Years of Restrictions Didn't Slow China's Quest for Tech Dominance
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Hello and welcome to another episode of the all lots podcast. I'm Tracy elway .

and i'm joe wasn't though yeah.

do you realize it's almost the end of twenty twenty four?

Yeah well, yeah, it's crazy. You know it's been a really warm month in october. Yeah I know. So I feel like we got this three months of summer. And so yeah, like we're basically almost here and we sort of like got a free one last month of water.

I feel like the warm weather throwing everyones of anyway. Uh, we're almost done with twenty twenty four. Who knows what the rest of the year is going to look like, but that means that twenty twenty five is coming up. And you know what I think of when I think of twenty twenty five.

you and I think of the same thing and we're the only two journalists in amErica that don't think of project twenty five.

of course. okay. So john, I thinking of made in china twenty twenty five, which of course was the big program that china launched ten years ago, almost ten years ago, now back in twenty fifteen, to bulk out strategically important advanced technology sectors.

And so i'm kind of curious what exactly happens in twenty twenty five, how much progress china has made on this front next year? Are they suddenly going to like declare Victory in advanced technology and that'll be the end of IT. What criteria are they actually using to judge its success?

I have a bunch questions. You know I just have to say that I appreciate things like made in twenty twenty five initiatives or even like you know five your plans or ten your plans or whatever, just because they provide a very convenient spot to go back and look, did the goals get hit or not. It's one thing to talk about moon shots and like we're going to lead all this.

But unless you put a date on when you want to achieve IT by, you don't really know whether you're successful, right? Because you never really know where you are and ort of the art of progress. But if you have a system that puts dates on where you want to be, at least you can go back and judge well where we successful or not. And so now we're on the verge of being able to look at the start of that initiative in the end of that initiative and sort of say.

whether IT worked or that, is that your pitch for all lots? World domination?

Twenty twenty five? Well, we d have maybe twenty thirty five OK. We need something like very specific metrics. You know we have to like really know what that means in advance. And then yeah, we'll see if we hit IT or now.

okay. You're right though. Deadlines are very important. So speaking of deadlines, why don't I go ahead and bring in our very perfect guests for this particular episode? We are speaking with jari dipippo, senior geo economics analyst over a bloomberg economics, as well as Rebecca wilkens, senior correspondent for the government and economy team asia.

I knew her back when I was in hong kong, and SHE covered china credit, and he was so good at IT. So who Better to kind of draw the connection between technology and finance and economics than these two? So jard and rebeca, thank you so much for coming back on all bots.

Thank you such a pleasure to be you.

Let's start with the beginning. I guess twenty fifteen, china decides to launch this made in china twenty twenty five program. What was the thinking behind IT?

What were the goals? But I think one thing to remember is this sort of a whole made in china industrial policy. This comes just a couple of years into president pain getting his leadership under way in china.

So this is also very much present. She's vision for the chinese economy, his idea that these key sectors, these key industries are essentially going to underpin the national development. So this is not sort of, I suppose, just a discussion about china's strategic ambitions, but also specifically she's own vision for the direction for china.

Also add in the context of chinese industrial policy, so made in is an example of an interactive process and also out of a reflective process with rest the world. So obviously were other industrial policies before. And that would include something like the medium, long term plan from two thousand and five, which is a fifteen year plan there.

Of course, five year plans, but also many hundred and twenty five, was partially inspired by germany's industry for piano plan, which is much less detail and ambitious. But there is a sort of a reactive effector which ends up having knock on effects because in the U. S.

Reacts in in china twenty five. And so it's just part of the cycle. I think what makes made in china twenty five different in other plans that china had is that was more comprehensive, more ambitious and much more focused on not just catching up but actually leading in ten strategic sectors. Previous plans have been more about, say, lower value added or mega projects, right? And this is basically they want to be the world leader in all the technologies that circle twenty fifteen they had identified as being the most important.

That's interesting. So one way of thinking about development is like, okay, we're going to build lots of bridges and rail and housing and hospitals and other sorts of things, but this is about really leading the technological frontier. And of course, this is what is the source of tremendous angst in washington, D.

C. And various U. S. Industrial giants and so forth. I mean, not enough. We need to like list all fifteen. But what are the big areas that china to felt that heads to pursue?

sure. So they have ten strategic sectors. But then within that, there is any number of technologies so that the big ones would be like information technology, which includes things like semiconductors, 5g artificial intelligence， then things like aviation and space technology. Energy equipment, which include things like solar panels and the new energy vehicles, things like electric vehicles. So IT stands pretty much everything, but IT excused towards the industrial sector and is really a manufacturing based view .

of development. So one thing that was interesting, jarred, is you said that IT was an iterative process. How is IT changed in your mind from like twenty fifteen to now? Has there been maybe more of a focus or a shift in direction?

A few things, the original made in china, twenty five blueprint, which is what people treat as being the plan that was announced early twenty fifteen. But then actually, when people talk about all the targets, those mostly come from something that's commonly called the Green book, which was published by the chinese academic of engineers.

And that's where you have the two hundred fifty plus targets that are looking at specific technologies over time. This is sort of like an authority attention. But in on top of that, there are something like four hundred plus other authoritative cuts going through technologies, going through different levels of government.

So it's not just one thing, and that's part of that. The fact of those other plans don't come out at exactly the same time that makes IT iterated. The other thing that I think is really important is the chinese government realized around twenty nine that the phrase man in china twenty five was provoking anti bodies in the west, particularly in the U.

S. I would say that along with belt and road initiative over the two slogans, ended up having the biggest effects in the discourse. But B, R, I has more favorite.

Viewed in a lot of part of the world where has been in china, two and five was considered more of a threat by a lot of industrial economies, said, what is trying to do? They actually templed down on IT. So you will struggle.

Define any direct references to IT now in chinese official documents, at least publicly, but it's not dead. So a lot of the key goals are now incorporated into the fourteen five year plan, which is the one that we're currently in going through twenty twenty five. The other thing to keep in mind is that the targets were what they thought circa late twenty fifteen, right? So I would think that within the chinese government, they actually have adJusting some things or realized that maybe that wasn't the right forecasts.

Some of them were actually quite vague for things like what natomy dia technology would send me. Conductors be circular twenty thirty because, of course, they didn't actually know. But my strong suspicion is that this framework still remains in place, but it's sort of an evolution because the point is not necessarily to hit all those individual targets. It's are you basically fulfilling the plan in the broad adsense? Are you actually achieving leadership and all those key technologies?

I just add that that you know some of that antipathy among western powers around the idea, and even the phrase of made in china twenty twenty five, is still sort of quite alive. I was at a meeting with some policymakers, think tankers university recently, and there was still this quite lively discussion I call IT politely, discussion between a visiting european political adviser and hongkong officials and chinese officials about precisely what made in china is, whether it's just industrial policy or, in the view of this particular visitor, something much more set of mine.

I just GTA say. So we're going to be the idea of, like, technological development along these lines, being mine. I mean, you know, this is human progress, right? Technology advances, and countries want to be technological leaders. And I understand why governments and companies around the world feel threatened by IT. But anyway, I know just one idealizing because, for instance.

the U. S. Will say, well, we want to develop more clean energy technology domestically because it's important for the environment. But on the other hand, you could probably have more progress on the clean energy front if you just imported a bunch of stuff from china right now. One of the chAllenges .

here are the differences here is precisely over what that means when beijing says it's going to back a certain sector, right? The idea that if beijing identifies that, say, electronic vehicles or solar panels as a sector back, IT really can throw its weight behind IT. IT can ask bank to provide cheap credit.

IT can ask local governments to provide land at cheap or no cost. IT can get state own enterprises to pull their significant resources, talent, innovation into those industries. IT really has lot of a huge machinery that IT can redirect, which you know, other countries feel is, quote, unquote unfair in some ways that sort of behind the whole accusation around the unfair use of subsidies.

for instance, I will try to channel both beijing and to dress your comment. So from beijing's perspective, I think they would say it's a bit ridiculous that the west was more or less fine, which china moving up the value chain as long as IT wasn't in sectors that are too high value added or too competitive with events, economy, industry. So textiles, fine, but when you say we won't have our own jet airliners, that becomes a problem.

And I think there is actually truth at that, right? So what change is that china went from lower to higher value added. And now with companies are direct competitors, in many cases with like g seven companies on the U. S. side.

I think part of the response to be well, the threat part of IT is it's not development per say is that the chinese government, particularly of late, is quite clear that self reliance or self efficiency or the maybe primary goal, this is clear in the third planet that came out in july that it's about self of reliance. And self reliance has a heavy national security undertone. So i'll go back to what I was saying earlier that I think both sides of feed off each other.

So why is china are worried about software lines? Well, part of that is a response to western terabits and us export controls. But the fact is they are basically saying we want to be free to the extent they can be from the western technological supply chain.

And they're doing that because they are worried about national security. So of course, in in washington, they would think, why you worried about national security, right? So sort of goes in both the.

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I guess I could see this sort of maline angle also. Events like this is not real technological development. This is just loss making companies that are backed by the government that are going to then bankrupt and destroy the industrial base of the west and not actually make any progress.

I guess I get all these debates and nuances and why people talk about china over capacity is a problem and all that stuff. But okay, the other thing that happened over the last several years is in addition to these ominous sounding phrases, es and slogans like made twenty twenty five and the belt road initiative that created the anxiety in the west, the us. Like actively started to try to suppress chinese technological development starting under the trump administration and then obviously continuing under the bind administration.

And you may get reacted up even further under the next administration, whoever that is. What's that are done? Like how would you describe specifically what the U. S. Has tried to do in terms of constraining china's technological development? And what's the basics of the impact of these .

efforts have hit what the U. S. Is trying to do is somewhat suspect to debate.

The official line is that the united states is not trying to stop china's development. okay. It's not about overall.

The linking of the economies is just about selecting, risking. It's about remaining ahead in the strategic and critical technologies of the future. But it's not about sort of stifling the macro o economy of china in beijing. The view is that it's all around containment and that the united states mostly, but some other western countries are trying to encircle china and basically prevent IT from moving up the ladder economically and technologically.

Is IT working? It's complicated because there's a series of policies, right? So when we talk about what started the thing that people mostly focused on as, of course, the trade war, which effectively started in twenty eighteen in the trip administration, the purpose of the trade war was complicated.

IT wasn't really to stunt china's growth, although there war people in the trouble administration would have hoped that IT was actually for the president, for present trumps perspective, to try to baLance rate and get a deal, which we ve got in the form of the face one deal as whatever you think of that. But the other thing that happened that I think was actually a bigger deal from the chinese perspective, was when the us. Added hallway to the commerce department entity list in early twenty nineteen.

Because what that signal was that the united states was effectively trying to kill what was arguably china's best global technology company. The us. Would say we're not trying to kill IT, but the restrictions are pretty draconian, and there is very much that vibe.

And so what I did was convinced not just beijing, but the local governments and chinese companies, that otherwise would you prefer to just use sometimes cheap or a Better foreign orts like for semiconductors, that actually what beijing were saying about self efficiency wasn't deed a national security imperative. Is that working? It's complicated.

But our basic take is that at the macroeconomic is happening in a chinese economy is primarily due to the property sector, and you can call a meltdown, and it's pretty dramatic. The chinese government arguably started that with a three red lines policy. But I would be careful about conflicting the idea.

Chinese economic weakness is due to basically industrial policy when really there's clearly a more obvious macro. And on that explains IT on the technology side, the export controls, I think, are really the crux of the question of are they slowing chinese dealt and I think they are the focus on the U. S.

Side is primarily on semiconductors. And there's even recent news, as bloom work has reported, that, for example, T S M C, the famous semiconductor foundry in taiwan, might have been sending some NVIDIA chips to hallway through some indirect body. Maybe didn't know about IT, but there's all this debate about how far ahead is china really and are they actually able to make the most advance ships on their own. And I think that is really the question of when you get to how effective or the expert controls and looks like they are having some effect, but not a lot .

at a if IT was so sort of discovering in real time precisely the sort of miscalculation, the idea of export controls. Initially, the belief was that I would help the U. S.

Stay ahead by eight to ten years. But last year we saw 华为 launch that mate 7 smartphone， which included nine o to chip. That suggested actually that whilst chip making partners, mic was actually somewhere between the four or five years behind. So there have been a lot of series of nasty surprises. And let us regalias tions of precisely where chinese tech advancement actually is.

So just on the idea of what the U. S. Needs to do here, I mean, one of the criticisms of some of its responses that the problem really is the cost of these technologies.

So in order to make them domestically, maybe internationally competitive, the U. S. Really needs to bring down the cost curve, and that's hard to do when you're competing with china.

And IT has maybe fewer regulations and certainly cheaper labor. Is there anything that can be done on that front to make american technology more competitive? For instance, via monitor.

in theory, if the U. S. Erect terrifies, which we already have, but if trump is reelected, he's promising sixty percent terrace on china would be huge and might shut off eventually a good share of direct U.

S. Trying to trade his area. As he explained recently on his blob interview with john michels, weight is essentially that we can tell all these companies to resort or onshore production back in united states to seven in united states.

Now generally speaking, import substitution has a pretty bad track record internationally. But the U. S.

Has the advantage being the largest economy, the world, right? And it's the largest consumer market. So there is some feasibility to IT.

But I think something that might be under emphasized in the general discourse is that the tariff s particular as they are constituted now, but especially if they increase them, also hit a lot of intermediate codes, right? So IT actually makes IT more expensive. Import things like steel, or all the components you need to build a factory or ts for whatever.

And so you have to sort of decide. So the U. S.

Wants to protect the steel sector. Okay, we can do that. We do do that. But that also means that deal costs more in the U S. That he means construction costs and arap which making a factory and say thailand or china, whatever is cheap. Er so there are tradeoffs there. In my personal view, I don't think terriers are a good way to go about IT think industrial policy, which is a much wider set of tools as some promise. But terrible to me, or like a sled hammer.

I think this is a really interesting point about inter media. I mean, I imagined that even if you were to go into an intellectual or fab somewhere in united states, they're just numerous imported goods of all. So we want intel to be a powerhouse.

The idea they're terrorists are going to make that much easier. I think it's complicated. Then of course, there's all the questions about like how do you know it's coming from china or what if final assembly is somewhere else and said, let's get into specifics. Both of you talk about some key industries where china is in twenty fifteen and where they are today in twenty twenty five and what kind of progress has been made.

Well, I think this is really obvious consumer ones where we seen these kind of extraordinary leaves in evs and solar panels. I mean, I think the company like byd, which is basically unheard of, I think globally, a couple of years ago now a chinese leader outpace its global competitors.

IT thinks it's gonna sell half of its products overseas in the future, so certainly also doesn't really see tariff or potential terrorist as as an impediment to its expansion overseas. And I think in a way, sort of an imaginably remembers of reporting in china about a decade ago, around the time that made in china was actually announced. And officials, local government officials are very excited to take me to a lithium battery, battery.

Which battery is are going to be used for electric vehicles. And IT seemed to have to say like something of a pipe dream, I can say, totally missing to restituted the future of the sector and the future of the company. But even at that time, IT was something that, you know, local officials were really have sort of razor sharp focus on.

Evs are probably the best example because they are the technology where china has exceeded the plan, so to speak, right? Theyve done much Better than their internal forecasts would have suggested in the twenty fifteen documents. But there are other sectors that y've also done well.

So unmanned vehicles, so which are to say drones like that D J, I makes china is clue, the world's leader at the us. Tries to restrict imports, use that U. S.

elsewhere. They're dominant. There are other things like solar panels that china clue has dominance in other areas. They're not exactly the world leader, but they clearly starting to catch up and they're Better off. They would have been a circa twenty fifteen.

So semicon tors are one area where they're not the world's leader, but they are on a relative basis as stronger than they were five years ago. Industrial robots, things like machine tools, there are other sort of maybe more obscure things like in large tractor. So part of the plan talks about things like agricultural equipment and pharmacy ticals, they're also making game. So really in all areas, except arguably for maybe commercial aircraft, they are making relative gains.

I guess the other elements in china, some ways china sort of had to set itself up to succeed because there are some areas right know china was already a global leader.

Yeah well, so that's a good point because the new energy vehicle plans go back to, I believe, two thousand nine, right? So when they're deciding in two thousand fifteen, where is onna go? Some of those technologies, they already had plans in place, they were under way and so they can sort of project, okay, we already know how this is starting to work, were other things like artificial intelligence? Yeah, IT was a thing people spoke about in twenty fifteen, but IT wasn't nearly as real as IT is now, right? That was much more speculative.

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Can we maybe talk about semiconductors specifically? Because this obviously has been a very hot button area for both the us. And china and maybe one of the areas where we've seen a lot of money pouring in, how SAT shaking out, I mean.

by in large semi conduction, is probably the one area where the U. S. Has had more success in rolling out export controls and curbing china's access to these really key strategic technologies. And part of that is down to the success of the bite administration in listing support from its allies. It's just a handful of companies that involved in making these types of chips. And you know there's an argument to make that unless spiten had have convinced japan and the netherlands to come on side, that actually the controls that he rolled out would have been far, far less effective. One key area here is actually preventing china from accessing the manufacturing equipment that needed to actually make these types of really advanced chips that are used in A I and quantum computing.

There is a interesting, and I think quite important counterfactual to be discussed. What is that? You know what if the U.

S. Had not done the export controls in, since what the U. S. Is doing is imposing import substitution on china in a way that china hadn't preferred.

But we can also see in the data, including for filing for sick, their main foundry, that they up the amount of subsidy they are getting after twenty nineteen, right? So that means that china sort of turn the industrial policy dial from ten to eleven. You could debate how much effect that has, but IT seems clear in that is the overriding priority.

Now more than anything else, actually, my doctor, right, because they know that is the key node, both sides, except that is IT working. I mean, clearly, IT has slowed down their ability to get the most advanced chips, but china's clearly making gains on so called legacy nose or mature notes, right? Sort of slightly older technology and they're building out a lot of capacity there.

And that's something that they're still have access to a lot of the photography equipment to do. So other areas like packaging, they've ve improved its design, maybe some improvement, but that there's still lagging a vessel call common and videos eeta. I think really, as rebeca said, it's the equipment. So specifically, the most advanced psychology phy shine that china, as far as we know, is not been able to make on its own, and that is the current road block.

But like whatever of the most advanced photography machine that china is able to make today, on october twenty four, twenty twenty four, is IT substantially higher than the most advanced psychology phy machine that china is able to make at some point twenty fifteen? And is the number of years gap between that most advanced machine versus the one that smell makes is IT perceived to have narrowed.

as you don't know that the narrowing of the generation zero OK? Well.

first of all, this is something where I think there will be subject to debate, right? So there's the fact as rebeca already mention, the the mate pro, the Willy phone that had a seven animator chip. And when that came out, there is a debate.

And I don't think it's been conclusively settled, as far as I know, is exactly what happened, how they got those chips. The fact that we have news recently saying that maybe actually quite away is kenning ships from tmc indirectly as a wrinkle because that's true that IT was adjusted. Actually, they don't have their own technology.

They are essentially just finding away around the expert controls, which is a problem for the us in one sense. But that also means that maybe the expert controls are working in that china doesn't have the indigenous capacity to make those things on python graphs. I'm not an expert on that, which is a super technical topic, but my strong suspicion is that the quality of china's mesa capacity has increased, but the gap is still there. And so T, S, M C, I believe, is so pretty confident and sl that there the worlds leader, there's going to be a gap going forward.

I just add that you know the gap that we know of now between smic and the industry leader t fmc is about two generations. So that's roughly four years. But as err says, there is actual that have still life debate over precisely where that that might be. Something it's bigger, something it's smaller.

So I think semon doctors are also they're interesting for many reasons, but one of them is that the technological race is very ongoing. So if morals law hasn't been exhausted yet, so if they're still the ability to get to lower and lower nano meters, then you can imagine that T S, M C or the west or whatever is able to stay ahead.

But if that slow is if at some point and not to this in future, that innovation is not moving as quickly, I would imagine that with enough resources, the odds of china catching up is higher. So there are other areas like, say, a commercial aircraft, right, where there's clearly innovative feel, but it's not as cutting edge as semitic doctors. And yet come back, china is struggling. I think that is more of a function of the sort of duopoly nature of that market and the difficulty of having sort of product integration then sort of market chair. But from a technological perspective, they're getting there and they eventually will catch up.

So the other thing I was wondering is the role of foreign investment. And I don't just mean foreign direct investment, but also companies that come into china and set up factories and then workers learn some of those techniques for advanced manufacturing and things like that. Obviously, there's a debate over intellectual property and things like that as well. But what role does fda, foreign investment, foreign expertise play in china's technological progress? Now I would .

say a lot less than he used to. So IT would vary by sector and technology, right? But generally speaking, if you look at, for example, the trade data that china custom puts out, they actually break down whether the entity that's doing the trading is a state of enterprises, foreign funded enterprises, which is basically in fd I company, or essentially a private chinese company.

And what you see is that chinese exports are now overwhelmingly dominated by private chinese company. So in the two thousands, during the sort of peak china shock years, a lot of that growth and exports were actually foreign invested firms in china that set up factories over the past decades that has shifted. It's really just private firms.

So I think more and more at least terms of brands and manufacturing, its really indigenous companies that are doing to work. Now there are some things like A I where I think having some of the like their research links might still matter. But buying large, I think china is moving closer towards indigenous innovation.

as I call IT. One area that we really see that transition that ji is talking about is about ten years ago. If you're a foreign investor in china setting up a factory, you are deeply concerned about IP and about information leakage and all of those sort of issues.

And now actually, as we see, for example, more chinese firms going to set up their own factories overseas, in part in response to issues around terrace. We actually see state own enterprises and private businesses, china's private businesses concerned about that same problem, concerned that you know their international competitors and local workers will actually be picking up set of technological skills and be picking up on the new potential company secrets. And they are worried about information leakage the other way.

One big question, you know, we're obviously in the U. S. Doing in our own industrial policy of various sorts.

One thing we haven't really gotten into in the made in twenty fifteen specific conversation is the Operationalize ation of a goal. okay. So it's one thing to say, in ten years, we want to be leaders in all these areas. And I think you know clearly, they've made extraordinary strides.

And i'm sure this is a very long separate question, but i'd be curious from both of you know maybe started rebeca like, you know, you went to that factory ten years ago, IT seemed like a pipe dream. And now it's extraordinary. How would you characterize what the government did or what the government did, along with and set on private companies to make these dreams a reality? Well.

just the scale of resources that were poured into these sectors. I will visit of two key parts that made in china. On the one hand, that was this idea of self efficient, that china should be less reliant on the countries that I wanted to, essentially to stand on its own two feet.

And that was clearly linked fundamentally to a national security goal. The other part of IT was this drive for innovation that china wanted to create these sectors that became global competitors, that they were able to explore high valued goods into the rest of the world. So there was the sort of jeel ambitions that were also feeding into the sort raise on debt her for supporting all of these industries.

And I think there's also this sort of prevAiling issue too for beijing about the idea of needing to really shore up its own security. So for example, of beijing officials are increasingly sa of concerned about making sure that IT has access to its own sources of energy, particularly in any kind of you know, potential wartime scenario and that is part of a whole ethos that we see also, for example, in food security in china too. But really an casing focus on trying to make sure that beijing isn't unnecessarily exposed and perhaps even exposing any way to overseas supply chains for these key areas in terms .

of policy instruments, quantifying what china's doing is actually very difficult, except for things like rebates for electric vehicles or things that show up in listed firm data. But things like state linked credit or even totally government guidance fund allocations is quite difficult, I would say in china's case, subsidies are not new. So subsidies are not the secret sauce.

What is different now? well. Generally speaking, around really twenty, twenty, twenty fourteen, they tried to have IT to more market orientation.

The big policy innovation at that time was the reinvigoration of government guidance funds, which are essentially state owned vate equity funds or venture ample funds. Those played a very large role in the first day five, five years of the plan. My sense is they've slowed in part because they weren't having the market orient returns they were hoping to have.

But in general, the state's the central ownership of much of the financial sector matters a lie. And you see private investors in the stock market, for example, where if beijing says this sector is a priority that people invest in IT or on the other side of when they said in five or so years ago that ed tech was not a priority that tanked. And so there's a way as sort of allocating all the market resources towards priority sector is the other thing I would flag is there are some technologies.

I think EV is the best example of this where they really got the markets orientation right in a sense that they allowed consumers to a, so every E, V company, if actually eligible, could get the credits for purchases to reduce the Price of their evs. Their locality ties. One have been helping them in different ways.

But ultimately, the best cars from a consumer perspective, one out like, so B, Y D Y is byd great? It's not just subsidy yesterday benefit from some, but a lot of other companies did to I think the hard part now for china, this is what their system is less good at is, well, they might have the problem of picking winners, so to speak, by having the market to IT, they're less bad at eliminating losers. And there's a consolidation and now has to happen.

Now you look at areas like solar panels where a lot of these companies that they have negative margins actually, right? So how do you you address that? So it's sort of like the tide goes and that goes out. But as long as its market oriented is generally more effective.

yeah, I think it's interesting a lot of people forget this sort of volatility that we've seen, especially in evy funding specifically because a few years ago, we had lots of chinese E V makers that going bank pt, and there are still some going bankrupt now. But there are also those litters sort of getting, I guess, revived from the dead with new funding. So it's interesting to see that flow kind of go back in fourth.

But what happens in twenty twenty five? So the made in china label brand is being downplayed somewhat. So what exactly does that anniversary the end of the time frame actually mean?

I can I add one war for all, which i'm also curiously, which is what happens to twenty thirty.

Well, in both cases, I would say the fifteenth th and sixteen and five year planes respectively, right? I think it's iterative. So made in china, twenty twenty five, some misleadingly actually has a lot of target to go out to thirty.

They're typically vigor than the twenty twenty five targets, but the plan doesn't end in twenty twenty five. And so I think they will, as part of five year plan that will be coming out in early twenty twenty six, will probably essentially incorporate some of that. As I said at at front, there are so many documents that are associated with this one blueprint.

It's like thinking IT as afraid as I before as someone is coin as cast of plans, right? It's not just one plan. It's a plan that then we get the whole bunch of other plans.

And IT is iteration and requires a lot IT actually think eat up a lot of the bureaucracy time because they have to assess and we assess and corner targets. But the bottom line is china's and definitely not giving up an industrial policy. The signals coming out of beijing in recent years, if anything, suggest there's a even greater urgency in part to the national security concerns. And so whatever the successor to made in china twenty twenty five is it's going to happen and probably won't be called me in china twenty four year or whatever.

Um but but it's going to exist. Part of the question is like us over that packaging precisely because of all of the responses and suspicions that were provoked by the made in china twenty twenty five label. And it's no longer advantages. In fact, that is sort of geopolitically disadvantages to be advertising your industrial policy in this way. If you're beijing and enjoy.

you read all of those plans, right? The hundreds and hundreds of pages, thousands of pages.

There are plenty of people around the world to do that work. For us, even reading just the so called Green book of the targets is quite a slog.

All right, we're going to have to leave IT there. But thank you so much to both of you for coming on all bots. That was great.

Thank you.

Thank you so much.

Joe, I thought that was a fantastic overview of what china is doing and to some extent, what the us. Is trying to do to.

I did too. I had a lot of thoughts. And obviously, anyone who listens to the podcast knows that we are both extremely interested and specifically and all the other things related to IT.

Can I say, you know, one thing at the end and a jord was talking about, like, I think he called IT a cassca of plans and all i've been reading, you know, a lot of chinese history, the twenty century history. They love meetings and plant. They always have all these like work groups, study groups and random people. As I got got appointed to a new study group, I don't know that's good or bad, but they love us.

Studdy group. I think it's funny that you're just discovering this. You know, one of the interesting books, just speaking of bureaucracies, one of the interesting books I read when I moved to abbot dobby was about saudia, a rabbi, an government ministries, and what IT was actually like to work there.

It's sort of a similar thing. There were lots of meetings and people kind of getting paid to not do very much. But I was super interesting .

as the meeting hater myself. I guess whenever I read, I note when the IT rings a bell in my head, when I see another study group or work committee or something like that getting form, uh, got that sounds so old. But no, I think that was good.

And look, I mean, you know, this gets back to many of our big themes, and I get why the U. S. In the west is anxious and all this stuff.

But on the other hand, I would just say two things like economic development is technological development. This goes back to record housemate and the ability to make complex machines, that is what this means to get wealthier. Or that seems to be the ability to do complicated things and move up the value chain.

And when we look at boeing and we look at what our own manufacturing like a lot of the issues, I get the impression or projecting our own problems abroad, like, you know, one way for china to close the gap on aircraft to make Better and cheaper airplanes, but another way for trying to to close the gap on aircraft is for the us. To not be able to make planes. And we can convergent two directions in one way of, maybe if we want to avoid that divergence, would be getting Better, making our plans ourselves.

Well, the other thing I was thinking about, and this is sort of speculative or kind of fuzzy, but the social, economic, I guess, aspect of this, which is, you know, a lot of the jobs in advanced technology, they might pay well relative to other manufacturing jobs.

But like some of them, aren't you very much fun, right? That's if you're working in a fab or something, you're wearing like one of those suits and you're staring at tiny chips all day and your indoors at sea. But at the same time, in china, you know, we've seen a lot of, like, popular dissatisfaction here.

You have to live flat movement where people are like, why should I even bothered trying? Because my life is never gonna get Better. And so I kind of wonder, like, how all of that plays into some of this as well.

There's a really good video by asonante try that people should watch. Basically, what does someone who work in a fab actually do? And it's an issue here.

Mean they, no, this is not a job. I mean, there are jobs in engineering and tech, in hard tech, in the us. That many people would find to be an extraordinary, chAllenging and interesting and highly reunited career. But there are also a lot of jobs in engineering and hard tech, united states, that I think, or anywhere, that people are fine to be quite miserable eeta. But this is why we need human oie robots.

That's right. okay. Shall we leave at there? Let's leave there.

This has been another episode of the all lots podcast. I'm Tracy l way. You can follow me at Tracy away and .

i'm g wasn't so you can follow me at the store. Follow guests jorge, the people he's at G D P nineteen and eighty five and rebeca tune wilkins, she's at our tune wilkins follow our producers common rud rigas at common ARM dash o benet at dash bot and kill Brooks at Brooks. Thank you to our producer mosses on them. And for more odd lots content, go to bloomberg dog, come slash out lots. We have transcribe blog in a daily newsletter, and you can share about all of these topics twenty four seven in our discord, discord dogg flash shot logs.

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