Dan Wang on What China and America Can Learn from Each Other

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Hi, Tyler.

A very simple question. Doesn't America just have better infrastructure than China? Let's say I live in Columbus, Ohio. What exactly am I lacking in terms of infrastructure? I have this great semi-suburban life. It's quite comfortable. What's the problem?

America has excellent infrastructure if you own a car. If you are driving every day on the highways into the parking garages to work, that is quite fine. I've never been to Columbus, Ohio. I'm sure its airport is perfectly adequate. I live mostly in between Ann Arbor as well as Palo Alto. And these are cities that enjoy access to two excellent airports, DTW as well as SFO. So all of that is fine. But if we are taking a look at the broader set of suburban living, you know, maybe it is more possible for people to take light rail into the city of Columbus where they might expect to work. Maybe they should have a little bit better high-speed rail access between not necessarily everywhere, but what we call the Acela Corridor from Boston down to D.C. Maybe we should have better high-speed rail between the Triangle in Texas, as well as a few select locations patients, probably not between San Francisco as well as Los Angeles. But I think there should also be much better transit options within cities as well, because we are working through these subway systems built mostly 100 years ago now in New York City, which are screeching loud. The noise levels on BART as well as New York City are sometimes exceeding these danger levels experienced by most people. And so I think that there should be just more options rather than cars as well as airports.

But aren't those relatively minor problems? So I agree that we should build more rail, but mostly we're not going to. So we'll improve airports, add more flights. The New York subway is clearly too loud, but part of the American genius is you don't have to live in New York City. Say we did everything you just mentioned. I mean, would GDP be more than 1% higher?

I believe that it might be higher, but I think that what is much more important is that quality of life will be substantially higher. We're not going to do all of this better transit stuff, but why not? Why don't we do it?

Just get everyone a car, or almost everyone.

Yeah, I don't know if we should give everyone a car. Tyler, I find it always quite funny that you live in suburban Virginia, which is not where we're— which is where essentially where we're speaking from now, really the most boring part of the country.

That's not true, but continue.

Oh, well, suburbs mostly, I would say that that's the most boring category of American life, is my view. And yet, you love visiting these vibrant cities of Asia, these ancient museum-like cities of Europe. Things are highly walkable. Very few people have cars there. Nice twisting roads, as well as excellent rail and subway, high-speed rail. Why don't we have— why don't we live a little bit more nicely like those Europeans, as well as the Asians?

I don't see how we could make American cities into European cities. What we have are the very best suburbs. Chinese suburbs strike me as really quite mediocre. They can have excellent food, as pretty much all of China does, but after that, I don't see anything to recommend them at all. If the idea of your country is to have the best suburbs, which is where the people are happiest— European suburbs, they're pretty ugly. They're generally okay, but they don't have the charm of Europe. And you go to inner cities of Europe, you know, maybe Copenhagen is an exception, But so many of them are somewhat emptying out, and people are living outside of the main central old town or business district, which is becoming increasingly touristic. So suburbs are the future. America just seems like the big winner, and Canada too.

Yeah. Well, this is where I believe it was a couple of months ago where Peter Thiel accused you on your podcast, Tyler, of being a boomer optimist. And let me echo Peter's wisdom here of accusing you of being a boomer optimist. You grew up in the age of highways. But I think they're among younger people, among all sorts of people now, there is a much better sense that American cities have been deeply broken for a while. They used to be quite walkable places about 100 years ago before they demolished it all in favor of highways. Now, I'm not a big fanatic in terms of walkable cities. I'm not a big fanatic in terms of bikeable lanes. But I think there are things that we can do to at least reduce how difficult it is to get around in places like New York City, especially where going to JFK is an ordeal and leaving JFK is an even worse idea.

Sure, we should fix that.

Yes, let's fix that.

Yeah, let's fix that.

A couple of other things too, and then GDP will be 1% higher.

Just having congestion pricing and direct rail to all the airports from New York City would be great. So I'll take the 1% GDP. If we think about why China right now has so much manufacturing success— so you have this notion that it's a nation of engineers. The United States is a nation of lawyers. But what if per capita income is simply the main variable? So the US in the 1950s does extraordinarily well with manufacturing. We're poorer, wages are lower, service sector is less developed. Why is it engineers versus lawyers as opposed to per capita income?

Well, I think the first thing I want to say is that we can definitely understand China right now as being partially 1950s America. What do I associate with 1950s America? Well, a bunch of things, including a giant highway building spree under Eisenhower, and that is what the Chinese have done. There are kind of these traditionalist attitudes towards work— which the Communist Party is enforcing, minimal immigration, attitude of favorability between both of these time zones, between both of these places. And so I think that one can definitely understand China as an earlier America. And I also understand China as perhaps an even earlier America at the start of the 20th century, in which the US wasn't doing terrific amounts of groundbreaking science. That was mostly left to the Germans and the other Europeans. There was just a lot of hucksterism going on, and there was just a sense sense of vibrancy and a can-do attitude, which has partially dissipated now in China but has been defining China, I think, for the last few decades. So I think that, you know, my, my hypothesis is that China will continue to build much, much more because it doesn't have a lot of these American notions of being super obsessed with financial measures like profitability, as well as these other ratios. I think there is something much more common in China as well as the rest of East Asia, where the business leaders are much more concerned about simply market share than they are about having really high profits. And so I think that is an element of China in which they are going to be investing a lot more because they're not targeting exactly the same things as American business leaders. I understand the Communist Party to be possibly the most technology-obsessed large institution in the world. I think that every country in the world would declare that it would like to have a lot of high technology, can have Canon We can have Canada saying that, we can have Austria saying that, but I think the Chinese really, really mean it because over the last two centuries, they've understood part of their self-described humiliations as not possessing technology when the European imperialists, as well as the Japanese fascists, made incursions into China because they did have technology. And so I think they are going to continue investing in all of these different things. I think there's just so much competition among the industrial companies in China, as well as so much bureaucratic incentive among the state-owned enterprises, and the civil engineers who are always planning a next big subway station, a next big high-speed rail link, that they will continue to invest in all of these things. And this is where I think the engineering mindset is a little bit more part of the process.

With this critique that the United States is too financialized or too concerned with the bottom line, hasn't recent experience with AI infrastructure and data centers shown we can rise to the occasion? It's not obvious all of that will make money. But we're going to put up trillions of dollars to do it. We're going to do it pretty rapidly. We're way ahead of China, certainly ahead of the rest of the world. The Gulf may end up in the running there. But the US is acting very quickly. We're clearing away a lot of obstacles. Trump administration wants to make review much quicker. Probably they'll do at least part of that. We're just way ahead of China in the area. And that's the most important thing. Like, why think the Chinese are doing it well? They're obsessed with technology. But because they don't have the private sector involved enough, they make the wrong picks.

First, I agree that the US has been doing amazingly well in terms of data construction buildout in particular. I think we can debate the premise of whether AI is going to be the sharp tip of the spear to be almost essentially the final technology in which we don't need much more technology after this one.

No, that's not what I said. We need plenty more technology. But even then, that would be a different criticism. The criticism would not be US won't take enough chances and build out rapidly. The criticism would be US picks the wrong things, right? That would have to make you rethink your criticism of the US.

Yes.

But we're doing it very well, very quickly, it seems to me.

Yes. Well, okay. Well, maybe it's not the final technology, but it seems to be, as you say, the most important technology that is going to be pretty defining. And I agree that it has been actually extremely impressive that the US has built a lot of data centers, a lot of trillions of dollars invested. But if I were a central planner here, I would ask, well, what do data centers need? Well, they need a lot of electrical power, and the US has not invested enough in electrical power. This year alone, China will build about 300 gigawatts of solar, and the US is on track to build 30 gigawatts of solar. Right now, there's 33 nuclear power stations under construction in China. There's zero under construction in the US. Now, you're gonna tell me that we're gonna fix this with a smaller nuclear We're going to fix this with geothermal. Maybe we'll fix this with gas.

And with Saudi Arabia.

And maybe with Saudi Arabia.

China has terrible allies. We have pretty good allies.

Yeah, I don't know. Saudi Arabia, Qatar. Are these the best allies? Perhaps. Perhaps.

It's not Qatar. It's more complicated. Maybe UAE, but Saudi seems likely at this point. They have plenty of energy. They don't really have a NIMBY movement that can stop things, right?

Donald Trump.

And that's part of the American infrastructure is all these allies.

Donald Trump is very intent on upsetting a lot of key allies. Now, maybe they won't be so upset that they don't follow American edicts, but at least I would have a little bit of hesitation about the strength of American alliances in the wake of Trump. So if I were a central planner, I would say, are we building enough power? Are we making sure that there's enough water here? Are we making sure that we're managing the potential political backlash among a lot of NIMBY residents, including in Virginia, who are getting the bulk of data centers, who may not necessarily like a lot of the information out there about water water use and electrical use. And I'm not sure if Silicon Valley is managing public opinion very well. There's a lot of what people call misinformation out there about how much water these data centers use. And so I think that I would like to invest in a much broader basket of technologies, not just data centers, that there has to be much more of everything else. Why don't we throw in better subways and light rail in there as well?

How about healthcare and services, right? US is way, way ahead of China Even adjusting for per capita income, healthcare is about the worst Chinese sector in terms of quality, corruption, what you have to pay the doctor, how nice it is to interact with the Chinese healthcare sector. Why isn't that the most important thing for people feeling better about their lives? And again, China is at the bottom of the pile, even compared, say, to Mexico. And US, I'd say it's a complicated story. It costs too much, but it's some of the best healthcare in the world for at least the top half of the population.

It's some of the best healthcare, especially for the top 1% of the population.

No, but it's far more than that, right?

It is far more than that. I agree with that. But, you know, the healthcare is what, 20% of the American GDP?

17-point-something, I think.

Okay.

But that's a lot, right?

That's a lot. That feels too high to me. I feel like there should be— we should be wringing better efficiencies out here. No, I think a lot of—

It seems not high enough, though, by another standard. Like, you only get that much happier moment to moment, but if you live longer, or you have better painkillers, or we can fix your broken hip, right? Your life is a lot better. Why shouldn't it be eventually 30%, 35%?

Yeah, I don't know. Should we be spending 35% of GDP on healthcare, double our share?

In 30 years, yes.

That sounds like quite a lot. So I am struck by the early pandemic experience in which every scientific health organization measured the US to be one of the best-prepared countries in terms of managing the pandemic. And my colleague at the Hoover Institution, Phil Zelikow, who is part of the COVID official study committee on thinking about how America responded well to the pandemic, what my colleague Phil Zelikow would say is that the US underperformed Europe by many, many measures. Many poor countries, the US underperformed. And so, you know, this is where I am thinking again about Are we too optimistic here about the US healthcare sector?

But that seems wrong to me. So US underperformed by different bureaucratic measures, but what really mattered for saving lives and reopening was vaccines.

I agree.

And that US overperformed. China is miserable at the bottom of the barrel. They even had the Pfizer contract and wouldn't even use those vaccines. They used their own inferior vaccines because they didn't have a society of lawyers who would go crazy suing everyone. So US, I think, in pandemic— like, everyone did terribly. But US got the vaccines, got them quickly, way ahead of schedule, and did certainly much better than China.

Well, here's where I want to be a little bit more of a financialized Wall Street person to say, shouldn't we look a little bit at the ratios? And what did we get out of so much spending? The US spends so much on so many things and gets so little that we have the Second Avenue subway costing something like 8 times per mile than Madrid and Paris. Yeah, that's terrible.

Mistake. But again, if you think of healthcare as more important than subways, you'll view the US-China comparison quite differently.

Yes, perhaps. But I am also thinking a little bit about the longer term where I'm not a specialist on biotech. This is— when I was living in China, I was studying things like semiconductors, clean tech, industrial robotics, and many other things, and I avoided learning too much about biotech. But there are plenty of people now who are extremely optimistic about China's development in biotech. They are doing a lot more manufacturing of a lot of different parts of biotech processes. And I am quite, you know, I think it is quite plausible that China biotech will run other aspects of the China story in which they start from relatively simple projects like manufacturing and get much better at R&D. You're absolutely right that China avoided the better vaccines for political reasons. But again, this is where I'm thinking a little bit about the And what is strange about the US to me is that what we have is bioprosperity for not just the 1%, but let's call it the top half, but within the top 0.1% and 0.01% of people who have amazing concierge doctors, who have all sorts of amazing healthcare that is customized for themselves. But then for the bottom half, it doesn't look very impressive at all, and especially in the early days of the pandemic where the US underperformed by a lot of different bureaucratic measures. Why don't we have bioprosperity for all rather than just for the 0.001%?

We don't have it for all, but if you look at the major advances like statins, mRNA vaccines, much better heart surgery, much better survival rates after heart attacks and strokes, it's even much more than the top half that has that, right? Medicare covers prescription drugs. GLP-1 drugs, one way or another, will end up being covered. We've had compounding in the meantime. The major advances which have mattered a lot, most people get in the United States, not just the top half. It's the top half that gets like much better care and they're treated more nicely. But in terms of real services, right, it's most people.

Yeah.

And in China, it's most people that don't get it.

Yeah, I think that's fair.

Yeah. GLP-1 drugs.

GLP-1 drugs.

Fewer people need it. Sure.

Yes.

When will Chinese suburbs be really attractive?

What are Chinese suburbs? You use this term, Tyler, and I'm not sure what exactly they mean.

You have a yard and a dog. And a car, right?

Yeah.

And you control your school district with the other parents. That's a suburb.

Yeah. How about never? I'm not expecting that China will have American-style suburbs anytime soon, in part because of the social engineering projects that are pretty extensive in China. So I think there is a sense in which Chinese cities are not especially dense. So Indian cities are much, much more dense. I think Chinese cities are— do not— the streets are not necessarily terribly full of people all the time. They just sprawl for quite extensively, but they sprawl in ways that I think the edges of the city still look somewhat like the center of the city, in which there's too many high-rises, there's probably fewer parks, there's probably fewer restaurants, but almost nobody has a yard and a dog in their home. And that's in part because the Communist Party has organized most people to live in apartment compounds in which it is much more easy to control them. And we saw this really extensively in the pandemic, in which people were unable to leave their Shanghai apartment compounds for anything other than getting their noses and mouths swapped. I write a little bit about how if you take the rail outside of major cities like Beijing and Shanghai, you hit farmland really, really quickly. And that is in part because the Communist Party assesses governors as well as mayors on their degree of food self-sufficiency. So cities like Shanghai and Beijing have to produce a lot of their own crops, both grains as well as vegetables, as fruits, as well as fruits, as well as livestock within a certain radius, so that in case there's ever a major devastating war, they don't have to rely on strawberries from Mexico or strawberries from Cambodia or Thailand. And so there's a lot of farmland allocated outside of major cities. And so I think that will prevent suburban sprawl. And you can't control people if they all have a yard as well as a dog, right? So I think the Communist Party will not allow it.

Whether the variable of engineers matters. So I went and I looked at the history of other East Asian economies, which have done very well in manufacturing, built out generally excellent infrastructure, none of these problems with the Second Avenue line in New York. So Taiwan, like the presidents, at least if we believe GPT-5, 3 of them were lawyers and none of them were engineers. South Korea, you have actually some economists, a lot of bureaucrats.

Wow. Imagine that. Economists in charge, Tyler.

I know. I wouldn't think it could work, but a few lawyers, one engineer. Singapore, Lee Kuan Yew, he's a lawyer, right? And he thinks in a very lawyerly manner. Singapore has arguably done the best of all those countries, much richer than China, inspired China. So why should I think engineers rather than just East Asia and a bunch of other accompanying facts about these places are what matter?

Yeah, well, Japan, a lot of lawyers in the top leadership. And even, you know, what exactly was the leadership of Hong Kong Well, a bunch of British civil servants.

Some of whom are probably lawyers or legal type minds, right? Not in general engineers.

PPE grads. I think that we can understand the engineering variable mostly because of how much more China has done relative to Japan and South Korea and Taiwan.

But it's much, much poorer. I mean, per capita, like manufacturing output. But it's gone much better in these other countries.

I understand some of these more as the bureaucratic incentives that are organized by the Communist Party. I think that if you take the perspective of a civil engineer or a mechanical engineer, a lot of the social processes in China make a lot more sense in which they are, again, have so much desire to control the population that there is a term from Stalin being an engineer of the soul that Xi Jinping repeated in 2019. I think there is a social element of engineering, and as I write about the one-child policy, you know, I think that this is pretty distinctive in East Asia, that no one else— that there were birth planning policies certainly in Japan, as well as Korea and Taiwan, but no one went so hard against the countryside as China did. That if we take a look at zero COVID also, that obviously East Asia had a pretty extensive pandemic control policies, but again, the China went quite a lot harder at some of these things.

You're making me love the lawyers.

I love the lawyers myself. I love the lawyers myself, Tyler. So I think that the lawyers are great in all sorts of ways. But as I talked about with bioprosperity for the 0.01%, I think the fundamental problem with the US is that the US is great in a lot of ways, but it is especially great to be rich here. So we're recording on Halloween in 2025. Yesterday, NVIDIA became a $5 trillion company. That is amazing. That is pretty remarkable.

Without even selling the best stuff to China.

And without even getting nationalized by the Trump administration. Pretty good job, guys. But the West Coast in America is the only region in the world that has produced several companies worth over trillions of dollars, and that is a really remarkable achievement. If you are a member of the rich in America, you can pretty easily transmute your wealth into some degree of political influence, especially as we can see now in the second Trump administration. In China, it is really dangerous if you become rich. In Europe, it's hard even to get rich. But what I'm always pushing American elites is to consider that, yeah, if you are a wealthy person in Manhattan, you get to live in these skinny high-rises that overlook Central Park. If you're in California, you have a giant home in Atherton, and that feels really good. But I want the subways to be less loud. I want mass transit to work better. Fine, let's improve the suburbs, and I think that What I would love is for the US to be 20% more engineering so that we can have all of this mass transit to fix all of the broken manufacturing that the US has. I would love for China to be 50% more lawyerly because the Communist Party does not respect individual rights. It strangles the creative impulses of young Chinese who are so funny. They can meme with the best American youths. They have amazing TikToks and Douyins as well. I would like for the Communist Party to just leave people alone for a change. Definitely, China should be more lawyerly, but let's have America be slightly more engineering too.

But is being insufficiently lawyerly the actual Chinese vice? I recently recorded with Dermot McCulloch, the British historian, and he wrote in one of his books that every single pope of significance between 1159 and 1303 was trained as a lawyer. Now, that's going way back, right? Popes then were very important. So the West and the notion of law, which comes from Roman law, and you also have British common law, they seem so inextricably intertwined in ways where the actual substance of the law and the importance of the law have co-evolved, I mean, literally for millennia, in what is mostly a good way. And China doesn't have that history, right? So a more lawyerly China, isn't it just worse and more oppressive? And we get the bad sides of lawyerly society. And not, say, lawyers standing up and saying, "No, you can't stop the programmers at Deepseek from leaving the country by seizing their passports." What would we actually get from a more lawyerly China?

Tyler, you can't bring up the string of popes without assessing some of them and giving us some of the merits and demerits of some of them. Were there any really distinguished popes among these lawyers?

The Catholic Church got us to where we are today, and Christianity did. Some of those popes were corrupt and very bad, bad, but overall that structure of the church with the common language, Latin, a common religion, to some extent unified Europe once again. We see it still today in the EU. It was a pretty miraculous achievement.

Yeah. Well, if I were running Conversations with Tyler, which I am not—

You're running it today.

I would name all of these popes and ask you to distinguish their characteristics. So I agree that, I mean, it is definitely the case that religion has been an essential part of the West and it has not been an essential part of China. China did not have an independent religious authority that can claim transcendent authority to interpret the affairs of the world. And the emperors did not allow any of these religious orders really to take root and claim higher authority than their own imperial power, that there was no landed bloodline aristocracy in China that was really able to resist the edicts of the emperor. And part of why I think that China has lacked a liberal tradition, which I understand as, you know, having constraints on the court imposed by either the church, other religious authorities, the aristocrats, or merchants, is because the court has captured the entirety of the intelligentsia through the administration of the exams. And if you wanted to get very far in Chinese society, you had to do very well on these imperial exams. And no one gets in court by advocating for constraints on imperial power. And so I am interested in having any sort of liberal checks and balances. Call me a classical liberal if you must, Tyler, but let's have some constraints on government power. And so I think that China would definitely be better if there were some ability of people in the countryside, rural folk, who were able to resist these posses of thugs reaching into a woman's most intimate parts to force them to have an abortion. I think that it would have been better if the Chinese were able to resist parts of Zero Covid, because a spokesperson of the National People's Congress once wondered whether the Shanghai lockdown was constitutional. It was announced by press release through the Health Commission, not through national emergency by the city government. Isn't that amazing that the health authorities can simply announce by press release the most ambitious lockdown ever attempted by humanity? This is where I think lawyers could have a difference. I think I think that China will never be as nimby as the US. They're never going to get their dogs in a yard. I totally concede to that. I think for the most part, it is good that they practice some form of fiscal dynamism, which is unavailable to Americans in the 2020s. I think that on the margin, again, call me an economist if you must, Tyler, but on the margin, there should be a few more loyalty instincts in China. What do you think?

Well, I don't know. Be a political scientist for a moment. As you well know, it was commonly predicted here in the 1990s, for instance, instance, that China would become democratic just as Taiwan had done, South Korea was in the process of doing, much of the rest of East Asia as they became richer became democratic. China's continued to get richer. No signs of it becoming more democratic. If anything, it's moved in the opposite direction. What was wrong with the original model? Why isn't China like South Korea?

I would put on any hat you want to put on me, Tyler, but I would not put on the hat of a political scientist. Thank you. Call me a historian, call me a lawyer, call me a liberal instead. So I wonder the extent to which democratization in East Asia was highly contingent. Japan was the first democracy that was democratized by force through MacArthur's constitutional changes after it was occupied and after it had two nukes dropped upon its cities. How did Taiwan democratize? Well, Chiang Kai-shek first had to pass away, and then his son Chiang Ching-kuo took over. And that was also a fairly gradual process. Maybe that was probably the best case scenario of Taiwan democratizing. How did South Korea democratize? Well, Park Chung-hee was shot by his own CIA chief. And then the person who took power after him, Chun Doo-hwan, was much, much more repressive than Park Chung-hee, and he shot students in the streets before he was deposed. And I'm not seeing a common story in the East Asian democratization story.

But just there's more income, people want it. There's even weirder cases. So Malaysia, Thailand, Indonesia, much weirder, more imperfect democracies, but they're democracies of some sort, and it's even happened in those places. And Indonesia is a pretty big country. It's not that well organized, spread out over so many islands. There's plenty of other places you can look at. India has stayed a democracy. China does seem like a big outlier. It seems weird to think all of those instances are just accidents.

Well, I would first point out that China is ruled by the Communist Party. That is studied extensively, the Soviet Union. In my view, China has studied 3 institutions in depth. The first institution is the Catholic Church. How do you organize doctrine, claim to be thousands of years old, and have a figurehead that everyone is expected to worship? And China is not simply the Communist Party, and the Communist Party is not simply the Catholic Church with a major figurehead. It is inflected with something like the Sicilian Mafia, which enforces its omerta throughout the entire organization. The second organization that China has pretty extensively studied is Japan and how to avoid the economic malaise that plagued it after the 1980s. Doesn't mean that it can avoid these problems, but it has extensively studied the experience of Japan. And third and most importantly, China has studied the example of the Soviet Union. They think that Deng Xiaoping famously called Gorbachev an idiot. And Gorbachev, until he realized what he was doing, it became too late for him to really rescue the Communist Party. And so they really want to avoid the fate of Gorbachev. Now, if Gorbachev didn't exist, maybe they would have Gorbacheved themselves, but they have this example of knowing what not to do. And so every day in Beijing, I feel like the Politburo and the rest of the Central Committee, and Xi Jinping in particular, feel like it is a life and death struggle to avoid the fate of political dissolution. They are really, really thinking in terms of apocalypse, much as Silicon Valley does today, to avoid being dissolved. I think having that very intense Leninist focus on not being dissolved like the historical predecessor is going to be a pretty important fact of not liberalizing and not democratizing.

Now, there's chart, I think from Andrew Batson, and you know this guy, measuring China's capital productivity. And it shows that capital productivity to be in steady decline. I know these things are hard to measure, but do you agree with that? And if so, why is that happening if China is so successful with all these manufacturing ventures?

Yeah, well, I think it is a very well-established fact that TFP growth in China has been falling. And, you know, we don't have to get into how valid TFP GDP measures are, but I agree with it, and I think that one can sort of see it in society. Now, my view of China is that 50% of China's economy is pretty dysfunctional, but 5% is going splendidly well. When I became a technology analyst working for Andrew Batson as well as Arthur Krober at Gov-Caltragonomics, you know, my remit was to take a look at the top 5% of China's economy, and that is the area that I've always spent most of my time thinking about that goes from strength to strength. Now, I would say that 50% of America's economy is also pretty dysfunctional. 50% of every economy is pretty dysfunctional. In America, I would just call that healthcare as well as the subways. I'm sorry to tease you, Tyler, but I know you can take it.

The subways are not going to add up to 50% of the economy, right? They're not 1% of the economy.

Maybe they should. Maybe they should. So—

Move to Knoxville. Move to Lexington, Kentucky. Lexington, Kentucky, you don't have to worry about the subways. That's where American growth is coming from, right? A lot of it.

Yeah. Well, I don't know. I feel like what you're telling us all, the running thread of this conversation, Tyler, is that I'm saying that people need to get around and you're saying let them eat cars. And I think that—

They get around fine in Lexington, Kentucky. I was there recently. They have horses too.

How's the traffic over there?

It's fine.

Okay. Well—

Not a problem. Same with Knoxville. I didn't really see any traffic. I wasn't there very long, but everyone there complains about it. And it's like, this isn't traffic once you're there.

If you say let them eat horses, I would say, you know, the Japanese eat horses, and I think that would be a little bit better. So I think that, you know, China's economy is mostly pretty dysfunctional. And what we are seeing is that the state-owned enterprises' morass is overtaking the highly functional private companies. But let me observe an East Coast flavor of thinking about China as well as a West Coast flavor of thinking about China. I split my time essentially especially between the coasts. And yesterday I presented to the editorial board of a major newspaper here on the East Coast, and I think that a lot of the flavors of the questions were of the sort that, why doesn't China end up quite like Japan or the Soviet Union? Aren't there all of these reasons for China to fail, whether because of financial crises or the imploding property sector or the long-term demographics? You can go on and on about all of these problems China. And I think that that is very valid to think about. And I think if I were having a China discussion on the West Coast, there would be among the venture capitalist class much more of a focus on thinking, well, how might China succeed? Because they, like me, are taking a look at the superstars and looking at the highly functional parts of the American economy as well as the, the Chinese economy. And what I am always asking is, well, what if they succeed on being the global center for automotives in the world. They make—

Which is likely, right?

Which is likely. They're on track to do that. They are on track to, right now they have about a third of global manufacturing capacity. They may continue gaining share in part because they're deindustrializing everyone else, deindustrializing Germany in particular, as well as Japan and South Korea. The US has mostly already deindustrialized itself, so it's not in the firing line. But at some point, there will be a second China shock coming for America's manufacturing industries. They're going to make all the drones. They're going to make much of electronics, they're going to make much of the munitions. In that scenario, what would it mean for most of the products that we physically use and touch to be mostly Chinese? Even if that's not true for the United States, that could be substantially true for Latin America, Africa, and even wealthier places like Japan as well as Europe. They seem to be on track even to be in that scenario. I don't find it too meaningful for the West to take a look at declining capital productivity and declining TFP growth writ large when it is the successful industries that really matter.

But how worried should we be about that scenario? So I understand that a China that powerful arguably can take Taiwan relatively easily. That might happen anyway. Beyond that, I don't view China as an extremely expansionist power. They want the world to pay homage to them. Some of that already has started happening. But how bad a scenario Why was that?

I think this is something that specialists can debate and the extent to which China is expansionist. Now, I think I agree mostly with you that China is not extremely expansionist. No PLA troops would ever take the state of Oregon. Why would they take Oregon? What would they do with it?

And we have nuclear weapons, among many other things.

I don't think that American troops will ever occupy their own province. What would they do with that? Then there's a more limited case of, okay, if China is fully dominant in East Asia and it can regularly—

Fully, that's a tricky word, fully dominant. Japan is going to be Japan, right? They're going to resist Chinese influence in a number of ways. They might buy a lot of Chinese products, but Japan will be fine. They'll militarize more if they have to. China won't be fully dominant in Japan. They never have been.

How about Malaysia? If the leaders of Malaysia and Vietnam regularly have to go to Beijing to kowtow for the emperor's pleasure. How much of a threat do you think that is to American imperial power?

I don't know. I'm asking you. Malaysia, I can see. I think Vietnam has been prickly forever. The US didn't beat them. China didn't beat them in the late '70s. They will be a funny kind of holdout. They may win some manufacturing share at the expense of China over time. I don't think they'll be dominated.

Singapore?

They will have to kowtow.

Okay. Is it a major threat to American power if Singapore has to kowtow?

It's very bad, and it's certainly bad for Singapore. But at the end of the day, if China is much more influential in Asia and the US takes greater care to cultivate the new world, this hemisphere, I'm not happy about that, but it's hardly the worst scenario for the future of our world, right?

I think I'm mostly with you. Now, my rabbi at the Hoover History Lab is Stephen Kotkin, and Kotkin would say that the appetite grows with the eating. And so what if they first seize Taiwan and then Singapore has to kowtow, so and so goes Malaysia, and then they decide to seize Japan because they can, because Japan—

No, they can't seize Japan. Japan will just build nukes and the US will protect Japan even if they don't protect Taiwan.

I think that is likely that. So I think that the case for Chinese expansionism is more limited. I don't think that they will be extremely expansionist. And then the question for the experts is, to what extent should the US defend a country like Singapore, Malaysia from Chinese influence rather than American influence?

If I think about the spectacular record of Chinese economic growth, and this is not only in the nation of China, but around the world, my unconfirmed hypothesis is that a lot of it is due to the fact that Chinese ex ante, before they were rich, already had high IQs. Whether that's this tradition of education, the exam system, earlier urbanization in mainland China, whatever, but the Chinese started off quite smart relative to their per capita income. So when other better developments came, they could just keep on growing without obstacles in a way that, say, India has not managed to do. Agree or disagree?

Maybe. I will say that Chinese to me seem extremely responsive to incentives. You put an incentive in front of them and they will maximize everything out of it. So Chinese to me are a super pragmatic people. It's funny, I was working with the healthcare system. My wife and I were navigating some of the healthcare system at the University of Michigan. And by the time that we spoke to a nurse with an obviously Chinese accent, you know, we could tell that she was Chinese. And then it was clear that she was kind of the truth teller among all of the nurses in the system that was able to help us navigate, oh, this process is good, that other process is not so good, maybe you should consider doing things with this doctor. And so I feel like, you know, what I enjoy about a lot of Chinese Chinese is that they're totally pragmatic, that if you throw up an obstacle in their way, they will simply, you know, rather than be aggrieved about the obstacle, they will think about, "Okay, well, how do I navigate around this obstacle?" Some of the Chinese I know have not even been all that upset with President Trump's jerking around of the visa statuses around H-1B. They simply understand, "Oh, the rules have changed and now I need to pivot." And so this is also something that I think speaks to some of these Chinese attitudes. Issues where Xi Jinping and the rest of the Communist Party is able to generate a lot of economic growth simply because it has been pretty easy to be a Chinese official in the last 20 years, mostly before Xi's era, in which the bureaucratic incentives were simply to maximize GDP growth and minimize the mass incidents, which is the Chinese euphemism for protests. And so you got a lot of GDP growth because that was what the bureaucratic incentives were. And, you know, even right now, there are plenty of people who realize that Xi is blocking their path to wealth. But they are able to repivot and are simply able to be pragmatic about doing all sorts of things. So I would say that education is certainly part of it. China has valued education for a very long time. And I would simply add the variable that they are very incentive-sensitive and are able to pivot and do things that make sense to themselves.

But doesn't it strike you how many top Chinese intellects in science or just graduate Chinese students, they might come from the countryside or they come from quite poor family backgrounds. If I look at Latin American top students, top economists, they tend to come from elite families. If I look at Turkish top grad students, top economists, they tend to come from elite families. And in China, this seems different. Do you agree? I agree. And your own family was not wealthy, right?

My family was not wealthy, but no family from that time was wealthy. And so I think that, well, there was something called the communism in China, and there was also the anti-landlord struggles initiated by Mao, and there was the Great Leap Forward, which plunged tens of millions into famine, and there was the Cultural Revolution, which destroyed a lot of the intellectual class. And my family is mostly made up of people of rural origins, but my grandmother was the daughter of, by family lore, according to family lore, the fourth-ranked private secretary to Chiang Chiang Kai-shek in Nanjing. And so there is a little bit of elite background in my own family through my grandmother. But I think, you know, I wonder how much of this is simply explained by communism and the fact that everybody in China was poor. When my parents and I moved to Canada in the year 2000, we had, you know, hundreds of dollars in our pockets. We had no wealth. But nobody had much wealth then. We left right before the economic boom of China, one of several economic mistakes of my my parents, who are not sufficiently entrepreneurial. But, you know, I think that there's plenty of smart Chinese, and very few people are elite of my, of my age.

Beijing or Shanghai?

Shanghai. Why? It was partially built by the French, full of leafy boulevards. It has all of these pleasures of life. We in Shanghai refer to ourselves as Paris of the East, and we referred Beijing as Western Pyongyang because it is this Stalinist no-fun zone fully built out in concrete. Now sometimes when I go to Paris, I tease the Parisians for living in the Shanghai of the West, but I think that it is just a really pleasant space. Shanghai is more intellectual than many folk give it credit for. Shanghai was where the Communist Party was first founded in 1921. 1991. Shanghai was driving intellectual energy behind the Gang of Four in the Cultural Revolution. That was the great readout of Jiang Qing as well as the other Gang of Four. There's a lot of literary traditions in Shanghai. They have a lot of the excellent senses of life because Hangzhou as well as Suzhou are very nearby, where the poets dwelled and drank and ate marvelous food. It has the much better weather than Beijing, which is every so often hit by these sandstorms which drift over from the Gobi Desert. And I get really uncomfortable in Beijing because it is just this, you know, unmasked celebration of state power. And, you know, I get somewhat uncomfortable walking around in Washington, D.C., which is the imperial city. And I am much more attracted to the pleasure center of China. Chengdu or Chongqing is the more cinematic city. I love how you can enter a building, go up 11 floors, and exit again street level because it is built through these gorges as well as mountainsides, and it feels like a city carved into cliffs. The front cover of my book is featuring Chongqing. It is this Raffles Tower built by a Singaporean company under construction, and it is just this really gorgeous gorgeous zone. Chengdu, I find a little bit sedate. It is certainly more pleasant in all sorts of ways. The food is more refined than the Chongqing food, and I think that it has, you know, slightly higher levels of food, but you don't get the sort of tackling frenetic energy that is more typical of Chongqing. And, you know, Chengdu feels in a lot of ways to me to be a little bit too laid back. Now, speaking as someone who has family origins in Yunnan, I would say that both Chengdu and Chongqing are I would definitely defend the Southwest against all comers. I'm from the Southwest myself. We're the most mountainous aspect region of China. We have the best food between Sichuan, namely Chengdu, Chongqing, as well as Yunnan, as well as Guizhou. We have a splendid natural beauty. It is the funniest region of China, and everyone there kind of looks like me, so I think everybody should go make a trip. Make a visit.

Why is it you have the best mushrooms and the best ham there?

That exists mostly in Yunnan, and Yunnan has a province full of mountains. So at its highest point of elevation, you know, northern Yunnan is essentially the Himalayas. Yunnan has one of the most sacred mountains in Tibetan Buddhism, Kawarkapo, or Mei-di-she-shan in Mandarin. And its south, it is essentially a giant rainforest, feeling much like Thailand. And when you have these extraordinary climactic zones, you have a lot of salt deposits in central Yunnan, which is where Deng Xiaoping's wife came from. Deng Xiaoping's wife was the daughter of a major ham merchant, and so they salted a lot of excellent hams there. And you can find all sorts of mushrooms if you go foraging through these excellent mountains, which are mostly in central Yunnan. There's excellent matsutake, there is really excellent all all sorts of morels. I have gone mushroom foraging extensively with my family when I'm visiting my aunts and uncles, and I have been poisoned only 3 times. The first time was when I had a spate of vomiting. Second time was a fever. The third time was pretty bad. I hallucinated for about 3 days after taking some bad mushrooms. But it can be kind of dangerous in Yunnan because people really love mushrooms there. Every year, something like 20 people die from taking the mushrooms, mostly because Mushrooms are very smart. Sometimes the poisonous ones look just like the normal ones, and they're quite smart and adaptive. Tyler, what is your ranking? Beijing or Shanghai? Chengdu or Chongqing?

I prefer Beijing. It has a better visual arts scene. The state power there, I don't like, but to me it's more interesting than the commercial nature of Shanghai, which I feel I can find in many places. I like the fact that in Beijing I can get food from many different parts of China. In Shanghai, I'm never quite satisfied with the spicier foods of China. I get that it has better Cantonese food and southern flavors than what you would get in Beijing. And Beijing does seem to me more bookish, better bookstores, nonetheless more intellectual, just as an outside impression. And the big ring roads, they're terrible for walking, but once you're in a neighborhood, it's quite good for walking. And there's so many excellent restaurants. Restaurants, and you can just stroll around. And the fact that it's scary, I don't feel scared.

I agree that Beijingers are much more fun to talk to. The Shanghainese can be— I think that the funniest part of— the funniest two parts of China are first the Southwest, which is Sichuan and Guizhou, as well as Yunnan, and second Beijing. Beijingers are so so much more funny. And I think that the Southwest is funny, Beijing is funny, Shanghai is not funny. The Shanghainese can't crack good jokes. I don't really understand what's with that. And so if we can somehow just bring all of these Beijingers and throw them into Shanghai and then perish the Shanghainese up to the north, I would feel quite fine with that.

And I prefer Chengdu to Chongqing. I think Chongqing is visually spectacular in a way few other parts of are. That's fun for me, but the greater refinement of Sichuan proper, the Tibetan part of Chengdu is quite interesting.

I agree.

It feels like an older city in a way. Again, I'm not sure I would prefer to live there, but as a visitor, it's more different for me.

Tyler, what does it say about us that you and I have generally a lot of similar interests in terms of, let's call it, books, music, all sorts of things. But when it comes to particular categories of things, we oppose each other diametrically. Like, I much prefer Anna Karenina to War and Peace. I prefer Buddenbrooks to Magic Mountain. And here again, you oppose me. What's the deal?

I don't think the differences are that big. So for instance, if we ask ourselves, what's the relative ranking of Chengdu plus Chongqing compared to the rest of the world were 98.5% in agreement compared to almost anyone else. So when you get to the micro level, the so-called narcissism of petty differences— obviously you're born in China, I grew up in New Jersey— it's going to shape our perspectives. Anything in China, you have been there in a much more full-time way, and you speak and read Chinese, and none of that applies to me. I'm popping in and out as a tourist, and then I think the differences make much more sense. It's possible I would prefer to live in Shanghai for essentially the reasons you mentioned. But if I'm somewhere for a week, I'm definitely going to pick Beijing. I'll go around to the galleries, and the things that are terrible about the city just don't bother me that much because I know I'll be gone.

98.5% agreement. I'll take that, Tyler Cowen. It's you and me against the rest of the world, but then we'll save our best disagreements for each other.

Let's see if you can pass an intellectual Turing test. Why is it that I think Yunnan is the single best place in the world to visit? Just flat out the best if you had to pick one region. Not why you think it is, but why I think it is.

Yeah. I have a good sense of why I like it. But I mean, if we're in 98.5% agreement, then I don't know if my views are going to be very different from yours. So let me throw throw out a few ideas. First, you like natural beauty, and that is something that Yunnan has in abundance between all of these different mountains and lakes. I think that you like excellent food, and Yunnan has, you know, extraordinary diversity of food within its very province.

And I can't get it elsewhere, right?

And you cannot get it elsewhere. You like fresh food, and between the mushrooms, which are not easily shippable even to Shanghai or Beijing, you want of that. You like a lot of ethnic diversity, and Yunnan has about, you know, half of China's official 52 ethnic groups in the country, which you have Tibetans again in the north and all sorts of Mue Sua people. There's the Dai, there's the Chinua, all sorts of people in the south. You are interested in thinking about geopolitics, and Yunnan is important for that because Yunnan will control a lot of the major waterways. There's 3 major rivers that have their headwaters in Yunnan. The Yangtze flows from there, and so does the Mekong, which will flow south through Vietnam. And Yunnan is a great place to dwell on geopolitics because it is the part of the country that is most facing Southeast Asia. There's now a high-speed rail connecting the capital city of Kunming to the capital city of Vientiane, which you can, you know, go through a lot of different regions there. And I think that there is also some pretty decent visual art culture in Yunnan, in part because during the Second World War, major parts of the Nationalist government retreated to Chongqing, and there was a big satellite in Kunming as well, in which they tried to bring a lot more elite culture into the the Southwest. So between the natural beauty, food, the visual arts— am I missing anything here?

Well, perfect weather you've left out.

Okay.

And it also means you can visit any time of year, which for me is important because I can't get there that easily, right? But you don't disagree that it's excellent weather?

Oh, it's perfect weather most of the time, yeah.

Some parts are relatively pro-American, you could say.

Yes.

Not a major factor, but certainly not a negative. So we agree. 3, right?

Did I pass the intellectual Turing test?

You passed with flying colors. Excellent. You did better than I could have done.

Okay, perfect.

So maybe it's higher than 98.5%. Very good. But War and Peace is still clearly better than Anna Karenina, which is more of a mono-novel and less complex and sprawling, right?

I think I prefer perfection a little bit more than you do. I think this is why I prefer Mozart to Beethoven, that there is no musical question that Mozart did not solve to perfection, and that "Budenbrooks" is a more linear novel than "The Magic Mountain." "Budenbrooks" is a remarkably Confucian novel because it is so much focused on family virtues and punishing the unvirtuous. And I think that "Anna Karenina" is just a much stronger love story than the story of Natasha Rostov.

And what can James C. Scott explain about Eunon? I guess the South is in particular?

I am a major Scott head, and I think that James C. Scott helped clarify my own views of Beijing in particular. I think that James C. Scott's most popular work, Seeing Like a State, is also unfortunately his, I would say, weakest work. It takes—

We agree on this too.

Okay, very good. It is an extensively centralized view that he likes to criticize.. And it's kind of a systematic view of human society. And I think that by far, by far, James C. Scott's very best work is The Art of Not Being Governed, in which he did extensive fieldwork in Yunnan, as well as the broader zone of Southwest China and Southeast Asia, which is heavily mountainous, an area that is larger than Western Europe. Zomia is an academic term he borrowed from French academic Pierre Clastres. And it is kind of this major zone where people decided to hide out from the state, whether this was the Burmese state, the Tibetan state, and overwhelmingly the Han Chinese state. These people practiced escape agriculture, planting cassava, which is underground, or potatoes, as well as maize, which can grow in higher elevations, rather than planting grains like rice or wheat. And they have stronger oral cultures so that they have greater ethnic malleability. And I think reading through all of that made me appreciate my status as twice an outsider. First, as someone from Southwest China, which is an economic backwater even today, hiding out from the state, hiding away from the imperial gaze from Beijing, as well as the excessive commercialism of Shanghai, I am much more skeptical of Beijing's power than I think someone who would just celebrate the grandeur.

So you're a regional thinker, as I am.

I am a regional thinker, and I submit that my region of Yunnan is slightly different and slightly more mountainous and more interesting than New Jersey. Wouldn't you agree?

New Jersey is more intellectual. You're very close to New York City. You have access to the entire northeastern seaboard, New England, Mid-Atlantic region. So they're both very interesting.

I think it is fair to be more intellectual because one knock against Zhuomia, given that so many cultures have only an oral culture, they didn't really write things down. It is hard to be more intellectual. I feel like I am also an outsider in the United States by virtue of having grown up in Ottawa, where for many of us Canadians, we thought that the United States is kind of the luminous center of the world. And then coming over to living in New York City, as well as San Francisco, the two cities that I know the best. Again, let's not get into these screeching loud subways. Let's not get into JFK.

country, of course.

And it is also where two of the most intellectual parts of the places where a lot of the highest paid people choose to gather. San Francisco's streets are full of syringes and the transportation really does not work so well. And I am critical of major aspects of China because I am an outsider within China. And I am critical of major aspects of the United States because I'm an outsider in the US as well. Now, one of the things I struggle with, with Scott. I was at Yale University, but I regret that I was never had a chance to chat with Scott before he passed away. But, you know, something that I've wanted to ask him is something that I try to grapple with myself. You can accuse me of enjoying elite cultural products like the opera and Mozart, as well as great books like Boudin Brooks. And I am sure that Scott is an extremely intellectual person and he is not some sort of illiterate farmer walking bare feet among the mountains of Myanmar. He was a professor at Yale University, which is also a quite elite place. So something that I grapple with and I wonder how he grapples with is, how do you embrace some aspects of elite culture while also prizing running away from the state? I don't have a good answer here. Can you supply one for me, please?

I'm not sure there's an answer to a question like that, but I think you can simply do it. So a lot of elite culture is quite revolutionary. Maybe it's rebelling against things that no longer existed, but you mentioned Mozart and Beethoven. They were revolutionaries in their time. Beethoven in particular, a classical liberal. Mozart, some kind of Freemason, which was also a classical liberal view. And there's something about the music that is quite life-affirming, even when with Beethoven it's stormy or pessimistic or can get you down. And our current ruling elites are not exactly enamored of such things for the most part. So I think it's easy to just do both. Yeah.

Well, Donald Trump doesn't like the ballet.

I have no idea. But if you think of rulers in general, especially in the United States— France, for instance, might be different— they're quite removed from what you and I would consider culture for the most part.

Really? Macron doesn't go to the—

No, France is different, I believe. Yeah. But most— the United States for sure. Right? Quite removed from what you and I would consider high culture.

Right.

A few senators, maybe not, but the House of Representatives? No way. It's country music, right?

I guess, yeah, maybe the United States is— maybe this is a difference between the US and China. The United States is much more governed by its zomia-like residents who are much more rural and who have a little bit more contempt for elite culture, and that is different from Japan, Europe, as well as China.

Our cities never served the same civilizing functions that they did in many other parts of the world.

Virginia doesn't even have cities.

That's right. It's one of the best things about it as a state. Virginia Beach is not a real city. Fairfax County is not a real city. Richmond, I don't know, it's a few hundred thousand people. It sort of feels like a small real city. It's just not that important. Important. Now let's say you're designing a 10-day trip through Yunnan for our listeners and say they don't speak any Chinese, not really, but they have ChatGPT and they're a bit adventurous. Where should they go? What's the trip like?

If you have 10 days, I would say that can cover quite a lot of Yunnan from the south to the north or vice versa. So you can go to Xishuangbanna in the south, which is my favorite corner of Yunnan, which has a lot of remarkable ethnic diversity. You have certain ethnic groups that essentially dwell within one mountain, and they have a lot of their own customs and rites and practices, as well as some of their own language and a lot of their own cuisines. It is where the Mekong River flows. Essentially, it is the first major city that flows along the Mekong, which takes the meltwater from the Tibetan Himalayans that flow down, and It is tropical rainforest. You can get excellent mango, durian, all sorts of tropical fruits. It is my favorite region of China to eat. You will have some grilled fish, a lot of quite spicy beef as well as other meats. And what I like to do is to just have a really big lunch, and then for dinner, I will buy a variety of tropical fruits, whether that's mango, durian, a lot of other things as well. And then you can drive—

And to get from Kunming to there, like, how hard is that or how How long does it take?

It is only a 4-hour train, high-speed rail.

This is the other great thing about Yunnan. You have extreme exoticism and diversity, but infrastructure is quite good. Maybe below par by Chinese standards, but you get around quite easily.

Yeah, how about that infrastructure, Tyler?

It's amazing.

Maybe it's good for something, right?

Good for the tourists. I love it.

If you drive a bit further north, you can stop by Kunming, but I think that is probably the least interesting city in Yunnan. It's the administrative center. They've torn down a lot of their interesting historic buildings. You can drive a little bit through. Central Yunnan, which has some of the best mushrooms, but I would go further north immediately. Twin cities of Dali and Lijiang have been treasured for a long time. Lijiang now, I think, is fully broken. Now it has really dramatic snow mountains. It has these snowy, close to Himalayan-like peaks, but as a town, it has totally hollowed out through commercial culture. Dali is a city that I love. This is where my wife and I spent 3 months when Shanghai was locked down. It is a city that reveals itself to those who properly live there. Its mountains are not quite so dramatic. It has a wonderfully big lake, but it has excellent community. It has excellent Gemeinschaft, and there are many people brewing coffee there and trying to maintain the local bai culture very, very well. And it is a lot of where cosmopolitan Chinese, as well as some foreigners, like to spend a lot of their time. And so Dali itself will not reveal to you if you are simply passing through, but if you had a few months to live there, that is the corner of China that I would live in. It's also where my, my parents met in the 1980s when they were sent down as college graduates to go teach the local Bai people. It was a tremendous adventure for them, so that's a personally interesting place for me. And then I would go to the extreme north, past Shangri-La, which is mostly touristed out city. It has some important monasteries, but Shangri-La Lhasa was so fully embraced commercial tourism that it renamed itself about, I think, like 20 years ago to be this mythical land, essentially to capture a bunch of tourists in this very cynical ploy. But the best part and the most beautiful part of Yunnan is extreme north, where in which you're running essentially into Tibet. There are no travel restrictions throughout that part of Yunnan, where yes, there are some travel restrictions, I believe, still remaining for a part of the extreme westernmost parts of Sichuan, which border Tibet. But it is possible to go to some of these Tibetan monasteries, as I have and listen to some of their chants and visit these extraordinarily beautiful snow mountains. Now, if I had 10 days, I could travel through all of that. Otherwise, I would just park myself for 5 days in Xijiangbanna, visit some of the local villages and mountains there, and then fly as far as you can go in Yunnan and then spend some days among the Tibetan praying monks there.

One difference between us, I enjoy seeing Chinese tourists. For me, it's novel. For you, you're trying to avoid it, right?

Yeah, yeah. And I will also say that part of the reason that I'm so into some of these tribes is that the ethnic groups in China is that, you know, within my family, a lore— again, I don't know how accurate this is, but there's speculation that through one of my grandmothers who come from— whose origins are cheerfully unknown— that we have Tibetan heritage through her or Hua heritage through her. And so again, in that sense, although I'm— I would officially be categorized as a member of the Han majority in China. It could be that there's some Tibetan noir in me.

Who's the greatest living Chinese novelist? Liu Cixin, author of "The Three-Body Problem." If I try to read Mo Yan and I'm bored— he's the Nobel laureate— what am I missing? Or is it in fact boring?

You know, I don't like a lot of the magical realism stuff, and I think that you do generally between the Spanish authors as well as the Japanese authors. But why is Mo Yan not speaking to you?

Just doesn't seem— I'm not reading it in Chinese, of course. It doesn't seem exceptional. It's okay. A lot of the Spanish authors, they're much better in Spanish, I find.

I'm simply not attracted to magical realism in whatever culture, so I don't really enjoy Mo Yan very well.

What's the best Chinese movie?

Something from Jia Zhangke or early Zhang Yimou. I think these would be the consensus answers.

But give us a title. One title.

Mountains May Depart. But let me throw in one title also from Zhang Yimou. I believe the English name is Qiu Ju Goes to Court. And this is, I believe, mid-'80s Zhang Yimou, in which you have a Gong Li, who is fabulous as always, walking through the Chinese countryside in a northwestern city, probably around Xi'an. And what you see are sort of these street scenes of Deng Xiaoping's China, just as it is starting to bustle. It is a movie about bureaucracy, and it is a movie about courts. And I think the Chinese are really wonderful at portraying bureaucracy. There are a lot of these genres of bureaucracy porn in terms of some of their novels, which could be fun reading for some people, especially if you work inside the US federal government. You see— can see some parallels. The best Chinese TV series in recent years— not that it's very good, it's, um, all these Chinese series are too long— but I watched a couple of episodes of an anti-corruption drama called In the Name of the People. And in the very first episode, you have 3 men spending about half the episode arguing about jurisdiction. What could be more jurisdictional and what could be more bureaucratic than jurisdiction, right?

Why isn't contemporary Chinese music better than it is? Or maybe you would challenge the premise. It's a huge market. It's censored, but music can be wonderful and still be censored, right?

Tyler, you're asking the wrong person because my knowledge of music essentially stops by 1928.

But that's endogenous.

I don't listen to any American contemporary music. I would ask you, why is American contemporary music so weak relative to Mozart?

I was just listening to the latest Beyoncé CD. It's not as good as Mozart, but I think it's wonderful and it will last. And American contemporary music has been a been a bit slow for the last, say, dozen years, but I think the last 60 years have been amazing.

Well, I would say that Chinese music is not a special case in which Chinese films have gotten steadily worse over the last 10 years of Xi Jinping's rule. You have the top arthouse movie director, Jia Zhangke, being openly frustrated about the censorship regime, that there is this clear preference in China for ballads, which are a holdover from basically the communist days plus the cantopop that was imported from Hong Kong. They haven't really been able to move on. That Chinese visual arts has gotten also weaker steadily over the last 10 years of Xi Jinping's rule. And so I would say generally Chinese culture has gotten weaker and weaker, and it's no surprise to me that Liu Cixin wrote most of the Three-Body Problem before Xi Jinping came into office. And so a lot of things are getting worse. It's not just the music.

And why is volume 1 of Three Body Problem the best of the 3 volumes?

It is the most Chinese of the 3. It integrates discussions of the past much more effectively than the second volume. The third volume to me felt mostly like rubbish. The second volume is so much more forward-looking. I do enjoy the second volume quite a lot. I think the second volume is totally excellent for being a really great science fiction novel. There's themes and discussions of strategic deception, very Chinese sort of a theme to pick up. And the strategic deception is everywhere in the first volume as well. The prominent scientist who doesn't even tell anyone that she alerted extraterrestrials to conquer humanity. And it integrates the Cultural Revolution much more effectively. And it is also a rollicking good police drama. As well. The top cop, the detective in the first volume, is just such a recognizably Beijing character who is competent, funny, full of humanity, also has to obey orders when his superiors tell him what to do.

These marriage markets in Chinese parks, the parents come, or maybe grandparents, they hold up ads for their kids. How effective are they?

It's very effective for the parents who feel like they're doing something for the kid. I am not sure that they have actually produced a lot of excellent marriages. I think that one thing that China clearly does so much better than the rest of the world, especially America, is that it is great to be an old person if you are in China. You go out to the park, there will be many people doing some sort of ballroom dancing. They'll be practicing tai chi. They will be, you know, dancing haphazardly to music from America that they cannot understand. They're doing all sorts of calisthenics, and there's a lot of community. You can playing Chinese chess, you could be playing mahjong, and, you know, people will just come to talk to you. My elderly grandfather spoke to anyone in the yard, mostly because he was deaf, and he was just able to kind of yell at them. And marriage markets are something like calisthenics. It's just something that old people do to hang out in the parks. I don't think it produces many great marriages because I think young people are not very interested in having their parents set up their spouses for them.

For our final segment, just a few questions about you. Why was it the clarinet that you decided to learn how to play at a very high level?

I am attracted to the beauty of the clarinet. I think that there has been some studies that the clarinet is the instrument most close to the human voice. And so I was not a very technical player, but I feel like I achieved a degree of musicality that some of my teachers recognized. Now, I will say that I haven't played the clarinet now for over 12 years now, mostly because growing up I had chronic bronchitis, and one year my lungs collapsed, and I couldn't play that year, and I never really picked it back up. But rather than playing music, I've transitioned smoothly to spending a lot of time listening to opera. And when I'm listening to opera, I think it is not surprising that, you know, the soprano's voice most approximates the musicality of a very fine clarinet player. And to me, I am indulging in all of my music interests by listening to especially Mozart, but also Rossini, Donizetti, Bellini, and Verdi.

Which is the most underrated opera?

Così fan tutte is never properly held up as being above Don Giovanni or The Marriage of Figaro. The Marriage of Figaro is definitely the most perfect opera. Maybe you can say that Don Giovanni is the greatest of them, but I would say that Così fan tutte is the most underrated.

How has knowing classical music helped you to understand China better?

I think a lot about the Communist Party as a Leninist technocracy with grand opera characteristics. If you watch some of these proceedings from the party congresses held by the Communist Party, which take place every 5 years. It really feels like watching a Wagnerian opera by other means in which they are— there's less noise, but much greater drama. The last party congress was, of course, the party congress in which Xi Jinping more or less forcibly removed his predecessor Hu Jintao after Hu Jintao tugged away at some papers. Now, I still don't understand what exactly happened there. I wonder if we will ever have a good answer of what Hu Jintao was looking at and what he was objecting to and why Xi Jinping decided to humiliate an elder in that way. And what I am much more keen for is to avoid these Wagnerian excesses in which every so often it really feels like the Communist Party is ready to march the entire country into Valhalla pala with them. And I would love it if the Chinese had a little bit of a better sense of the comic operas of Rossini or Mozart or Donizetti, who have smiling optimism, who have a sense of irony, who have a sense of humor. China's Politburo is totally po-faced. There's no humor among them. But there is just so much wonderful irony, especially in Mozart, in which— take a look at a lot of the love songs. Almost none of them are meant to be very sincere. Meant to really declare love for the intended target.

What did you learn from your time as a Royal Canadian Army Cadet?

I think the trite answer is just a lot of discipline. I think that I was a bad kid growing up. I was absolutely not a good child, and I'll be the first to admit that.

What does that mean concretely?

Ottawa is not only the federal capital, the capital of Canada, but it is also the drug capital of Canada. And it is very easy to fall into a mischievous crowd when you're over there. And so I was playing hooky from school a little bit too much and running off and trying to do whatever I found fun and not going to school. You know, I never had good grades growing up. To this day, I was— I will admit that I was academically challenged. I always I always just enjoyed taking a book to read in the park or something rather than sitting in class. My main issue was that I played hooky a little bit too much. Raised the ire of my parents. My parents threatened to give me to the army and I laughed that off because no parents ever do that. But then my mom did it. So she gave me to the Royal Canadian Army Cadets and they straightened me out. So I was a very good army cadet. I was awarded recruit of the year. I was the fastest person in my regiment to be promoted to corporal.. And I was in the marching band and I did excellent drill as well. And something I take away from some of the commanding officers whom I grew close to, they would tell me that the ethic of the Army was that whatever you imagine is the most difficult thing, you should simply reconceptualize it as the easiest thing, and then you just do it. And that turned out to have been a fair fairly robust lesson.

How did you learn how to write so well?

I have always grown up loving to read. My grandfather bought so many books for me—first picture books that had text underneath, and then my mother also encouraged a reading habit. We had so many books growing up, and I think that if I were thinking about writing, first and foremost, I pay attention to cadences. I think about beat. I think about the musicality of the effect. And I think that it is just really, really valuable to just have a sense of how the words sound before it falls out of your pen. I have a sense of practice. When I was a musician, every so often I would take some time when I was still a college student to just go to the music library, check out some score scores from— I did this with a Mahler symphony as well as some Mozart symphonies— to just simply copy out the scores and just write it all out. And I did this exercise also when I was, you know, early in my writing. I would just take a New Yorker article that I really liked and simply rewrite the entire thing. And when you engage in that sort of exercise, you really have a sense of what the composer was thinking when he was plotting out the harmonies. And when you do that with a really good piece of writing, whether that's a New Yorker article a really good book, you start having a sense of the choices that the author was making in terms of syntax, in terms of sentence length, in terms of the word choices. And being in a position to make those sorts of choices, I think, is very valuable.

Why is Stendhal your favorite novelist?

Stendhal is someone who loved voluptuous excess, like his— one of his heroes, Rossini. I think a lot about the wonderful musicality of Rossini. The Barber of Seville is a great place to start. Rossini also wrote these comic operas that sound a little bit strange today in terms of only their titles: The Italian Girl in Algiers or The Turk in Italy. But even these have just these— and these were early operas, I mean, he composed them I think in his early or mid-20s— but they are so much fun to listen to. The voice mixing really bursts when you have excellent singers. And then you have some really excellent late works like the Comte d'Orsay, which is Rossini's final opera. Very underrated. Very underrated. Yes. Very underrated. It's very silly. But do you know what I'm talking about with the final trio, which lasts about 10 minutes at the very end? Do you know that? I would have to hear it again. It is these voices encircling and entwining. Which I think is one of the most beautiful parts of opera ever. And this is something that I sometimes listen to on loop when I'm writing because there is just remarkable beauty. Stendhal loved Rossini. Stendhal mentioned Count Orri in my favorite book, my favorite novel, The Red and the Black. I reread The Red and the Black when I was living in Copenhagen this summer, wondering whether it would hold up. It was my fourth time rereading it. And this was one of my mother's favorite novels as well. And she gave it to me to read. And I think that The Red and the Black still holds up very well. It is a story of ambition, of an extraordinarily ambitious young man who has to choose between trying to join the army or trying to join the priesthood, and then, you know, making these ridiculous errors in love and gets humiliated along the way, attends a performance of the Comte d'Orsay, and ends in a great tragedy. But along the way, there are some, you know, just these very voluptuous descriptions of love, and it is all the while very funny to boot. What do you think of Stendhal?

I like him very much, but I've never loved it. It feels distant to me. So that's a notable difference between us.

Stendhal has had some very passionate fans. John F. Kennedy read a lot of Stendhal. Robert Alter, before he translated of the Torah, wrote a biography of Stendahl called A Lion for Love. And I think one other remarkable thing about Stendahl is just that he inspires passion among those of us who appreciate the Italian ecstatic commitment to the art of song.

I will reread. Before the last two questions, let me just plug your book again, which I was very happy to have blurbed. Dan Wong, it is Breakneck: China's Quest to Engineer the Future. Final two questions, possibly related. First, what do you want to learn about next? And second, what will you do next?

I would really like to curl up on my couch and read a lot more novels, follow the Henry Oliver, Hollis Robbins Great Books Program to just read a lot more authors. I have a lot of history books that I am very very keen to read and follow along the Stephen Kotkin program for reading a lot of excellent histories. These are the two genres that I am most interested in thinking about. And I think my— I am thinking in terms of my professional life, you know, having more extensive following along evaluation of the US-China competition. And I am trying to come to a net assessment of, you know, what is going on between the US and China, what competition, coexistence, the contest really look like over the longer term. And I think that this is going to be something that we're all living through, something I have some perspectives and views on that I think is going to be fruitful for thinking about the future. Tyler, I want to ask you that you have had these really remarkable pivots throughout your life. You had your PhD in economics from Harvard. You studied under a great advisor, Thomas Schelling. You published published in top economics journals. You were an early economics blogger. You have been doing all sorts of new things related to Marginal Revolution University, Emergent Ventures. Now you are doing a lot of things on AI. You've started this extraordinarily successful podcast, which I've always felt should be— we should maybe rectify the names here. Rather than having this be called Conversations with Tyler, maybe we should call this Interrogations by Tyler Cowen. That's fine. Maybe sometime we should have a rebrand of this. But how do you decide how to pivot, how to be an early blogger, how to continue learning new things?

For me, it's quite arbitrary and based on whim. And I simply feel I need to start doing or continuing something. And there's no grand strategy or plan behind it. It's gone well for me. I suppose I trust my instincts, right? Yeah, my instincts are endogenous.

To have no grand strategy, but to always be able to pivot like that, that is still a grand strategy in itself, no?

If there's a new thing it seems I can learn or should learn, I'll want to do it. You could call that a grand strategy, like the become an information trillionaire. It's kind of a grand strategy. So different things pop up. You figure this is an effective way to learn. Travel would be part of this. And so I do it. I guess that's my grand strategy if I had to describe one as such. But it's not predictable what I'll be doing, say, 4 years from now. I actually think it will be pretty close what I'm doing now, but I'm not sure of that. I could imagine doing more with AI, but the AIs are good enough. I'm not sure at that point what my contribution to them might be.

Something like Emergent Ventures, it is something that you started. Did you imagine that you would have built out a great network of folks to build out the Marginal Revolution extended universe of so many people that you have been able to support?

When I started it, I thought it would be a small thing that would be over in 6 months. And clearly that was wrong, completely wrong. Now it's 7 or 8 years and we have over 1,300 winners. I thought there'd be sort of 15 winners, they'd be really great, and then that would be it. And I'd go back to doing things I was doing before then.

But of course, that's not how it's gone. My final question, and then I'll stop hijacking your conversation. How have large language models changed the questions themselves that you ask on Conversations with Tyler Cowen? Often, you know, many of us love joke about these hyper-specific questions that you ask people that, frankly, often could be better answered through AI, through GPT-5, than people themselves. How do you think about asking some of these questions after large language models are arguably better at providing some of these answers?

I think of a good podcast as it being about the drama of the unfolding of the conversation. So again, I recorded this very good episode with Sturmid McCulloch, the British historian who's written on the Reformation, history of Christianity. And I don't think the audience, or even me for that matter, cares primarily if the GPT-5 answer is better. What they want to learn is his way of thinking about things. And they will get something out of that. It will be real. It will be vivid. They might end up disagreeing with his sort of very liberal Anglican American perspectives on history, but they'll have figured out what that perspective is. And you don't get that from GPT-5. You get the GPT-5 perspective, which I find fascinating too, but it doesn't render irrelevant figuring out how Dermot is going to answer the question. So in that sense, it hasn't changed it that much. I don't get many questions for podcast guests from LLMs. Sometimes I ask in some episodes, there'll be 3 or 4 LLM-generated questions, but it's not mostly that. It's mostly things from my own head, or maybe Marginal Revolution readers will suggest something. Or in the case of you, I know the person and we've had previous conversations. So to ask you about Italian opera or Stendhal, it's like, well, of course I'm going to ask Dan about that, right? I know that will be interesting. So that's easy. It's way less prep. So I think podcasts will not become less valuable because of very good AI. Blogging might be, but you You still can market, "Well, here's a person's way of viewing the world." Just marketing analysis or facts, I think, will be less salient and already is.

Final question. What flavor of drama was our conversation today? Tragedy, comic opera, what was it?

I don't know that it was any of those. I think it had two parts. So the first part was about your book. It was a bit of debate back and forth. People get a sense of where we differ, that I like the suburbs more than you do. I like the American Southeast more than you do. Like, I think the American media overrates the importance of the dysfunctionality of New York and San Francisco. We went through that in a way I think both of us found a bit predictable, but was necessary to do. And then we had all these other parts. I don't— haven't heard most of your other 50 interviews, but probably you didn't speak very much about Yunon, right? Didn't speak about about Italian opera, didn't speak about Volume 1 of The Three-Body Problem. And I knew that would be, for me, the better part of the podcast, but the readers need both. And we ran over time. That was on purpose. And it was a switching thing. So not a single mood. I don't know what opera you would compare that to. Maybe it's Fidelio in a way, right? I'll take Fidelio.

When you have these excellent recordings like Christa Ludwig singing about— at the very end, it is the very end of Fidelio—

always, always moves me. Dan, thank you very much.

Tyler, thank you very much.

Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm @TylerCowen and the show is @CowenConvoes. Until next time, please keep listening and learning.