Transcription
Much of what people in the West believe about China is just untrue. I have been visiting China for the last 16 years. Um, often multiple times a year, sometimes for extended days. Uh, this year I have spent more than half of so far of this year in China, traveling to big cities, small cities, villages. Um, I have over this time come to see China not through ideology or media narratives, uh, but through my own deep experiences interacting with companies, locals, street vendors, bureaucrats. Um, I have, uh, what I'm going to talk about is based on what I have seen, what I have experienced, and what I have heard.
Um, much of what people in the West believe about China is just untrue. It amazes me no end how persistently and deeply people across the political spectrum hold negative images of China. I suspect Washington's propaganda, and when I use Washington, I mean the American government, and when I use Beijing, I will mean Chinese government, because they might not represent their people. I suspect Washington's propaganda has steeped into the minds not only of leftists and hawks, but even of thoughtful conservatives and libertarians, because they often repeat the same clichés.
Chinese, as I have experienced, are inward-looking and focused, not expansionist. They are not looking for a war, not the average citizen. They are not threatening. You want to have a fight with Chinese, he wants to find a way out of it. I have found their society to be more curious than they get credit for. They are not as censorious as many people think they them to be. Um, contrary to popular perception, they are very open-minded. At least the ones I have come across are very open-minded: students, um, private company workers, or even bureaucrats. They are self-critical. Um, and they are reasonably truthful. Um, and when I say reasonably truthful, you have to understand that two-thirds of the world's population has no clue what the word truth means. I did not know what the word truth meant until I was in my early 20s, until the time I arrived in the UK. So, Chinese are reasonably truthful.
Now, yes, if I ask them about Tibet or Xinjiang, or if I want to want them to criticize, if I incite them to criticize Xi Jinping, they will probably avoid confrontation on that subject. Now, I, um, um, I, I, I'm quoting statements of two people in this audience. Uh, and this is what, in my view, so no offense to everyone, but I'm just talking, highlighting the influence of the media narrative. Uh, a friend asked me if I have ever been worried about being arrested in China. Another one, um, asked me if I have ever been followed in China. Um, and I have been, as I said, to many parts of China. I seriously doubt it. Um, I have been followed in Myanmar. Military intelligence followed me. Um, I was arrested in Zimbabwe because I was taking, taking some forbidden photographs. Um, I have traveled with insurgents in Laos. I have traveled by myself, just alone, in the ungovernable parts of Congo. Uh, I have been to close to 100 countries. Uh, I have traveled with state operatives in North Korea. Um, I can usually tell when I'm followed. I don't think I have been followed in China.
Um, uh, just about, uh, a year or maybe two years back, uh, I decided, um, to walk around a very controversial mosque in a small, in a village in China. Um, we had stopped over, and I decided I just wanted to take a walk around it. I even went inside it. Um, an hour later, uh, a police car showed up, um, to look for this brown-coated, Arabic-looking guy, um, um, and, uh, because they had failed to trace me to a, a hotel. I was not registered in a hotel. I won't tell you the details. Um, so he came over and asked me for my passport. Um, I declined to show it to him. Um, he, uh, we, uh, and, um, and I told him, why should I? I'm not crossing the border. Uh, I am within China, and well within China, that you have no reason to ask me for my passport. This young officer understood my question and the implications that, um, I was, um, the underlying issue with that question, and he said, that's perfectly fine. Show me an ID, because the Chinese law requires you to have an ID all your time, all the time with you. Of course, I did not have a Chinese ID. He behaved with me professionally and politely. Um, eventually, after, uh, some, um, uh, discussion, I showed him a PDF copy of my passport on my cell phone. Um, he took a photo of my passport, apologized, and he, he told me I should never have been asked for to show my passport, and he moved on.
Now, um, ironically, in the statist world we live in, uh, this, in absolute terms, was of course unpleasant, um, but it was no worse than, and perhaps even milder than, what I have experienced in many countries, including in Canada or Germany. Uh, I have been asked for my passport twice by, uh, plain-dressed people who claimed to be policemen, to show my ID cards in Germany. So, nothing special about China. You can, in isolation, uh, nitpick on things to do with China and show it in a bad light.
Uh, now, in China and elsewhere in the Far East, uh, people are very careful about publicly voicing their political opinions. So, this kind of seminar is probably not going to work out in China. Um, I have, however, never, in my, uh, 16, 20 years of, uh, traveling in Far East Asia, ever heard of someone getting a knock, um, at 2:00 a.m. in the morning, hooded by the police, and taken away to an unknown location. Uh, I have talked with people about what happens when someone crosses a political, uh, line. Uh, usually, what happens, and this has always been the case, uh, a call starts from the higher authority. It comes down, distills down to your immediate supervisor, and he will calmly explain to you what your limitations are, are not too different from what you have in North America.
Unfortunately, uh, if you express certain political views in North America on race, sex, Amy Wax talked about it, you risk being canceled. And indeed, I have been canceled. I was canceled from a Frankfurt-based mining conference because I was deemed to be homophobic and sexist. Those were not intelligent enough to blame me for, uh, racism, which is what they should have done, actually, had they thought things properly.
Um, uh, China has what I consider to be the most capitalistic economy in the world. Um, despite the communist label, it's a label. Forget about it. Ignore it. Don't repeat, uh, it all the time. It operates with astonishing efficiency. Transaction costs are minimal, making goods and services not just cheaper, but increasingly of higher quality, sometime meeting Japanese and German standards. And I, I think these days, mostly meeting German and Japanese standards. It boggles my mind to no end that China is not a micro nation. It's not Monaco or Singapore. It is a, the biggest, uh, among the biggest countries on the planet. Um, but it boggles my mind no end that despite this, um, despite the fact that from your underwear to the high-tech equipment here, most of things have been manufactured in China. Many, many people think China is a paper tiger, and if at all they accept the growth story of China, they credit it to dictatorship. So, they basically want to make their claim unfalsifiable, if I use that scientific term. They just don't want to accept that China is growing, progressing, and improving, irrespective of what evidence I show them.
Uh, in much of the third world, and I'm a very, um, in, I'm, I'm, I'm a very, um, I don't like this purchasing power parity concept in in economics. In much of the third world, yes, I can buy, uh, cheap food, but there's a difference between cheap food made on a street corner and good food made in a high-class restaurant kitchen in Switzerland. I don't like PPP measurements. But when, so when I go to a third-world country and if I want a Western kind of lifestyle, I don't, I don't pay less. I actually pay more because Western lifestyle in a third-world country actually becomes more expensive, not cheaper, contrary to what purchasing power parity might tell you.
China is a rare exception. I love it. Uh, I can get Western quality services, or much better, actually, for a third or fifth of the price that I would pay in a Western country. Uh, it is not unusual, uh, for me to pay just $1.50 for accommodation in a nice five-star hotel with two buffet breakfasts included. This is not unusual in a tier three city in China. In fact, um, last year I was transiting through Guizhou, and I had booked a nice hotel, and I know it's hard to believe, I paid $10 for my overnight accommodation, personal pickup, personal drop-off to the airport, and a buffet breakfast. Um, so you can imagine that they are trying to make money from that $50 or $10. You can imagine the efficiency of that country. Taxis cost you a fraction of what you would pay anywhere else in, in, in most cities. When I take taxis, the cars are amazing. And I ask them often, how good are these cars? How have, how long have you run them? And they often say, without a problem, for the last two years. And I pay a couple of dollars from going from one part of the city to another part. They are so cheap.
Uh, banks are open during the weekends, sometimes late at night. I know, I understand there are people working, and they are not, uh, they maybe don't want to go home. I'm talking about at least one side of the equation. Um, Renminbi maintains an almost a parity with the US dollar. It's not fixed, but it's close to a parity, but the bank deposit rates are better in China.
Now, in these 16 years, I cannot think of many occasions when I was cheated. In fact, I can think of only once that I was overcharged by a taxi when I tried to take a taxi in Beijing from the nightlife area. Uh, people drink too much, and the taxi drivers use that as a reason to make money. In 16 years, once. Uh, the, in these 16 years, the transformation in China has been staggering. Um, when I first arrived in China in 2010, actually the same year that I started this seminar, um, I went out in Shanghai to search for coffee, uh, and I found something barely drinkable. It was watery. Uh, really couldn't be drunk. Um, today, forget Shanghai. I can go to a tier three city, um, and the range of coffees available easily surpasses that found in Germany, Switzerland, or France. You get really top-quality coffees in China.
Um, likewise, I thought until recently that Canada had the best and tastiest fruit. Uh, but flying over China, you see miles and miles of greenhouses. They have erupted. They have mushroomed. Uh, in many parts of China, the scale and quality of domestic agriculture has improved so quickly that Chinese, in Chinese, in my view, today produce the best fruit anywhere.
This is what I think about the Chinese character. They have taken Kaizen, the Japanese concept of Kaizen, to heart. They are keen learners. They absorb new ideas. They absorb them quickly. They adopt them. They adapt them, and they institutionalize them. And without backsliding, they continue to improve. Um, China keeps ratcheting up, and when they do something worth adopting, it swiftly becomes a part of their culture. This is amazing. You try educating and doing good things to third-world people, otherwise they slip back right away. They go back to their prior existence in no time. China keeps ratcheting up. I think this is the key to their success.
One image, this is which is hardwired in my mind. I was in Changsha, just by myself, walking around the museum, which is not, Changsha is a city, not too far from Wuhan. A few months before COVID hit. Um, and I was sitting on a bench, and this old woman who is a jan, who was a janitor. Now, of course, in China, it's not communist. It's not a welfare state. If you don't have money, you go hungry, so you better work. This relatively, uh, old woman climbed up a pole to brush off dust off that pole. I was mesmerized watching her. I have that video and photograph with me. I use it sometimes in my presentation. That image is hardwired in me. She didn't have to do it. I don't know if I would have done it in her, her shoes. Uh, u, but that is, for whatever reason, their system works. Uh, either they take pride in their work, or their, the structure of their organizations is such that people at least show that they are proud of what they are doing.
Uh, now, um, you know, I, I, as I said, I come from a hellhole. I grew up in a horrible hellhole. Hellhole is probably not the right word for the, the place I grew up in. U, but those people where I grew up, they constantly say that we supply the CEOs to the US. Um, um, I grew up in India, of course. Um, now, um, you should never ever judge a society based on the highest IQ people from that society or the most successful people of that society, because you are not looking at an average. You are statistically wrong at looking at just the high IQ smart people or rich people. Um, what I assess a country based on is their average people. And this janitor, in my hardwired, uh, uh, information, it tells me what an average Chinese I have seen to be.
Um, u, from what I see in China, and of course, this is partly as a tourist. I have never worked in China. I am, of course, a business traveler, or just a traveler, or even a backpacker when I was 16 years, 16 years back. Um, I don't see any, any sense of whining among those people. So, when I stop a janitor to ask her something, she smiles back and responds to me. Unlike, uh, welfare, you know, there are people, we have, there's a, a class that we have managed in the Western world, which is a whiners, which is entitled, and which always holds a victim card. Um, u, in China, from the Chinese government's point of view, if you don't work, you go hungry. For them, it's that simple. It's not a communist country in that sense at all. Um, and I am all for that, that ethic. I have been hungry, broke. Rick has known me when I was, uh, pretty broke. Um, I have been broke and hungry. And I think the best education any young guy can ever get is to not have money. It teaches you to be entrepreneurial and think about providing value to the society.
Now, that doesn't mean Chinese people go hungry, because social support, mixed with accountability, because all compassion and tolerance should come with accountability, u, takes care of people who don't have jobs, who are disabled, or whatever else. Um, and I think not having the victim mentality, and not being given space to, uh, express their sense of entitlement, makes them less distracted and happier. I'm talking about the lower class, lower-paid people.
Now, wages, surprisingly, this is what capitalists should be. In wages in Hong Kong and China, rise and fall with changing economic conditions, which I doubt happens in, in any other, any other place in the world. Uh, you should not be surprised if the officer you go to meet this morning ends up delivering your Amazon delivery, kind of thing, the same afternoon. He is allowed to hustle a bit, uh, on the side, if his salary has gone down recently.
Now, last year, I, after the capitalism and morality seminar in Vancouver, I flew to Shanghai, uh, with a domestic connection. My, so I flew into Shanghai. I flew into Tokyo. I stayed overnight in Tokyo. I took a flight to Shanghai, and I had an onward, a domestic flight in China. Uh, my flight was about 20 minutes late, with 20 minutes left for connection. There was no way I was going to catch my domestic flight, because the international arrival and domestic departure are two ends of the airport there. Uh, I came out very relaxedly, because I knew I had missed my flight. Uh, when I came out, uh, someone was holding a, a banner with my name on it. He photographed my boarding pass, and me. He, sorry, he took a, yeah, he photographed my boarding pass and me, and said, "Go that way." Uh, uh, now, um, the, um, this is something I have become accustomed to. What comes across as might be a bit blunt, is the Chinese way. It's a Chinese and Singaporean way. They, they just, they are more functional rather than, um, um, I sit with maybe unnecessary politeness sometimes. It's not that I have anything against politeness. Western culture continues to be supreme for me. But I'm just highlighting the negative things that have sunk into the minds of Western people because of Washington and because of media propaganda.
Uh, now, I started walking to where he said, and I knew, you know, there would be no one, next. I would get lost and eventually lose my flight. There was a chain of agents on the way who knew who I was, and they said, "Go that way. Go that way." I was ushered to the top of the line when they needed to, because I still had to do customs and immigration in those 20 minutes. Um, and I made it to my plane in less than 20 minutes. Um, I don't know, um, how to set up an organization like that. I actually don't know how that was achieved. Um, just to add, I was not flying business class. I was flying economy. So, it was not that I was given special privileges because I was flying first class or business class.
Now, I have visited government offices in China. Uh, they are again blunt. They, you walk in, and they want you out very quickly. They want you to do your job very, very quickly. The goal is very simple: do the job and let, let the citizens go. Um, they don't waste time on pleasantries. You, if you go to S, arrive at Singapore airport, or Chinese airport, or Japanese airport, or Korean airport, and say "good morning," they'll probably not even look at you or not even respond to you. They don't, u, you know, I, I'm all for pleasantries, but I'm not for pleasantries with government officers, not with politicians, not with bureaucrats. Um, um, when dealing with immigration and police, I want an interaction that is brief and not condescending chitchat. When an immigration officer in America says, "Good, uh, hello, how are you?" Maybe I don't want to respond to him, but I'm forced to respond. So, I don't like that condescending chitchat. If I can send, if I can avoid selling saying hello, I like it. That's what I prefer about China and Singapore. Um, because my anti-statist principles hold a higher value than politeness. In China, that is exactly what I get.
In these 16 years, I have never met a heavy-handed bureaucrat in China, um, or for that matter, in Japan, Korea, Singapore, or Hong Kong. And I have spent extended times in all these countries. Uh, recently, uh, 3 months back, I was driving around with a host, and I said, "Why don't I see those city police officers?" These were, uh, a different kind of police officers removing street vendors from the street. Um, and his answer was, "Officers have been given more productive roles. They have, they have demarcated a tacit line between what officers can do and what street vendors can." Um, at least among the people I have encountered, u, and I'm talking about a street corner guy to normal people I meet, an average guy, or bureau, corporate guys, I mean, meet, I don't see a fear of police among them. So, this, you know, I, I have nothing, uh, uh, I'm saying nothing about what happened 30 years or 40 years back in China. I'm talking about today. I simply don't see fear in the eyes of the, and average citizens when it comes to the government. In fact, I know someone in China who is suing the local police for something, and she, he, or she has no fear of reprisals.
Put it simply, everyday systems work in China. People are responsive, conveniences are real, and despite my negative views of purch, on purchasing power parity, things are actually very inexpensive. Uh, it has become strangely, over the last one or two years, extraordinarily safe. People now leave their, as they do in Singapore, they leave their women leave their purses on the table and go away and come back later. That's how safe China has suddenly become.
Um, um, China has dealt with religious extremism. They had Islamic extremism extremely well. Um, you, I don't see any sign of it anymore. Um, and if this contradicts the Western narrative, perhaps it's time to trust my direct experience, um, over the ideological filters I'm required to put on.