The Exchanges

Q You know, the book is called The Age of Ambition. Um, certainly China's a very dynamic place, shall we say. Are we Going into a different phase, and how would you describe that?

A Yeah, that's a good important point, because something is changing at the moment in China. Something is, and I don't say that with great pleasure. I did a long profile in the New Yorker last year of the president of China, Xi Jinping, and he came into office at the end of and he's turned out to be a much more important figure, because in simplest terms, he's taken what was this consensus model of Governance, which was you had this group of guys who were almost studiously bland and nonspecific. They wanted them to be that way. They were looking for the opposite of Chairman Mao. And instead, now we have, once again, a very dominant single personality. And as that can be a good thing or that can be not a good thing. And in some ways, it has set back the process of bringing China into the world, the process that China itself initiated. So in practical terms, if you're sitting in Beijing or Shanghai right now, you're not able to get on a half a dozen information sources, news sources, data sources that you could have three years ago. And from my perspective, how many countries in the world today do you go to where the internet connectivity is worse than it was three years ago? So it's that instinct that worries me, because what that suggests is politics over pragmatism, and pragmatism has helped China so much over the last 40 years that I want that to be in the foreground as much as…

AI assessment note: “something is changing at the moment in China”

Q Well, tell us more about those other entrepreneurs you met. I mean, what was like, what was unique about them? What were the things they were working on?

A The reality was that in some cases, these are still somewhat derivative of successful American products. That's a dynamic we've seen for a long time. But in other cases, They'd begun to tweak things in some important ways. I highlight one example in my book. There's a woman that I met when I moved to China whose name was Gong Haiyan. She'd been very successful. She'd gotten a PhD. She had grown up in a little village in the middle of nowhere at the foot of a mountain and had made her way to the city. So she got into her late twenties and her parents said, okay, now it's time for you to move home and get married. And this is the way that we have always done it. We will introduce you to somebody in the village. You'll be very happy. And, you know, traditionally in Chinese marriages, there really isn't much room for individual choice on the part of the participants. And in this case, she said, that's not going to work for me because the people that you know are nothing like the people that I know. And so, and she started a company, essentially the Chinese equivalent of match.com. And it was very early. In fact, it was so early that people didn't even have enough, uh, connectivity. They were mailing in their photos.

AI assessment note: “she started a company, essentially the Chinese equivalent of match.com”

Q Well, tell us more about those other entrepreneurs you met. I mean, what was like, what was unique about them? What were the things they were working on?

A The reality was that in some cases, these are still somewhat derivative of successful American products. That's a dynamic we've seen for a long time. But in other cases, They'd begun to tweak things in some important ways. I highlight one example in my book. There's a woman that I met when I moved to China whose name was Gong Haiyan. She'd been very successful. She'd gotten a PhD. She had grown up in a little village in the middle of nowhere at the foot of a mountain and had made her way to the city. So she got into her late twenties and her parents said, okay, now it's time for you to move home and get married. And this is the way that we have always done it. We will introduce you to somebody in the village. You'll be very happy. And, you know, traditionally in Chinese marriages, there really isn't much room for individual choice on the part of the participants. And in this case, she said, that's not going to work for me because the people that you know are nothing like the people that I know. And so, and she started a company, essentially the Chinese equivalent of match.com. And it was very early. In fact, it was so early that people didn't even have enough, uh, connectivity. They were mailing in their photos.

AI assessment note: “There's a woman that I met when I moved to China whose name was Gong Haiyan.”

Q So you wrote a book, The Age of Ambition, Which is about China's ambitions to be the center of innovation. I mean, could you tell us more about your book and the themes of that?

A Yeah, I was struck, uh, in moving to China about how much it felt to me like where the United States was at a point in our own development about a hundred years ago, uh, the Industrial Revolution, the Gilded Age. We were climbing out of this period of turmoil, the Civil War, and All of a sudden, it was like the faucet had been turned on, and all of these individual possibilities, people who had been, you know, the oddball in small towns all over the United States suddenly started making their way to big cities, and they were getting together, they were discovering capital, they were discovering other people with like-minded ideas, and things were germinating. And that is sort of what's been happening in China. And when I called it the age of ambition, it was because I was describing this phenomenon where it was truly that. It was like, if you had enough gumption and creativity And sort of sheer audacity to get out of your Village, wherever you were, you could go to the big cities and try something out. Wasn't always going to succeed. And in fact, it might run you headlong into powerful institutions, or it might make you into somebody who is a real pathbreaker. And that was, that's an astonishing thing to see. And it's not something that I'd seen living in other countries. This was very specific to China and to this moment.

AI assessment note: “moving to China about how much it felt to me like where the United States was”

Q Right. Well, okay, so one final question then, you know, you mentioned Charleston and the Dillon case. You're working on a story right now about gun violence. I mean, I know it's early reporting, but given that we're a technology podcast, what are some of your thoughts on some of the technologies with guns?

A Well, one of the really intriguing prospects is that we can use a technology solution for what is this public health and sociological crisis of gun violence in America. And the president said a few months ago, why is it that we're able to rely on a thumbprint to open our iPhones, but we're not able to do that with a handgun or a shotgun? And it's an intriguing prospect. It's a new, I mean, it's not a new thing. It's been around for a while. The hope of doing this In the end, you're still asking investors to put money behind a firearm, and if you're choosing between putting money behind a firearm or something else, it's easy to choose the something else. I think smart guns will probably end up being a part of our future, uh, in the United States, and that'll prevent a kid, for instance, from picking up their parents, you know, even if that parent has a legitimate use for it, let's say it's a cop, you know, keep that kid from, from, um, picking up that gun and hurting themselves or somebody else.

AI assessment note: “I think smart guns will probably end up being a part of our future”

Q entering China because you have to go through, like, joint ventures to actually do that, or where you're just even selling products in China, or there's partnering with Chinese companies. You know, recently in the news, there's been a lot of discussion around the capital outflows. Like, how do you think that's playing out with what we're talking about here in this age of ambition? How do we reconcile those?

A Some of the hyperventilating, I think, about capital outflows is a little bit overstated because some of this actually is The process of what China was trying to do anyway, which is to become a little bit of a more normal economy. That being said, people are moving money out. They're moving money out because they're uncertain about what the future holds. Uh, this anti-corruption campaign, which has been a big story for the last couple of years is going to be around. It's not going anywhere. And what that means is that people, even people who feel like, look, I've done nothing wrong. I'm not worried about being caught with my hand in the, in the till. It's that they don't really know if they can count on the courts to defend them in the case where, you know, to, to give them a fair hearing if something happened. So people with a lot to lose are saying, look, I'm going to hedge, and I'm going to put my assets in places like California and, ah, New York real estate and elsewhere. So that's a real phenomenon. It's not the sign of the barrel going over the falls the way it's sometimes described.

AI assessment note: “Some of the hyperventilating, I think, about capital outflows is a little bit overstated”

Q So what does that tell you? Like, what are some of the takeaways that come from that?

A I think the most important thing is, even though we often tell ourselves, yes, we have to understand the local market, we underappreciate how hard that is, and how much it can be almost impossible to do it from, um, from far away. So You know, there's this tension, right, about how much do you localize versus stay true to what you are. And what you find over and over again in the cases that I've looked at is that the people who know the most, in the most subtle terms about what Chinese consumer habits are, about what it is that they're looking for, they really do succeed. And I hate to say, because I'm, I'm not prepared to say that foreign companies will never be able to compete with Chinese companies, but it's hard. Because Chinese players are really good at this. They know what they're doing, and as much as you can figure out a productive relationship to work with them, I think you sort of, you know, stack the deck in your favor.

AI assessment note: “we underappreciate how hard that is, and how much it can be almost impossible”

Q So you wrote a book, The Age of Ambition, Which is about China's ambitions to be the center of innovation. I mean, could you tell us more about your book and the themes of that?

A Yeah, I was struck, uh, in moving to China about how much it felt to me like where the United States was at a point in our own development about a hundred years ago, uh, the Industrial Revolution, the Gilded Age. We were climbing out of this period of turmoil, the Civil War, and All of a sudden, it was like the faucet had been turned on, and all of these individual possibilities, people who had been, you know, the oddball in small towns all over the United States suddenly started making their way to big cities, and they were getting together, they were discovering capital, they were discovering other people with like-minded ideas, and things were germinating. And that is sort of what's been happening in China. And when I called it the age of ambition, it was because I was describing this phenomenon where it was truly that. It was like, if you had enough gumption and creativity And sort of sheer audacity to get out of your Village, wherever you were, you could go to the big cities and try something out. Wasn't always going to succeed. And in fact, it might run you headlong into powerful institutions, or it might make you into somebody who is a real pathbreaker. And that was, that's an astonishing thing to see. And it's not something that I'd seen living in other countries. This was very specific to China and to this moment.

AI assessment note: “when I called it the age of ambition, it was because I was describing”

Q You know, the book is called The Age of Ambition. Um, certainly China's a very dynamic place, shall we say. Are we Going into a different phase, and how would you describe that?

A Yeah, that's a good important point, because something is changing at the moment in China. Something is, and I don't say that with great pleasure. I did a long profile in the New Yorker last year of the president of China, Xi Jinping, and he came into office at the end of and he's turned out to be a much more important figure, because in simplest terms, he's taken what was this consensus model of Governance, which was you had this group of guys who were almost studiously bland and nonspecific. They wanted them to be that way. They were looking for the opposite of Chairman Mao. And instead, now we have, once again, a very dominant single personality. And as that can be a good thing or that can be not a good thing. And in some ways, it has set back the process of bringing China into the world, the process that China itself initiated. So in practical terms, if you're sitting in Beijing or Shanghai right now, you're not able to get on a half a dozen information sources, news sources, data sources that you could have three years ago. And from my perspective, how many countries in the world today do you go to where the internet connectivity is worse than it was three years ago? So it's that instinct that worries me, because what that suggests is politics over pragmatism, and pragmatism has helped China so much over the last 40 years that I want that to be in the foreground as much as…

AI assessment note: “instead, now we have, once again, a very dominant single personality.”

Q You and I were joking earlier about cyber, a cyber in front of everything, but cyber threat is a real topic, especially when people think about that in the context of China. What are some of your thoughts on that topic?

A I think some of this comes from how China regards itself in the global Balance of competition that, and oftentimes people who haven't been in China for very long don't appreciate the degree to which China regards itself as a weak player in an asymmetrical conflict with powerful players around the world. So they try to truly, I mean, on an individual level and on a national level, looks at the United States and says, you know, we are like bandits trying to take down a huge locomotive and there's something virtuous in that. I mean, one of the terms in Chinese for Counterfeiter is Shanjai, which is a mountain stronghold. It's like the, you know, it's like the little village where the bandits are holed up fighting kind of gloriously against the powerful foe. And that idea, and all the layers of that gives you an idea of how they regard themselves in this global competition for progress and edge and ideas. They said, look, we missed the first industrial revolution. This is our chance to make up that. Something is changing now. From my perspective, I noticed a few years ago that One of the clearest signs that China was beginning to take IP more seriously and regard it differently was when a company like Huawei, for instance, was hiring a lot of lawyers, because that meant they were suing other people to defend their own IP. Get as many patents as you can, but that didn't, it was kind…

AI assessment note: “China regards itself as a weak player in an asymmetrical conflict”

Q Right. Well, okay, so one final question then, you know, you mentioned Charleston and the Dillon case. You're working on a story right now about gun violence. I mean, I know it's early reporting, but given that we're a technology podcast, what are some of your thoughts on some of the technologies with guns?

A Well, one of the really intriguing prospects is that we can use a technology solution for what is this public health and sociological crisis of gun violence in America. And the president said a few months ago, why is it that we're able to rely on a thumbprint to open our iPhones, but we're not able to do that with a handgun or a shotgun? And it's an intriguing prospect. It's a new, I mean, it's not a new thing. It's been around for a while. The hope of doing this In the end, you're still asking investors to put money behind a firearm, and if you're choosing between putting money behind a firearm or something else, it's easy to choose the something else. I think smart guns will probably end up being a part of our future, uh, in the United States, and that'll prevent a kid, for instance, from picking up their parents, you know, even if that parent has a legitimate use for it, let's say it's a cop, you know, keep that kid from, from, um, picking up that gun and hurting themselves or somebody else.

AI assessment note: “I think smart guns will probably end up being a part of our future”

Q competing theme where if you have, like, a high concentration of people in a particular area, you can get more unique innovations as a result, especially if you specialize and you create some sort of regulatory arbitrage around all these regions. How is that playing out in China, and what are your views on how that innovation is happening? I mean, you document a lot of that in your book.

A You see some successful examples and some unsuccessful examples. I, at one point, spent some time studying what was going on with green tech and looking at how China was using this extraordinary scale, for instance, to be able to, oftentimes it was not inventing things, but it was process innovation. They were able to say, okay, let's get a bunch of small manufacturers together. They will learn from each other. There will be some advantages to that. It was, they were doing wind turbine manufacturing, and they managed to figure out how to drive the price down by Producing essentially faster and larger than anybody else could do, and that was an example of what China does very well. Look, this is a time in America where we have in some ways dismantled some of the infrastructure for science and technology development in ways in which the government can be helpful, and all usual caveats apply, but the, the moments when it can promote some sort of helpful head start, China was doing that, and China did that very deliberately around a few key areas. For instance, nanotechnology, uh, material science, wind and solar, and in some cases, they were able to take steps forward. In other areas, you start to see that this sort of oversized role of government can be an obstacle. There's an expression that Chinese scientist friends of mine use, which is that the funding goes, this is a way to …

AI assessment note: “You see some successful examples and some unsuccessful examples. I, at one point”

Q entering China because you have to go through, like, joint ventures to actually do that, or where you're just even selling products in China, or there's partnering with Chinese companies. You know, recently in the news, there's been a lot of discussion around the capital outflows. Like, how do you think that's playing out with what we're talking about here in this age of ambition? How do we reconcile those?

A Some of the hyperventilating, I think, about capital outflows is a little bit overstated because some of this actually is The process of what China was trying to do anyway, which is to become a little bit of a more normal economy. That being said, people are moving money out. They're moving money out because they're uncertain about what the future holds. Uh, this anti-corruption campaign, which has been a big story for the last couple of years is going to be around. It's not going anywhere. And what that means is that people, even people who feel like, look, I've done nothing wrong. I'm not worried about being caught with my hand in the, in the till. It's that they don't really know if they can count on the courts to defend them in the case where, you know, to, to give them a fair hearing if something happened. So people with a lot to lose are saying, look, I'm going to hedge, and I'm going to put my assets in places like California and, ah, New York real estate and elsewhere. So that's a real phenomenon. It's not the sign of the barrel going over the falls the way it's sometimes described.

AI assessment note: “Some of the hyperventilating, I think, about capital outflows is a little bit overstated”

Q So what does that tell you? Like, what are some of the takeaways that come from that?

A I think the most important thing is, even though we often tell ourselves, yes, we have to understand the local market, we underappreciate how hard that is, and how much it can be almost impossible to do it from, um, from far away. So You know, there's this tension, right, about how much do you localize versus stay true to what you are. And what you find over and over again in the cases that I've looked at is that the people who know the most, in the most subtle terms about what Chinese consumer habits are, about what it is that they're looking for, they really do succeed. And I hate to say, because I'm, I'm not prepared to say that foreign companies will never be able to compete with Chinese companies, but it's hard. Because Chinese players are really good at this. They know what they're doing, and as much as you can figure out a productive relationship to work with them, I think you sort of, you know, stack the deck in your favor.

AI assessment note: “I think the most important thing is, even though we often tell ourselves”

Q competing theme where if you have, like, a high concentration of people in a particular area, you can get more unique innovations as a result, especially if you specialize and you create some sort of regulatory arbitrage around all these regions. How is that playing out in China, and what are your views on how that innovation is happening? I mean, you document a lot of that in your book.

A You see some successful examples and some unsuccessful examples. I, at one point, spent some time studying what was going on with green tech and looking at how China was using this extraordinary scale, for instance, to be able to, oftentimes it was not inventing things, but it was process innovation. They were able to say, okay, let's get a bunch of small manufacturers together. They will learn from each other. There will be some advantages to that. It was, they were doing wind turbine manufacturing, and they managed to figure out how to drive the price down by Producing essentially faster and larger than anybody else could do, and that was an example of what China does very well. Look, this is a time in America where we have in some ways dismantled some of the infrastructure for science and technology development in ways in which the government can be helpful, and all usual caveats apply, but the, the moments when it can promote some sort of helpful head start, China was doing that, and China did that very deliberately around a few key areas. For instance, nanotechnology, uh, material science, wind and solar, and in some cases, they were able to take steps forward. In other areas, you start to see that this sort of oversized role of government can be an obstacle. There's an expression that Chinese scientist friends of mine use, which is that the funding goes, this is a way to …

AI assessment note: “China was using this extraordinary scale, for instance, to be able to, oftentimes it was not inventing things, but it was process innovation.”

Q move. But in China, something unique is playing out as well, where there's also government policy to draw people out of the rural regions and into these huge urban centers, down to the tiering of the cities. Like, you know, you're really pushing people into tier one next to tier two cities. Does that sort of change that self-selection notion of it? Because China is really unique in that sense.

A Well, the immigration thing is an interesting one, because, and we should talk about this when we're thinking about innovation possibilities in China, the fact is that it's not an immigrant destination. So how does that change what it becomes? But what, what it has, and this is, is that in its own odd way, immigrant, it's, it's so large that it almost is like an immigrant destination, because if you're in Beijing or Shanghai, they're not coming from County Cork, they're coming from, you know, a county in Hunan Province, but it's the equivalent dynamic to what was going on in the United States. So you still get the, In some ways, you know, the, you know, people are sort of splashing ashore in Shanghai coming from inland China, and so there is some of that self-selection quality, but the tiering of the cities, which you mentioned, is such an important phenomenon.

AI assessment note: “and so there is some of that self-selection quality”

Q You and I were joking earlier about cyber, a cyber in front of everything, but cyber threat is a real topic, especially when people think about that in the context of China. What are some of your thoughts on that topic?

A I think some of this comes from how China regards itself in the global Balance of competition that, and oftentimes people who haven't been in China for very long don't appreciate the degree to which China regards itself as a weak player in an asymmetrical conflict with powerful players around the world. So they try to truly, I mean, on an individual level and on a national level, looks at the United States and says, you know, we are like bandits trying to take down a huge locomotive and there's something virtuous in that. I mean, one of the terms in Chinese for Counterfeiter is Shanjai, which is a mountain stronghold. It's like the, you know, it's like the little village where the bandits are holed up fighting kind of gloriously against the powerful foe. And that idea, and all the layers of that gives you an idea of how they regard themselves in this global competition for progress and edge and ideas. They said, look, we missed the first industrial revolution. This is our chance to make up that. Something is changing now. From my perspective, I noticed a few years ago that One of the clearest signs that China was beginning to take IP more seriously and regard it differently was when a company like Huawei, for instance, was hiring a lot of lawyers, because that meant they were suing other people to defend their own IP. Get as many patents as you can, but that didn't, it was kind…

AI assessment note: “To go back to the cyber thing, I think there is a recognition now”

Q move. But in China, something unique is playing out as well, where there's also government policy to draw people out of the rural regions and into these huge urban centers, down to the tiering of the cities. Like, you know, you're really pushing people into tier one next to tier two cities. Does that sort of change that self-selection notion of it? Because China is really unique in that sense.

A Well, the immigration thing is an interesting one, because, and we should talk about this when we're thinking about innovation possibilities in China, the fact is that it's not an immigrant destination. So how does that change what it becomes? But what, what it has, and this is, is that in its own odd way, immigrant, it's, it's so large that it almost is like an immigrant destination, because if you're in Beijing or Shanghai, they're not coming from County Cork, they're coming from, you know, a county in Hunan Province, but it's the equivalent dynamic to what was going on in the United States. So you still get the, In some ways, you know, the, you know, people are sort of splashing ashore in Shanghai coming from inland China, and so there is some of that self-selection quality, but the tiering of the cities, which you mentioned, is such an important phenomenon.

AI assessment note: “and so there is some of that self-selection quality”