Transcription
But if you look at the world value survey, the Chinese average Chinese would say they prefer over 90% for security over liberty and in the US uh uh less than 30%. We've looked at throughout history lots of these, you know, common sense views of let's try to suppress the competitor in various ways, cut them off, embargos, blockades, you know, technological export controls and so far those have never worked. But now it's especially a stark because China has become a major major superpower and it's not just in terms of economic size but real technological potency.
>> Why do you think the the west insists on viewing China through either a ideological or or this geopolitical kind of political stance?
>> Today we are reacting to Chinese economist Dr. Ku Jin, someone I believe is in the perfect position to bridge China and the West, giving us the proper lens from which to see Chinese society. But before we begin, please subscribe if you haven't. It really helps support the channel. All right, let's get to it.
The three biggest um misunderstandings about China would start with the model which I've written extensively uh about uh you know I I was trained in the west um uh uh as an economist and we we learned basically three macroeconomic models and there was no role of the state but here China has the state model we're opening the debate about industrial policy from America to Europe uh actually distilling the lessons from China uh but is it really a politically centralized centralized model as we we we see it I think it's much more nuance has its strength has its weaknesses second is uh a huge misunderstanding of the Chinese people but just on things like the relationship between people and authority is something that if we use a purely western lens to look through we're always going to get something that is puzzling that is maybe even offensive to some and something that is very difficult to to to understand to grapple uh but authority right the notion of that implicit contract even between the emperor and the people from thousands of years ago to modern-day families between children and parents to uh school teachers and students that is not blind submission at the same time there is a certain amount of difference for authority.
>> Dr. KU nails the foundational problem that Western economics pretend there is no state intervention. Zero role for the state. As if the state didn't build the American railroads, the interstate highways, the internet, or the GPS satellites. As if every major western industrialization wasn't state directed at its core. China's sin isn't having a state model, but admitting it. And the implicit contract point is crucial. We read Chinese deference to authority as authoritarianism or brainwashing. But Dr. Ku traces it to family structures, teacher student relationships, a cultural continuity going back millennia. And once we understand this, we can see this isn't blind submission, but different social structure.
>> So these there are a lot of these kind of examples uh even on uh things, you know, how you value between freedom or liberty to security. It's obviously a spectrum and there are in many cases clear trade-offs. But if you look at the world value survey, the Chinese average Chinese would say they prefer over 90% for security over liberty. And in the US uh uh less than 30% would prefer security over liberty although I haven't checked in the last uh two years but this was 2018. So again, if we take that lens, cultural lens, civilizational lens, geopolitical lens, uh national security lens to look through China, you're going to miss this uh country that um is complex, but uh but clearly uh very important.
This isn't about right or wrong. It's about context. It reveals the fundamental trade-offs that different societies are willing to make based on their history and values. If we only view China through a single lens, whether cultural, geopolitical or national security, we risk missing the bigger picture. China is complex. It is nuanced. And regardless of that spectrum, understanding its position is vital to understanding our world. We must let the arrogance go in our western frame or analysis by assuming our own cultural settings are the universal preference.
Why do you think the the west insists on viewing China through either a ideological or or this geopolitical kind of political stance?
>> China was always had the same political system, right? For uh uh uh you know for for a few decades now that wasn't really the issue before China became really big, right? As we are often reminded uh the Clinton administration helped China join the WTO. uh they saw opportunity but now it's especially stark because China has become a major major superpower and it's not just in terms of economic size but real technological potency um supremacy even in some areas uh potentially exceeding uh the frontier uh technologies in the west and so I think it's mixed in between and that becomes renewed uh discussion and if you look at the populist wave sweeping around the world. Discontent with globalization often conflated with uh the rise of China uh or um or or China's dominance um is bring back the the the conversation. But you can't blame China for being competitive, right? But you can really talk about China in a more negative lens. Look, this is a holistic picture, right? If we're looking at whether it's WTO uh rule violations, then we can count plenty even for uh uh advanced economies uh uh uh including uh uh and of course uh China's uh trade issues as well. But you know, nobody's perfect. If we look around the world where we are right now, which government is actually doing the best for its people? I think on that uh front whether it's accountability, responsibility or responsiveness to the Chinese people, the Chinese government has actually done a pretty decent job. But uh they they you know it's often underappreciated.
Absolutely. China didn't change. The West's tolerance changed. When China was poor, it was integrating into the global system. When it got rich, it became a threat. The political system was identical in both eras. What changed was western comfort with a non-western power succeeding on non-western terms. And this is where we need to step back and look at the full honest picture. Dr. Cu is making an essential point. Every major economy plays hard ball in international trade. The United States has its own long history of subsidies, tariffs, and protectionist measures that have been challenged at the WTO. Europe, too. This isn't unique to Beijing. It's the reality of how great powers operate in a complex global system. If we're going to hold China to a perfect standard, we'd better be prepared to apply that same scrutiny to everyone else. But what I find genuinely compelling and underappreciated when you look at the core function of any government, which is to deliver for its people, China has been remarkably effective. Think about this. In just four decades, they've lifted over 800 million people out of extreme poverty. They've built a physical infrastructure network, high-speed rail, highways, ports. They've created an education system that produces millions of highly skilled engineers and scientists every single year. However, the cultural context matters enormously here, too. the sense of collective responsibility, the reverence for education, the fierce drive to compete and innovate. These aren't imposed from above. This is ingrained in Chinese DNA.
>> Well, um, in terms of the how the model works, um, a lot of people, you know, mislabel it state capitalism or market economy, market over mau, as one book would would would call it. Neither is quite quite right. Um it has been able to foster in my in my view a unique um balance between market mechanisms and state coordination, industry and government and communalism and individualism. And this is anchored in national conditions but also in the historical legacy part of the values part of the culture. When you talk about system, that bureaucratic system, the political system, the long-termism uh is very much uh uh some of the some of the features. But they've been able to craft this very interesting model, political centralization, economic decentralization, which initially was really the way that reforms were able to be done in this highly anti-capitalistic uh era of the 19 late 1970s, 1980s. uh the the mayors, provincial governors, the local uh uh government uh were incentivized to um you know take radical uh uh uh projects and uh be bold. This is how Shenden turned from a fishing village into what it is today. Yes.
>> Uh and the incentives were were aligned uh in the sense that they did something great for the economy. They were more likely to be promoted. Of course, there was the pride, there was the recognition, there was the model emulation. Everybody wanted to be like them. But you fast forward and it's still the same model, right? Central direction. China needs to do strategic long-term planning in AI in eiables. China needs to prepare for the arrival of Trump, you know, and so forth. But who carries this out? It's the local government because they know the local conditions.
Many people mislabel China's economic model as state capitalism or a pure market economy as we saw in the Steve Keen and Patrick BetDavid debate. But in my view and many others, it has been fostered from a unique balance between market mechanisms and state coordination, industry and government. This model is anchored in national conditions, but also in historical legacy, values, and culture. Its bureaucratic and political systems emphasize long-term planning. And they've crafted a truly distinctive approach. Look at Shenzhen. As Dr. KU points out it transformed from a fishing village into what it is today precisely because of this. When local leaders delivered great economic results, they were promoted. There was pride, recognition and a wave of model emulation. Everyone wanted to be like them. And this is just one of many examples.
>> I think the vision is there for many countries, right? Um but who implements it and how are these incentivized? And that's a key question because you're right, it's not just about the west. There's a rest of the world, if you will, that is growing and uh uh becoming uh uber important and uh carry great weight and they they look at the China model for inspiration. Um they might have plans but it doesn't get done. It's the last mile delivery if you will. Um that is also a problem. uh now they so they try to study the local government model in China and but China has a very different system because politically uh there's enough power to incentivize the local governments to perform by and large and you're right it's all in the end it's about ecosystem it's not about one particular technology uh whether it's frontier or not uh China has crafted something that is about integration that is about efficiency and even in the semiconductors of chips uh the whole ecosystem matters more than particular chips. And that would be true for AI, biotech, um, and so forth.
>> With with AI in particular, I would say that that the the Chinese Asian view is more about AI is for civilizational architecture. It's what takes humanity forward versus the wider worldview, which is AI is a battle between five or six companies. It's a very different philosophical way of developing a potentially humanity defining new technology, new platform. Yes.
>> it's very different.
>> Uh and you don't hear about so much um you know all the jobs lost uh and this very pessimistic view about employment uh and uh people's you know prospects in the future so much uh in in China as in the west. I want to make a point that this is not just about the state. State state planning, state coordination, all of which um are are are essential. But in the end, they heavily lean on private market competition. And as most people who have been to China will know, there's no market more competitive than China. So today, if you make it in China, you can make it in the world. Words are cheap or in this case plans are cheap but execution is everything. That's the key.
It's not just about the west. The rest of the world that is growing becoming increasingly important. They might have grand plans but execution often fails. China has political centralization but with economic decentralization where local politicians are incentivized by interjurisdictional competition to maximize growth and investment. But here in the west we label it as authoritarianism and recoil. However, in the end the model leans heavily on private market competition. And as Dr. Ku said, most people who have been to China will tell you there is no market more competitive than China.
I want to go back to this same notion I know I keep returning to but the the fact that certainly politicians push us into the geopolitical perspective if you were to really pick that apart is that actually a sign of weak political leadership and poor economics in the west rather than the threat of what's emerging in Asia.
>> I think it's a lot of is a distraction right um if you can't do a good job here then you can always have somebody to blame that's at least part of um the underlying cause. In my view, it's it's really not about trying to stop a competitor, right? It's always been trying to um harness your own strength and build your own strength. We've looked at throughout history lots of these, you know, common sense views of let's try to suppress the competitor in various ways, cut them off, embargos, blockades, you know, technological export controls and so forth. Those have never worked ultimately. And coming back to the example of US Japan, US first tried that on Japan. But then Japan's rise especially in the chips sector made US do a lot of things differently internally including passing some of the laws that were fundamental to creating this innovation system. And guess what? Innovation really thrives. So it's not about stopping trying to stop the other. And I hope that as you know when and if if and when the US does recognize that it's unable to stop China that finally this geopolitical rivalry narrative will start to soften give each other some breathing room. Um but if they recognize that and start to turn all that attention domestically then I think that would be the better outcome for everybody.
Michael raises an important question. Geopolitical framing pushed by politicians might actually reflect weak leadership and poor economics in the west rather than the genuine threat from Asia. And Dr. Ku reminds us about history that we are quick to forget. The 1986 US Japan semiconductor agreement. The US first tried on Japan, but Japan's rise, especially in chips, forced the US to do things differently internally, including passing laws that became fundamental to its innovation system. So, it's not about stopping everybody else. But interestingly, the American public is ahead of its politicians on this. The Chicago Council 2025 survey found that 53% of Americans now favor a policy of cooperation and engagement with China. A sharp reversal from 2024 and the first time since 2019 that a majority has preferred engagement over containment. Even more telling, a majority of Americans oppose higher tariffs or restrictions on Chinese students, and 62% prioritize avoiding military conflict with China. The bipartisan consensus on great power competition no longer holds among the public. Yet, politicians continue pushing the rivalry narrative.
>> I think the Chinese young generation, and I'm very impressed by them, um just so creative, so innovative. um but in in in in things that they they're interested in, right? In making, you know, just life a bit more um more enjoyable, right? That notion barely existed, enjoying life. I mean, you know, God forbid what what a what a decken thing to to want, you know, from the parents generation, but that's all they want to do to the point that they don't even want to have kids because they want to have a better time. There is definitely a psyche behind there. So again, China is reaching a really interesting phase where that is going to be uh a very dominant and with that softer side with people wanting to have a good time, people want to share that uh around the world. Um that is the organic soft power, right? Not state-led uh soft power. And the new generation, there's just so much more commonality between the Gen Z's around the world than there there is across the older generations. They care about animal rights, social inequity, the planet, and that's the thing that that unites them. And again, they're not so hungry and so desperate uh to, you know, to drive others out of the market uh again like the last generation. So I think um you know, even on the consumption side, they're borrowers, right? They have no qualms of borrowing to buy lipstick today and hopefully somebody will repay it, you know, tomorrow. That notion completely did not exist in the last generation. So I think if if a lot of the focus you know uh uh shifts around the connections from person to person, the young generation to the next, China will be in a much better position to be better or more easily understood um less ideologically uh uh divisive. And yes, of course that would help even on US China relations.
This matters geopolitically because soft power isn't state-led anymore. It's organic. Chinese young people are producing culture that travels. Mobile games, fashion, digital art, lifestyle content. The organic soft power Dr. Ku describes is already happening, just not through channels the West recognizes or controls. Older Chinese were hungry. They remembered poverty. They wanted to catch up. Younger Chinese are confident. They grew up in the world's second largest economy. They don't need to prove anything. That confidence changes how China engages the world. More willing to share, more interested in enjoyment over domination. The West is still fighting the last generation, but China has already moved on.
Very well. That's all for today. As always, please subscribe if you enjoyed the discussion and let me know in the comments. Can we learn from China's ability to plan longterm and execute, or will we continue to deny that it works at all? See you in the next one.