# US-China Industrial Competition and Digital Sovereignty

**Podcast:** a16z Podcast
**Published:** 2026-02-13

## Transcript

Digital borders and physical borders are like the same thing, right?
The Great Firewall will be seen in some ways as a very far-sighted thing because it is digital hard borders.
I think that the US can very credibly point to these amazing strengths that the US has.
I think China can also point to these amazing strengths, namely these drone armadas, which are very powerful.
Chinese robotics are actually really good.
And for the first time, Tech America is actually taking China seriously.
Special economic zones became Shenzhen.
The Eastern Seaboard industrialized.
By 2025, China led the world in cars, solar, ships, and advanced manufacturing.
That growth is real, but so are the cracks.
Political purges, a property implosion, youth unemployment, and a wave of entrepreneurs leaving for Singapore, Dubai, and beyond.
Meanwhile, America's trillion dollar tech companies remain unmatched.
The question is whether software valuations and financial engineering can sustain a great power, or whether the US needs to rebuild its industrial base to compete.
And if it does, who builds it?
Previously aired on the Network State podcast, Villaji Srinavasan speaks with Dan Wang, author of Breakneck, about the engineering state versus the lawyerly state, and what builders on both sides of the Pacific should understand about what comes next.
Dan, welcome to Zimmer's Day Podcast.
And uh I think uh, you know, we hung out several years ago in the before COVID times, I think, at some stripe thing, if I recall, that Collison organized, something like that.
One of these Frontier Camp.
We played a uh very um um my favorite board game together.
Yeah, what was it?
It was um it was one of these things, uh was it werewolf?
No, what was it?
So wherewith.
Something close.
It's called Avalon, uh, in which um there are uh roughly seven of us around a table.
Um three people are uh evil, they know who each other are, and the four good people don't in general know who anyone else is.
And the aim of the game is for the uh evil people to assert themselves as good and for the good people to choose uh who the evil people are.
I've been playing this for uh many years now.
I play it in different cities, and I'm glad to have been able to play with it with you in the woods of Northern California.
That's right.
And I think I as I remember, I I was uh because this is the first time I played it, and Jose King, what if we wrote the state space matrix on a whiteboard, which was either the really smart thing to do or really dumb thing to do, and like Gwern got annoyed at that or something, as I vaguely recall.
This is like many years ago.
Yes, that's right.
Yes.
Um but I still think there's something to that.
I have to go back and play that, and I feel like you might be able to maybe maybe be bad to write it on the board and it takes away the mystique of it, but there's something to that, the process elimination.
Anyway, I remember you doing that, and I think I was evil, and I managed to deduce um who was like who the who who the Merlin was based on your based on your calculations.
Yeah, there's something there's something about like there's an underlying data structure behind the thing, some kind of process, you know, sort of like the Monty Hall problem in stats, where you actually write out the decision tree and then you can actually understand it better.
At least I wanted to see what would happen.
Anyway, maybe it took some of the fun out of it, but it was fun uh for me at least, or maybe hopefully for you.
Um anyway, so um, so we sort of traveled in some of the same circles.
And uh, you know, I I liked your book, uh, which we'll get into in a second.
So breakneck, and we'll put it on screen.
Um and I liked it because so, you know, what's funny is maybe this conversation will be a little different than some of the other ones you've had, because it says a lot of things that I think are uh that Americans should understand, but are super obvious to anybody who's paying attention to Asia.
And in fact, I actually think you go easy on the US.
I'm much more of a bear, perhaps on the US than you are.
Maybe you pull your pull some bunches in that or or what have you.
Uh, because I'm actually I'm I'm I'm messaging, I'm talking to you right now from Singapore.
Um, and uh, so let me see if I can, you know, obviously others have summarized the book, but essentially uh China's an engineering state, America's a lawyerly state.
China actually is on the right in many ways, uh, because Xi is all about the great rejuvenation of the Chinese nation.
Even if he's kept the communist symbols, um, you know, he, you know, Mao went after the four olds and and went after filial piety and so on and so forth, and Xi completely reversed that, where it's really uh, you know, nationalist conservative, you know, revival of 5,000 years of history and so on and so forth.
And in many ways, when Doug Xiaoping took over in 1978, you know, a rebranding changes the logo, but not the guts.
And Dung Xiaoping did a reinterpretation where he kept the logo but changed the guts completely.
It was basically, in my view, a coup, which which is funny because neither the Communist Party, nor Democrats nor Republicans admit the extreme discontinuity between Dung and Mao, because like I I'm I'm no I'm butchering the pronunciation, but Hua Guafeng and the gang of four were supposed to be like the successors to to Mao, and Dung managed to take over and shifted it towards a capitalist road, even after he'd been purged three times and his sudden being thrown through a window.
And, you know, the famous, you know, black cat, white cat, doesn't matter if it catches spice, and the Zhao Gang contract where those villagers uh at least that was that was the there's the idea of it.
Maybe that was just a legend, but those c there's uh villagers that uh had a contract to do capitalism and they weren't actually executed unlike everybody else.
And that was kind of like hell up a hand, Deng Xiaoping helped it and said, Okay, capitalism's legal in these regions, the special economic zones, and thus began Shenzhen and the things that were on the Eastern Seaboard, and that's how China modernized, didn't go to capitalism all at once, right?
So I may be getting some of that wrong, but was that roughly accurate?
Kind of a quick capsule history.
Go ahead.
Yeah.
The only thing that I would um quickly add is that I think uh Dung had a lot of the governing styles of Mao.
Um he certainly purged a lot of people.
He was really ruthless against some of his um enemies.
He got rid of several of his successors.
Uh and I think he was, in the words of one party historian, half a Mao.
And so I don't um think he's no no saint there.
I mean, he was um he was as ruthless, I would say, even though his um ends were much better for sure.
He started out as a communist, right?
And he was in the he was in the party for a long time.
And actually somebody said that even the war in Vietnam, that which was the one word that was, you know, was that Dung held that I had read this book, I see if I can find it, to distract the generals from his because he was he was doing a lot of changing of the guard in in Beijing at that time.
So he just sent them all to go and fight Vietnam again so he could go and do some reforms or whatever in the Capitol.
I don't know if you have you heard that.
Yeah.
It was to get the army support to give them a really fun war.
Uh and then he will um and then he'll have their support forever.
Yeah, something like that, right?
So and then, you know, that began sort of the tradition of, or maybe I'm wrong about this, maybe that predated Dung, but there were like there's like three posts that the head has, which are you know, the titular head of the state, the head of the party, and then also like the head of the military or something like that, right?
Yes.
And Dung began the tradition of ha how holding all three of those crowns to run China, is if that's correct, if I'm not mistaken.
Or maybe not the head, but um state um president.
Um, but he was I I'm not even sure he was head of the communist party, but he was head of the Central Military Commission.
CMC.
Right.
Yeah, I this is what I'm this is why I'll get some of the details wrong, but there's like three things that he had, and he was kind of running, it's like uh, you know, uniting the triforce, so to speak.
Okay, fine.
So I'll uh maybe we'll flash up what I what I got wrong.
Okay.
So the reason I say that is here is what I will stipulate.
Well, so I I want to play your your book back b to you and you tell me if I got it wrong.
And then I want to actually debate with you what comes next.
Sure.
Okay.
So first everybody should read Breakneck.
Awesome book.
Um and I think in many ways you sort of explain stuff because so many Americans are in COP mode.
Less so perhaps in 2025, but for the last 10 years, they've had extreme cope, where they've been pretending, you know, the Peter Zihan kind of argument that China's gonna get old before it gets rich, it's gonna fall into a ditch.
It's actually weak and blah, blah, blah, blah, blah.
And that keeps not happening.
And instead, it's number one in cars and number one in solar and number one in all kinds of industries, especially the post-COVID burst of energy into advanced manufacturing and so on by 2025 seems to have really worked.
And it's also number one in surface ships, and it's signing all these trade deals.
And then down the list, all kinds of things seem to be working for China, but it's like you're very gently kind of breaking reality, Chino.
Let me let me know your thoughts.
Go, go.
Yeah.
Um, I think that uh all of those things are true.
Everything is real.
Um, and I think, but there is uh there is more to this, a little bit more to the story, which is where I feel like you're doing the r a really good job of summarizing the business pages of um the Wall Street Journal or or or whatever, uh Bloomberg.
But sure.
I think um we could also flip a few pages into the economics and the politics pages, in which I think the situation there does not look really good.
That, you know, the concurrent with um China's uh rise in EVs and solar, all of which is real.
Um, you know, there's also crazy politics.
The C constantly purges its generals, um, purges defense minister, um, purges his foreign minister, a lot of strange party politics that um none of us really, I think can understand outside of a few folks uh in Beijing.
Um the economic growth has definitely weakened in some severe ways.
Um the property implosion is real, the youth unemployment is real.
There's a lot of folks uh who uh have decided to leave China.
I'm sure a lot of them are washing up at your doorstep in Singapore.
A lot of amazing Chinese entrepreneurs who have thrown up their hands at the political environment in China.
Um a lot of Chinese have decided to fly to Ecuador where they don't need a visa and try to walk across to the uh American border.
And so last year, Customs and Border Patrol were apprehending something like 40,000 Chinese nationals every single month.
And so that's a lot of people who want to take leave of the great rejuvenation of the uh Chinese ethnostate, right?
So, you know, I think that there are, you know, real economic issues.
I think there's a lot of political uncertainty in addition to amazing technological growth.
So, you know, we had to reconcile all of these.
So, you know, the Ecuador part, I've certainly heard those reports.
Um that is the part that I don't fully understand because, you know, there's the other interpretation is China's just sending a bunch of people to go and embed in the US or what have you, you know, military age males crossing the border, blah, blah, blah, blah.
So uh, but but the other piece of it, uh so let me discuss those other pieces of it, because I'll give maybe, you know, obviously a lens you probably considered.
Um Zi goes and purges Jack Ma because he doesn't want something like Elon to happen in China, where the tech zillionaires of China get their own ideas and they control these giant networks and you know, they can turn against the state, right?
We sort of see like two paths there with network versus state and state over network in in my parlance, you know.
Um, and in some ways, uh this is provocative, but in some ways China is the best for the most, and the internet is the most for the best.
Where if you're up to let's say the 98th percentile in China, you have clean streets and no crime and 24-7 delivery services and at an upper middle class up to that level, you're fine.
But once you start getting to the top one or two percent of society, now you better watch carefully.
You know, you're basically constantly surveilled to make sure that you're in line with the with the party and uh what you could be hailed for a year or two ago, suddenly you're on the outside of something, and that's too sinuous a twist for a good chunk of people.
So they head overseas to Singapore or Dubai or something like that.
Would you say that's roughly right?
Yeah, I think the great contrast, I think you're you're exactly right in all of these.
And I think the great contrast, one of the great contrasts between the US and China is that America works really, really well for the rich.
Um, if you're a rich in America, um, you know, you really don't have to suffer um too many of the problems uh in, let's say New York and California.
You don't worry about the housing crisis.
Uh you have a Chin home in Atherton.
You don't worry about taking the New York subway to work every day, you know, which is like screechingly loud and dirty and doesn't work very well.
You get to live in these skinny skyscrapers in uh Manhattan.
I think that there's nowhere else in the world that's better to be uh enormously rich um than in uh the United States.
I disagree with that now.
I and the reason I say that is I think uh I think that maybe was true.
The reason I smiled is just like it's I think that was true.
And I think the there's several bad parts about that now.
The first is it's fine to be wealthy if other people are doing okay.
Yeah.
But a good chunk of American wealth is Keynesianism, which is really like you know how China's actually capitalist, but they call it communist.
America is actually Keynesian, but they call it capitalist, in the sense of the money printing is actually a gigantic redistribution of um, it's basically, you know, inflation is taxation without legislation, if you've heard that one by Milton Friedman.
So when they print trillions of dollars, it's like diluting down the currency for everybody.
And they're doing that a lot, uh, both both overtly and covertly.
And then the plunge protection team.
Have you heard that thing from uh Greenspan, the plunge protection team?
Okay.
That's a useful thing to look up.
That is why one thing you mentioned in the book is like American stocks have done well and so and so forth, and Chinese stocks are flat.
But part of that is because there's almost a social contract in the US, which is the upper middle class and upper class have all these index funds, you know, stakes and index funds, foreign K.
So they expect the stock market to go up, and that's actually the metric, the number go up of the society.
And so the plunge protection team at the Fed will actually print to make sure that in extreme circumstances the stock market doesn't go down.
Some of that was explicit, like the obviously the mortgage-backed securities that were bought in 2008.
Some of that is implicit where they'll spot Goldman or Morgan, like the, you know, for or for example, the BTFP program that they just did where treasuries weren't actually marked to market.
They were valued on what they were bought for, not what they were sold for.
Just all kinds of manipulations they do to just keep the market nominally going up.
But in real terms versus gold or digital gold, it's going way down.
Um, like for example, if you just saw as of today, gold is actually outperformed SP never the last, you know, right?
So in my view, the U.S.
is actually a fake economy, a Keynesian economy.
And actually, you know, you actually, you know, your thing on the engineering state versus the lawyers state, I think we could do a lot of iterations on that.
And I'll give you the ball in a second.
But I have somebody I love your book so much that I wanted to say so much.
So jump in.
But yeah.
I mean, I um can I say I I I want to be, I want to tease you a little bit about this.
So you sound like Xi Jinping, man.
Um, this is um he has this uh term that um the Communist Party calls this the American economy, the fictitious economy, and also the bubble economy.
Um not like a financial bubble, but just something that can pop very easily.
And I think there is certainly something to this.
I mean, a lot of Americans would tell me, Dan, what are you talking about?
This country has no problems.
Look at these giant trillion dollar corporations that we can create and the Chinese cannot, and no one else can.
And I don't and so again, I come coming back to just uh to slightly put uh uh close this loop, which is that I think the US works extremely well for the rich, and I think it cannot stay a great power if it works only well for the rich.
And you know, there is something strange about China where if you're an elite, let's say you're some sort of an elite in Beijing, you're working in um tech.
Uh who knows if your tech company would be smashed by Xi Jinping uh as he did a couple of years ago.
Like the gaming companies got just sent to zero.
Um online uh tutoring, you know, they are really declared to be nonprofits.
Um, you know, let's say you're working in something like finance, and then he announces a salary cap as he did two years ago of $300,000.
And maybe you need to give your back pay.
If you're within the party military state elite, you never know when your patron might be taken down by some sort of an anti-corruption purge, and then your entire network uh will fall.
And so, you know, there's something really precarious about being rich and powerful in China, in which in the US, if you're rich, you can more or less transmute a lot of your wealth into political influence.
And maybe that's bad, um, but it's much easier to be rich here.
But I fully agree with you that there is something like very strange and fictitious about the um American economy.
You know, the contrast that I I like to set up is let's think about Apple, you know, something like $3.5 trillion uh market value now.
Spend 10 years debating whether it could produce an electric vehicle and after it's a good idea.
Yeah, and Xiaomi did it and be on what is Xiaomi's uh market value?
Um something like 200 billion dollars.
Um last I checked.
Exactly.
Um so the um Apple is worth something like 15, nearly 20 times more than Xiaomi.
And um, you know, what would you rather have?
A company that is able to build cars within four years of announcing it, as Xiaomi did, and for these cars to go win uh major racetracks in Norberg Ring uh and in Western Germany, or to be kind of Apple and just not, you know, debate this for a while and then give up.
Yeah, I think I would rather take um um Xiaomi.
And I think this is um less an indictment of you know Apple than an indictment of the financial system in the US, which assigns these crazy valuations to um highly profitable companies, but these mostly software companies.
Yeah, so uh Apple is a hardware company, also, but yes, your point is correct.
So my view on this is looking ahead to 2035, 2040, maybe even 2030.
Um, you know, I've written about this, but to briefly summarize, I think I wouldn't even I don't even think of it as a United States, I think of it as a disunited states.
Because, like, for example, there's no Korea, there's only North Korea and South Korea.
Right.
Like it's not actually, you can't talk about Korea and Korea's position on this and Korea, because North Korea and South Korea literally have different foreign policies.
They're opposed to each other, they have different mores.
They both might write in Hangul, but they're saying totally different things, they have different vocabularies, you know, premises, all that kind of stuff, right?
So there's only for the most part, only one Korea matters to us.
You know, only one Korea is in the global economy producing any memory chips, right?
That's right.
South Korea, exactly, right?
But North Korea, obviously it's pointing missiles and so on and so forth.
But yes, correct.
So we can't talk about Korea, we have to talk about South Korea and North Korea.
In the same way, I don't think we can talk about America.
We can talk about Blue America, Red America, and actually tech America.
And those are like three separate groups.
And whenever you would hear a defense of America, it's almost always coming from tech America talking about the trillion dollar companies, or sometimes Red America talking about, well, we can still re-industrialize and we still have the 1945 spirit and so on and so forth.
And Blue America is sort of not really, you know, that animated in terms of its defense of democracy and so on and so forth nowadays, but they were a few years ago.
And my view, at least, maybe you'll disagree, is uh like tech America is actually the internet, and it overlaps with European tech and Indian tech, and especially crypto, which is which I I know you don't love crypto or you're probably skeptical about crypto.
Yes.
But the way I think you know how like when Rome fell, what survived was Christianity?
Interesting, right?
In my view, like, like America is going to go to zero.
And what will survive is the internet.
And the bad version of the American legal system is the one you mentioned, which is obstructing and constricting and so on and so forth, and it's being abused by all these lawyers and so on and so forth.
But the good version is the internet legal system, which is a predictable order, and it's rule of code as opposed to rule of law, and it protects property rights and has the best monetary policy in the world and has smart contracts and so on.
And even if Americans and Chinese can't trust each other's legal systems, actually lots of Chinese people do appreciate Bitcoin.
And BTC is actually the genuine balance to CCP as opposed to USA, which is going to zero.
Let me pause there.
I have a lot I can say about that.
That's a crazy idea, man.
Uh that was uh BTC is going to be the alternative against CCP when USA goes to zero.
I think that's a that's a great phrase.
You should tweet that if you haven't yet.
I I have tweeted that.
I have to, that's actually the so to just to explain, it's more than just a meme.
It's like a compact phrase, but it's right.
Like in the 20th century, the contestation was symmetrical between Eurasian communism and Anglospheric capitalism.
It was like tank for tank, plane for plane, USA versus USSR, you know, and so and so forth.
Uh, but I think in the 21st century it's asymmetric.
It's between China and the internet.
China is like Apple, vertically integrated with a nation, you know, the Han Chinese language, culture, thousands of years of culture, the the the party state, and then of course the network, which is the firewall and the apps and all the Chinese tech companies.
That's vertically integrated and something like 97% of people of Han Chinese descent are in this sort of vertically integrated, very functional Voltron, this meta organism that coordinates all these people in this really, really powerful way.
And the other summing 7 billion people are gonna initially and perhaps for a long time be the weaker of the two sides.
And that'll be the internet, which is messy Android, chaotic, but also more free.
And uh and that's how I think things square up after the fall of the dollar.
Uh Balgi, I think we're this conversation is going to be amazing when it's published.
Uh I hope everybody watches this on video because you'll see me smiling this entire time because I love your catchphrases.
I love these on tweets.
I'm still hung up by this idea of BTC uh being uh being the alternative against USA and um uh CCP.
But then let me re uh re rephrase this, which is that um, oh well, it seems like um USA and CCP must both hate BTC.
And so because it is representing the alternative order, what if they crush BTC?
I don't know if BTC is powerful enough.
Oh, that's the question.
So basically, the the way I put it in the network state is actually I say uh CCP, NYT BTC, the party, the paper, and the protocol are sort of like a rock, paper, scissors kind of thing.
And when I wrote it, NYT still hadn't been defeated.
But with Elon, X is basically defeated NYT.
I think NYT has lost its hegemony and so and so forth.
So it's like it's sort of like, you know, in the in the mid-20th century, there was communism, fascism, and and democratic capitalism, and two of them teamed up on the third, and then the other two fought amongst themselves and so forth.
So I feel NYT is just being knocked out of the box as a shadow of what it was.
I don't think it's gonna be coming back.
Um, and because it depended on being ideologically hegemonic.
So CCB versus BTC, you're right that there's like that is a genuine polarity because, you know, for example, in the early 20th century, the swing vote in Germany was like the German worker.
Like the Soviets would appeal to them as a worker and the Nazis would appeal to them as a German.
So one was appealing on the base of like class, and the other appeal on the base of race, right?
And that was like the swing vote.
Um with this last election, somebody like the black American or female American or gay American, the wokes would appeal to them as black or female or gay, and the MAGAs would appeal to them as American, right?
That was like the swing vote, right?
In the center, okay.
And I think in the dispensation that is to come, the swing vote will actually be the Chinese technologists.
Because the Chinese will appeal on the basis of China will appeal on the basis of race, and the internet will appeal on the basis of class.
Right?
So that's often a kind of thing like you see what I'm saying, right?
Like uh sometimes it's the left that appeals on the basis of in in the case of the wolves, they'd appeal on the base of race or genetics.
And the mag is actually we're appealing on the base of class in the sense of a membership in the American class, you know, which is like a software thing, whereas race is like a hardware thing.
You know, let me pause there.
Yeah, maybe.
Uh I mean, I wonder.
I mean, first I would um wonder about your idea that uh Elon has defeated um NYT.
I s I think Elon has certainly defeated someone, and that someone is himself.
And I think Elon has been extremely adept at uh defeating himself.
I mean, he got himself out of being co-president.
How's Tesla doing?
Uh, I don't know, it doesn't look great.
How's X doing?
I'm not sure.
I think NYT is winning this round.
NYT so it's pretty good.
Okay, go ahead.
It's something here.
Go ahead.
I mean, I I I think that, you know, I I'm I don't know, I'm I'm almost mostly off X at this point, but I'm I'm I'm reading more NYT.
So maybe I'm not the target audience.
Maybe I'm defeating myself.
But I would also say that um, you know, I think the only force that is more powerful than the USA, um, the only force capable of defeating the USA is the USA.
And the only force capable of defeating China is the CCP.
And I see that both of these um nation states have become extremely powerful at beating the shit out of themselves.
And I think these humiliating self-beatings will continue until morale improves.
But I think that, you know, Biden did uh a terrible job.
Trump is doing is being kind of apocalyptic, and uh, I think they have a good chance of unraveling the United States, yes.
And I think the uh Chinese have been driving a lot of its smartest people of a lot of its most entrepreneurial people, a lot of its best creatives out of the country.
And I think the CCP will also defeat the Chinese ethnostate.
They'll defeat the Great Rejuvenation.
So that's my model.
I'll pause there.
What do you think?
Okay.
So what I think is I think Zhi is a lot like FDR in the 30s, where he was the least bad in the sense of like there's lots of things.
I mean, FDR in turned the Japanese.
FDR basically did the gold seizures.
You know, FDR essentially pushed, I mean, he used the government against all of his enemies.
He went after Andrew Mellon.
He pushed the great fortunes into foundations.
People credibly allege that he, you know, pushed the Japanese into World War II and so and so forth.
All kinds of stuff he ran for four terms, which broke all previous norms, blah, blah, blah.
All kinds of stuff FDR did, right?
Uh people think he made the Great Depression great.
He prolonged it.
Um, but net net, when all the dust settled, ultimately the US was in the strongest relative position and it screwed up the least.
Yeah, it's not that it didn't screw up.
Go ahead.
Yes, go ahead.
Right?
It screwed up the least out of the Soviet Union, which has gotten killed, Nazi Germany, which has gotten itself blown up, the Japanese got nuked.
The US both both through competence and through luck or whatever, screwed up the least out of them and was therefore the most powerful in that dispensation.
And I think China's big instinct because the century of humiliation.
You know how, like a great founder will take a lower valuation but always preserve control.
Right?
My view, and you can probably fill in the gaps on this, is especially also seeing what happened to Japan with the plaza accords in the 80s, right?
Lots of people, our friends will say something like, oh, you know, people were saying Japan was going to beat us in the 80s, and therefore it'll happen exactly like that, and we're gonna beat China the same way.
But Japan didn't just lose, it was basically killed because it's it's like a US occupied country, right?
There's a military base there, you know, thousands, tens of thousands of troops, Japan's constitution is written by the US, and most importantly, um Japan's not a sovereign.
One way of putting that, in 2017, actually NYT released an article that said in 2010 China had killed a bunch of American spies in in China, right?
Japan could never do that.
That means China has deliberations that America can't see in a way Japan couldn't.
And so Japan with the Plaza Accords, it was handicapped, it was forced to buy US treasuries, its whole decade of stagnations, you know, began at that point.
And China's hyperconscious of not going through that.
So China at all at all stages, it took less money to preserve more sovereignty.
It took worse terms in some ways to preserve, right?
So because of that instinct, that wall building, you know, for example, it took all these hits when it banned foreign social media and it built its own, right?
All these PR hits constantly, and it was willing to do that to preserve sovereignty.
I think that's gonna end up being the far-sighted decision, for better or worse, in in this century.
For example, you do you see what happened with Ukraine where there were scre scripting drones on Russian soil?
No.
What what what does that mean?
So, like uh a few months ago, the Ukrainians managed to like have some exploding drones activate within Russia and go blow things up, right?
So they could they could control things remotely, right?
So, in my view, that means, and I and I talked about this actually 12 years ago, but now it's actually becoming real.
Digital borders and physical borders are like the same thing.
Right?
Your fire the great firewall will be seen in some ways as a very far-sighted thing because it is digital hard borders.
People won't be able to script drones on Chinese soil, they won't be able to script humanoids on Chinese soil.
They won't be able to also send in destabilized memes, desabling memes into Chinese soil, right?
Whereas the unmoderated anglospheric internet will just be filled with all of these scissor statements and crazy things that are all driving everybody crazy as we're seeing.
Yes.
And so China's also insulated against that because people only speak Chinese.
So, and G is taking English out of the schools.
So they've got like multiple levels of firewall, and they can just like sip green tea and everybody is shooting each other, you know, in other countries as the dollar goes away.
Like that is a uh reasonably compelling idea.
I think that um, I have a solution for this, but but go ahead.
Yeah, good.
I feel like the Chinese are um they've really taken Napoleon's uh maxim to heart that the game goes to he who does not lose.
Now, obviously Napoleon was The do nothing win meme.
Um Napoleon won like nearly all his battles, but he just lost Waterloo and a couple of others, right?
Um, and then he lost and he lost, he lost badly, right?
Um and so I think the Chinese are very intent on not losing.
And there is uh certainly some good things that I see that the Chinese are doing.
I mean, I agree that the Great Firewall in retrospect looks like a good decision.
You take a lot of PR hits, but you know, I was as I wrote in one of my letters, it becomes really difficult to say that the Chinese really wanted the internet in the late 2010s when Congress was regularly dragging Zuckerberg and Twitter and everyone else into Congress to say your products suck.
Um you're destroying us, um, you're killing us, man.
And so, you know, I think like you can't tell the Chinese you really need these products in your state.
And I think that is um that makes a lot of good sense.
I take a look at um what is going on with uh AI today.
You know, last week we have Sora too, uh and we are able to produce like hyper-realistic slop that um like friends have told me that their family members have were not able to distinguish um that this was an AI generated cameo, right?
And I think that's kind of incredible.
Like, why are we so focused on releasing this stuff?
And this seems like crazy decisions being taken by the AI labs without any real consideration for um how the state, uh how the people might actually use it.
And so, you know, there is a sense in which I think that China just wants to be totally stable and then you know, close the doors on the celestial empire and then let the barbarians tear each other apart and you know, eat some mochi balls and then drink green tea.
Yeah, I mean, that sounds good.
But but I think that there is a problem here, which is that um the only force capable of uh hurting China is the CCP, which um I mean, in my book, I write about how you know they zero COVID, uh had zero COVID and they had the one child policy, in which they were really dumb and they were really um autistic about uh thinking in such literal-minded terms.
Oh, there's gonna be ecological doom if uh we have overpopulation.
The solution is one child per couple and then you know, conduct uh 300 million abortions um over this period.
Or, oh, you know, we don't care about people who need chemotherapy or need dialysis treatment.
The only thing that we care about is preventing the spread of the COVID virus.
And so we are going to um, you know, uh prevent the spread of the virus at all costs.
And so, you know, here is where I think the engineers with their literal mindedness will not be able to uh leave the people alone.
I think the best case scenario is for China is if the CCP decides to spend all day sipping green tea and then just leave the people alone.
And I don't I don't think they're gonna do that.
I think they're gonna figure out new and novel ways to destroy the country themselves.
What do you think?
So it's interesting because um I I I want to make the case for China, and then I'll make the case against China.
Right.
But that's to say, um, let's say there's like V1, V2, V3, V4 of an argument.
You know what I mean?
I think maybe you and I are on V4, but let me let me let me do the V1, V2, this gets our progression, right?
Because you go to underscore arguments against the sophisticated one, right?
Okay.
So the V1 is kind of the naive, like, that's a Chinese communist party.
They're all, you know, and people think they're all Maoists and it's slave labor and so on and so forth.
And that's also that's a, or that they're still the ideological Maoist.
They've got a very outdated view of what China is.
They see the Chinese cities and their response is, oh my God, there's LEDs on the cities.
They don't realize the point is the cities didn't exist 30 years ago, right?
And they're actually very clean and beautiful or whatever.
Then the V2 is uh, and I'm not attacking him, but let's say somebody like Arnaud Bertrand on X, right?
Oh, or Carl Zha, which is basically, you know, I welcome our new Chinese overlord, someone someone who will say something like that, right?
And it's like their case is something like America's been blowing up the Middle East, China's been building up Africa, America just has a bailout economy for the wealthy, China has shared prosperity for everybody, China hasn't started any wars, America's starting all these wars, China's internally united, America's truly and divided.
And actually, also with these tariffs, China's been doing trade deal after trade deal.
And by the way, that also is why I think Xiaomi or, you know, BYD, DGI, their market caps will probably rise because Chinese market, Chinese market access has expanded as a function of all these trade deals that, you know, Xi has recently inked as a function of the reverse thing on the tariffs.
Okay.
Then the V3.
So that is like the first is, you know, USA is still 1945, it's going to win, China sucks.
The second is actually China's super strong and it's good.
Everything will be fine.
The V3 argument is basically the US was on balance better than the Soviet Union from 45 to 91.
But then after it won, it became by degrees worse and worse and worse behaved and started bombing people and abusing its power and so on.
And one way I think about it is at home, China's a one-party state, but abroad it's a two-party state because it's checked by America.
Conversely, America at home is a two-party state with Democrat Republican, but abroad was a one-party state where it blew up everybody because it wasn't checked.
It's an interesting way of thinking about the last 30 years or so, right?
And now America's coming home because, you know, it's the national defense strategy, if it's real, says pulling troops back from Asia, like it's becoming a country, not an empire.
It's giving up the imperial burden, like the end of the Soviet Union.
And so the bad part, the V3 is China will expand in such a way that it actually has unchecked power.
And even, for example, zero COVID would never have actually been undone in China without the signal from other countries.
Because the Chinese diaspora knew that zero COVID wasn't working elsewhere, because other countries were, you know, that that external signal was certainly filtering into China in some ways.
And people were aware that Chinese people didn't have to live like this.
And that was part of the signal.
And I think another part of it is Xi just wanted to win his re-election in 2022, and zero COVID was sort of a way to winkle out anybody who wasn't super loyal to him.
And then right after, you know, I think the November 2022 Congress, um, then they un unlocked everything.
So it wasn't really about zero COVID, it was about third term or fourth term, whatever, you know, and nth term.
And so then the V4 would basically say, okay, the USA is going to zero.
It's it's not 36 trillion debt, it's 175 trillion debt.
The dollar is being devalued against gold.
It's dropped by 100 million X against Bitcoin.
It's pulling back its troops, people are shooting each other domestically.
Um, it's telling NATO to go fight for itself.
It's it's basically sanctioning itself on trade, essentially withdrawing itself from world affairs.
It's like, you know, have you seen a steel cage match?
Yeah.
Yeah.
So imagine I imagine like a new iron curtain, like a steel cage UFC octagon thing descending over America, and all talent is told go home.
All the researchers are told to go home, all the wealth is getting going to either the internet, but where it's S P 7 or the digital asset treasury companies, SP 493 is flat, US Treasuries are down to zero, and conversely, all the manufacturing and military is in China because of the robots and drones there and all the media and money is on the internet.
And now North America is just this gigantic steel cage match with all the shouting and all the shooting.
And it's like basically what the Eurasian continent was under communism, unfortunately, in the 20th century.
All kinds of crazy people shooting each other, warlord era, collapse of the Soviet Union, Tajikistani Civil War, all that kinds of stuff.
I think it's coming to North America.
So in the V4 is basically, okay, in that world, something needs to balance the Chinese drone armada.
Because China will be insanely, insanely, insanely, insanely, insanely powerful.
It'll be like five or 10x America at its peak.
It will be because it's it's actually hitting more steam.
Chinese overproduction just means like so many widgets popping out of, you know, the ground.
They're they're they're they're still gaining steam, right?
Like the country still hasn't been fully developed.
And so China will just be the most powerful physical force to have ever existed.
And right now, many Americans aren't mentally living in that world because they still think like the US military exists, right?
But the US military has been unfortunately beaten by the Houthis.
NATO is being beaten by Russia.
If NATO can be beaten by Russia to the point that there's peace treaty talks with Putin, China's like 10x Russia easily.
You know, Heggseth has said Chinese hypersonics can sink all U.S.
aircraft carriers, right?
The Secretary of the Navy said one Chinese shipyard makes more ships than the whole U.S.
Navy combined.
Right.
Raytheon CEO has said you can't decouple from China.
So what can possibly balance the Chinese drone armada?
I think the entire American mentality of like fighting with your fists and so on and so forth is very romantic 20th century thing that can't be done against China.
So you actually need something totally different, which is Gandhian nonviolence, decentralization, agility, invisibility, something totally, totally different against this enormous force.
So that's where I'm at with like V4.
Let me pause there because that was a lot.
But let me uh give your thoughts.
Yeah, I think my my problem is that I'm on like V 73, and it has a remarkable convergence with V1.
And I think I'm um I I've kind of horseshoeed my way back into the start of this snakes and ladders.
Um I think this is um I think I mean you're right that there is kind of this um negative element um with both of them.
And this is where I I would um, you know, think about how uh you say that MAGA was appealing to um the gays as Americans um rather than as gays.
I I I think there is something to that, but um there is also, you know, MAGA is also very interested in defining who the internal enemies are, and probably they're throwing they would like to throw more of the gays in jail.
And I think it's 25, yes.
In 2024, maybe it was it was a very different message up until the election.
And then shifted 30 four.
Yeah, go ahead.
Well, I mean, I when you hear uh these terms like heritage Americans, um, first I think of like when you say heritage American, I think of like a giant Thanksgiving dinner um that's with a big turkey in the middle.
Um, and you know, I think that is just these very strange um tar sort of terms.
I agree that there is kind of this iron curtain that the Americans are self-imposing on themselves.
And that feels really strange.
Um maybe maybe it's good for the troops to withdraw from the rest of the world and give up the imperial burden, but I think it's not good to deport a lot of uh South uh Korean engineers, or let's just call them Korean engineers, uh who are trying to build the battery issues.
That's right.
Um and humiliate them in chains.
That that is um like totally uh a horrible own goal.
I'm just always very conscious of the ability for um the Chinese to impose own goals for themselves as well.
You know, it would be great if they spent all day uh sipping green tea, but they can't leave anything alone and they just constantly have to meddle in everything.
Is America Keynesian?
Yeah, sure, maybe.
But the Chinese are, according to Adam Two's, um, just so much more Keynesian.
They Keynes everything, right?
And I think that there is kind of just this endless meddling mentality.
And let me just make a broader point, which is that I think the US and China are in competition.
And rather than one country having all of the structural advantages on its side, I think I I wouldn't agree with that characterization.
I think that the US can very credibly point to these amazing strengths that the US has.
I think China can also point to these amazing strengths, namely these drone armadas, uh, which are very powerful.
But there's also, you can, if you wanted to focus on the most ugly parts of America, you can definitely paint a horrible picture just as the same uh with how you can do that with China.
And so my mental model for all of this is that this is a long-term competition.
There will be no country that uh completely implodes and fails to get up, get back up in the way that Gorbachev um did really kind of drive um the Soviet Union.
Okay, so that's that's a big difference of opinion because you just finish your saying and I'll say something.
Go.
I think that um, you know, when one country is ahead, it is going to get overconfident and make a lot of mistakes.
Because I felt like I lived through this um in uh China when at the end of 2020, at the start of 2021, Xi Jinping felt like he was at the top of the world.
He was able to control COVID, in which um, you know, the US was not.
January 6th just happened, and China looked like it was like a super stable, economically prosperous place.
What does he decide to do?
Smash a lot of tech companies, destroy the real estate sector, and then also hold on too tightly to COVID.
And I think that is a classic mistake of overconfidence.
And arguably was it, but was it because let's analyze it now from 2025.
Okay, key go ahead.
The three red lines essentially were sort of a control demolition of the real estate bubble.
It didn't actually fully crash the economy.
Um he went after the video games, he went after after school tutoring, which there's a red queen phenomenon after school.
He definitely hit all kinds of people on, you know, you know, entrepreneurs and so on.
But advanced manufacturing, the transition into it did work.
I know you mentioned the little pinks in your book, say this, but maybe they're actually right because uh he avoided the fire economy, you know, finance insurance real estate of the US.
He avoided going too far into it, popped it, doesn't seem to have it caused some damage.
I mean, one way of think about it, if the country, you know, rather than talking about it in a very ideological terms, if the country is like the platform and the companies are like the apps on that platform, right?
Sometimes Zuck will make like a breaking change to the Facebook APIs and break Zynga, for example, if you remember when they did that, right?
Because it was spamming the feed too much.
Nothing, nothing against Zynga or whatever.
You're just making that decision, the greatest good for the greatest number.
Like Zynga is working in its own way, but long term this is spamming too many people with zombies or whatever it is.
So actually, no, we don't want to have Zynga.
We're gonna push Zynga into its own archived inbox, like a spam inbox and so on and so forth.
And so in the same way, if he's like got he's got root over the Chinese platform, he's like, actually, we don't want these apps.
Yeah, we don't want any more than we want the advanced manufacturing stuff, which seems to have worked.
Yeah, I mean, if you if the only thing that matters to your economy is advanced manufacturing, and I am going to let no one talk me down from my stance on manufacturing as almost everything.
And so I think that the manufacturing is really important.
But you know, he didn't only hurt a lot of the video games.
And maybe, yeah, you should control the video games, you should control the social media, you should control the short-firm video apps, you should control the AI slop.
Frankly, the Americans ought to do more on all of these different things.
So he also smacked around uh people like Jack Ma, um, people like John.
Real guys.
And other people, right?
And so that's pretty important too.
And so this is where I think that it is still important to flip a few more pages past the business pages of the Wall Street Journal into the economics pages, because youth unemployment is real, dumping is real.
Um, you talk about inflation uh being uh well, what's the Friedman line?
Inflation is a taxation.
Um Inflation is taxation without legislation.
Without legislation.
And I think, you know, yeah, inflation is bad.
But the only thing that might be worse than inflation is deflation, which the Chinese are not quite able to get out of.
And C is kind of this boomer who says, why do people dislike deflation?
Um don't people like lower prices?
Well, not if you're not.
Well, so here's where I'll uh here's what I want to argue with you.
Go, uh go first.
You're saying I'll let me let me just make one more point, which is that I think that, you know, the country that's going to be ahead is going to make all sorts of mistakes driven by overconfidence in cubris, which is what I think um for the most part, uh C did.
I think that the control demolition of the property sector destroyed a lot of confidence in housing, and construction activity is still not back.
And we're we still might like get some sort of a weird financial crisis because of the supposedly controlled demolition of the um of the property sector.
I think that this was not as controlled as we'd like to believe.
And arguably you can say that the United States grew overconfident, which is how it imposed this octagon upon upon itself to make its to make people um destroy each other.
That's a mistake of uh overconfidence.
But the more that you're ahead, the more you'll make these sort of mistakes, the more that you're behind, the more that you're interested in patching up your deficiencies, which is why I think this is going to be kind of a neck and neck race for a very long time, because we we can't just look at a race based on structural advantages.
As it goes on, you know, people will trip up and stumble and uh fight harder.
Okay, so here is my worldview, and where I disagree with you on is basically a few things.
Um, first is I don't know if the US has that much longer to live as like a coherent political entity.
I think we're on the verge of a end of USSR type scenario.
Dahlia describes it as a debt heart attack.
Elon thinks the government isn't going to last very long.
You're seeing gold flipping U.S.
treasuries, for example.
If you saw that graph, gold is flipping US treasuries as reserve asset of states.
And certainly Bitcoin has risen more than 100 million X against it.
There is uh, you know, the US has not become the de like uh the US used to be the number one destination for global millionaires up to 2019 plus 10,000 millionaires.
After 2020, it dropped 85%.
It hasn't recovered.
And global millionaires' tap capital has relocated to Dubai and Singapore, number one and number two.
They've left China as well, a good chunk of those millionaires, but China regenerates them so fast in a, you know, that that it's actually it's it's basically seemingly fine for them.
And China's view, I think, is that the new up-and-coming generation of 20-somethings is speaks purely Chinese.
They have purely Chinese apps, they'll be Chinese nationalists.
And unlike the 40-somethings that have some sympathy for the West, you know, a lot of these Gen X or older millennial entrepreneurs, he's like, you know what?
Why don't you guys go and it's fine, Jack Ma can be a teacher in Japan or something like that, what he's, you know, doing, and somebody else in China can run that.
We've got a billion Chinese people here, right?
That's essentially Ji's bet that he can do without these sort of older Chinese entrepreneurs.
And now he just wants those, the younger ones who have grown up on Xinji and Pink Dot and all the Chinese apps and think China's number one and Luckin is better than Starbucks.
And maybe they're right.
BYD is outselling Tesla in neutral markets.
Xiaomi is able to ship a car when Apple wasn't.
TikTok needed total state intervention.
And the combined efforts of Google and Facebook and so on and so forth couldn't be TikTok.
And DGI is the cheapest and largest scale drone manufacturer in the world.
And an end in end, you know, like essentially the US can't compete with China abroad, with the exception of maybe Elon, and even Elon is having a tough time.
In any neutral market, Chinese products win.
And so the US has retreated to just trying to tariff and build tariff barriers around the US, which is going to fail in the medium to long run, because the Democrats may defect from that.
Like Newsom has said, hey, maybe he'll import goods from China if he saw that, right?
Like that's why I say America, it's not the United States, the disunited states.
Blue America has its own foreign policy distinct from Red America.
And Newsom and Walls and Hillary Clinton have all signaled that they may want to align more with China than uh than the Republicans do.
Like, you know, you saw the thing with Newsom and how he it wasn't just that they cleaned up San Francisco for Xi.
It was that Newsom was the only Democrat to get the meeting with Xi.
Do you remember that?
Yeah.
My view on that is uh, again, a lot of Americans don't know this, but like within China, you you can't just jump straight to the presidency like Obama or or Trump.
You have to go from like, you know, mayor of a village and then governor of a province and all the way up and you make it to central committee.
And so Xi recognized Newsom as having a similar path, going from San Francisco mayor to California governor to possibly president, so recognize him as a credible possible person.
And when Newsom was in ca uh China, he said he wants to be China's long-term stable and strong partner.
My view is that after the dollar ends, that's the last strand that's holding blue and red together.
Because blues only four percent of Democrats marry Republicans.
Democrats certainly don't vote for Republicans.
Democrats don't even talk to Republicans anymore.
They're in their own blue sky versus X, you know, kind of thing.
Digital secession's already here.
They're now starting to shoot each other, blow each other up.
There's a new killing, crazy blowing up thing on X every single day nowadays, unfortunately.
And it's the last piece of paper that's holding this thing together.
It's not you know how people say it's not a it's a country, not an economic zone.
You've seen that kind of post on X?
Yes.
It's actually an economic zone, not a country.
Because the only thing holding it together is this piece of paper called the dollar.
And when that tears, unfortunately, there's nothing keeping blue and red together.
And Democrats will side with Xi if they don't have DC.
Yeah.
Well, I don't know.
I mean, I why why would she want to meet um uh Governor Newsom?
This is a guy who looks exactly like the lead actor in American psycho.
If it seems kind of dangerous to me.
That's just weird.
Um, and I think there is uh someone who is more willing to give a bear hug to Xi Jinping than um uh governor new some, and that is President Donald Trump.
I mean, I was digging up these quotes for an article I was writing, which Trump told the Wall Street Journal uh C is so smart, brilliant, everything nearly perfect.
There's no one in Hollywood like this guy, as if like Xi Jinping had like Tom Cruise levels of handsomeness, which I find up.
Wendy but Trump is unpredictable because he'll say that about someone, then he'll insult them, then he'll come back and say it.
Well, uh right now he's trying to bear hug uh Xi Jinping.
And so, you know, it's And so you know, I think you're right.
I mean, maybe there is more than one thing that unites Democrats and Republicans.
Uh that's the paper.
Rather, it's like a love of Xi Jinping.
What do you think about that?
Well, what's interesting is a few years ago, people were saying the one bipartisan issue was being anti-China, right?
My view is Democrats were only anti-China because there was a contestation for who would run the most powerful state.
Like basically, first China disrupted manufacturing, so it disrupted Red America.
Then, post-2020, it seemed to become the most powerful state.
So then Blue America really fought it.
And now recently, finally, Tech America, which always had a sense of superiority versus China, has finally started to see, wait, Chinese AI models are actually giving us a run for the money.
Chinese robotics are actually really good.
And for the first time, tech America is actually taking China seriously, not just one-off like TikTok, but actually, whoa, actually, the Chinese engineers aren't just copycats, they're actually innovators and so on.
That's that's always being the thing which tech is, you know, American tech has felt they've had the edge, and now that edge is maybe slipping.
So I think though at almost a genetic level, I think red Americans at the base, not Trump, have a more visceral aversion to China.
Whereas Democrats, it's funny to put it this way, this is a one-liner, okay.
But Democrats and the and China are both natural communists.
So they'll be that's it, that's a joke, okay?
But there's, you know, they're statists, right?
They're they're Democrats are willing to be administrators in a multi-ethnic empire.
And so they could find something under the Xi dispensation, sort of like you know how Venezuela is like this dysfunctional kleptocra, but it's sort of bailed out with Chinese goods.
China's willing to, as you know, it's willing to work with, you know, Iranian fundamentalists and Singaporean meritocrats and Venezuelan kleptocrats and Russian Orthodox, so long as they don't interfere in Chinese internal affairs, right?
And so I think they will support the Democrats and just ship them goods and support them in this way as the have you seen this thing on soft secession that the blues are doing?
Right.
Right?
So in that soft secession, they just get goods from the West Coast ports from China.
They don't enforce the tariffs.
I think it's very likely something like that happens.
Newsome has talked about it.
I'm not even, you know, inferring this.
Go ahead.
I don't know.
Um Biden Democrats, this guy from Delaware, another potential port town.
There's a port of Philadelphia.
Didn't get a lot of uh didn't do a lot of good for Joseph Biden uh when he was president.
And but but but Biden, Biden is 19 born 1942 and Trump's born 1946 or something like that.
So they're actually both, if you zoom out, they're both like, you know, coarse, handsy guys from the northeastern US, born at the time of like peak America, who grew up thinking the USA is number one on everything effortlessly, and Biden would say things like, we're the United States of America for Pete's sake.
Like essentially they just think USA number one.
Go ahead.
Yeah.
I mean, I think um I mean look, you're uh focused on a lot of um weird shit happening in America.
And no doubt the weird shit is real.
Um, but I am living, I'm I'm speaking to you from San Francisco.
I look out the window and I see three weird pieces of shit at a day before breakfast, you know.
That's just um that's just how how odd things are.
But if I am, you know, trying to think a little bit about China as I looked at it, there's plenty of dissatisfaction.
I don't know if they're regenerating all the millionaires very quickly.
You know, there's a lot of this when see when the most the biggest driver of wealth in China is the property sector, when you have a property sector collapse of 25%, and then people aren't really buying homes, it's really hard to build more wealth after that.
There's a lot of uncertainties about the corporate sector.
There's a lot of uh young people who've decided to move to Northern Thailand where they could smoke drugs that are legal in the state of California, and they're taking leave of um, you know, the great rejuvenation of the Chinese ethnostate that's being undertaken in their name.
And all of these millionaires are leaving.
And there are, I mean, I don't think the definitely the demographics is not an issue in the next 20 years.
But in like 25, 30 years from now, demographics will yawn larger and larger.
It seems like they're not going to be able to escape this whole uh very well.
I understand there's deploying a lot of uh robots, but what if, you know, um the um Silicon Valley bet is real, which I don't really buy.
But let's say we invent God in a box and we get the superintelligence, and they invent all these humanoid robots, and then we get to take control of these humanoid robots because we have the AI and they don't.
You know, that could be bad.
You know, maybe finally all of this AI slop, we should just consume all of the Sora 2 videos just to support, give Open AI a hand so that they can take charge of the robots later.
And you know, the Politburo seems pretty dysfunctional.
Xi Jinping, you know, I know I get he's like more handsome than Tom Cruise, but he has a belly.
I get by the way, go with you.
I said that.
You know, he's um smoking probably too much because um, you know, she was born in like 1952, and all of these people uh smoke way too much.
If he falls over one day, are we gonna get tanks in the streets in Beijing?
I don't think so.
I think they'll have an orderly transition.
But what are we really going to get?
And so I think there are all of these um, you know, does the United Politburo um comments that we can also have as soon as this guy kills over.
And so, you know, I I don't know.
It's like I think that uh the tariffs will be enforced.
It's more likely for the terrorists to be enforced on California than for the Chinese somehow to figure out all of their own political problems, too.
What do you think?
I think Li Chang is very competent and he is potentially the number two after Xi.
Um I think very few Americans even know who the seven I I'm sure I'm butchering the pronunciation, but it's like L I Q I A N G, I think.
Yeah, and you know who this guy was?
This guy was the party secretary of Shanghai during the worst lockdown ever attempted in the history of humanity.
Every other democracy was able to toss out the bastard who enforced COVID on their policies.
And then what the what did the Chinese decide to do?
Elevate this guy into premiere.
That's weird.
Wait a second, but Trump was the one who did COVID lockdowns in the US and he's president again, right?
So I'm not sure.
I'm not sure that's true.
Well, but yes, but he did I mean, Republicans ultimately didn't care that much about like COVID's a very complicated kind of thing because everybody switched positions on it like four times.
Like at first, Democrats said it was racist to talk about COVID and Trump was calling it the China virus.
It's Jan Feb 2020.
And then Trump started saying, oh, okay, you know, we need to start, you know, covering up the testing and showing, you know, that the numbers are going up.
And then Democrats were saying it was a big deal.
Then Democrats flipped in the US and said, actually, racism is a real pandemic and we need to go and do Black Lives Matter riots.
And Trump was doing the warp speed vaccine, and Kalama Harris said that she wouldn't take a Trump vaccine.
Then, and the vaccine was actually blocked.
Uh people said that they were, you know, I think um, gosh, I forgot this guy's name.
There's a scientist.
This is a reporting like MIT Tech Review that they were blocking the vaccine's approval until after the election to make sure Trump didn't get a bump from the vaccine, which is a big deal, by the way, because a close election to a tweet.
Then after the election, suddenly the vaccine became a tool in the hands of the Democrats.
And fundamentally, I just looked at that as as something where it wasn't a scientific issue.
It was just something that was a tool in a power struggle.
And similarly, in China, I think it was just a tool for Xi to get his third term.
It was just that.
I don't think they actually believed in it.
Well, let me let me give you um a um an alternative view.
But first of all, let me say that you know what the Americans got and the Chinese didn't?
The vaccine.
The MRNA vaccine.
Yeah, farm didn't work.
Right.
Pretty important.
I mean, the the Chinese were were locking people up and and swabbing their noses and mouths, you know, every every other day.
And they did not do the vaccines, which is which is really, really strange.
They they were just using police to uh to to keep uh shutting people in.
I think that, yeah, uh after living in um China, after living in Shanghai in 2022, what I observed was that yes, politics was part of it, but Xi's coronation.
I feel like Xi felt like he had the coronation in the back.
And he like he did like the most blatant possible insult towards the Shanghainese by elevating their most hated politician into the head of premier.
And I th I was surprised that I would have been surprised if Li Tian was still vice premier, one of the four vice premiers um after this, and then he was elevated to be premier.
Think about how that distorts the incentive structures of all of these other, you know, party secretaries who who thought this guy messed up big time and he gets promoted.
I was living in China and I felt that the protesters did play perhaps some role in showing C that they are dissatisfied.
I was um living in Shanghai.
I would went to one of the protests the day after that all of these youths staggered out of their cocktail bars uh and you know started chanting down with Xi Jinping down with the Communist Party, which is kind of like America's very unusual to see that, because usually it'll be something where they're just critiquing like a local party person versus the big dog or whatever.
It's not their fault.
They had too many of these Western cocktails in the French concession.
But I think the other big thing was that I felt very strongly that the local governments everywhere throughout China, especially in smaller cities that are not as wealthy as Shanghai, they could no longer enforce zero COVID.
They had just no state capacity to do onto Shanghai what Li Tian did uh onto Shanghai.
And they had given up, they were really exhausted.
And I think when the virus started really spreading in Beijing, the central government took a look at itself and said, Can we, the central government, enforce a lockdown upon the central government?
And then they decided no and threw up their hands, and then they completely let this whole thing collapse in one of the things.
Yeah, in 2023, yeah.
Right.
It sounded like a mistake to me.
Didn't have to happen this way.
Because we know what you know what they didn't have?
Vaccines.
Yeah, the Chinese vaccine did not work.
Um, so I I'll agree with you on all of that, basically.
And I know that the Shanghai lockdowns were actually like seriously house, you know, like house arrest type things, and people who were zillionaires or whatever were literally locked in their house, and people like had pregnancies messed up, all kinds of bad stuff happened during that time period.
So I will completely agree with you.
I'm I don't think China gets everything right at all.
I I just, however, think they're messing up less.
And the reason I say they're messing up less is if you take a flight from San Francisco or Seattle or LA or any Western city which has syringes and refuse and drug addicts on the street and people attacking you as you walk down and so and so forth.
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