Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The biggest misunderstanding is somehow that a group of people, or even just one person, runs the entire Chinese economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is far from the reality.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is a very complex, large economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And even if there is an extreme form of political centralization, the economy is totally decentralized.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The role that the local mayors, I call this the mayor economy, plays in reforms but also driving the technological innovation that we're seeing right now, it is actually not run by just a handful of people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's more decentralized than the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think more broadly, a big misunderstanding is really the relationship between Chinese people and authority.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, you know, people think that somehow there's almost blind submission to authority in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We have a very nuanced relationship with authority, whether it is between kids and parents or students and their teachers or with your bosses and the Chinese government.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's kind of the same thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's paternalism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They think that they're responsible for you.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But deference, a certain amount of deference to authority is not blind submission.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's been written implicitly in our contract for thousands of years that in exchange for some deference, we are given stability, security, and peace, and hopefully prosperity.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah, absolutely.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Without that, how can you have this radical, dynamic entrepreneurialism you see in China?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you don't have a sense of self, a sense of the fact that you can find opportunities, you look for opportunities, you drive opportunities, it's all self-motivated.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are millions of young kids like that in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They might not be thinking about changing the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is where the Chinese approach to innovation is very different from the Silicon Valley one, I'd say.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But they see opportunity.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They see a country with a billion consumers.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They see scale.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They see speed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They see that...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
With their dreams and the team that you have in China with engineers and the digital transformation, you can do so many things.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this generation of young people think about transforming their local economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think we're going to get into this, but it's no longer going to just be manufacturing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The young kids are entrepreneurs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I've rarely seen a more capitalist society than China from the pure economic side.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I've rarely seen companies that are as competitive as Chinese companies, people as ambitious and obsessed with making money as Chinese people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Kind of ruthless, actually.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And look, you know, consumers shop, firms invest.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you invest well financially, you'll get great returns.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
What is not capitalistic about the Chinese economy?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
At the same time, the social fabric is highly socialist.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
First of all, the state enterprises dominate many of the sectors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The state banks control the financial system.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We often talk about common prosperity, about equal opportunity, just and fair society.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But even, you know, daily stories, a walk in the park behind my parents' apartment, you're going to find at least 50 organized social groups on a daily level talking
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Singing, dancing, exercising, doing whatever these fantastic idiosyncratic hobbies they have, getting together every single day.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And free courses for the elderly and the retired.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That sense of communalism, that sense of belonging, that strive for harmony at the societal level is there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Competition is ferocious in China, especially when it comes to Chinese companies, but also in education.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I should be thankful that I'm not, you know, born later than I am because I thought China was pretty competitive already going to the schools and studying for the exams.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is a different level today.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Competition is not necessarily in the culture, I'd say.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's driven really by the changing economic and social circumstances of the day.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese companies are all hardworking.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're all going after the market share.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They all kind of want to do the same thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, it's not quite like in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
where you open a coffee shop.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, next door, I'm going to, you know, open coffee.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
bagel shop, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In China, the coffee shop does well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Everybody wants to open the same coffee shop.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think, again, I'm sure we're going to get to this, but there's a lot of that kind of competition, which really drives the world sometimes crazy, of replication.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But it's because it's not easy, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not easy to make money.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the education system, there are not enough jobs for the young people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So how do you get ahead?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
How, as, let's say, if you're part of a lower stratum society, how are you going to make sure that your children are going to have a better life than you?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You invest in education.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So everything is about competition in a country with 1.3 billion people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's somewhat to be expected.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah, Confucianism is more of a moral philosophy than, let's say, religion or a belief system.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It prioritizes social harmony above anything else.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not about metaphysics, but more about ethics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And at the individual level, the responsibility, the duties are all meant to preserve that social order.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So it's filial piety.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is loyalty.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is how to be a Chinese gentleman.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But things like saving, frugality is part of the moral discipline.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Education is part of the moral cultivation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So there's a very strong emphasis that you as a citizen have a responsibility to contribute to society as a whole.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If China were relatively successful economically, a huge part of the reason is, by and large, it's been meritocratic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That is changing somewhat now, but...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The only way that you have still that many poor people, especially a couple decades back, still be in harmony with society, seeing all these rich people make tons of money and you're still belonging to that lower stratum, the only reason is that you believe that your children have a future through meritocracy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And even though it's imperfect, it's highly imperfect, standardized testing, all this competition, all of the hours and the tutorials to studying for standardized exams.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, that is a very realistic scenario in China because there's that many people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, when I was growing up in school, we had 60 people per class and there were 10 classes in one grade.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, imagine that many people applying for colleges in the American way.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
How many essays would have been written and need to be scrutinized?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But also, that gives room for total corruption, if you know what I mean, just connection-based.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And actually, to standardize exams as imperfect as it is to select talent is still by and large fair.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's how that whole generation of entrepreneurs, bureaucrats, government officials were selected.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You look at the Chinese premiers, the presidents of the past, they all went to great schools.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
A lot of them were engineers.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And same thing for civil servants.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It has changed somewhat.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The meritocracy, I think, is eroding in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'm worried about that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because it is fine that you get into a good university based on your own merit, but finding a job now becomes much less meritocratic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
People with connections get jobs more easily than others.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Of course, this is not just a unique Chinese phenomenon.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's actually everywhere.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I guess what I'm saying is that that meritocracy, which was so fundamental to the ancient Chinese education system, by the way, civil servants were selected based on standardized exams in the past.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's always been throughout Chinese history, and that relates to Confucianism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now the opportunities, and coming back to the competition point, is that the opportunity is getting slimmer and slimmer.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And again, this is not a unique Chinese phenomenon.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Jobs, where are the jobs going to be, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So meritocracy has become more of a problem.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There is a good and bad part of competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I remember when I was going to middle school, every single midterm exam, final exam, you are ranked from number one to number 800 in your entire grade and publicly displayed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Very nice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But, you know, going to the U.S., I finally realized that Americans are totally competitive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's just that they don't display it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not as apparent.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I remember I went to a very competitive high school, but everyone's like so chill.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Oh, I'm not studying.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Oh, you know, they're studying.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are secretly studying.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When I was doing my PhD at Harvard, people said, oh, you know, my parents, they don't work so hard.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, people say, don't say you worked.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're working hard, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Just you don't show it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In China, it's kind of a noble thing to show that you're working hard and that you're number one or that you're top of the class and you want to display it and you want to let everybody know.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But in the U.S., everybody's like secretly doing it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the right, I would say, the right kind of competition or the efficient kind of competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I feel that in the Chinese education system,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was not necessarily efficient because it kind of frames you and molds you to be thinking in a certain way what's been taught to you.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You don't have the bandwidth or the time or creative freedom to be more creative and to think outside the box there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's just the box.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You maximize the box and that's it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You don't actually know what's outside of the box and you never actually go there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the bad part of Chinese competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And when I got to the U.S., the high school teachers were asking us to question authority, to question text.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'm like, wow, really?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can do that?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I started asking why.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Deng Xiaoping was by far our most pragmatic leader.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think everybody's grateful to Deng Xiaoping.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
My father's generation would not have seen
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
that amount of prosperity and peace and opportunity without Deng Xiaoping.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It started in the late 1970s when Deng Xiaoping came out with this open up and reform mandate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And it was very tough.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, coming back to the big misunderstanding of China, it's not as if one leader decides that that's what we're going to do and then everybody follows order and does that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
No.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are tons of political barriers, tons of incentive compatibility problems at the local level.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the end, you need the local provincial governors, the mayors to do the job.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And how many prefectures are there in China?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
A lot.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And they have their own interests, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We know this around the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Politically, it's the most difficult thing to do.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But somehow, Deng Xiaoping was able to break tradition, break convention, come up with this completely new way of thinking about society, life, and the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And it was so transformative.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I remember people of that generation saying,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
told me one time that society was going to focus on the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Really?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Why would they do that?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Wasn't it politics?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Wasn't it everything about politics and struggle and ideology?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So for them, that the whole country and the government is going to focus on the economy was just so...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
shocking, even though we take it for granted now, that shows you that breaking that mold was incredibly difficult.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think opening up was a really momentous thing that China did, and it wasn't just joining the WTO.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, they were doing a decade of work in preparation leading up to that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
What's called special economic zone is really to turn Shenzhen from a fishing village to an export platform, now to a Chinese-style Silicon Valley, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there was the agricultural reforms in the 1980s that meant that farmers could decide what they were going to grow and keep the surplus, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
whereas it was a collective system before.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know that very well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then, of course, the ultimate transformation was when China actually joined the WTO in 2001.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the rest was history, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We're still talking about the aftermath.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But reforms was the single biggest impetus to Chinese growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And every time there was a major reform, it was followed by a good...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
decade-long growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Every time growth went down, there was a new series of major reforms rolled out.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then, oops, that, you know, led to another wave of good growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I'd say that reform pace has slowed in the last 15 years.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But are there reforms to be done?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah, absolutely.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But again, it comes back to politics right now.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's less about economics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's more about national security.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's more about politics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think that is probably the single biggest barrier to continued good economic growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
As a contrast to Soviet Union, the Chinese economy, as I mentioned, was extremely decentralized.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In Soviet Union, the ministries were in charge, it was central bureaucracy, but a lot of the power were given to these provincial governors, party secretaries, mayors of different sorts, and they were incentivized.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the key, is that these mayors were incentivized to do a good job.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If I were successful on a radical reform,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If I were successful, I'd be a national hero.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then that reform would be rolled out in every single city in the country over time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I would be promoted to the higher run of the central government.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And who knows, I might even become vice premier, premier president one day.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That was how the individual was motivated to carry out these really tough reforms.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, China has changed a bit, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not about being radical and radically successful.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's about being safe, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So when you shift from basically an entrepreneurial state to a safe state, then the objective function changes and you see it in different economic outcomes.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, the central leadership politically is extremely powerful and very consolidated, but they hold a very crucial key to the local governments, which is that they decide their fate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Am I going to promote them?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Am I going to put them in jail?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Am I going to fire them?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Am I going to reward them?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Am I going to punish them?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They hold that crucial key.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think what was, you know, very surprising for most of the Western audience is that when I mentioned about the mayor economy, there's, you know, why don't our American mayors in each city do these very radical things and then push for GDP growth and technology and innovation?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's quite different.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think this is where China's very unique in the world is that political centralization, economic decentralization, and the yardstick to measure local mayors' competence.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
through, in the first stage, it was GDP growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I am a mayor of, you know, the city of Nanjing in Jiangsu province.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'm going to like peek at my neighbor's mayor's city's GDP growth, and I'm going to be very, very competitive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
By the way, I forgot about that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Competition is extremely competitive among the local government officials because you are competing with other mayor for a top job, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So you need to do better than them.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And whether that was efficient structure or not, I cannot comment, but it certainly just fueled this massive and rapid expansion, economic expansion.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
First, it was industrialization.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Everybody wanted to do exports.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Then they discovered, oh, my gosh, we can have so much fiscal revenues coming from land, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Selling land and real estate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Let's build real estate and let's urbanize.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then the money kept coming in to these local governments and that they can spend it on nurturing more companies or supporting real estate or supporting investment.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and they can do a better job.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So then it was geared towards real estate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's how the property cycle became the big thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Everything was at double speed because of what the local government's incentives were designed to do.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I say now that China's biggest challenge is consumption, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We know that China is very, very competitive in production and supply.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
China needs to be a consuming country to be a rich country.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Why don't you put consumption as part of the yardstick for measuring local governments?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, for a while it was environmental protection.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Guess what?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Very few of them really want to do it seriously because it goes against the policy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
incentives of driving growth, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They would suffer on GDP growth if they were very serious about environmental protection.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So for a couple years, nothing happened in China on that front.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then the central government got really kind of concerned and even angry and frustrated.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So they decided to put that as a penalizing factor.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then guess what happened?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, actually, environmental protection sped up.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And, you know, in a matter of short, short few years, I see blue skies every day in Beijing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's how it works.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The metrics shouldn't be geared just towards growth alone, GDP growth alone.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was just singular GDP growth and you can borrow heavily and just spend on infrastructure.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's not a productive way to drive the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's what the local governments were doing for a long period of time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the last few years, innovation, unicorns have kind of been an implicit yardstick for local governments.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's kind of how we've seen these great EV companies, 80 cities doing EVs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, do we really need 80 cities to do their own EVs, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Solar panels, now DeepSeek has become a star.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Semiconductor companies, each local government wants to have their own national champion EVs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So implicitly, technology was part of the yardstick competition as well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But if you can more accurately have a metric for consumption measures, really focus on making sure that it's coming from consumption, this GDP growth, rather than from investment or infrastructure, then I think that it might focus the government's objective a bit more on
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
thinking about how to make people feel more secure so that they want to save more.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
For instance, creating more jobs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
For instance, more on social security spending, on health care, on elderly care.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because for the longest period of time, this political economy model was brilliant at scaling up supply, but it was extremely weak at raising personal consumption because the incentive does not lie in consumption, it lies in production.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So you shift the objectives a little bit and maybe the local government will do more.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think it depends on the timing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you're starting something, starting a new emerging strategic sector like EVs or batteries or solar panels, you need the local governments to be involved, to mobilize, the big push to coordinate the supply chains.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you wait for the markets to develop over time, it's going to take a long time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe they don't even want to do it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Look at the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is very, very behind on some of the new strategic sectors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But once you've reached a certain level of market competition, I think the state needs to withdraw or to retreat because ultimately the state is not the best at allocating resources, picking winners.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You want the private actors, whether it's the venture funds or the through-market competition, to ultimately decide who gets the most resources.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But in the beginning, that big push is not really in any of the canonical models that I've studied in economics in the Western school of thought.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
State push, state mobilization, state initiation, that's not there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think if you look at EVs, solar panels, even just thinking about the idea of reforms in the first place, that initial state push was vitally important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The other negative, although I think by and large positive aspect is I don't.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
think that we need 80 cities to do their own EV brands, but to get started, maybe that's what it would have taken to drive that incentive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then ultimately, it's up to the market to decide who are the last five remaining EV companies, right, through market mechanisms.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's Chinese-style industrial policy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Industrial policy was heavily criticized.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And again, if I talk to my
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Harvard professors, they will be very, very, very skeptical about the role of the state, especially in such a major way.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But if you look at the Chinese experience, the evidence for success is all there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The cities that have pushed the most on supporting that particular sector ultimately did the best in terms of production, but also in terms of innovation, measured by patents.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's all in the data.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But the downside is that a lot of the capital is wasted.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and this is what I also discuss in my book, is that it is inefficient, although maybe it's necessary.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The amount of waste of investments plowed into these companies that will ultimately just go under, but also the misallocation of resources because it's led by the state, are some of the downsides.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I guess on balance, it's been positive because look at China's internal combustion engine effort.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Nothing, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Semiconductors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Thanks to Biden, thanks to Trump, it's improved dramatically.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But all these things that they tried to do before, they couldn't do.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But when it's a new thing, like something that there's no incumbent, no particular advantage in any country, actually, China is really spearheading these sectors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, you need to be elected and reelected, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Is that what your electoral base cares about, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In China, it's what the central government, your boss, cares about.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you ask the consumers, they'd rather you spend on social spending, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The things we talked about that stimulates consumption, on education, on healthcare, things that stimulate demand.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that's the political, it's the difference of political system.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese are both the most patient and the most short-termist economic actors I met.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The patience I don't need to explain because I think the political continuity means that they can make plans for two decades ahead, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Even longer.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The investment of Chinese parents in their children is...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is a multi-decade long project.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And they save, you know, Chinese people love to save because they think that they'll have even more money if they save that money rather than spend it on a ski vacation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that, I think it's patently obvious to most people around the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think that most of them would not have known that there's a very popular motto in China, which is called short, flat, fast.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the impatient part of the Chinese culture, especially with respect to the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Short, flat, fast was used to describe a winning volleyball strategy that eventually became adapted to describing the society as a whole and economic decision making.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you're an investor, you only want to invest in things that you can quickly turn around, make a lot of money and don't need to do much work.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It also applies to marriages.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So a short courtship, a very flat emotional relationship, and a fast divorce.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That is how you see these companies rise within a very short period of time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Of course, investors are only interested in those companies that can turn around and exit in a very short period of time, making many, many multiples.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And so in that sense, people are very, very impatient.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I sit on some boards of these longstanding companies and the values are just so different, even though a lot of these public companies are constrained by the quarterly results and so forth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But the values are about sustaining something, a company for a long time, thinking about organic growth, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
thinking about investments for the future, sustainability.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe it's that competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe it's the speed that we're used to in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
People think about short.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So, you know, this dichotomy is very, very interesting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's a transitory phenomenon, I'd say.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But if you look at the cheaper stuff, poor quality, that's a reflection of that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The copying, it's the same kind of mentality.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Just get ahead quickly.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But again, that is all shifting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That is all shifting because China is now in a different stage of development.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you ask the younger generation, they really care about quality.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They care about values.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And these companies, these very successful companies, successful in five years, 10 years, found themselves in a very difficult position after a longer period of time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that short, flat, fast attitude, which was so popular, especially before the pandemic, that's actually somewhat disappearing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So in some sense, this economic downturn is not that bad for China because it made the Chinese realize that it's not always going to go up.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And it made them really look down deeper into what they really should be focused on, that there will be cycles, there will be up and downs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And so these very short termist thinking and opportunistic way of driving business will ultimately fail.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's bad for China that we're having a sustained economic softness, sustained economic softness, but I think it's also a very, very important lesson for the Chinese people to go through.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, we look back at those moments when everybody in China was very poor with a bit of nostalgia.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I remember no doors were locked.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I was in Beijing, and I remember every day in the summer, everybody just went downstairs and chatted with everybody else.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was very social.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was very community-based.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The neighbors help each other.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We had very, very little small apartments, very limited access to certain goods.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When I was born, even in Beijing, there were these vouchers for how many eggs you can buy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And even in Beijing, there were three or four blackouts per week, typically.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There was a sense of community.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There was a very strong bond between
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
people and within the family because they were going after a common goal, making your life better, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Struggling, striving to make your life better.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I remember being on the back of my father's bike, getting up, you know, 6 a.m.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
every day and going to nursery.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And, you know, that's the typical day.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Not a lot of material goods, but people had a sense of purpose.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's radically different.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's completely different now in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Absolutely.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, everybody having a common goal and a sense of community, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That is what's missing in these extremely individual-based capitalist societies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think what the Chinese government is striving to do with Chinese socialistic characteristics is to somehow try to preserve a bit of that socialist character while still relying on market-based incentives.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But if you're an extremely individual-based society, I think you do lose a lot of that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think some of the backlash that we're seeing from society is a reflection of that, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
People being alone more and more, the death of despair in the U.S., the addiction, you know, that they're lonely, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And competition means that you kind of have to be somewhat badass sometimes.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And you sometimes put down values and you forsake harmony in order to get ahead.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's certainly the Chinese society now.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That was not the case before.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think it's a spectrum, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And Europe is somewhere in between, I'd say.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But Europe also is not as technologically innovative as the US.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But on a social level, there is more social protection for the people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There is a...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
stronger sense of community, I'd argue.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not perfect.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Ultimately, it is a choice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is what I think that China has to decide, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Do you want technological supremacy and radical breakthroughs?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, yes, if you do, then you have to tolerate that there are going to be some people who are going to be
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
just going to be uncomfortably rich, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Like in the United States.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can't say that you detest the financial system for its greed, but then not accept the fact that it is what fuels innovation, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Risky capital fuels uncertain investments, which allows for countries like the United States to be making these breakthroughs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's what China wants.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But at the same time, China can't tolerate these extremely rich people around and the power that is accrued to them.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They want to...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
to be a leader in technology, but then the financial system is not liberalized.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's highly regulated, but there's also intervention.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Even if we look back at the French civil law versus the English common law, well, the former protects creditors and the latter is more friendly towards debtors, which gives them more breathing space to innovate, but also to fail and to innovate again.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that makes a big difference.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So it's all about a spectrum, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But you can't have it both ways.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the power that the US has.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, it's funny that we're talking about this now, because I was able to go to the US on a scholarship to an American high school because the US at that time was open arms, all open arms towards international students.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They kind of wanted to be the country that...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
was going to educate the future leaders of the world and their elitist institutions like Harvard was really going to be, you know, they're the center of the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So they welcomed students like me and many, many others to be exchange students, to study in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And we thought, wow, we've never seen a more generous country.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I was able to go to high school, an American high school, and live with an American family, which was, wow, can I say, a big change from China, not only because I was plucked from the Communist Youth League party and then straight to supporting their Democratic campaign because the host family was running for state attorney general in New York.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I was kind of
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
going to these conventions and handing out flyers and trying to get votes.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I don't know, in Chinatown or something.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But it was so interesting to see that's how the system worked.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But in the course of doing that, I realized that people had a very simplistic understanding about China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's probably, even when I was 14, I decided that one thing I wanted to do was to
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
dispel some of these deep myths about China, because the China that they knew, and again, it was all the three Ts back in the late 1990s, Taiwan, Tibet, and Tiananmen Square.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They thought about China, they thought about these three things.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I was like, well, that's strange because that's not how I'm feeling in China with all this bidding for the Olympics before 2000 and all these buildings going up and down, all this excitement about joining the WTO, all these radical reforms that are taking place, and then all this effervescence that you feel in the air.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not GDP growth as numbers.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You actually see it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is really, you know, and they're describing China as if it was a place shredded with white terror.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And so I thought, hmm, that's interesting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's a big gap, big gap of understanding.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And even today, that many years later.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
People know China a little bit more, but the sentiment hasn't profoundly changed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Some variation of that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I don't think to the same extent because there's Hollywood.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They can see daily American life, although it might not be totally realistic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There was a huge amount of admiration of Hollywood.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
technology innovation, but also the American dream.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think our newspapers, even though there's bias everywhere, is not focused only on reporting the really bad stuff and portraying a negative side.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think these few years have been a little bit different, but so many students went to the U.S., right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So many people traveled to the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is an interesting thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I've rarely met an American who has been to China and who still goes on about how bad China is.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that going to China makes all the difference.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Go dig deep and don't just go to Beijing and Shanghai.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Another big misunderstanding and a fundamental one is that people somehow think that the state suppresses the private sector.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not at all as simple as that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
For the most part, if we look at the local government's incentive system, they want to help the best private companies, which are the most promising, because it makes them look good.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It adds to their GDP, it adds to the jobs, investment.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are so helpful to these private companies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Actually, I know many of these local government officials working tirelessly day and night, especially in bad times, to coordinate between debtors and creditors and to kind of smooth out and to find relationships with banks.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They want to help these private companies because, again, their incentives are aligned.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Deep Seek is a private company, by the way.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So it has done the country proud.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And why would the state want to go and suppress these private companies, which ultimately is kind of a beacon, represents a beacon of success for China?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, on how much freedom they have, it's really ranged from too much freedom, that's part of the problem, where you have defense companies buying art auction houses, real estate companies like Evergrande buying soccer clubs, doing EVs, companies investing in real estate that has nothing to do with their core business.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's how much latitude we're given to private companies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there were consequences.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They were not reined in.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then you go to the other extremes where they're scolded, they're reprimanded, they're reined in, and they're kind of folded into submission.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that is the whole spectrum.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have the whole range.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I guess what we're really getting at is it is a country that is moving from...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
no rule of law or very little rule of law, very immature markets to something that is being gradually established, bankruptcy laws, corruption laws, rules and regulations on what's possible.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
One interesting point is that in China, you ask the companies to innovate first and then you regulate after.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that has led to things like P2P platforms, you know, it's led to lots of kind of financial innovations, some of which has actually been very helpful and good, some of which had been disastrous.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But the intention to regulate after the fact is to really not slow down or hinder the innovation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is a very different approach from Europe.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You regulate first, and then, you know, companies have to work around that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So the
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is why Chinese economy is so complex.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You cannot reduce it to simply a statement saying the state is unhelpful for the private or something like that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are certain sectors where this SOEs dominate, right, when it comes to national security in terms of energy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But let's not focus on these few sectors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
By and large, most of the economy, if you actually admit to the fact that China is highly innovative and highly entrepreneurial, means that it must be the private sector that is driving the show.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the West, they group these economies together as if they're the same thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
No, it's not the same at all.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's so many differences, so much more flexibility.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can have dynamic entrepreneurialism at the same time have socialist characteristics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think this is what China has been able to shape and mold, a unique model that balances between government industry and
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
between state coordination and market mechanisms and between individualism and communalism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not necessarily black and white.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can have all these things at the same time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In China, the speed is just awe-inspiring.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have a good idea, you implement it, you realize your dream very fast because there's also the support system, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The infrastructure there, the digital infrastructure there, the engineers are there, the talent is there, and they're cheap.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the market competition is there to keep you going.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The consumers give you a very, very fast feedback.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Look at Xiaomi.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was making phones, and now it makes one of the world's best EVs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
270,000 cars sold in one day a few days ago with a new model.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They were phone makers.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Wow.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So there's an advantage to that, okay?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I would not feel safe.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Not because of danger of expropriation or anything like that, but the bankruptcy laws are not there, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not necessarily always fair competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Things don't happen necessarily in an orderly manner.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you have a competitor, you can have a very evil competitor and evil competitors are there everywhere in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They would, you know, call the police on you, put you in jail, spread false rumors about you.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe that happens also in the U.S., but there's a different level in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And also the mold that you can have to protect yourself, the IP protection, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's much weaker in China because the legal system is not very effective.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have a good idea, you'll be copied.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there's a lot of work.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have to dine and wine with the local governments.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, that's not allowed anymore, by the way, but you dine and wine, you know, figuratively speaking, you have to have a very good relationship with them.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's a different kind of work.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's true.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The potential negative ramifications are there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think personal protection is a big difference.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you make a mistake, if your company's not run well, you go to jail.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is much, much more tolerant on entrepreneurship, entrepreneurs on failure.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the U.S., capital controls politics, one could argue.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In China, it has to be the other way around.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Capital must be reined in by politics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
As part of the capitalist class, do not have the ambition to exceed the powers of the political class is really at the core of it, I'd say, the biggest difference between U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are important details that I think the West has not fully provided to the public.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
For instance, Ant Financial, as innovative as it was, was doing banking work.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
jobs without being regulated like a bank, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that obviously poses a host of financial stability questions and rules and regulations and so forth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So the fact that IPO was halted, you could say that there were strong economic regulatory grounds for that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think more broadly speaking, if you're an entrepreneur, part of the capitalist class, keep your head down, make money, and that's fine, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Do some philanthropy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are also many, many other billionaires that are just fine, that are actually very much in favor of the political leadership, and they do their thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, I'm not saying what's right, what's wrong.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's just a very, very different culture and different country.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the U.S., it's great to be colorful.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, you have a very, very colorful president.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
He would never have been able to make it in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have the likes of Elon Musk.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's great to be different.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's great to stand out.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You do not want to stand out in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So the moral of the story is that the top leadership understands that it needs these top entrepreneurs, the likes of Jack Ma.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And they have done so many great things for the country, even for the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But in China, garnering too much influence and power
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
even through social media, doesn't make you look that great.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not a good thing for you personally.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there's a saying in China that you just don't want to be the tallest tree, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The tallest tree gets the most wind.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I don't agree at all with the Western conclusion that this anecdote, this story has meant that entrepreneurs don't want to be entrepreneurs anymore.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The young kids don't aspire to be people like Jack Ma.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's not true at all.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The incentives are still there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's a different kind of rich elite class in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Absolutely.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Don't be too outspoken.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Don't try to get too much attention and too much influence.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And just, you know, again, it's a cultural thing, but just keep your head down, be humble, you know, contribute to society, do philanthropy, work, collaborate with the government, and you're kind of okay.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah, stay out of politics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I just want to say, that said, Jack Ma was really an emblem of extreme success for China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the Chinese entrepreneurs look up to him.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's really important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was a signal that unfortunately was misconstrued by the side and by also outside world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But it's laid a different path for what these entrepreneurs should be doing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's by choice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
No, he's an extremely fascinating character, which, you know, and if he were in the US, he'd thrive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Funny, witty, smart, wise, creative, loves a good life.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think it's by choice that he's roaming around the world, given that he has more free time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
All of them do.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
All of them do because their lives, their destinies were totally changed because of China, because of the government, because of Deng Xiaoping, because of everything.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's not how I would describe that generation and their feelings towards China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Of course, you always get exceptions, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The ones who have moved to the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and who...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
who wants a democracy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But by and large, people are deeply grateful to China, the Chinese government, the Communist Party, if you want to label it as that, because they've seen their lives be totally transformed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, Jack Ma went from being a schoolteacher to becoming one of the most powerful people in the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, if you didn't have China, how could that have happened, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
will lead for some time on breakthroughs, on disruptive technologies, the zero to one technologies that ultimately change the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But innovation is a process.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It goes from invention to production and commercialization and diffusion.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
diffusing technology throughout all parts of the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And on those two stages, I think that China has a unique advantage, even if it still can't do the zero to one breakthroughs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because in the end, how much this technology is adopted by the countries and by the various parts of the economy is fundamentally crucial to how much productivity will be unleashed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And China's
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Innovation currently, the deep seek is really one example, and I think it's really the beginning of the scale-based, leading-edge technology, cost-cutting-driven kind of innovation model could be just as powerful, maybe even more effective and powerful than the breakthroughs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And it's a very different approach to innovation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese companies focus on solutions, problem solving.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, that comes back to the education system, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You're giving a problem.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'm going to find the answer.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese students can do it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You want them to
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
write their own question, they can't do it, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'm exaggerating a little bit, but it's a little like that, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They see a problem they're going to go after and they're going to find the best solution.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's really, really useful, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because we don't need, or developing countries especially, don't need these frontier technologies that they can't use.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And China currently has this AI Plus program, which is about pushing AI into every single plausible sector with the help of the state.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So adoption, diffusion is very important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Why China can't do breakthroughs or can't do zero to one technologies, I think at the root of it, and there are some deeper, we talked about the proximate reasons, the short, flat, fast, for instance, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You don't want to spend too much time on investigating something that you don't even know if it's
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
commercially viable so basic research is still weaker than in the u.s universities but also this kind of intrinsic motivation it's very different right in china it's driven by extrinsic motivation you are rewarded by you know compensation financial compensation all these kind of extrinsic motivation is what drives you but intrinsic motivation pursuit of knowledge for knowledge sake um
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That was deep in the Confucius philosophies, but of course, poverty has changed all that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The profound commitment to scholarship, to research, which we know is very much true in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
universities, it's starting, but it's not there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I think these two approaches are actually quite compatible with each other.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I don't know what all this fuss is about, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
China uses technology very well, can scale up and reduce costs, and then it can spread it around.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
makes the highest value added by inventing these technologies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But, you know, again, diffusion matters.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think where it ultimately leads to an impact on the economy, that's more important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's this persistent question we have, why don't we see the productivity in the numbers?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You're in AI.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
AI, we had long periods of investment.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You hadn't seen it in the numbers until maybe even recently, and it's still very slow.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But China's pushing that in the sectors, you know, robotics, AI, cloud, industrial internet of things.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And even companies like Huawei, I think it's gotten a little bit too bad of a rep in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But American engineers working for Huawei said that it's
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, they're so happy working for Huawei.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The intent focus on innovation, but also on solution-driven innovations in Africa, in rural areas, really changes people's lives.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It doesn't change the world, but it changes individuals' lives.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
No, unfortunately, this is a big cultural difference.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Our sense of property rights is actually quite different from the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that will change over time, but absolutely, you're right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They have no qualms about copying as long as it leads to success, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the difference in values.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
As we mentioned in the beginning, you asked why the level of competition is so fierce.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, they all do the same thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Once they've seen one successful thing, everybody does the same thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You'd have no respect for doing that in the U.S., right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But in China, it's all fine.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think that over time, it will change.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Just give it a little bit of time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the end, if China is all about innovation technology, you cannot not have very strict IP protection.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And ultimately, again, we're still in the short, flat, fast stage, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When we graduate from that stage, you're going to have very different views about these things.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You're going to try to diversify and do different things.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But again, it's a stage.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Chinese people were hungry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're still a little bit hungry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're not going to be as hungry in the future.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Deep Seek was a surprise to the world, but I don't think it was that much of a surprise to the same degree to the Chinese.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And remember that Deep Seek happened in times of crisis, urgency, not in times of comfort.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
A lot of these technological breakthroughs and leapfrogging happens in times of crisis.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is called crisis innovation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And you got to thank the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
for that, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When the Chinese were comfortably importing chips from the U.S., the whole industry stalled for 20 years.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, why would you plow in billions, tens of billions and even more when you can just import the best?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You don't want to do your own innovation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's because of these export controls, these sanctions on these companies that Chinese companies in the Chinese state felt an existential crisis a few years ago.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
by being cut off from these critical components.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And guess what happened?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In a short amount of time, the degree of domestic capacity ramping up and catch up has been nothing short of remarkable.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, thanks to U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
truculence on technology.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, I'm sure there are many aspects of hyperbole related to deep seek, but it just shows you that the gap is much smaller between China and the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
on leading-edge technologies than what was expected, that these export controls were not effective.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They may have even backfired.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And it shows you that China has this relentless focus on taking some of the existing technologies and using scale and the advantages to cut cost and to diffuse.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is just the beginning.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think it will happen in many other industries as well, including in semiconductors.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's the Chinese approach.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's an interesting dilemma here, which is that this is happening in a time of extreme economic softness, slowdown, and missed uncertainty, trade wars, a lack of confidence, slowdown in private investment and consumption, a withdrawal of foreign investment from China, especially the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
venture funding.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Imagine what China would have been like, let's say, if the economy was doing better, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But you could also argue that it's because people feel threatened that they make more leaves.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now, I wish the world is not, we don't have to drive each other to the corners to do something great, but that is the reality.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I don't think that there's an easy say between who wins, because I think the winning idea is part of the old playbook, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You're all kind of part of a network.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Different countries, different players have different choke points on each other.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I don't think it's just about the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And what's more, you use your leverage once, and that leverage has a half-life.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
it becomes a lot less effective the second time around because other countries, other companies are going to try to substitute it away.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, if China uses the rare earth leverage, which I think it is now a little bit, there will be alternatives and substitutes.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Got to be very, very careful of what coercion leverage means.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Same thing with the U.S., right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I think this is all the old thinking of who wins, who dominates.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think we need a new playbook.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I hope it was unintentional.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Otherwise, you'd be questioning the level of intelligence of the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
administration, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I think that the things they laid out did the opposite of what was intended.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It sped up domestic capacity.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It motivated the whole country to do this whole of a nation program to go after technology.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's kind of like the way they go after Olympics, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Olympic gold medals.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They wanted to maximize Olympic gold medals and they put the whole nation at work and all the resources.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's what China did.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Huawei, another example, they were sanctioned.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Guess what?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They have come back to life stronger than ever before.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is not unique to this episode.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If we look throughout history, these blockades don't work.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The continental system actually indirectly led to industrial revolution in the UK.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When the Spanish kind of blockade the Portuguese, they came up with a very ferocious, forceful naval power.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And you're talking about China here.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They just don't lie down and lie flat and say, oh, we give up, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're more motivated than ever before.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You make them have a very comfortable situation and they tend to become complacent and they stagnate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, China has been preparing for this for the last five years and for the return of Trump and for Trump's maniac trade policies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You'd think that Trump also had five years to prepare for this battle with China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It didn't show.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can say that the Chinese, at least this time around, have played their hand pretty well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
when dealing with Trump's tariff threats and the trade war.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
With a level of calibrated assertiveness, they have really thought through everything very elaborately.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And look, you know, this is not good for either country.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Let's just be clear.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's bad for U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and China, and it's bad for the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And every country has a stake in the U.S.-China trade war, because whether you trade directly or indirectly with China, you're going to be affected.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are one of the largest intermediate exporters in the world, and Chinese manufacturing goods anchor global manufacturing prices.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The cumulative tariff burdens, when you get to Canada, when you get to Mexico, when you get to any other final destination, these tariffs will affect you, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So it's clearly very, very bad for the world, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
China's core principles, and I think that this is not well understood from the rest of the world, towards the U.S., and something that they have kept up, is equivalence, reciprocity, and realism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
China's not going to lower tariffs unless the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
does.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can kind of stand up to Trump like a man.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the only way to deal with Trump.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's its view.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The deal has to be realistic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The phase one deal the last time wasn't realistic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And China thinks, look, the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is going to use this as a leverage.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's not possible.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This can't be seen as political concession.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The deal has to be seen as mutual commerce.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So where China can have room to negotiate is opening up things like services.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, American banks, American financial institutions have a lot of business to do in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They can buy a limited number of more goods.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They can discuss about transparency around rules and regulations on e-commerce, on data.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
All of that is fine.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But don't confound economic issues with political issues.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Hong Kong-Taiwan is not part of the deal, by the way, in case anyone was wondering.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Trying to change China's state hybrid private sector model, don't go there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Anything that challenges China's technology, security, that's not really part of the discussion.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that people have to be clear about also what China thinks and wants, and also the Chinese have to be clear about what Trump wants, although I don't know anybody, even Trump himself knows exactly what he wants, in order for these very complex negotiations to actually succeed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Don't mix the political issues with the trade deal.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, that's diplomacy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We have an absence of diplomacy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But you're absolutely right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There needs to be respect.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese, at least, really care about respect.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I wish there was just a bit more cultural fluency.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think a lot of things would be so much easier between the two countries, just understanding that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because you can actually push China to do a lot of things, all within reason, that would work in favor of the U.S.,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But understand that respect is vitally important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Face saving is very, very, very important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Xi Jinping is not Putin, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there is a genuine desire on China's part to de-escalate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, coming back to the level of pragmatism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Under economic strain in China, you don't really want to be picking fights.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They don't agree at all with Trump's economic views and world vision, let's just put it simply.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So understanding that a lot of this is also driven by American internal politics, which they are aware of, helps a bit.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But there's a genuine desire to take the temperature down with the U.S., even if the weather doesn't fundamentally change.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that Trump can show to the American consumers that he has gotten some sort of a deal, right, that the Chinese have bought more American goods or promised to buy American goods and then the American companies can come into China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then a lot of the previously restricted investment opportunities are now not restricted and the American banks can make money in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
He can say that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think that could be part of a really realistic deal, that somehow American companies will be better protected through IP protection.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And again, that's in China's interest as well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I don't see a fundamental conflict here.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And at the same time, they lower the tariffs, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Not to the rates where they were before, but lower and you don't prohibit trade.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And then for China, that would also be a success.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So you can actually have success for both places, but being realistic is part of the game.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
No.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that there is a real problem in global trading system and globalization in general that is not going to be resolved by tariffs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We do need to think about more harmony.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
um between countries uh where let's say not one country dominates and here i i'd push back on china and say yes you have amazing companies and competitive companies but you just can't dominate everything that would not be good for global harmony you need to give other countries an opportunity uh you need to develop your own internal economy right rely on your consumers as part of the deal um
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Tariffs, this kind of highly protectionist method, is very distortionary and it's going to be bad for the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'd actually argue that both China and the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
have totally taken advantage and also enjoyed the global economic realm under the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
liberal order.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that China quite likes it, actually.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
kept a peace, and during these peaceful times, things were working very well economically, technologically.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They kept the sea lanes open.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They did their part to preserve...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
peace to the extent they can, I guess, but China wants peace, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Only with peace can they do what they can.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And actually, U.S., despite saying they've been victimized, look, they've had a very, very good time, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Never have quality of life, standards of living, technology risen as much as the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
did under its own liberal order than it has ever before, and the amount of influence and power.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yes, of course, you can blame the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
for lots of things that happened, but
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
it actually had a really good time, and China as well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So now they're going to take this apart.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They think that they're going to be somehow better off, that American people and Chinese people are going to be better off under a more disorderly, fragmented, rule of a jungle kind of world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's an illusion.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's what politicians tell their people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But that's not the truth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, exactly.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Tariffs is a way to punish foreigners.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But what you really want to do is to strengthen your own domestic competitiveness.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I want to draw an analogy to the U.S.-Japan competition in the 1980s.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Japan actually took over many parts of the semiconductors industry, even though the microchip was invented in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But guess what happened?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, it actually drove more competition and more mobilization in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Actually creating this innovation system changed a few really critical laws that helped with U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
innovation, and the consumers benefited.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
took over again as the leader of the semiconductors industry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's no better way than to strengthen yourself to be competitive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because ultimately, tariffs have not done anything to help the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The trade deficits have widened since Trump, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They haven't closed the imbalance with China, with the rest of the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because ultimately, the U.S.,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
saves less than it invests.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that's a macro phenomenon.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not a trade phenomenon.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I fear that the U.S., by kind of dropping off of this global trading network and system, it will lose more and more of its power.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have power when you're deeply engaged and embedded with a country.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Once you've left it, you actually lose any sort of leverage.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
all kinds of subsidies that are justified for the green transition, for innovation, R&D, support for the university system.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is the world leader in terms of attracting talent.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It has everything going for it.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But it was a little bit complacent.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And by dropping off of that global network, it's going to do itself more disservice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It doesn't make sense to economists either, and economists are not all dumb.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
On U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
immigration...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You see, I understand both sides of the story, to be very honest.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I also understand a bit of the protectionist streak, not only coming from the US, but also from Europe and various parts of the world, which is going to be a trend.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I understand that before you care about people in the rural villages in Indonesia, you really care about, you know, the Northern Brits in this country, and they have not fared well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I understand that...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
your jobs may be under threat because of this uncontrolled influx of illegal immigrants.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
From a purely economic and rational level, you'd say immigration is very important because it keeps the prices down, keeps inflation down, it keeps up the supply, which is very important when you have that much demand.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And look, you know, the standards of living have also improved for many people who can afford
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The low cost workers being able to sustain the service economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I understand both sides of the story.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that in the end, it is a balance.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I do believe even as an economist, that social harmony, and I come back to this word harmony repeatedly, even though as an economist, this thing doesn't even exist, is becoming ever more important.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And as a nation, some kinds of skilled immigration is actually what makes the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
the most technologically advanced country in the world.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
At the same time, you do have to think about your own citizens, the ones that have had generations and been around, and you have to think about their livelihoods.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But I want to come back to the point of choice, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
What makes America so great is that it tolerates choice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
instability.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It tolerates clashes.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It tolerates volatility.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Think about the financial crisis, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The financial volatility.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
dollar is where it is because of this deep, liquid financial system in the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
that no other country has managed to build.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are clashes everywhere in society, but it is a very diverse country with all the benefits to that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is a highly, highly unequal country, economically speaking.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The CEO pays, the businessmen being able to be in top political positions, you don't
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You kind of balk at that level of cronyism, if you will.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But, you know, the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
is the technological leadership, and it kind of is able to stomach that volatility and clash without breaking apart.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And other countries don't have the capacity, the institutions, the culture to be able to tolerate and still maintain, keep the society together.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So I think it is a very interesting, but yeah, it's a puzzle.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Taiwan has, among other things, TSMC, which is vitally important for the global economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's also very important for the Chinese leadership and the Chinese people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You don't want to ask what I think.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Ask the Chinese young generation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They would one day like to see unification.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's part of the patriotic, the dream, if you will.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So, and it's a chip, right, between the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
and China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So everybody is watching Taiwan, but I'd say that this attention is not necessarily good for Taiwan because all this uncertainty, all the political risk has meant that investment there has dramatically been curtailed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And mainland China is a very, very important economic partner to the Taiwanese economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that I don't have a lot of views around this, but I just say this.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think there's more political wisdom of the Chinese government side than we assume outside of China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And that strategic ambiguity, but also strategic patience, especially given China's economic situation currently, is
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
means that more likely or not, I think that if China does really well economically, and Taiwan is not doing as well economically as we've seen, that over time, this is still the best strategy from China's point of view to resolve these differences.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think any military use and action would be actually quite detrimental to China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, first of all, you have to keep the communication channel open, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There was a risk of that being shut off during the Biden administration.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's highly, highly dangerous.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's also something that I think people miss, which is that the soldiers in mainland China, that's part of the one-child policy generation, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's only one son.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Families have only one son.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think to assume that the Chinese people desire and would be able to forsake that generation for unification purposes or be able to tolerate lost lives for this, I think is also a bit of an exaggeration and stress.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And I think Chinese people also really...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They really care about peace and stability.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Chaos is just not part of what they think is good for them.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The role that TSMC plays is so critical, given the choke point they have on the rest of the world in the semiconductors industry, which we know is one of the most important industries sustaining the economy, not to mention things like AI and technologies.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Look, you know, the U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
has been trying to build another TSMC outside of Taiwan.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's very, very, very slow, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are a lot of cumulative knowledge, experience and skills that are involved.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not that easy, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The Chinese don't want to see an eruption of TSMC either, because, again, it's vitally important for everybody.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Whilst I don't think that this is really necessarily a bargaining chip, because if you really see what the Chinese thinks about Taiwan, it goes beyond economics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It goes beyond the logical.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It is about realizing a dream, which...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Even I, I tended to not place enough importance.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But when I talked to the young people in China, I realized that it's still their dream.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, this is the trend that you need to manufacturing things that are important for national security.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not efficient, but it's so-called strategically safer.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's probably one of the most radical policies that China has enacted in its history.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the enforcement was very strict.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In my class, nobody had a sibling except my friend, who was a Uyghur.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
98% of urban households had only one child.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The other 2% are twins, which you're allowed to keep, thank goodness, if you had the good fortune of giving birth to twins.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It had lots of unintended consequences on the economy and society as well.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe on the good side, it's actually a golden age for Chinese women because the Chinese girls never had as much education investment apportioned to them as they've had after being the only child in the family.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And you raised a daughter like a son.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And if we look at all the skill gaps and the education gaps and the returns to education, actually, girls fared better.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Apart from the top, top, top leadership in the Chinese political class, you look at the CEOs of major companies, in the ministry, civil servants, there are a lot of Chinese women there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And actually, recently, if you look at the surveys, the Chinese families would prefer to have a daughter than a son because they've seen how much bargaining power you as a Chinese woman and as a rare bride or husband.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
a scarce supply of brides goes, you have raised your bargaining power and you can command high amounts of dowry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That was an unintended good thing about the one-child policy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And to the opposite, the recent relaxation of the one-child policy, actually, women are now encouraged to have as many kids as they possibly can.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The flip side of the one-child policy has not necessarily been good to women in the job market because they think
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Oh, well, you've only had one child.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Oh, guess what?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You can have another child.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So that's not necessarily good for long-term employability.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But on the economic side, I've written about this in my academic papers.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's been one of the very important causes of high saving rate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I always tell people, you want to stimulate consumption, we'll have more kids.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know how much one of those costs, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Especially in China, the tutorialships, the education, you have to buy a house, you have to buy a house for them so that they can get married eventually.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So it's very, very expensive to have a child.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you have more children, you spend more, but maybe people don't want to have more children because the cost of having a child is so high.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is driven by the competition.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And why is there so much competition?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Because there's a one-child policy generation, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You want your child to be the dragon or the phoenix, and you put everything into that one child.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That makes the child more anxious, makes the whole environment more competitive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And in the end, these one child policy children don't want to have a lot of kids because they don't want them to see them suffer what they have suffered.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So there are all these kind of unexpected consequences, but also changing the social fabric.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I'd like to say that it broke the hierarchy of the family where the parents had the dominant role.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now the kids are the boss.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They boss everybody around.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They boss the grandparents around.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It relates to the puzzle, the housing puzzle.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
How is it possible that the Chinese youth can afford these really expensive real estate with their meager income?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, one common saying is that they have six wallets, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You and your spouse, together with the parents, and maybe even the grandparents would chip in.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So there's this kind of intergenerational family dynamics that makes our models focused on the individual consumption just completely inappropriate to describe these dynamics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But the demographic side is the other thing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
challenge, which is they were so strict about the Guangzhou policy and they kept it in for too long so that once they decide to loosen it and decided that fertility rates were way too low to sustain the Chinese economy and its future, it was already too late.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And now they're finding all kinds of creative ways to make people have more kids.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is not something that they can demand and command in ways that they can demand and command emerging strategic sectors, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So all these really interesting social anecdotes where they're encouraging even single women in a highly conservative society, encouraging single women to raise children.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Nothing to be afraid about that.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Lots of support system going there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I mean, they're radically changing the whole, you know, thinking around these kind of issues.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
South Korea.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
South Korea.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Very, very, very low fertility rate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's just that for China's stage of development...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
it should be having more babies than it is currently having.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So the one-child policy accelerated that demographic transition, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It really squeezed in many, many decades into two.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But my view about the demographic aspects for the economy is not as pessimistic as most people, because
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Meanwhile, we're talking about aging.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are also high rates of unemployment, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When we're talking about, is there enough people to do the jobs?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We have things like AI and not enough jobs and these kind of questions that are first order, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
We haven't even figured out the relationship between labor force, productivity, you know, what are the factors of production that will be most important for future economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And so we shouldn't be terrified that there's a looming aging problem, because I think the more important question is that skill.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
What kind of skills do we actually need in the economy?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
What kind of education system should we design in the economy to better suit the country to an ever-evolving and transformative technological society?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Yeah.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you look at the most recent evidence on this issue, they found that post-1990,
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
aging economies became richer.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Not the other way around, which was true for the pre-1990 sample.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the reason is that these aging societies much more rapidly adopted new technologies, automation, that actually helped the entire economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So should we be panicking about this now when we're actually also panicking about the fact there are not enough jobs around?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There are other issues that are more relevant for the Chinese economy today.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Collapse is such a strong word, and the West has been using this word repeatedly, if I remember correctly, maybe four to five times, maybe even six times since 1980s during the period of China's fastest growth.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I tend to not think that Chinese economy will collapse, but with a slowdown continue, we'll be able to
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
lift up again?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Will it be able to come out of this cycle soon?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I think that's more relevant.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And the Chinese economy has a lot of potential because the fundamentals are still there, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
When we talk about the fundamentals, it's the skills, it's the human capital, it's the physical capital, it's the macroeconomic stability and political stability.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's a lot going for a country if you look around the world right now, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is why the entrepreneurialism is still there, because the fundamentals are there, even though the economy is weak, consumers are not confident, and private investment is insufficient.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The fundamentals are there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Is China where it should be?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Far, far, far from it, because China's potential based on the fundamentals is a much higher level of per capita income.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
than where it is currently.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's kind of currently in a $10,000 bracket.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And this is also a puzzle because you're a $10,000 per capita income country that can actually do leading edge technology and can be neck to neck with U.S.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
companies on these high tech.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the first time in history.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Even the Soviet Union, which was very technologically advanced, did not have the extent of commercializable civilian technology and the technologies that were pervasive throughout the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But fundamentally, we have to understand how much of this real estate crisis has impinged on the economy and explains the persistent slowdown.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
A few years ago, there was a crackdown on the real estate sector.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And again, it comes back to a lot of the social issues we were discussing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Why aren't people having kids?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Well, maybe it's because housing is too expensive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Maybe it's because education system is too competitive.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
The speculative bubbles in the real estate is making housing unaffordable, and that's not part of the Chinese social characteristics.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And so when they decided that the property investors were going to be reined in, that housing was to be lived in, not speculated, it really brought down the whole sector in terms of investment, in terms of the financing of the sector.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
But ultimately, it made such a massive impact or such a massive dent on the economy because it really...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It embodied the two fundamental pillars of the economy.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
One is the fiscal system, and one is a financial system.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So coming back to our local mayor economy, where did you think the local mayors got their funds?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right, through real estate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They sold land.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Real estate property developers came in.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They can develop the entire local economy because the services will come in, the jobs will come in.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And by the way, you're an equity owner of the entire city.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So you want these property developers around.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Many countries throughout history all have this property transition, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You need to wean the economy off of property.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In a good situation, it takes three to five years.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In a bad situation, it can take 10 years.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I don't know where China belongs currently, but the real estate collapse also meant the local finances, local government finances also shrunk dramatically.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Real estate was a really important part of the financial industry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It brought that down.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Together, it really had a major impact on the economy, but also from the consumer side, their wealth was primarily tied into real estate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Not the stock market, not other kind of investment opportunities.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It was real estate.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
So they felt poor.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They consumed less.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
A checkout speed.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
His travels into China, I think they represent a more dynamic reality than just visiting Beijing and Shanghai and Shenzhen, the big cities.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I actually think a lot of the opportunities, especially economic opportunities, are in the second, third tier cities now in China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And there's a return of talent.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, these companies...
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Pop Mart, they're coming from these second tier cities that care about the local economy, about fun, entertainment.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's what the new generation is about.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They don't want to be lining up some factory, you know, doing manufacturing jobs.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
If you think that the Chinese new generation is still all about that, you know, you should really study them a little bit more.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They're all about making their lives more fun and more interesting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That's the cycle.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
In the beginning, Chinese people are hungry.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They want to look for jobs and they find these jobs in the manufacturing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Now they want to work life balance.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are spearheading fashion.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Right.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They spend so much more on entertainment, travel.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
clothing, restaurants.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They have come out with these amazing coffee chains that have beaten completely Starbucks within a very short amount of time.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
This is all the new generation.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Where are the opportunities?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's in the local areas.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's all about localism, not globalism, localism.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Being rooted in your local economy, you will actually find so many more opportunities.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You go to Chongqing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I actually was watching a video about Chongqing.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I thought we were in Shanghai.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
I was so surprised.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And you go to Chengdu.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's fun.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You know, people work a little bit less, but it's really exciting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's very fun.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
People are really nice.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Go to Xinjiang.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Take a look for yourself.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
There's ski resorts.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
being open there.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have a very interesting, colorful, dynamic, complex country, and it's not defined by Beijing and Shanghai.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are flourishing more than the first major tier cities.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Interesting.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Behind all this competition and ambition, you have a very genuine group of people.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are funny.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are community-based.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
They are authentic, actually.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's not contradictory, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
You have a society which is heavily controlled, but they find ways to be truly, truly authentic.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
And
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Ultimately, they're just a very social group, right?
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Again, I keep on coming to this being lonely aspect of the Western society and increasingly living alone.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
That is not China.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's still a very, very warm country, and they're warm to foreigners, and they are friendly.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
Great to be with you.
Lex Fridman Podcast
#477 – Keyu Jin: China’s Economy, Tariffs, Trade, Trump, Communism & Capitalism
It's a pleasure.