Transcription
You in America, like I said, government turns bad, you recall it. The next one's just as bad or worse, and it keeps going like this. There's no end to it. It's called "elect and regret," and it's a continuous cycle of elect and regret. That's what the numbers show for decades.
And the Chinese government has taken down to size entrepreneurs, like tech entrepreneurs like Jack Ma of Alibaba. If you know tech entrepreneurs, uh, like, uh, Jack Ma, get taken down to size by the Chinese government. How can you have that kind of very innovative tech culture in China that produces very successful tech companies the way Silicon Valley does?
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I know you didn't really, you really focused in your presentation on just the last chapter, but could you just tell us the premise of your, um, you know, your theory on liberalism? On your take that liberal democracy is not, is leading civilization downwards, as opposed to centralized leadership like, like China has?
Yeah. You know, well, obviously, um, when we were graduating from universities in the '90s, okay, we all bought the story. It's like a prospectus of a bad IPO. We, we all bought it that liberalism, elections, um, multiple parties, free press. Yeah, I should be careful here at the FCC. Okay, all of that stuff put together is going to take us to paradise. Okay, everybody will be very soon, if we just did these things and copy the American Constitution line by line, in one generation, we'll all be living like Americans. Okay, I bought it. I was convinced. We were all doing it.
But 30 years have passed. When we looked back, the opposite had happened. Those countries from Africa to Latin America to Southeast Asia who did that, who changed their political models from whatever they were, you know, military or authoritarian, whatever they were called, to the liberal system, to the liberal regimes, none of them did very, very well. They all got stagnant. The one country that said no to it, China, succeeded. So, I mean, you have to...
Doesn't that depend on how you measure success?
Well, I mean, if you're starving, you're not successful. You, you, you can, yeah, of course, you can say that if you're starving, if you're poor, but you can say whatever you want, you're still successful. I, I, I don't think most people will buy that.
No. I mean, some of the things that you, you say do not work. For example, let's talk about freedom of the press, because we are a press club, after all. What is wrong with freedom of the press? I mean, it, yes, I, I agree that there can be extremes, but generally speaking, when people have access to reliable, checkable, transparent information, they make better decisions.
I'm not sure if that's the case. Why, why, why do you say that?
I mean, it's not a proven case that people. First of all, I don't think that's a proven case. Okay. Secondly, I don't think it's possible practically. Okay. It's not a proven case. It's not like gravity that you can prove it, that people who have reliable, checkable information, they make better decisions. I look at my kids, they don't do that, and they're grown. Okay. Do they have access to? Yeah. I look at my information. No, I'm in an investment business. Okay. I got highly educated people who have perfect, transparent, great information, spreadsheets up to here. They make the wrong judgments. Okay. So, I, I just don't think it's a scientifically proven principle. You can claim it, just like you claim go, human rights are god-given. Okay. They're god-given. There's nothing I could say. Fine. You take that as, as self-evident truth, like Thomas Jefferson claimed. He didn't have to prove it because it's self-evident. God said it, right? Freedom of the press is the same thing.
I think, well, I think press plays an important role in our society. Okay. Media, journalism are important. But if not regulated and managed well, it could do a lot of harm and could harm actual human beings, human lives. You, I mean, you could see everywhere in the world. Come on, look at it. Look at what's happening in the world. Okay. Look at America. Look at Europe. Look at Africa. All these countries where speech is not regulated. Look at what's happening in those countries. Look at what's happening to their peoples. We don't want that.
But by the same token, in countries where speech is completely regulated, I'm not saying it's a black box. We don't know what's happening, and there are terrible things happening that only emerge later.
That is correct. Okay. I'm not claiming an absolute principle. I'm not claiming an abstract principle that somehow there's a particular way to regulate speech. All I'm saying is speech is a form of act, and acts are regulated because actions can harm people. We all know speech is a form of act. We know that in our heart. We know that if you grew up in an abusive family, your parents abuse you, they don't have to hit you. Okay? But that affects your life forever. You need a psychiatrist forever. Think about that. If you, if you go to a school where teachers are abusive, he or she does not have to hit you. So words matter. Words harm. And words must be constrained and regulated in a healthy, forward-looking society. How this is done, we don't have time to discuss that. Okay.
Well, in your book, you seem to believe that the Chinese Communist Party is the gatekeeper of, of what should be said, what should be believed, what should be, what what gives them. At the moment, like I said, I, I spent a half a chapter on the internet. Okay. So, all of the stuff 15 years ago, 15, 20 years ago, Western journalists are, are talking about how China is regulating the internet. That's going to kill the internet. Uh, it was kill a vibrant society. Never panned out. And if you look at unfettered internet speech, social media speech, you just have to look at America. Look at what's happening there. Okay? Total polarization of society. Total hostilities. There's no regard for facts. Zero. Okay. Talk about the abundance of information, the totally unchecked, unfettered flow of information and speech. No country does better than America. Okay. But do people make better decisions? Do they respect facts better? More? I don't think so. I don't think so. We're not going there. We keep what we've got. It's not perfect. I realize that. I live in Shanghai. I complain about it just like the next guy. Okay. People, nobody doesn't complain about it.
But Eric, there are times when facts need to be out there, and they are important. Like in your book, you refer twice to COVID death numbers. Yeah. And you, you sort of give an indication that the high rates of COVID deaths in Western countries are a measure of the failure of liberal democracy. But the fact is, we don't know in China how many people died. I mean, the, we will never know that. We will never know that because the Chinese government changed the definition of a COVID death. They didn't report people who didn't die in hospitals. And that, those that kind of data is in, is important for future planning of pandemics. For example, that kind of data is expected from countries who want to be partners in the world.
Let's just say, I mean, you have a point that we have incomplete information, but let's just say we do have complete information that too many people died in liberal democracies. That we do know. Too many, way too many. We do know. That has nothing to do with them being a liberal democracy. I'm not saying it's to do with the fact that we know the numbers. I'm not drawing a causality here. I'm just stating a fact. It's for the rest of you to decide whether politics played a role in your country's deaths. If you can go to bed and say, "Hey, politics has nothing to do with it. Our political institutions are perfect. All these Americans died because for some other reasons, because they're stupid or whatever," then it's okay. You can believe that. Okay? You just draw your own conclusion. I'm stating a fact. I am not imposing a causal relationship on you. Okay? I'm looking at these numbers under those liberal democracies during COVID. How many people died and suffered tremendously? I'm not saying the US Constitution led to that. I'm not saying the US president led to that, was elected in the American system. I'm not saying the Congress led to that. I'm not saying any of that. Okay. You, you guys decide whether politics was responsible for it.
Okay, I'm going to open it up to the audience because I'm sure you all have a lot of questions. Just raise your hand and we'll get you a microphone. Um, this gentleman here.
Hello, I'm Tohi from Singapore. Um, you know, do you think that China can match Silicon Valley since you used to be linked to Silicon Valley, in technological, in innovation? Because, you know, Xi Jinping has been giving directives saying China must do what this or that technology sector, but it sounds like a state-driven economy. And Chinese government has taken down to size entrepreneurs like tech entrepreneurs like Jack Ma of Alibaba. If you know tech entrepreneurs, uh, like, uh, Jack Ma, get taken down to size by the Chinese government. How can you have that kind of very innovative tech culture in China that produces very successful tech companies the way Silicon Valley does?
Well, let me correct two misperceptions here. Okay. One is Silicon Valley, as we all know, the US Defense Department played a huge role in the beginning of Silicon Valley. Okay. From the semiconductor companies for national, all were backed by the US Defense Department. Okay. Without the state, without the American state, there will be no Silicon Valley. Number... Well, I, I know Steve Jobs is great. Okay. Well, Elon Musk, on the completely backed by the US government. It's biggest customer. Come on. Okay. Where would Elon Musk be without the US government? So, so the state played a huge role. I went to Stanford. I know. Okay. I lived in Silicon Valley. I'm not saying the entrepreneurs didn't, didn't do anything. The entrepreneurs played a huge role, but the state played a big role too. Okay. Let's not discount that. Number one. Okay. Number two, um, in fact, the last 20 years, we've seen this huge big tech, Chinese big tech. We got these big companies, right? Behemoths. But the level of technology innovation was actually pretty low. Most of them were business model innovations. Okay. They changed the way things are done. The QR code, okay, which is ubiquitous, right? Uh, that was invented in the like '80s or '90s, long time. Nothing new. They took an old technology and and used it to change the way people live. Uh, which is marvelous and ingenious, but it's not technology innovation. What this country, what China needs is true technology innovation. You even lag behind semiconductors, come on. Uh, so there's a long way to go. Um, and I think the, the current direction is correct, but it needs both the state and market forces. It cannot just be relied on. You cannot just rely on market forces.
Questions. Yes. Um, I, I heard you talking about the ideal of a system of a political meritocracy before, but I think the last time, I mean, it was much of these talks were 10 years ago. So I was wondering what do you think nowadays, um, in the West, I think many perceive the increased centralization and the, uh, reduction of checks and balances, and the party is ultimately behind the law. You know, where are the checks and balances there that we may not see? Um, and do you think if there are no checks and balances, how can that be squared with a system of political meritocracy going forward?
Meritocracy and the ideas of meritocracy and checks and balances are two different things. Meritocracy simply means that capable people become leaders, instead of the two we're looking at in America. Okay, the 80-year-olds. Okay. So, so we, that's, that's the simple idea. Do capable people become leaders? That's what meritocracy means. Checks and balances, that's a totally different idea. Checks and balances, I think, is what's ailing America and Europe and liberal democracies. Francis Fukuyama calls it vetocracy. Checks and balances are captured by special interests, and they capture the state, and vetocracy means that every interest group is strong enough to veto any political initiatives that are against their interests. But nobody could initiate and do something positive. And you get stuck. That's what checks and balances carried to the extreme do to your countries. We run that risk too. You know, our system runs that risk too. So, so we swing between, you know, more centralized power and more distributed power. We swing in the history of the People's Republic, we swing between these two. But luckily, hopefully, you know, gradually, not too drastic, like, you know, we had disasters like the Cultural Revolution, you know, um, but, but we survived that. Okay. So now we're in a period where, you know, I personally think stronger leadership is called for to engineer the economic transition because there are a lot of vested interests in real estate. How do you, how do you burst the real estate problem? We've known the problem for many, many years, but there are too many special interests. Corruption, too many, too many checks and balances lead to more corruption potentially because nobody could, um, so we need stronger leadership to correct the three major problems that we talked about. Uh, and as you know, we face tremendous geopolitical risks. So all of these things call for stronger leadership. I believe that's my personal view. People, some people don't agree with me. Yeah. Um, there could be a time, circumstances change, that we need more distributed power. That's possible too, but it's not now.
Oh, over here. Can you, can you comment on the, the current big news on TikTok from the point of view of pros and cons? Because you were mentioning that, you know, platforms like TikTok can have news of all sorts and nobody checked the truth. Regulating TikTok, would that help? What are the pros and cons in regulating TikTok or banning it, uh, altogether in the US?
I don't know if you have children like I do. You want to ban TikTok. Okay, but that's a separate matter. Right now, TikTok, TikTok's trouble is essentially driven by geopolitical tensions, right? There, there are people in the United States who think a Chinese-owned company to have such influence, big. It's actually interesting, you know, it's actually a phenomenon that if you really think more information, the better, and people are smart enough to figure out what's fake and what's, you know, just put them all out there, then TikTok shouldn't be a threat in America. But sizable sections of American society, vast majority of the House of Representatives, think that it is. Um, so it's, it's, I think it will be, it's America's decision to make. Uh, but the Chinese government have a say in it. I think I read in the papers, I didn't follow the case, but yeah. But, but they think, they think a foreign company is poses greater threat. Right. Well, that's what Donald Trump says. He says, "Don't ban TikTok because Facebook is worse." Well, think about that. God, I mean, it's not a glorious case for freedom of speech. I mean, freedom of speech is in trouble in America. It's in deep trouble because it's causing so much harm in their societies. So much.
A question over here. Hi. Uh, two questions, if I may. First, uh, industrial policy, how can you ensure that it's successful? You know, Argentina, Latin America, they they tried import substitution. Japan had the MITI in the '90s, and you know, I don't know. So, question number one, how do you ensure that industrial policy becomes successful? Second question, in K.L. Papa's conception of, uh, politics, the, you know, the main criterion is that if a strong government turns bad, you can recall it. How would you say this could happen in today's China?
You in America, like I said, government turns bad, you recall it. The next one's just as bad or worse, and it keeps going like this. There's no end to it. Countries that, it's called "elect and regret," and it's a continuous cycle of elect and regret. That's the numbers show that for decades. I mean, every time after an election, people regretted what they elected. That's, that's not a good case. Okay. All right. Back to industrial policy. My answer is, you cannot guarantee it'll be successful. Just like when you make a venture capital investment, you cannot guarantee it's going to make money. You know, it, it just, you just have to be smart about it. You have to have capable people at the helm. Number one. Number two, you cannot just do it with the state. You have to combine it with market forces. So you have to do both. You can't go back to Soviet Union centrally planned economy. That doesn't work. So you have to do, but you cannot do go neoliberal market economy. We all know that doesn't work. Okay. So you have to combine it. Uh, and I think, I mean, you, you know, the industrial policy, you got to give it time. Um, 15 years ago, everybody was saying China's industrial policy on solar was a huge failure. I lived through it. Thank God, I, I mean, I didn't make investments in those industries. I made one was successful, but in wind power. Okay. But all these companies failed because of excess capacity. So, so when you pursue industrial policy, it's inevitable you waste a lot of capital because you make mistakes. But look at it now. And China's solar industry is the most successful in the world. Um, but it's taken 10, 15 years and a lot of self-correction, you know.
Yes. Question over here. Thank you. Um, first of all, I respect your bravery in coming into the, the FCC where opinions might be extremely different. Um, but on, on the other, as, as a psychologist, I'm just wondering with all this, the changes that are going on in, in China, for example, all these people who invested in mortgages with Evergrande and all that, and these huge amount of young people who are unemployed now, their mental health must be of concern to the, the government. And what are they doing about it? Did you have any idea? I mean, especially economically, it must have a big impact.
I have not studied it. Um, and I think that's a valid point. Uh, there is, um, we're going through a challenging period for our economy. Um, and I mean, although I wouldn't say it's as challenging as what America went through in 2008. I mean, that was massive, much, much worse than what we're going through now. Um, but I think your, your points are really valid. I mean, especially with young people, um, they're, they were coming out with full of hope, and now the economy is slowing. Um, they feel they don't have as many opportunities. Uh, so all of that, I think the government, the society as a whole have a lot of work to do. Um, we, um, it's unfortunate when your society and economy are going through tremendous changes, these collateral damage happens. And, you know, I, I was talking to, uh, some university students in Hong Kong the other day. Um, I drew an imperfect comparison between China and America. In China today, we're becoming bigger, becoming the largest economy in the world, but just, just becoming the largest economy in the world was very similar to around the same time last century when America, between World War I and World War II, was quietly becoming the largest economy in the world. And you will know between the two Roosevelts what America went through. Great Depression. It lasted 10, 15 years. Means people starved to death, piled up corpses on the street. Just, you don't have to read, just search for photographs of the Great Depression. And what America, American society, American people went through to claim the American century, uh, was tremendously difficult, huge suffering. Um, so, I mean, you're right. We need to be mindful of these difficulties that are, and, and, and to be caring about human beings, especially young people.
Just following up on that, Eric, the other problem that China faces is, of course, the aging population. Yes. So, in combination with incredibly high youth unemployment, which we don't know what it is anymore because the government stopped releasing numbers, the whole "lying flat" and being full-time sons and daughters phenomenon, where where young people just say, "Forget it. I'm not even going to apply for a job. I'm just going to stay home and cook for my grandparents." Plus, the aging population. That, that's a, a very visible, yeah, time bomb.
These are, these are huge challenges that we have to tackle, and we have to make sure the economic transition succeeds. I mean, if we stayed on the old course, I think the time bomb was much bigger. Um, I mean, I wish we had gone on this change sooner. Uh, but we are doing it. Um, I wish we had dealt with the real estate problems sooner, but we're not doing it. Um, and the demographics, I mean, that's what can China do about the demographics? I mean, China created the demographics. There's always consequences when you meddle with with fertility.
Well, I mean, the demographic challenges are not unique to China.
No, they're not. But, but China, didn't meddle, and its population is declining faster than us. Um, so, so I, you know, but we, our population was growing out of hand. You know, if we didn't meddle at that time, we'd have the opposite problem. Okay. Maybe we didn't quite get it exactly right, you know, but, but, but if we didn't meddle at that time, um, we'd be in probably bigger trouble now. Um, there's no way we could have implemented these market reforms and these, the. Can you imagine if we were, you know, having 10 children per family, uh, after which people were doing, people would be starving. But the, the thing is now that those measures are gone, you're not, people don't want to have families. You know, the, the birth rate in China is, that's correct, replacement. That's a major problem. And it's a common problem faced by so many countries, so many countries. Um, and, and I think the root causes are much deeper than we think. The root causes are cultural, economic, many, many things. Uh, so it's, it's a worthy of studying.
Some more questions here. Hi, Dr. Lee. My name is Neville. I work in the public sector consulting field. Uh, so my question to you is, uh, in the next decade or two, what do you think of the role of China in the making of the Asian century, or are we seeing a shifting away from Asian century to more Indo-Pacific century? So, what, what's your take on that? Thank you.
Well, I don't know if we're going to have an Asian century or Indo-Pacific century. I mean, I, I think the primary contradiction in our world today, in the next 10, 20 years, is the, is that there are people and countries who want to maintain a unipolar world, and there are peoples and countries who want to have, who want to nourish and grow a multipolar world. Okay, that's the primary contradiction. And the multi, the unipolar world is a world that's essentially post-Cold War, in that short period after the Cold War, and maybe 5, 10 years ago, I don't know when. Historians will have a better say on that. Uh, it lasted maybe a generation. Okay. That basically the US is a hegemonic dominant power, unquestioned. Their e, their economic system, their military, their ideology can be imposed on any other country who disagrees with them, violently if necessary. Okay, that's the unipolar world, which we know we lived through it. Okay. And there are countries and peoples around the world who don't want that. Who want a multipolar world where countries and regions can pursue their own ideologies, their own politics, their own economics, and somehow get them to work together. Okay. Um, and I think that the first group is a very small group of countries. The second group is a very large group of countries and peoples. And, and I think the, if I'm going to name the 21st century, I'll name it after them. Fore speech. Soch. Fore speech.