What are your top handful of critiques

say of the Chinese tech ecosystem or CCP

after going on a tour there? What would

you say they're not doing well or things

that complicate their ability to

compete?

>> The first one that's I think been well

publicized is when an entrepreneur has

risen to a level of success and then

uses that as a platform, the government

seems uninterested in that. So,

>> exhibit A, Jack. Jackma. Yeah, exactly.

And there's a saying that I think I

heard while I was over there. Don't be

the tallest tree.

>> Don't be the tallest tree. The nail that

sticks out gets hammered down in Japan.

They have a totally different system.

Obviously,

>> the other entrepreneur outside of Leune

is the bite dance CEO. And bite dance

probably got the leading position for

the consumer AI like OpenAI but over

there right now. in addition to just

incredible revenue growth. This is the

company that owned Tik Tok and whatnot,

but they're not going public and you

don't see him at all.

>> Mhm.

>> You know, which may get to this tallest

tree thing.

>> Yeah. I mean, celebrities also disappear

over there. No doubt.

>> Very mysteriously.

>> Yes. And business people.

>> Yeah.

>> So, yes, that does happen.

>> I will say and for people who are

wondering, right, because the there are

a lot of how should we put this? I mean

there are people who are very angry,

very hawkish. Some people are very very

supportive and then their agendas or

alliances get questioned. I like you am

just interested in understanding what is

happening to the extent that I can.

Right? What is the actual truth on the

ground? What are the details? And

frankly, I mean, the innovation over

there is is remarkable. And what they've

done in terms of establishing access to

rare metals and everything they need to

manufacture is remar. You go to South

America or Africa and it is Chinese

everywhere on infrastructure projects. I

mean, they've been very very smart about

it. So, I'm deeply interested in in all

of it. And please hold your thought

because I want to hear everything you

have to say. What I would say is a a

piece of the threedimensional chess that

I've been impressed with is how well the

Chinese government is able to well I

mean of course they're able to integrate

with the private sector so that they're

able to use in a sense products to widen

their scope of access potentially like

DJI for instance great example people

have a lot of questions around these

cars as spectacular as they might be Are

they an extension of surveillance?

Right. These are open questions that I

think are worth asking. But you were

about to say something, so I'll let you

hop.

>> No, no, no. I I think let me make one

point and then let's come to that. So

there's two other things I wanted to

mention.

>> Obviously infrastructure. So they are

building new nuclear fision plants. So

fision being old school, not new school

at 1/4 the price that we do it here in

the US. So is South Korea, by the way.

>> Yeah. Yeah, the numbers are incredible.

>> But when we sit here and say, "Oh, we

want to reshore manufacturing and they

can build things at 1/4 the price we

can." If you don't solve that, you're

going to reshore something and we're

going to not be price competitive

globally.

>> And then because you won't input what

they have and you're going to make our

citizens buy this new from this new

factory where we're making things way

more expensive, it doesn't work. Like

>> the math doesn't matter. It it doesn't

weigh. And by the way, I not not sure it

brings jobs. The Xiai factory was a a

third based on some numbers I was able

to acquire, a third the number of

employees per car output.

>> Mhm.

>> And I got to believe in 10 years it'll

be a sixth. And so you could calculate

the total number of jobs you'd be

bringing back if you brought back all

this car production. And it'd be

hundreds of thousands. It's not millions

and millions of jobs. So anyway, that

infrastructure thing is for real. And

and I think Dan Wong does a good job of

saying that America is run by lawyers.

>> He's the author of breakneck.

>> Our country is run by lawyers and theirs

is run by engineers. And so when you try

and build something here, the lawyers

just get in the way and try and block

it, which certainly when you hear Elon

talks about why the Gigafacto is here in

Austin and not in California, it all

relates to those things. So anyway,

that's infrastructure. There's another

thing that's I think quite interesting,

which is the government may not care

about whether or not their companies

have really big market caps.

>> Mhm.

>> And when I first realized this, you

know, you saw what happened when they

they took down Alibaba when they went

after Jack and Ant Financial could have

been this big thing and it got, you

know, haircut and you question, well, do

they care? And if you are pushing your

companies to be lowcost providers, maybe

that's at odds with them being hyper

profitable and really big. And then you

can turn around and ask the question

that hearing that caused me to ask the

question, does America really benefit by

the fact that the MAG 7 have $3 trillion

market caps? I know the employees of

those companies do, but is that a sign

of of our competitive capitalistic

society not being truly competitive

>> on a global scale?

>> And even within like there's a notion

you learn about in economics classes

called pure competition. And in pure

competition, no one has an intellectual

property advantage. Marginal profits are

whittleled down just to the cost of

capital. and the consumer benefits

because there's no excessive profit

capture. If we have all these companies

that are able to kind of have excessive

profits, is that a form of market

failure?

>> Mhm.

>> And does the fact that they exist help

America in any way? I at first I of

course I'm a venture capitalist. I want

to think yes, of course. But then as I

think about it, I don't know that our

government or our society or our people

are better off because these six

companies have $3 trillion market caps.

>> No, it's not that many people that the

percentage of the country that's

employed by those companies is small on

overall basis. And so anyway, I think

they have a different perspective on

whether big market caps matter and I

think that is somewhat intriguing. What

do you think about the innovation in

China leading in some cases to the

development of superior technology at a

lower cost that is

plausibly an extension of the

intelligence gathering apparatus of the

government? Is that a real thing?

>> I'm not in a good place to know. I would

have to imagine I mean it seems like

they would have to be stupid not to use

that given their ability to penetrate.

>> It's certainly well known that they do

surveillance in of their own people and

I know that would be particularly

upsetting to people like Greg Luciano

that you know runs fire and is very

interested in free speech.

>> The flip side is there's very little

street crime. You walk around

>> you don't worry about that when you're

there.

>> Yeah. It's true also in Japan though,

right? doesn't make it right or wrong.

It's just it is what it is. And I don't

know that we have this ability to kind

of tell them how they have to do it.

Now, to the extent that

>> the Huawei stuff where their products

are being shipped out and then those are

used to gather intelligence out of their

country and the rest of the world, of

course, that's a problem.

>> Yeah. But I think the way to deal with

it, I'm not a politician, but I think

the way to deal with it, I'm more of a

believer of of the engage engage talk

about what you don't like and what you

do like and try and negotiate that

problem away like we're trying to do

with the fentanyl precursors.