Arthur Kroeber is a leading researcher on Chinese tech and macro, a founding partner at Gavekal Dragonomics, and author of "China's Economy: What Everyone Needs to Know." It's the most useful, detailed resource I've found of how China actually works.
On this episode, we discuss how China achieved high-tech manufacturing dominance, and where they'll go from here. By Arthur’s account, the Chinese government is like a giant VC fund: they decide on key priorities and then spend hundreds of billions of dollars subsidizing ruthless competition at the local level. They are willing to lose huge amounts of money for a few of their bets to pay off: at China’s scale, effectiveness matters more than efficiency.
There's also a growing bipartisan consensus that we need to combat China's rise. This doesn’t make much sense to me. China is a big, powerful country at the frontier in many fields, and its economy is intricately tied in with our own. Being instinctively adversarial is both unsustainable and risky. Arthur and I discuss how we can create a productive, mutually beneficial version of this relationship.
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Timestamps
(00:00:00) – We should reconcile with China
(00:21:21) – BYD, Tesla, & Chinese EV industry
(00:36:05) – Will China have a Japan-style financial crisis?
(00:44:39) – Local debt situation is manageable
(00:57:28) – If CCP is so competent, why isn’t China richer?
(01:05:08) – How China keeps tech under control
(01:33:45) – Does China win AI?
(01:43:34) – Communication with China key for AI safety
(02:10:08) – What foreigners get wrong about China
(02:17:32) – China-US relationship future