, you know, their
• 35:09
  Speaker 2: their own citizens and choking off the future prospect of
• 35:14
  Speaker 2: the youth. So they rather look to China as an
• 35:18
  Speaker 2: alternative example. And you know, like it's and this is
• 35:23
  Speaker 2: mostly again like mostly it was driven by the youth themselves.
• 35:29
  Speaker 2: But the American you will have American politicians like Hiller
• 35:32
  Speaker 2: Clinton will say, oh, this is because the Chinese Communist
• 35:35
  Speaker 2: Party is using TikTok to influence our young, misleading our youth,
• 35:42
  Speaker 2: spreading anti Semitism against Israel.
• 35:45
  Speaker 1: I'm totally unacceptable, you know, it's they really have to
• 35:50
  Speaker 1: keep it secret. What how the West, particularly the US,
• 35:54
  Speaker 1: actually works. I mean, I know, I remember back when
• 35:58
  Speaker 1: Julian Assange, he's been you know, kind of neutered since then,
• 36:02
  Speaker 1: but he said it so well when he was talking
• 36:04
  Speaker 1: about the war in Afghanistan and he was being asked about,
• 36:07
  Speaker 1: you know, winning the war in Afghanistan, he said, the
• 36:09
  Speaker 1: point isn't to win the war. The point is to
• 36:11
  Speaker 1: draw it out as long as possible so that they
• 36:13
  Speaker 1: can wash money from the US tax base into weapons manufacturers.
• 36:19
  Speaker 1: And then obviously those weapons manufacturers fund the same politicians
• 36:22
  Speaker 1: who are making the decisions to spend US tax dollars
• 36:26
  Speaker 1: on those kinds of things, whether it be through tax
• 36:29
  Speaker 1: dollars or whether it be through printing more money, which
• 36:33
  Speaker 1: ultimately reduces the value of the money that US citizens
• 36:38
  Speaker 1: do have, and you when you really look at that,
• 36:40
  Speaker 1: when you really look at how the whole system is designed,
• 36:43
  Speaker 1: you are literally stuck in this dystopian corporation that is
• 36:48
  Speaker 1: just designed to suck you dry and support the upper class.
• 36:52
  Speaker 1: And people are waking up to that. You know, it
• 36:55
  Speaker 1: probably would have happened even without the help of looking
• 36:58
  Speaker 1: onto China and seeing a model where it's being you know,
• 37:01
  Speaker 1: where there's a system that actually can serve the people,
• 37:04
  Speaker 1: but you can. I would imagine you could only keep
• 37:08
  Speaker 1: that lie up for so long. You could only hide
• 37:10
  Speaker 1: that reality from people for so long, and obviously it's
• 37:13
  Speaker 1: falling apart now. Yeah, yeah, we have Oh yeah, this
• 37:19
  Speaker 1: is another one you've sent over patents.
• 37:23
  Speaker 2: Yes, yes, So the story from Reuters is China owns
• 37:29
  Speaker 2: more than eleven thousand German deveaut patents. Study shows the
• 37:34
  Speaker 2: actual story is actually China went out and bought and
• 37:38
  Speaker 2: pay for those German patents. And the cool tweets say
• 37:45
  Speaker 2: is did you know China had the database of foreign patents,
• 37:48
  Speaker 2: the patent holders, researcher and companies. People could probably guess
• 37:53
  Speaker 2: that that part. Did you know? They also score them
• 37:56
  Speaker 2: by expected value and other matrix so now this is
• 37:58
  Speaker 2: an accident or natural evolution. Again, this is this faulding guy,
• 38:03
  Speaker 2: you know, like he's just like Gordon Chan. He's implying
• 38:06
  Speaker 2: like China is engaging in systematic industrial espanaje. Look, China
• 38:14
  Speaker 2: went to pay and bought for those patents. I mean,
• 38:18
  Speaker 2: like it's all about the table.
• 38:20
  Speaker 3: And so the.
• 38:23
  Speaker 2: Reply guy said, did you know that patents are public information?
• 38:27
  Speaker 2: And you can find copy of every patent, every file
• 38:30
  Speaker 2: anywhere simply by going to w I Po's website. Now
• 38:38
  Speaker 2: this is what as this actually says, is China is
• 38:41
  Speaker 2: actually taking public intellectual property seriously. Now that's why they
• 38:45
  Speaker 2: went ahead and bought them, bought those commercial patents so
• 38:50
  Speaker 2: they can be And another reason China does that is
• 38:53
  Speaker 2: because China is very good at scaling. You know, They're
• 38:58
  Speaker 2: very good and commoditized seeing the production and scaling and
• 39:03
  Speaker 2: make yeah, and and make it like affordable for everyone.
• 39:07
  Speaker 2: You know, like China have mastered that into our art.
• 39:10
  Speaker 2: So that is a part that WES has difficulty to
• 39:13
  Speaker 2: compete with. Their their difficult difficulty to compete with China's
• 39:17
  Speaker 2: massive economy of scale and and of course you know
• 39:21
  Speaker 2: Chinese industry are often very cutthroat and competitive, you know,
• 39:25
  Speaker 2: but it's just they can't compete, so they have to
• 39:29
  Speaker 2: continue to manufacture those narratives to paint China as bad
• 39:34
  Speaker 2: when you know, it doesn't doesn't really help them, It
• 39:37
  Speaker 2: doesn't really help them to compete with China by you know,
• 39:40
  Speaker 2: just by producing this kind of copiate.
• 39:44
  Speaker 1: Yeah, I mean, the patent system was designed obviously to
• 39:48
  Speaker 1: protect ideas if they're your own, so that you can
• 39:51
  Speaker 1: monetize it yourself, or you can get compensated for creating
• 39:54
  Speaker 1: that idea. And it's China's doing exactly what was intended there.
• 39:57
  Speaker 1: They they they are compensating people for those patents, but
• 40:01
  Speaker 1: when they buy them, they're wording it as being seized.
• 40:04
  Speaker 1: And yet uh, America owns one third of all of
• 40:09
  Speaker 1: German's foreign you know, foreign patents also, so again, if
• 40:14
  Speaker 1: America buys it, it is a regular economic activity. If
• 40:18
  Speaker 1: China buys it, it's an issue and it's being quote
• 40:21
  Speaker 1: unquote seized as they as they say, we have, oh
• 40:26
  Speaker 1: this is a good one. Here we go, it's another
• 40:30
  Speaker 1: one of yours.
• 40:31
  Speaker 2: Oh so this is uh the act I wasn't being
• 40:37
  Speaker 2: factious when it said US is alarmed that China is
• 40:40
  Speaker 2: trying to cure cancer because you actually read the article,
• 40:44
  Speaker 2: you know, like talking about China's rising the drug develvement
• 40:48
  Speaker 2: is we talk about China is trying to find cures
• 40:51
  Speaker 2: for cancer, different different uh uh drugs for for for
• 40:56
  Speaker 2: for treating cancer. And this is what alarms the Western
• 41:00
  Speaker 2: far more suitable cup companies because they don't actually want
• 41:03
  Speaker 2: to cure cancer. I want you to have those conditions,
• 41:08
  Speaker 2: but they will sell you drugs just to treat the symptoms, you.
• 41:11
  Speaker 3: Know, treating more profitable than a cure.
• 41:15
  Speaker 2: Exactly, exactly, you got that threatened again, that threatens their
• 41:20
  Speaker 2: business model. Their business model is collecting rent. You know,
• 41:24
  Speaker 2: this is a lot of them. Western economic activity now
• 41:28
  Speaker 2: is rent seeking, uh you know by these oligarchic companies.
• 41:34
  Speaker 3: Yeah, yeah, yeah.
• 41:35
  Speaker 1: I mean you've got cars now that you have to
• 41:36
  Speaker 1: pay a monthly fee to activate the heated seats, Like
• 41:40
  Speaker 1: it's like come on, you know, And it lends credibility
• 41:45
  Speaker 1: to quote unquote conspiracy theorists who say that we could
• 41:48
  Speaker 1: have long figured out a lot of many cures for cancer,
• 41:52
  Speaker 1: but a lot of the times there's something on the
• 41:53
  Speaker 1: table that get scrapped. Like you always hear this big
• 41:56
  Speaker 1: breakthrough like this, you know, young scientist. I remember there
• 41:59
  Speaker 1: was like a Canadian high school or from from uh,
• 42:03
  Speaker 1: from Canada also who came up with this really amazing
• 42:05
  Speaker 1: possible cure that was showing a lot of promise. It
• 42:08
  Speaker 1: was this genius kid and then one of the companies
• 42:10
  Speaker 1: bought it up and it just kind of disappeared afterwards.
• 42:13
  Speaker 1: Now people might say, oh, maybe it just didn't pass trials,
• 42:17
  Speaker 1: didn't go through it, But there are people who always thought, no,
• 42:19
  Speaker 1: they're not trying to find a cure, and this lends
• 42:23
  Speaker 1: credibility to that theory where all of a sudden, somebody
• 42:26
  Speaker 1: else is close to finding a cure or they're prioritizing
• 42:29
  Speaker 1: finding a cure, and they're saying, oh, this is bad.
• 42:32
  Speaker 1: You know, they had the previous article a couple of
• 42:33
  Speaker 1: years ago saying China might be curing cancer too fast,
• 42:36
  Speaker 1: or China is curing cancer but at what cost?
• 42:39
  Speaker 3: The famous words, but at what cost?
• 42:42
  Speaker 1: Like I mean this, Yeah, that's they won't actually say that,
• 42:51
  Speaker 1: but that's yeah, that's the truth. My apologies, I have
• 42:55
  Speaker 1: some stuff that is not in the correct order. I'm
• 42:59
  Speaker 1: noticing here, So we're kind of jumping around a little
• 43:01
  Speaker 1: bit I'll try to rearrange these a bit, but we
• 43:05
  Speaker 1: are going.
• 43:06
  Speaker 3: Back to.
• 43:08
  Speaker 1: Patents now. I see what's going wrong here. But I'll
• 43:12
  Speaker 1: reorganize the images. But you can go go ahead with
• 43:14
  Speaker 1: this one. We're gonna jump back a little bit.
• 43:22
  Speaker 2: Oh, I think we lost we lost mister Daniel for
• 43:28
  Speaker 2: a second. So now it's my show. Welcome to the
• 43:32
  Speaker 2: Silk and Steal Podcast. I'm your host, Carl Zah. We'll
• 43:37
  Speaker 2: wait for Daniel to come back. But in the meantime,
• 43:40
  Speaker 2: if there's any questions you'd like to ask me, this
• 43:43
  Speaker 2: is your chance. This is the A M A session,
• 43:45
  Speaker 2: ask me any any anything session, So you know, let's
• 43:51
  Speaker 2: let's not waste time and the chat. If you have
• 43:57
  Speaker 2: any questions for me, this is the chance to ask.
• 44:00
  Speaker 2: I'm I'm white open. Oh Daniel is back. Yeah. I
• 44:04
  Speaker 2: was gonna turn into an A session while you're gone.
• 44:07
  Speaker 2: But okay, Daniel, you.
• 44:08
  Speaker 3: Go ahead while i'm you you go ahead.
• 44:10
  Speaker 1: You talk a little bit while I'm sorting out my
• 44:11
  Speaker 1: connection and also rearranging the media assets here.
• 44:14
  Speaker 2: Okay, yeah, all right, we have we have a Q
• 44:20
  Speaker 2: and A session right now. We're holding an impromptu Q
• 44:24
  Speaker 2: and A session. Uh and oh Carlz. Do you watch
• 44:28
  Speaker 2: c S dramas? Yes, uh, you know, I haven't, not
• 44:32
  Speaker 2: as much as I would like, but you know I
• 44:35
  Speaker 2: enjoyed The last one I enjoyed was uh type Pinion
• 44:40
  Speaker 2: or the Sword into Plowshare. I didn't finish it though,
• 44:42
  Speaker 2: because I watch it maybe like halfway. It was very good.
• 44:47
  Speaker 2: I think it's one of the better historical sea dramas
• 44:50
  Speaker 2: coming out. And my wife was actually asked me the
• 44:55
  Speaker 2: other day to recommend her some sea drama. So if
• 44:58
  Speaker 2: you guys know any let me know, I'll pass I'll
• 45:01
  Speaker 2: pass along to my wife. I just told her about
• 45:05
  Speaker 2: the Pursuit of j because that's what's popular right now,
• 45:09
  Speaker 2: both in and outside of China. There's a lot of
• 45:11
  Speaker 2: sea drama that has gained a lot of popularity, particularly
• 45:14
  Speaker 2: in Southeast Asia. You know, our babysitter are like twenty
• 45:19
  Speaker 2: one year old babysitter was watching like sea drama all
• 45:22
  Speaker 2: the time, you know, like this is BOLLI. Uh you know,
• 45:25
  Speaker 2: she obviously was watching through subtitles and and so so
• 45:30
  Speaker 2: it's like, now, you know, I used to joke the
• 45:35
  Speaker 2: the you know, the the anime and k pop are
• 45:38
  Speaker 2: just gateway drugs for the two Chinese soft power, because
• 45:43
  Speaker 2: you know, most of the people don't don't don't, can't
• 45:46
  Speaker 2: tell the difference anyway, So you know, first you get
• 45:49
  Speaker 2: to soft them up with anime and K pop and
• 45:52
  Speaker 2: then Sea dramas you know, and but it's actually happening.
• 45:56
  Speaker 2: It's happening in real life. I see like Sea drama
• 45:59
  Speaker 2: is getting a lot of pop philarity right now, at
• 46:01
  Speaker 2: least where I am in the in Uh. Uh So, Carl,
• 46:06
  Speaker 2: I'll tell your wife to watch some sold Adventures. Okay,
• 46:11
  Speaker 2: I don't even know that one. I have to look
• 46:12
  Speaker 2: it up. Uh more the first j ass Man. Okay, cool,
• 46:19
  Speaker 2: I'm getting a lot of c drama recommendations along to
• 46:24
  Speaker 2: my wife. Uh finally something useful? All right? So okay,
• 46:33
  Speaker 2: so is here just blocking? No? I don't, I don't.
• 46:35
  Speaker 2: I don't block people because I actually like it when
• 46:38
  Speaker 2: people hate watching me. The fact that I like the
• 46:42
  Speaker 2: idea that somebody hey watch me while helping with our
• 46:45
  Speaker 2: utube algorithm to funnel more traffic to my show. I'm
• 46:50
  Speaker 2: moreful of that anyway. So Daniel, are you ready?
• 46:54
  Speaker 3: I'm ready. Let me just go through.
• 46:56
  Speaker 1: I'm not sure which one of these patent ones we've
• 46:58
  Speaker 1: already covered this one.
• 47:00
  Speaker 2: We've done that one. Yeah, okay, we've.
• 47:02
  Speaker 1: Done that one. Okay, and then how about this one.
• 47:05
  Speaker 1: It's not showing up on the screens.
• 47:07
  Speaker 2: Did we do Yeah, yeah we didn't. Please tell him,
• 47:10
  Speaker 2: Please tell him in that report why the control over
• 47:14
  Speaker 2: German patents by countries like the United States and Switzerland
• 47:18
  Speaker 2: is more often seeing as normal competition.
• 47:21
  Speaker 1: This is when I yeah, yeah, yeahquisition is regarded as
• 47:27
  Speaker 1: abnormal market behavior.
• 47:29
  Speaker 2: That's that's the point that you brought up.
• 47:32
  Speaker 1: Yeah, yeah, this guy is this guy what was his
• 47:35
  Speaker 1: name again, Sydney, Sydney Daddy.
• 47:37
  Speaker 3: Right, He's he's like he's.
• 47:41
  Speaker 2: Actually as he's actually a big critic critic of China.
• 47:46
  Speaker 1: Normally, he he comes across as somebody who's a little
• 47:52
  Speaker 1: bit more mentally stable than Gordon Chang, and he's he's
• 47:55
  Speaker 1: able to make his points in a way where it
• 47:58
  Speaker 1: sounds reasonable in the surface, but.
• 48:00
  Speaker 3: Like, what the heck are you talking about.
• 48:02
  Speaker 1: The danger actually comes from the US, who will sometimes
• 48:06
  Speaker 1: force their own allies to sell their prized companies, like
• 48:09
  Speaker 1: the French Allstrom their their prized energy company. They had
• 48:13
  Speaker 1: held Frederick Perucci hostage until they were willing to sell
• 48:16
  Speaker 1: it to ge. They they regularly newter their own allies
• 48:23
  Speaker 1: when it's in their own interests. Can you still hear me?
• 48:27
  Speaker 1: I'm not sure if I'm like yeah, yeah, yeah, yeah.
• 48:30
  Speaker 1: So they're they're painting China, who's going around and paying
• 48:34
  Speaker 1: good money for all of these patents as the villain
• 48:37
  Speaker 1: when there is so much more risk when you're dealing
• 48:42
  Speaker 1: with the US. Who was it who said, you know,
• 48:45
  Speaker 1: it's uh, it's dangerous to be uh, China's enemy, but
• 48:50
  Speaker 1: it's fatal to be their front Kissinger.
• 48:52
  Speaker 2: Kissinger said, it's uh, it's dangerous to be United States enemy,
• 48:58
  Speaker 2: but it's fatal to be it's friends.
• 49:01
  Speaker 3: Yeah.
• 49:02
  Speaker 1: So I don't I don't know what point he's trying
• 49:04
  Speaker 1: to make there, but he's not. It does not make
• 49:06
  Speaker 1: sense when you look at the reality of how the
• 49:08
  Speaker 1: world works. What do we have next? Let me see
• 49:11
  Speaker 1: if I've let me know if I've done any of these. Oh,
• 49:13
  Speaker 1: this one, this one was went a lot longer than this,
• 49:16
  Speaker 1: But hopefully this will jog your memory and you can Yeah.
• 49:18
  Speaker 2: Yeah, Actually, I have David Fisherman's tweet a threat lineup
• 49:23
  Speaker 2: on my machine. So again this is uh. This is
• 49:28
  Speaker 2: in response to an article about how the profit mark.
• 49:34
  Speaker 2: As profit margin shrinking, China's auto industry, auto parts maker
• 49:38
  Speaker 2: increasingly turned to robotics as new growth engine, tapping their
• 49:42
  Speaker 2: manufacturing supply chain and component expertise into a potentially massive
• 49:48
  Speaker 2: future market. This is This is by Michael Petis, who
• 49:53
  Speaker 2: is a professor at the Baking University. But he's a like,
• 49:57
  Speaker 2: he's like the thinking man's born chan. He's been like
• 50:00
  Speaker 2: poo poo in China's growth for like the last twenty years.
• 50:03
  Speaker 2: And but he but he continued, he said as a
• 50:06
  Speaker 2: bad thing that that China is turning into advance uh
• 50:10
  Speaker 2: and man is employing AI and UH and men robotics
• 50:15
  Speaker 2: and advanced manufacturing because he says, as evolution wipes out
• 50:20
  Speaker 2: profit margin, ev industry TV producer are turning into robotics,
• 50:24
  Speaker 2: where ironically profit margins are even worse. And this isn't
• 50:28
  Speaker 2: because of stupidity. They're responding correctly to the incentive to
• 50:31
  Speaker 2: face in the economy in which unit labor costs are
• 50:34
  Speaker 2: among the lowest in the world. You would expect the
• 50:37
  Speaker 2: most competitive producer to specialize in labor intensive industries, but
• 50:42
  Speaker 2: in China, many of them are rushing into politically preferred
• 50:45
  Speaker 2: industries because in this industry the cost of capital including
• 50:49
  Speaker 2: subsidized equipment and logistics is even lower. They get unlimited
• 50:53
  Speaker 2: credit as low rate, which is no hard budget constraint.
• 50:57
  Speaker 2: Under these conditions. Is natural shift even more from labor
• 51:01
  Speaker 2: intensive industry to capital intensive one. I mean this is
• 51:05
  Speaker 2: just run on so many levels because first of all,
• 51:08
  Speaker 2: China's wage labor has been rising steadily over the last
• 51:14
  Speaker 2: twenty years. Now, the China manufacturing labor costs is actually higher,
• 51:21
  Speaker 2: much higher than countries like Vietnam, India, much of Southeast Asia.
• 51:27
  Speaker 2: Yet those industries are not leaving China because China have
• 51:32
  Speaker 2: figured out how to manufacture at scale and employing advanced
• 51:39
  Speaker 2: technology into the manufacturing. What Michael Pettis is really saying
• 51:42
  Speaker 2: is China should stick into stick with labor intensive industries
• 51:46
  Speaker 2: like making shoes and toys for the United States. You know,
• 51:50
  Speaker 2: China has no business making evs, so they're In response,
• 51:57
  Speaker 2: another guy, Isabella Camiska China in to support Michael Pittis
• 52:02
  Speaker 2: by saying below story about Chinese tech evolution is really insightful.
• 52:06
  Speaker 2: I think it perfectly explains why China has such difficulty
• 52:10
  Speaker 2: reinvesting its capital in the West beyond purely financial asset
• 52:14
  Speaker 2: or acid. He wants to strategically sabotage Chinese FDI felt
• 52:18
  Speaker 2: quite sharply post aten, and it's not just because Western
• 52:22
  Speaker 2: country become more wary of Chinese control and influence. The
• 52:26
  Speaker 2: documentary American Factory That was, a documentary produced by Obama,
• 52:32
  Speaker 2: perfectly illustrated the beginning of the evolution problem. The Chinese
• 52:36
  Speaker 2: factory model, when powered by cheap, exploited labor, simply cannot
• 52:40
  Speaker 2: be replicated competitively in the West, at least not without
• 52:44
  Speaker 2: making the West visibly poor, something that would likely trigger
• 52:48
  Speaker 2: a political backlash. The documentary tracks successful attempts by Chinese
• 52:52
  Speaker 2: owners to block American unionization to protect profitability. The Chinese
• 52:58
  Speaker 2: manager are also regular bewildered by American labor norms, but
• 53:03
  Speaker 2: the reason their investment eventually fail has little to do
• 53:06
  Speaker 2: with Americans being lazy or overunionized. On the contrary, is
• 53:10
  Speaker 2: because when once comparative advantage is cheap labor and repression,
• 53:15
  Speaker 2: it's impossible to make that model work anywhere that doesn't
• 53:19
  Speaker 2: abide the same norm. This limits Chinese corporate expansion to
• 53:24
  Speaker 2: jurisdiction with poor labor protection and standards. Or non democracy.
• 53:29
  Speaker 2: This is why China's American investment are eventually abandoned in
• 53:33
  Speaker 2: favor of PRL countries jurisdiction where China had more cloud
• 53:38
  Speaker 2: and influence over local governments as us greater ability to
• 53:41
  Speaker 2: run exploitative models. It's also helped that these populations are
• 53:46
  Speaker 2: generally poor and had to take terms as presented, but
• 53:49
  Speaker 2: even that strategy is becoming increasingly politically contentious. This left
• 53:54
  Speaker 2: China with no choice but to compete technologically. After all,
• 53:59
  Speaker 2: only alternative the points are Bankrupty is primary customer and
• 54:03
  Speaker 2: trade partner AKA is a force that power what growth
• 54:07
  Speaker 2: it has. Number two writing off the wealthy thought it
• 54:11
  Speaker 2: had on the ground it is no longer materializable, a
• 54:14
  Speaker 2: move that essentially locks its own people into exploitive condition
• 54:18
  Speaker 2: for the long term. Number three annexing foreign countries so
• 54:22
  Speaker 2: that the foreign population can be forced to work in
• 54:24
  Speaker 2: exploitative condition instead. So so far, China is opting for
• 54:30
  Speaker 2: the technological path, but as a below story illustrate, the
• 54:33
  Speaker 2: more China griefs up on its true comparative advantage large
• 54:38
  Speaker 2: cheap workforce in favor of technological advances, the more likely
• 54:42
  Speaker 2: it's going to turn into evolution, and this is because
• 54:46
  Speaker 2: without natural input cost advantage, it has to compete on
• 54:50
  Speaker 2: an actual merit and non human labor cost control. The
• 54:53
  Speaker 2: problem for China is that simply shifting toward automation and
• 54:57
  Speaker 2: technology is no guarantee of success, especially if its overall
• 55:01
  Speaker 2: production is far more capital and energy intensive than the
• 55:04
  Speaker 2: older way of doing things. You might not even guarantee
• 55:07
  Speaker 2: greater efficiency. Since foreign competition would no longer be put
• 55:11
  Speaker 2: up by inability to emulate exploitative working practice, their system
• 55:17
  Speaker 2: won't tolerate. On the contrary, China will now be the
• 55:20
  Speaker 2: one constraint by its own ability to adopt Western practices,
• 55:24
  Speaker 2: notably the art of yielding to consumer feedback and power
• 55:28
  Speaker 2: cost control and respectful heart budget constraint. This is a
• 55:32
  Speaker 2: very common talking point about in the West about China's rice,
• 55:36
  Speaker 2: How China's rice must be powered by slave labor. I
• 55:39
  Speaker 2: have been hearing this since nineteen nineties. I mean it's
• 55:42
  Speaker 2: the same talking point despite that the Chinese working condition
• 55:47
  Speaker 2: has improved drastically over the last thirty years. So David Litterman,
• 55:54
  Speaker 2: who works in the Chinese energy sector, he wrote a
• 55:58
  Speaker 2: whole Twitter threat to to counter this argument. He said
• 56:01
  Speaker 2: this argument keeps misdirect describing what China's actual source of
• 56:06
  Speaker 2: competitiveness are than treating those bad description as explanatory. This
• 56:12
  Speaker 2: is the problem. You know, this Isabella Fellow is quoting
• 56:15
  Speaker 2: Michael Petties. It's like garbaging garbage out, and then eventually
• 56:18
  Speaker 2: it will feed to like the bottom feeder, like Noah Smith,
• 56:21
  Speaker 2: and then they will regurgitated and then then and spilled
• 56:25
  Speaker 2: out as a conventional wisdom. But David Fisherman, who actually
• 56:30
  Speaker 2: understand how China works, being a long term resident of
• 56:33
  Speaker 2: China working in the Chinese energy sector, he wrote a threat.
• 56:37
  Speaker 2: He said, rather than rebut every bad conclusion, it's more
• 56:40
  Speaker 2: useful to identify and a few false premises that caused
• 56:44
  Speaker 2: most of the damage. Let's go one false premise Number one,
• 56:49
  Speaker 2: cheap exploited labors China's defining comparative advantage. This is the
• 56:54
  Speaker 2: biggest and most obvious air implying multiple places throughout. The
• 56:58
  Speaker 2: argument obviously still has a two thousand and oh five
• 57:02
  Speaker 2: era or earlier model of Chinese industry which is undermining
• 57:05
  Speaker 2: all the subsequent analysis. Explanation of Chinese competitiveness assume low wages,
• 57:12
  Speaker 2: weak labor protection, and scalability via labor about this was
• 57:16
  Speaker 2: never the whole story. This is particularly wrong today. Supply
• 57:20
  Speaker 2: chain expert and procerment people have been trying to explain
• 57:23
  Speaker 2: why Chinese manufacturing hasn't immediately slipped the way to cheaper
• 57:27
  Speaker 2: labor markets like India or Vietnam for a while now,
• 57:30
  Speaker 2: but it seems some China opinion habers still haven't heard
• 57:34
  Speaker 2: about it. More serious analysis today attributes Chinese manufacturing advantage
• 57:40
  Speaker 2: to things like industrial cluster supplier density, rapid iteration, economies
• 57:47
  Speaker 2: of scale for capacs, high equality infrastructure, strong national local
• 57:53
  Speaker 2: government coordination, and extreme domestic competition, among others. If you
• 57:57
  Speaker 2: refuse to acknowledge this, your argument or will always keep
• 58:01
  Speaker 2: circling back to unsophisticated caricature of low cost labor exploitation.
• 58:07
  Speaker 2: False premise number two industrial upgrading is some kind of
• 58:11
  Speaker 2: force pathology. This idea is particularly odd that China is
• 58:15
  Speaker 2: forced into technology and innovation because it's exploitative labor model
• 58:20
  Speaker 2: doesn't work abroad. It's also completely backwards. Moving up the
• 58:23
  Speaker 2: industrial value chain is what all mature industrial economy have
• 58:28
  Speaker 2: done and try to do as their wage right and
• 58:30
  Speaker 2: their demographic shift. It's not some desperate last resort unique
• 58:36
  Speaker 2: to China. Cultivating the technological and human capital to pursue
• 58:40
  Speaker 2: such sector already indicate merit accumulated from prior generators of
• 58:45
  Speaker 2: industrial activity and has been the explicit long term goal
• 58:48
  Speaker 2: from the dawn of China's modern industrialization. It seems that
• 58:53
  Speaker 2: I understand China's expansion into high tech sectors like clean
• 58:56
  Speaker 2: tech battery robotics TB as force because China has run
• 59:01
  Speaker 2: out a way to exploit cheap labor and now must
• 59:04
  Speaker 2: compete on real merit rather than indigenous natural transitions. This
• 59:09
  Speaker 2: is even a sillier suggestion. Is this is even a
• 59:13
  Speaker 2: sillier suggestion that China not supposed to do these things
• 59:17
  Speaker 2: because it's comparative advantage it lies elsewhere cheap exploited labor
• 59:21
  Speaker 2: see false premises number number one and false premise number
• 59:25
  Speaker 2: three seeing FDI pattern being part of a moral story
• 59:29
  Speaker 2: rather than just following normal institutional policy incentives. So there's
• 59:33
  Speaker 2: a kernel of truth here. Chinese outbound FDI into developed
• 59:38
  Speaker 2: world has declined, and firms do face genuine friction operating
• 59:42
  Speaker 2: across very different regulatory, labor and political system. But then
• 59:46
  Speaker 2: interprete to declining Chinese FDI as proved, Chinese firm cannot
• 59:51
  Speaker 2: function in rich democracy, which is some classic motivated reason
• 59:55
  Speaker 2: if I ever seen it. There's a long list of
• 59:57
  Speaker 2: things you could and should look into first to understand
• 1:00:00
  Speaker 2: why Chinese FDI might decline, including tightening Chinese capital control,
• 1:00:06
  Speaker 2: increased emphasize on de leveraging domestic firms, greater pressure and
• 1:00:10
  Speaker 2: scrutiny from regulator in post countries, national security and geopolitics concerns,
• 1:00:16
  Speaker 2: sector level restriction, ig on fossil fuel investment, reduce appetite
• 1:00:22
  Speaker 2: for risk from Chinese companies after a decade plus of
• 1:00:25
  Speaker 2: often dubious return under oversea ventures. Any one of these,
• 1:00:29
  Speaker 2: or combination thereof is a more empirically sensible way to
• 1:00:33
  Speaker 2: understand why Chinese outbound FDI might slow down, rather than
• 1:00:37
  Speaker 2: this smug moral narrative. But why would we be interesting
• 1:00:41
  Speaker 2: on complexity and nuance fallse premise number four. Western industrial
• 1:00:47
  Speaker 2: strengths embody merit and morality. Chinese industrial strength embody low
• 1:00:52
  Speaker 2: mirrits and immorality. Right at the end of that post,
• 1:00:56
  Speaker 2: it was a singular chauvinistic implication that the web has
• 1:01:00
  Speaker 2: some unique ownership over innovation, cost control, consumer feedback, or
• 1:01:06
  Speaker 2: respectful budget constraint that will pose a challenge for Chinese
• 1:01:10
  Speaker 2: companies because apparently are just too oundisciplined and immoral to
• 1:01:14
  Speaker 2: understand the things. So Chinese strengths are implicitly illegitimate or coercive,
• 1:01:19
  Speaker 2: and Western strength are neutral, normal and organically meritocratic. And
• 1:01:26
  Speaker 2: if Chinese firm will become more maritalk meritorious, they are.
• 1:01:34
  Speaker 2: They're only doing so because they're forced to, not because
• 1:01:37
  Speaker 2: it's a natural institutional evolution. When you start keeping a
• 1:01:42
  Speaker 2: sharp eye for the civilizational civilization chavinism from Western ecompoundeds,
• 1:01:47
  Speaker 2: you will realize that it's everywhere. It's twenty twenty six.
• 1:01:51
  Speaker 2: We're still pretending this is serious analysis instead of a
• 1:01:54
  Speaker 2: chronic superiority complex in a Trench Code primise number five.
• 1:02:00
  Speaker 2: The involution is a broad symptom of civilization disease in
• 1:02:05
  Speaker 2: the Chinese industrial sector, not just a sector level of phenomena.
• 1:02:09
  Speaker 2: We've already seen a lot of misunderstanding of evolution in
• 1:02:12
  Speaker 2: Western pounded try. I have previously been critical of how
• 1:02:16
  Speaker 2: other European e compoundents have misused it, and now I
• 1:02:20
  Speaker 2: realize all belongs to the same click. So the repeated
• 1:02:23
  Speaker 2: error is not surprising. Evolution is not a broad diagnosis
• 1:02:27
  Speaker 2: of China's modernization path. It shouldn't lazily be taken to
• 1:02:31
  Speaker 2: me too much competition or not enough reward for too
• 1:02:34
  Speaker 2: much effort. It described a specific phenomena in emerging specific
• 1:02:38
  Speaker 2: sectors under specific condition, which include overcapacity, policy distortion, and
• 1:02:43
  Speaker 2: sluggish demand. Because the evolution is not a catched all
• 1:02:47
  Speaker 2: description of China's economic industrial model, it can't mean industrial
• 1:02:51
  Speaker 2: upgraating or automations are futile. In fact, diversifying into higher
• 1:02:56
  Speaker 2: productivity activities seem to like a very since way to
• 1:03:00
  Speaker 2: escape this kind of low marching trap that unabated evolution threatened.
• 1:03:05
  Speaker 2: So yeah, this post doesn't just set get a few
• 1:03:08
  Speaker 2: detail around. It's constructed on a fundamentally mistaken model of
• 1:03:12
  Speaker 2: how the Chinese economy works, and it's rotten to the baseboard.
• 1:03:17
  Speaker 2: Worst of all, if you think about it, there's literally
• 1:03:19
  Speaker 2: nothing here that helps anyone to think about how to
• 1:03:22
  Speaker 2: compete with China. It's all useless reassurances that China either
• 1:03:27
  Speaker 2: cannot do what he's doing or that it can, but
• 1:03:30
  Speaker 2: it doesn't count because he's not moral enough. No strategy,
• 1:03:33
  Speaker 2: no model, no serious engagement. With reality just smug self
• 1:03:37
  Speaker 2: congratulatory whining and cope. And this is I mean, he
• 1:03:44
  Speaker 2: said it better than I could. This is just copian
• 1:03:48
  Speaker 2: And he actually does not help the West compete with
• 1:03:52
  Speaker 2: China in any way. It only offers a psychological comfort
• 1:03:56
  Speaker 2: to think we are still moral experior to those things grupable,
• 1:04:00
  Speaker 2: oriento Chinese. But yeah, I mean, like I I, I
• 1:04:06
  Speaker 2: don't know, I don't know what you have to add
• 1:04:08
  Speaker 2: to that.
• 1:04:09
  Speaker 3: Yeah, No, I mean that's pretty concise.
• 1:04:11
  Speaker 1: Nobody can beat David on his on the way that
• 1:04:13
  Speaker 1: he puts things together. He is you know, he's right
• 1:04:17
  Speaker 1: up there with you know our no Batron does some
• 1:04:19
  Speaker 1: really great commentary also, he is up there is He's
• 1:04:22
  Speaker 1: one of the most underappreciated accounts on X and I
• 1:04:26
  Speaker 1: recommend that everybody follows him.
• 1:04:28
  Speaker 3: I mean, yeah, he pretty much says it all.
• 1:04:30
  Speaker 2: Yeah he he. He actually responded one more bonus bonus
• 1:04:34
  Speaker 2: wrung because uh is a is about Comishka double down,
• 1:04:41
  Speaker 2: because she said people seem to have real trouble understanding
• 1:04:44
  Speaker 2: that just because something is technologically possible or optically impressive
• 1:04:48
  Speaker 2: doesn't mean it's necessarily commercial, commercially cost effective to deploy
• 1:04:54
  Speaker 2: at scale. China is the experiencing evolution because he's technological
• 1:04:58
  Speaker 2: success in the lap don't necessarily translate into commercially viable
• 1:05:02
  Speaker 2: technology at scale. We know this because of its ongoing
• 1:05:06
  Speaker 2: reliance on subsidy to mask non viability impacts. This really advanced.
• 1:05:11
  Speaker 2: If it's the tech is really advanced, you would be
• 1:05:14
  Speaker 2: capable of maintaining market share without subsidies. This is the
• 1:05:18
  Speaker 2: equivalent of scientists generating fusion in a lab and choose
• 1:05:21
  Speaker 2: to roll out commercially before proving they can generate a
• 1:05:24
  Speaker 2: net energy game from the technology. What happened then, rather
• 1:05:27
  Speaker 2: than generating positive some effect for the world, it generates
• 1:05:30
  Speaker 2: an energy sucopist black hole. And to this, David respond,
• 1:05:37
  Speaker 2: this is the bonus round the up. Continue on the
• 1:05:42
  Speaker 2: credibility in generating campaign with a batch of claims that
• 1:05:46
  Speaker 2: even more dubious than the last, Unfortunately with a smugness
• 1:05:50
  Speaker 2: and condescension that certainly hasn't been earned. Quote here, China
• 1:05:55
  Speaker 2: is experiencing evolution because it's technological success in the lab
• 1:05:59
  Speaker 2: do not necessarily translate into commercially viable technology as scale.
• 1:06:03
  Speaker 2: This is the exactly backward China's obvious strength over the
• 1:06:06
  Speaker 2: last twenty years has been scaling and commercialization of things
• 1:06:10
  Speaker 2: that weren't able to escape the lab environment elsewhere in
• 1:06:14
  Speaker 2: the world. Ironically, the most enduring critique of Chinese industrial
• 1:06:18
  Speaker 2: sector tech sector has historically been that it struggles with
• 1:06:22
  Speaker 2: innovation at the frontier i elab work while being strong
• 1:06:25
  Speaker 2: in deployment and scaling. Because of this sour grape narrative
• 1:06:30
  Speaker 2: about Chinese technology achievement, neually revert to angle like, well,
• 1:06:34
  Speaker 2: they may have built it and scaled it, but they
• 1:06:36
  Speaker 2: didn't invent it, which I have been caring endlessly for
• 1:06:39
  Speaker 2: the last decade when it comes to pretty much every
• 1:06:42
  Speaker 2: technology in energy sector, although there's also that is also
• 1:06:47
  Speaker 2: changing now too. And again, what do you think evolutional
• 1:06:51
  Speaker 2: evolution means here? It's not being used to describe outcome
• 1:06:54
  Speaker 2: of inability to scale technology commercially. Come on now again
• 1:06:58
  Speaker 2: quoting if the technology is the tech is really at advance,
• 1:07:01
  Speaker 2: you would be capable. You will be capable of maintaining
• 1:07:05
  Speaker 2: market share without subsidies. This is a deeply unseerious way
• 1:07:08
  Speaker 2: of thinking about industrial economies and reveal an issue more profound,
• 1:07:12
  Speaker 2: profound than classic China bad pound try state support and
• 1:07:16
  Speaker 2: subsidies show up pretty much everywhere across advanced tech, at
• 1:07:20
  Speaker 2: every stage of product, product development, and deployment in pretty
• 1:07:24
  Speaker 2: much every country. By this logic, US semiconductors and European
• 1:07:28
  Speaker 2: aerospace sector or early renewable industry in the West are
• 1:07:33
  Speaker 2: We're also all not generating real advances. You can dislike
• 1:07:37
  Speaker 2: subsidies and argue against them without degrading the entire conversation
• 1:07:41
  Speaker 2: into unsophisticated slop like subsidy equal non viable, and the
• 1:07:47
  Speaker 2: fusion analogy makes no sense. Fusion has fundamental physics constraints,
• 1:07:51
  Speaker 2: and it either works reached net energy gain or it doesn't.
• 1:07:55
  Speaker 2: So far it doesn't. Most industrial technologies are they pass
• 1:08:00
  Speaker 2: that They first work technologically in lab setting, but are
• 1:08:04
  Speaker 2: expensive or impractical, then get better over time in real
• 1:08:08
  Speaker 2: world via iteration, incremental improvement, economies of scale, and supply
• 1:08:13
  Speaker 2: chain matureation which private capital often doesn't have the patience
• 1:08:17
  Speaker 2: or stomach for. That is a point of stage or
• 1:08:20
  Speaker 2: support to take a longer view on strategically valuable technology
• 1:08:25
  Speaker 2: than market do on their own. You know wow, yeah, David,
• 1:08:30
  Speaker 2: throw it out of the water here.
• 1:08:32
  Speaker 1: Yeah it does think you know yeah, and it goes
• 1:08:35
  Speaker 1: one step further, you know, beyond saying that the West
• 1:08:38
  Speaker 1: also subsidizes certain industries, they actually go one step further.
• 1:08:43
  Speaker 1: They don't only just subsidize companies and industries so that
• 1:08:47
  Speaker 1: they can go on and develop something great. In some cases,
• 1:08:51
  Speaker 1: they even develop the tech themselves. Like for example, the
• 1:08:54
  Speaker 1: founding infrastructure for the Internet was developed by the US military,
• 1:09:00
  Speaker 1: developed with public funds. It wasn't, you know, encouraged, They
• 1:09:05
  Speaker 1: didn't encourage a private company to do it, but they
• 1:09:07
  Speaker 1: did then hand over that technology to a private company
• 1:09:10
  Speaker 1: to completely profit from. So it was socialized development and
• 1:09:14
  Speaker 1: completely privatized profits. So it goes even one step further
• 1:09:20
  Speaker 1: than what China is doing, which that should be a
• 1:09:22
  Speaker 1: greater outrage to the ordinary person.
• 1:09:28
  Speaker 3: Yeah, yeah,