"Today I'm talking with Victor Shih, who is the director of the 21st Century China Center at UC San Diego. China is obviously one of the most important economic and geopolitical issues of our time, dou..."

"Let's start at the very top. First, I want to understand the personnel. If you look at the members of the Politburo and their pasts, a lot of them were provincial leaders, and then had some kind of lo..."

"On the one hand, they’re super educated in STEM. They’re selected at least partly on merit, etc. On the other hand you see things like… A lot of Zero-COVID was just genuinely stupid, scrubbing down ai..."

"you have to go toward, no matter what. Because if he observes that you're dragging your feet, or that you're pursuing a slightly different agenda, you’ll be purged. And we’ve seen cases of that. At so..."

"It's stupendous to think about. You can tell someone how big China is—the population, the size of the economy, etc.—but visiting gives you a tangible sense of just how big. You have provinces, each of..."

"Just because in China, the experts talk to the top leadership all the time. Yeah. The advantage of the American system, of course, is that, at least in theory, it can survive a leader who is not up to..."

"He took that position back in 2022, so he’s been steeped in cybersecurity for a couple of years. I think by now he knows all the major players and some of the key policy issues. His relationship with ..."

"What are the different organizational milestones we should be watching for, to understand how they’re thinking about AI, and when things have escalated? To add more color to this question, what I expe..."

"Because there is such a team of people in every major internet company in China. What would cause them to pull the plug? Specifically? First of all, if AGI started generating Falun Gong–related conten..."

"The chief negotiator with the United States, He Lifeng, the Vice Premier in charge of finance, he’s well known for starting and perpetuating the largest real estate bubble the world has ever seen in T..."

"Then you’d go through that one, and there’d be an even bigger one. This happened five times. If you were to drive through this would take you a while. But it’s new, not historical, right? Oh no yeah, ..."

"One thing I would say about AI is that content creation is going to be a big roadblock for China. Because China is so paranoid about the content that flows on the internet that they put human beings a..."

"As somebody who is trying to observe what the Party’s doing, have you found that using LLMs has been helpful? If so, which model gives you the best insight into what the CCP is thinking? Yeah, I’ve be..."

"DeepSeek puts some higher weighting, let’s say, on this kind of content. I don’t dare install it on my phone. I certainly have collaborators who’ve downloaded the open-source model and installed it on..."

"alpha is to use algorithms to look closely at these policy documents. This is going to sound like a naive question."

"is going to sound like a naive question. We’re talking about how the Party, in the abstract, wants to maintain control over every aspect of Chinese life and the Chinese economy. But of course, the Par..."

"things to your enemies.” Apparently, that’s the lesson he learned. He basically honed his skills and built his coalitions—for the time that he would take over high-level positions in the Party—for dec..."

"But then lately, of course, he’s been purging some of these people which is really interesting. He had a strategic vision about his own career trajectory, and he pursued that in a very determined fash..."

"What is the newest there? What’s your sense of the situation now? It just keeps growing in absolute size. Basically, China is trying to tell the world that they don’t have a high debt level. At the ce..."

"They have to find domestic investments. As a result, many of them choose to invest in Chinese high-tech. Or they just put their money in the bank. Actually, a lot of people just choose to put their mo..."

"People from Silicon Valley would want to invest in China. Why would getting rid of capital controls make capital go the other way? This ties into some other questions. Why is it the case that the Chin..."

"But the companies aren’t socialist, right? The companies are profit-seeking? But because the financial system is socialist, they’re forced into socialist-like behavior. You can’t go into a bank and sa..."

"If these banks aren’t actually competing against real investors— And it’s not their money so they don’t care. But it seems like this is still compatible with many of the world’s leading companies bein..."

"your project is good, you’re good to go. Here’s $100 million.” But it seems to work. Doesn’t this just belie the whole idea? Central planning isn’t supposed to work, right? There’s selection bias. We ..."

"Yeah, we can talk about that. I’m a bit skeptical about that in the case of China. But yes, as you said, some places like Shanghai and Guangdong are still in relatively okay fiscal positions. But ther..."

"He’s held multiple study sessions, had different Politburo meetings, and Ding Xuexiang—one of his most trusted lieutenants—is in charge of it. So I do expect a fair amount of resources to be devoted t..."

"What would a solution at this point look like? If you’ve already spent all this money… First of all, why is it the case that these investments actually aren’t productive? It’s not like it’s entitlemen..."

"very rapidly diminishing returns. Also, the population is basically shrinking in China, especially in a lot of cities in northeastern and southwestern China. You really don’t need high-speed rail conn..."

"I find it fascinating whether a corrupt political equilibrium can lead to more construction vs. less construction. The political equilibrium in America today… California isn’t the least corrupt state ..."

"Okay and what would a solution to this problem look like? Because if the debt is already over 100% of GDP, that’s tough. Of course the Chinese government will never, ever in a million years do this in..."

"Yeah. Why is it the case that when economists talk about rebalancing more toward consumption, they often suggest increasing welfare? It seems like the more straightforward thing to do would be to get ..."

"So you do need better medical care insurance in China. Frankly, that’s something I worry about in the US too. If you cut back on Medicaid, it's going to encourage precautionary savings. You could say,..."

"I mean it depends. You could say the same thing about Taiwan. It’s conservative because in the long run maybe they pose a national security threat. It is a change from the norm. If he wanted it so bad..."

"it was very obviously a mistake. So to the extent it wasn’t stopped at that point, was that because information wasn’t getting up to the top leadership? There was also that famous case in 2024 where X..."

"always be a higher priority than any kind of technical consideration in a given decision-making process. Why protect all these pharmaceutical companies? Because they’re state-owned enterprises, they n..."

"biggest impact is this. Right now, financial repression works because… Let’s say you’re a billionaire trying to get your money out of China. You make up fake paperwork: “I’m importing a million Rolex ..."

"But they can stop it? If there’s a command structure, yes. If people believe they’re going to jail the week after, even if they get $100 million in cryptocurrency in Hong Kong or wherever. Suppose it ..."

"Sometimes even those transitional figures are too weak. Jiang Qing was purged within weeks of Mao dying. Now the Long March veterans were so close to each other that they worked it out among themselve..."

"In the Soviet Union after Stalin died between the sort of Kruschev and post-Kruschev transition, they were stabilizing politically, even though they ended up damaging the Soviet economy by demanding s..."

"I think there’ll be a pretty big pushback, or at least some kind of limit. Let’s say China takes over most of Latin America, most of Africa, most of the Middle East. That’s still not such a big market..."