hello everyone and welcome back to conversations with Tyler today I am here with yashang Wang who is Professor of management at the MIT Sloan school he has written the famous book capitalism with Chinese characteristics on the history of Chinese economic reforms and he has a forthcoming book coming out which I found fascinating it is called
the rise and fall of the East examination autocracy stability and Technology due out this summer yashing welcome thank you Tyler so good to be with you on the podcast I have so many questions about China let's start with one why did the Chinese State fiscally centralize so late in its development well so you could say that the Chinese
state it depends on your definition of development you in one definition you can say it was over developed in the sense that you essentially only have this day and you don't really have private economy you didn't have a real meaningful Society you didn't have independent intellectual class intelligencia in Russian word and you
didn't have organized religion so all you had was the state and there were pockets of the society the state was not able to reach that's true but where the state was able to reach reach it was all dominary right so in essence the Chinese state was over developed I think it was probably underdeveloped in the sense that in part because of this dominance of the
state it didn't really develop the kind of administrative capacity to tax the population it didn't develop the institutionalized support for public services even though the state did provide some Public Services comparable to what was available in Europe and it was not able to for example have a proper RMA so that's why Chinese Chinese history was full of
Northern nomadic tribes taking over the country so it was not that professionalized in the modern sense of the world so it was underdeveloped in that sense let's take say the middle of the 1990s what percentage of GDP is federal government revenue in China well it was very small and that's the number say I I don't know the number but but if you go
to the economic historians work on Qing Dynasty there uh that their rough estimate is that China had a much smaller state in terms of the physical capacity as compared with Europe uh at that during that comparable period of time but here I think and to some extent we we struggle with the same issue today if you look at the tax
revenue relative to GDP even China today is not an excessively High ratio but if you look at the ownership role of the state it is no has a big state sector it has a big influence over the private sector so I would argue that Chinese state in the 19th century I did not arrive all its power from taxation it had the power to appoint officials they had the power to
control the private sector control the merchants so that kind of administrative power was quite substantial say when China needs to fight Britain in the Opium Wars or come the 1920s is that lack of fiscal capacity what's holding back China well it was the overall lack of Economic Development right so and the the lack of physical capacity was a part of that
but the the the bigger picture is obey our own data the Chinese state it didn't have an a naval power as they used to have back in the sun Dynasty and in the meant Dynasty there was a famous uh event uh the seven voyages where the Chinese ships were able to travel to Africa to Arabia and and China relinquished all that Naval Power by
19th century I read so many experts insisting that China should rebalance its economy toward consumption yet China never seems to do this or the experts right is China right no the experts are not wrong but but the problem is that the low consumption to GDP is a symptom it is not a cause of the imbalances of the Chinese economy
the bigger issue I believe is the fact that the household income share of the GDP is very low right so you have to save a fixed proportion of your household income when the household income relative to GDP is is low and at some point was declining the consumption all of the mathematical necessity is accounting for smaller and smaller share
of the GDP so the issue is really the household income so if you look at the government and the corporate sector and the household the household sector as a proportion to the GDP was never high and during certain periods in Chinese history it was a losing sector relative to the other sectors of the economy and that gets to a deeper issue about
essentially the power of the government Visa fees the household the power of the corporate sector vis-a-visa household that's a bigger political economy question rather than a narrow fiscal issue what's the biggest misunderstanding that American Business Elites have about the Chinese economy um well I wouldn't say is the biggest but one of them is
is that they look at the Chinese r d spending and they look at the uh for example some of the impressive technological progress the country has made and then they drew the conclusion in the Chinese economy is driven by productivity and Innovations and in fact studies show that the total Factor productivity contributions to the GDP have been declining
in the last decade and even more so as China has begun to invest more in r d the economic contributions coming from technology coming from productivity have been actually declining so in that in the in the economic sense it's not a productivity driven economy it is a overwhelmingly investment driven economy and I think that's one of the biggest
misunderstandings of Chinese economy and it has to it has entails implications about the future prospects of the country right whether or not you can sustain this level of economic growth purely on the basis of massive uh Investments why don't the Chinese want to have more children urban areas the TFR can be below one even right yeah you're lucky if it's one
well I think um by the way this is a East Asian phenomenon as well and so part of it is the socialization of the norm because of the one child policy that they instituted in the late 1970s and they only lifted that policy in 2015. so essentially we had many many years in which people were socialized in in the norm that one child
is that is the is the is the norm but South Korea has done the same right they didn't have one child policy yeah I know so that's the point I was trying to get right Japan didn't have a one child policy Japan has a very low fertility rate uh but but so something is comparing apple with with orange Japan is much more developed a society the per
capita GDP is much higher so essentially the fertility rate would probably be lower only naturally as a result of that difference in per capita's GDP but I think it's probably more than that they they the the land uh intensive you that the nature of the Chinese economy and Japanese economy is it's a very land intensive so the urban cause
of living are very high because of the very high housing costs right so the the the the the the common complaint we hear from young people in China is that they cannot afford the children and and there's a cultural norm that you need to have your own housing to be able to get married and that may also deter family information and therefore
producing production of children right what's the future of immigration into China as population declines and it's just started declining right who wants to go there yeah well it's not a very attractive country to go now right so look at what happened during the covet um Public Health crisis and this erratic policy from zero covet
to essentially no policy in place to control any kind of various transmission and now China is reporting a 60 000 death related to covet and most people believe there's a vast underestimate of what the true number is the erratic policy on on economic management is also incredibly jarring it undermines The credibility of the policy
management of the government I think the the bigger worry is is a foreign Capital uh ahead of foreign uh migrants foreign Capital the reorganization of the supply chain and China used to be a factory for the world now many companies are rethinking about whether or not they should rely so heavily on supply chain China and for example if you look at the
recent iPhone iPhone 14 parts of it are Made in India rather than in China I have heard from many companies that they are going to move out the part of the production that caters to the World Market to other countries they are going to have the production caterings with the domestic Market stay in China so China increasingly is becoming factual
for itself rather than Factory for the world so so I think from an economic from the immediate economic perspective the the reluctance of 4 current capital is a bigger concern than the lack of immigration in the long run probably the labor Supply is becoming an issue and they may rethink about the immigration policy what are the possible Chinese origins of
the phrase laissez-faire um well I'm not a I'm not a historian per se I'm not a historian of that particular um particular phrase but there is at least there's believe that that phrase originated from China in the sense that there was a European belief that the meritocracy the Chinese meritocracy conferred a lot of autonomy on meritocrats
they could do the things that they wanted to do without the close supervision from the emperor and so the one version of the origin of that word is the the Chinese marital class the Chinese Court officials the Confucian mandarins enjoy a lot of operational autonomy and they could do whatever that they wanted to do and we know for a fact
that's just not true the Chinese Court officials didn't have any autonomy operating autonomy nor did they have any ideological autonomy why did Chinese literacy appear to stagnate in the 19th century yeah so so this is a a um a a deeply puzzling uh development so let me make the argument why there was a potential for China to uh to raise its literacy
they implemented the examination system back in the 6th century and the state began to provide um not Universal education but something closer to Universal education was more like a preparatory education for boys and men to be able to take the Civil Service examination right and the costs were subsidized by the by the state and the apparatus the
infrastructure was quite widespread and developed and there was a cultural uh cultural premium um plays on being able to read and write so they have all the conditions for further literacy and even Universal literacy number of factors hindered the further development of literacy one of the bigger factors was that this entire system
was designed for half of the population only for the male half of the population and so the females didn't have access to the preparatory schools and they couldn't take the Civil Service examination system also there was some spillover from the mail to the female in terms of basic literacy but the scale was not that big the other was that the
the entire education was organized around memorization rather than teaching people how to think and one problem with that was that there was never any kind of liberal liberalizing value that came from Road memorization memorization of the confusion text and those texts were usually extremely conservative and backward looking so not only the the female half of the
population didn't benefit from that there was no kind of a liberal value that came from this apparatus of Education that would uh sort of over time advocated for Universal education beyond the male half of the population right so so there was almost like a like um self-contained restriction on the scale of the literacy to the Mayo sector of
the population I think the third reason is economics and Chinese economy didn't develop commercialization didn't develop at a scale that we saw in Europe and that didn't really increase the demand for human capital for basic skills if you run a bureaucracy you know for a country the size of China you may need 10 000 people 20 000 people
40 000 people 100 000 people but if you run a commercial economy you need Millions you need tens of millions of people working uh in the factories and doing this and that they're producing this and that right so so the the demand for human capital when you don't really have a commercial economy it's always going to be limited if all you need is
the human capital to run the bureaucracy right so I I would say that all these factors combined uh uh together restricted the um what could have been a earlier literacy Revolution that failed to occur in China if you look at for example going back to the 16th century I don't know how to literacy as compared with you know some European countries but the
difference is that in Europe you have this explosion of literacy whereas in China a stay at the same level uh that that the the initial level didn't translate into a higher level whereas in Europe it did now you argue in your new book that the imperial exam system weakened the horizontal structure of Chinese Society
prevented China from developing Civil Society what's the mechanism for how that works so I can see that the exams might pull away some smart people but there's still plenty of people left in China why don't the remaining people develop some kind of Civil Society well so uh yeah but the Norms are shared beyond the select few who eventually succeeded at the exam
right if it's kind of the bottom of the pyramid the bottom of the pyramid it is not the people at the bottom of the pyramid didn't aspire to become a bureaucrat didn't expire to excel at exam they all wanted to become a a bureaucrat they all wanted to be educated in confusion ideology but why are there no so that's the homogeneous
you go back to the Song Dynasty Southern shine is extremely commercial very diverse the whole world passes through China the Silk Road why do the Norms end up so saltified so homogenizing well so I think I think so so um I didn't quite say in my book but uh but but but I think this is a plausible explanation what the examination system did was it
was homogeneousing homogenizing the smartest people right so essentially the smartest people were socialized and their ideology was homogenized into this very satisfying confucianist ideology if you begin with a world view that you know smart people are the people who begin to make breakthroughs in ideas in the organization of the politics in the
organization of the economy those people in China the smartest people in China were completely homogenized right so yes you have a lot of other people that were not able to be part of this system but they were the not the ones that were sort of naturally disposed toward making transformational changes toward coming up with revolutionary ideas toward
coming up with a new religion new way of thinking right um so in that sense the Civil Service examination system was incredibly successful even though the number that eventually made it is not that big but the bottom of the pyramid is big and the people who are mode most at risk of making societal ideological breakthroughs are completely homogenized
does the history of civil service exams in Korea and Vietnam are in the same way or is that different yeah they they uh they were less watertight as compared with the Chinese system and there there were probably less well organized as the Chinese system also in Japan they also had a version of the Civil Service examination system but they
didn't really continue the system beyond the 20th beyond the 12th century 13th century so essentially in the 19th century when Japan embarked embarked upon modernization it was a Japan similar to China at the very beginning stage of the Civil Service examination system rather than toward the end of the Civil Service examination system when the exam system
was extremely watertight was extremely homogeneous was extremely well organized right so so Japan kind of evolved into a modern society with a loser system of the Chinese system as compared with China in 19th century which responded to the challenges from the west from a very very rigid system that China began to consolidate around the main Dynasty and
the Qing Dynasty if I think of China economically speaking in the 17th century it still seems broadly On a par with Western Europe and by the 19th century that has changed is it that the civil service exam system in China became more negative more dangerous or is it simply Europe raised ahead and China stayed put I I think
there are debates about whether in 17th century China was really on the par with Europe uh there was uh uh you know famous California school that made that point um and their argument was it is not right to compare the whole China with Europe you need to compare the most developed part of China with Europe and if you do that the the the level of
Economic Development was comparable with each other I think there's some recent research that challenges that View using better data more fine-grained data that shows that per capita GDP by 17th century in China was much lower than uh per capita GDP in in Europe even among the most develop regions of China our own data do not support the view that
China in 17th century was comparable to Europe um we we we don't use economic data where we use inventions data by 17th century China was already not very inventive as compared with 6th Century the level of inventions declined dramatically uh in the 17th century so I I tend to lean towards the view that by 17th century China was already quite
backward if I think of the Chinese exam system today not just for civil service but more generally it seems fairly meritocratic to me I often meet smart Chinese graduate students I ask where are you from the answer is not I'm from a wealthy family in Shanghai they're from some part of China I've never heard of Am I Wrong to think that it's
currently quite meritocratic no you're not wrong at all it is one of my Essential points in the book is that the power of the Chinese Civil Service examination system was that in a very narrow sense very meritocratic very well proctored corruption there was there was public corruption but the corruption was not endemic um and they were guard rails uh making
sure that the Integrity of the exam was at a level sufficient sufficient to attract the interest and the participation from the masses of the of the people right so we showed that the family background and this is from the data from the uh um uh from the main Dynasty 14th century 15th century the family backgrounds didn't affect
the performance of the candidates who took the exam right which is quite remarkable right if you think about sat today you know even today there's some correlation between the uh exam performance and the backgrounds of the people who took who who take the exam so Chinese had a very well developed system to make sure that the economics didn't
affect the performance through a subsidy program through a very well administered uh protocol of the Civil Service examination system anonymization China invented a double anonymization system The Examiner didn't know who the examinee was the examinated didn't know who the examiner was right so it was a very sophisticated system they also
hired the Skypes to copy the the exam papers to make sure that the handwriting did not provide any information about the identity of the of the candidates right so so from that tradition a China now has College examination system which is very very tough which is very very strict which is one of the one of the justifications for having that
system is that because China is so corrupt this is one of the few areas where corruption has not affected the outcome and therefore we should keep the system right so when you make the argument that maybe we should change the examination system to allow more creative thinking less emphasis on memorization the pushback has always been
look at the country it's so corrupt and so the corruption is so pervasive this is one area that is now corrupt let's not uh let's not destroy that the isolated area of uh of um of cleanliness and uh and the capabilities right so yeah so there I have no problem with with what you have just said which is a Chinese examine system is very meritocratic
if I look at China today I'm never quite sure how much Civil Society I should think China has so one sees the zero covet policy being repealed quite suddenly possibly because of all the demonstrations could it be there's a lot of Civil Society in China it much more often takes the form of demonstrations which are highly numerous and frequent
in China at least before zero covid and then a lot of the rest of it takes place on WeChat which is not quite visible but isn't Chinese Civil Society much stronger than it looks if we apply say Western benchmarks no actually if you apply Western Benchmark it is a very weak Civil Society right so there's a difference between a
Civil Society consisting of isolated individual actions and the civil society that consists of organized activities that have a program that have that have financial support that have the capability to operate independently by the second Criterion the China has none of that right so if you look at the recent protests against covet uh covet control zero covet
controls let's keep one number in perspective by various estimates in 2022 there were probably 400 million people under some sort of long-term quarantine right and and let me just concretize that word quarantined that means you are essentially locked up in your home sometimes for weeks in some cases for two months okay so that's the level of the
suffering and and the uh sometimes you can't get food sometimes you cannot get patience into the emergency room because the hospital also shut down uh refuse to taking patients who are tested positive or who cannot show a negative test on covid right some people have died they are suicides they are fires and all these collateral damages from the zero
coverage control relative to that China experienced a wave of protests by one estimate in 17 cities and I don't really have a good idea how many people were involved but we're not talking about millions of people we're talking about maybe 10 000 people or tens of thousands of people contrast that with Iran right in the Iran in the case of Iran
one woman died in the hands of the moral police and there were other grievances but that was the trigger and the protests are still going young millions of the people took this street right and then Iran the religion played a big role if you look at the color revolution in in Tunisia it started with a peddler whose assets were confiscated
by the government official and then he self and he and then he committed suicide that sparked the color Revolution those kind of brutalities who were small Peddlers happened almost on daily basis in China right so it's very important to specify relative to the to the Grievances and the level of the misery we are not talking about large scale
social movements here these are individual actions these are spontaneous actions the complaints on WeChat these are not organized these are essentially individuals expressing their frustrations they are not really using WeChat to coordinate their actions they are maybe they are implicitly crowding their messages by supporting each other
but we don't really see any evidence of organized activity right in that sense the Civil Society is is quite weak but the the CCP in the governments the local governments they are quite responsive to Citizens on some but not all issues right so there's a kind of embedded Civil Society where a message is sent you don't need to do all the
organizing you get a fair amount of response and it's like a kind of Shadow Civil Society yeah so but but that's a that's a that's a different framing right so this is about a government even though it is autocratic that is still reasonably responsive to the demands of the citizens and therefore the argument is that you don't
really need organized Civil Society to press their demands to press their policy preferences I think in some sense that's correct right so if you look at what the CCP has been doing it is actually quite clever right so it's not it's not the case that they don't take input from the society they create portals they create websites they create phone numbers for the
citizens to call in they also do surveys right what they want to do is they want to solicit opinions and information from the citizens without creating conditions for the citizens to get organized right so if you think about all these opinions you express to the government through the government control portals you are doing it as an
individual you're not doing it as a member of a larger group The CCP has no problem with that and sometimes those opinions can be quite negative the CCP has no problem with that right the beauty of the system is that once you express those opinions convey that information as a CCP official I have number of choices I can act on them to alleviate
your concerns and I also make sure that you don't find it necessary to organize protests and demonstrations but that's only true um traffic pollution things like that right so covet zero covet the the difference there the big difference between zero covet and these other issues such as traffic and pollution is that so many people are affected by the policy
simultaneously and to a similar extent therefore they can relate with each other much much more than the previous situation when you think about your own treatment mostly as a isolated individual situation rather than something that you can generalize and that I believe is the main reason why you see this level of demonstrations in protests
um and yes China has had a lot of protests but those protests tend to happen in rural areas in less Urban settings in isolated situations and on single issues right so usually in the 1990s it was about the land that the government took away and then it was about the the salary that the employers were late in paying my salary so they were protest
about that very single issue very focused but this time around you're talking about people demanding the ccps who stepped down demanding Xi Jinping to step down that's just something entirely different from what we saw before now in your book you write of what you call tulloch's curse Gordon Tully having been my former colleague namely embedded
succession conflict in an autocracy why has Chinese succession been so stable up to now and will we see tullik's curse whenever she steps down passes on whatever happens there so so I do want to modify the uh the word that you use stable right so there are two ways to use that term one is that to describe the succession process itself
if that's the situation we're trying to describe it's not stable at all so if you look at uh the the entire history of the PRC there have been so many uh uh succession plans that failed and and at a catastrophic level right uh one uh one potential successor was persecuted to death another flat uh and died in a plane crash others were ceremony unceremoniously
dismissed and one was put under house arrest for you know almost 15 years and he died but no Civil War right yeah that's right so Civil War that's right so there's there's another uh sort of way to talk about stability which is stability at a system level and that you're absolutely right despite all these problems with these
successions the system as a whole has remained stable the CCP is in power right and there's no cool um and they were not even demonstrations on the street uh uh uh associated with the succession failures right so we do need to distinguish between these two kinds of uh stability uh by one criteria and it was not stable by the other Criterion it is quite
stable the reason for that is I think although it's a little bit difficult to generalize because we don't really have many data points one reason is is the Charisma power of individual leaders Mao and Junction ping right so these these were funding fathers of the PRC of the CCP and the highly Prestige and using Max Weber's
term Charisma that they could do whatever they want and while being able to contain the spillover effects of their mistakes right um so the issue the big uncertain issue now is whether Xi Jinping has that kind of Charisma to contain future spillover effects of succession failure so since 1970 and this is a remarkable statistic since 1976
there have been six leaders of the CCP all of these six leaders five of them were managed either by Mao or by doing shopping so essentially the vast majority of the successions were handled by these through Giants right who had you know all sized Charisma oversized Prestige and unshakable political capital now we have one leader who doesn't really have that he relies
mostly on formal power and that's why he has accumulated so many titles where where's he is making similar succession eras as the previous two leaders right so you know obviously we don't know because he hasn't chosen a successor so we don't really know what will happen if he chose the successor but my bet is that the ability to contain the
spillover effect is going to be less rather than more down the road because Xi Jinping does not match even in a remote sense the Charisma and The Prestige of Mao Zedong and Dom Chopin there's there's no match there in Chinese history if we look at the years 220 A.D to 581 ID why is that your favorite period in Chinese history
um or some people may say that's my European bias um that period was quite similar to Europe after Western Roman Empire collapsed uh China at that time was more of a Federation of States rather than a unified empire it has multiple governments rapidly replacing each other or simultaneously existing parallel with each other there was a lot of human capital moving around
the intellectual environment was quite free and there was not a one dominant ideology lording over uh other ideas and other ideologies Confucianism was powerful but it was first among equal rather than a monopoly ideology and in fact there were many intellectuals at the time who openly challenged the authenticity and legitimacy of a
confucianist ideal ideology it was also a period of enormous creativity right in terms of poetry in terms of humanities and crucial lay in our measure in terms of technological creativity China reached its peak in terms of inventions divided by population during that period why so few female Emperors in Chinese history um well so uh so let me let me answer that
question by relating my answer to your prior question During the period we were talking about Buddhism was a formidable ideology competing with Confucianism Buddhism was actually quite friendly to the female have of the population the only female emperor of China formally there were some female regions but but they only form formal formalized
Emperor who was female was a Buddhist and also during that period of time there were other Asian East Asian States that had female rulers and then Confucianism took the control and and weaponized by the Civil Service examination system Confucianism was extremely hierarchical extremely hostile toward women and a very rigid in terms of the social
hierarchy in terms of gender treatment and a marginalize the women so you can actually see that according to Art historians you can see the evolution of Chinese art from sort of painting women in in in relatively free style in the time Dynasty to a very very personalistic portrayal of women beginning in 10th Century 11th century
and then and then the Civil Service examination system chose one of the most chauvinistic versions of Confucianism as is curriculum starting around 14th century or maybe even 13th century and then that curriculum continued onto the Civil Service examination system was itself dismantled in 1905. I think it was really because of the
ideological hold of the stringent version of the Confucianism that prevented any liberalizing the emergence of any liberalizing forces women being one of them right but also liberalism also other ideas and it was you know going back to our earlier discussion the Civil Service examination system contributed to the male dominance of Chinese
politics in society why do the Chinese like ghost stories so much well I think it's it's a um it's part of uh really it's at least in part related to the ancestor worship um essentially backward looking way of looking at the world rather than kind of forward-looking way of looking at the world so you always think about what
happened in the past uh it could be your ancestor it can be Confucius and ghost is a kind of a negative version of of that um because it goes typically emerge from dead people um that that would be my very simplistic explanation why ghost story is popular I'm I'm not I'm not a fan of ghost story where's the best food in China where where you pick your favorite
I say you and on Province but of course opinions differ yeah opinion's different on that I I I I like you and then food uh I my parents one came from Hubei one came from Hunan and they eat very spicy food so but I grew up in Beijing I didn't eat very spicy food so Vietnam food is a little bit too spicy for me uh
I like I like food in the Yangtze Delta area it is a little bit gentle in your tongue and I also like Cantonese food there's more variety the problem that I had with spicy food is that it overwhelms every other sense that you have uh it's it's a little bit homogeneous whereas the Cantonese food is very rich the Yancey River delta food is very very
rich you can have spicy food but you you can also have salty food and so I like variety I like I like the food from that area culturally why do you think that Chinese and Chinese Americans have done so much less well becoming top CEOs of American companies than Indians and Indian Americans now so that's a running topic among among Chinese American professionals uh
like like like like me and and many others um so I I actually have a colleague Jackson Liu who has systematically studied this issue and his conclusion is not surprising but his method is quite innovative his conclusion is basically everything comes down to communication the Chinese Americans are less able to communicate their ideas
plays less value and premium on Communications they are technically very competent very capable you know very accomplished academics um but this is something I have noticed among my friends who are Engineers who are scientists they are very systematic when they are talking about chemistry when they are talking about physics
but once you take them out from their discipline they are actually not that systematic in a way that they describe the world in a way they analyze the world right so if you ask them to analyze food analyze spores analyze politics analyze international relations analyze economy the way that they approach these topics is not that different from someone who
has not gone through a PhD program in physics and PhD programming chemistry whereas you know when I talk to my Indian friends who are in science and technology they apply the same scientific mindset and methodology to social issues right to political issues and that gets you a lot of mileage in America where you need to communicate with a broad spectrum of the
people not just your fellow academics but well maybe there are fellow academics but they are not academics strictly in your discipline if you want to be a leader you have to learn how to communicate with all sorts of people not just with other uh people in your own discipline and my view is that we Chinese have a lot to learn in this
regard and I think one reason is that we grew up in a homogeneous society and in a society that does not place very high premium um trying to convince others of your point of view Xi Jinping doesn't need to score points on debate to get his policy preferences executed right well he may execute people but he doesn't need the
communication skills to get his policy preference through he can just order he can just issue commands right so it's a command driven Society we don't need to convince people who disagree with you to come to your point of view we didn't grow up in that Society whereas Indians operating in the Democratic Society very noisy uh what Armada sent calls
argumentative Society to get people behind you you need to convince them of your point of view right to be able to do that you need to rely on some sort of framework that both sides rely on and that usually is logic evidence and the way a systematic way of thinking so I think Indians are better than us Chinese in part because of that
let's say you had an educated American friend the person had been to Beijing to Shanghai and you were planning a two-week trip through China for them where would you send them well Iowa uh urge them to go to Xi'an uh the the city that has the famous terracotta um uh sculptures but but it's not just because of that I think what's very interesting about Chinese
political geography is an economic geography is that the political geography is heavily Northern the economic geography is heavily certain right so we think about Shanghai you think about Guangzhou Shenzhen these are heavy economic economic heavyweights uh they're in the southern part of the country but Beijing is the northern part of the
country is the political Capital Xi'an used to be the capital of Imperial China for many many centuries right so to understand kind of the political mindset and by the way Xi Jinping has very deep roots in that Province to understand the political mindset of China you need to go to that part of the country right it is a um it is a country that is um uh it is a
part of the country that is of heavily influenced by um natural disasters by flooding right arid environment very harsh environment that doesn't grow it doesn't cultivate agriculture very successfully right so it is very maybe a little bit like Ohio or places like that very inward looking um and no matter how modern Chinese economy is the politics is heavily
colored but that particular perspective right it is a little bit paranoid it is um sort of suspiciously looking at the rest of the world and it also has this a very found memory of China many centuries before when China was a unified empire that had that part of the country be the capital of the country right and so I think I I think to
understand Chinese ideology and political mindset we need to go there and for the next week where do you send them then for the next week let's say that's week one you have two weeks where do they go you buy the ticket oh okay so so I was talking about one week and then I was sent them to shinjin just as an incredible contrast uh Shenzhen
was basically created by economic reforms it is the capital is the economic capital of of a private entrepreneurship of Innovations and of the incredible Supply chains that China has been able to create in the last 30 years and to understand the economic side of China you need to go to Shenzhen close to Hong Kong just just you know next to Hong Kong and and then
I I would argue that you go to CN first to understand that political mentality and then you go to Shenzhen and then ask yourself the question right can these two things coexist with each other for a long period of time and under what conditions can they co-exist with each other for a sustainable period of time my own view is that these two things
cannot coexist with each other for long periods of time one of them has to give do you have a prediction I have the prediction that Xi'an is going to give and and I think the economic side is going to win rather than the political side and it's it's not it's not automatic it's not The View that economics automatically
raises the political advances political progress it is also because of a lack of political progress the regime tends to make mistakes and it is those mistakes that will have a bigger educational effect on the Chinese middle class on University students in how they think about whether or not the current political system is viable and desirable
I have three final questions all about you first how was it that you decided to come to the United States oh I mean for uh young people in China even today despite the tensions between U.S and China U.S is always a dream country to come to so it's it's we I never really asked myself that question of course if you want to
um get educated if you want to achieve accomplish something you try to go to the United States although you know a lot of my friends have decided to go back to China um because they see commercial opportunities there they typically get a western education and then go back to China to start business businesses and they have been extremely successful I
have chosen to stay because I'm an academic and I don't think China is the right country for for academic not for social science academic maybe if you're a scientist uh you you you get support from the government but not as a social scientist second question what did you learn from Janos Gordon I yeah so um the underscore and I taught generations of
not just Chinese students but but many students from Europe east Europe European countries from Russia that there is a basic um basic illogic with socialism and so before the underscore night we tended to think about socialist system in vague General and sometimes ideological terms Janus Corner taught us that it is rooted in the system right the investment
hunger the self-budget constraints right and it really gave us a new way of thinking about the Socialist system and Central planning system in that particular perspective and that really was revolutionary uh because you don't have to be easy log to be to be critical of central planning you can be a good empiricist and good system
thinker to be critical of the central planning and we didn't have that kind of language until Janus cornai provided that language right the investment hunger the soft budget constraints and now soft budget constraints are being used not just by people who study Central planning but also by people who study other types of economic systems
and that was remarkable um and it helped us it also helped us help a lot of Chinese students think why China was different from other Central centrally planned economies in terms of soft budget constraints China seemed to have a harder budget constraints as compared with Soviet Union and there were a lot of debates about why this was the case so that led
us to look at the history of reforms in China look at the Great Leap Forward look at the decentralized organization of the economy even before the economic reforms in 1978 I'll again mention your forthcoming book the rise and fall of the East call an examination autocracy stability and technology which I found one of the most
interesting books on China but to close just tell us what do you plan to do next yeah so uh I am collaborating with number of uh professors and some of them are based in China on a book project looking at the history of Chinese technology using the data set that I already use for this forthcoming book but we are going to devote the entire book to this topic
and this is the the title of the book is the the Needham question Joseph Needham famously asked the question in 1969 how come China failed to take off and had his own Industrial Revolution even though it had it had a very advanced technology very Advanced science so we're trying to answer that question using the database that we have
constructed and I just learned from the Princeton University press that they are going through award a contract to us and we already have three chapters finished and we are uh we hope to finish the book by the end of the uh by the end of this year congratulations thank you very much thank you Tyler this is such a wonderful conversation thank you thank you very much