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- (00:00) - Overview: 3 weeks in China
- (02:33) - The China knowledge problem: Grappling with Reality
- (06:54) - Physics seminars in Shanghai and Beijing
- (15:54) - Chinese academia, challenges in scientific culture
- (22:43) - Yu Min: Two Bombs, One Satellite
- (27:02) - He Jiankui and gene editing, plus the future of biotech in China
- (33:32) - China's AI and chip war strategy. Impact of U.S. policies on semiconductor industry
- (35:46) - Quiet confidence in China's technological advancements
- (37:17) - Discovering my father's history in Yunnan, etched in stone
- (41:04) - Climbing Jade Mountain on election night: Trump Triumph
- (48:31) - Shanghai modern infrastructure and technology
- (51:16) - High-speed rail in China
- (53:12) - Visit China - or at least watch some travel videos on YouTube!
Links to X posts made during my trip - check out the whole timeline
during this period.
PPP and US vs PRC Real GDP
PhD student asks me whether Jews control US politics:
Note to retards, on "Chicoms":
Yu Min and the Chinese H-bomb:
Me and He Jiankui:
Dali:
Lijiang:
MAGA on the Mountain:
Business-class lie flat seats on HSR:
Kumming:
Shanghai:
Music used with permission from Blade Runner Blues Livestream improvisation by State Azure.
--
Steve Hsu is Professor of Theoretical Physics and of Computational Mathematics, Science, and Engineering at Michigan State University. Previously, he was Senior Vice President for Research and Innovation at MSU and Director of the Institute of Theoretical Science at the University of Oregon. Hsu is a startup founder (SuperFocus, SafeWeb, Genomic Prediction, Othram) and advisor to venture capital and other investment firms. He was educated at Caltech and Berkeley, was a Harvard Junior Fellow, and has held faculty positions at Yale, the University of Oregon, and MSU. Please send any questions or suggestions to manifold1podcast@gmail.com or Steve on X @hsu_steve.
Creators & Guests
What is Manifold?
Steve Hsu is Professor of Theoretical Physics and Computational Mathematics, Science, and Engineering at Michigan State University. Join him for wide-ranging conversations with leading writers, scientists, technologists, academics, entrepreneurs, investors, and more.
If you're a serious person and you say, wait a minute, the most important thing in terms of human affairs that's going to happen in the next 20 years is the U.S. China competition. Everything else is secondary. Okay, whatever tragic events are happening in Gaza, if the U.S. gets into a war with Iran, all of that is still secondary to two potential global hegemons competing in all spheres, military technology, nuclear technology, semiconductors, AI, genetic engineering. Everything else is secondary to that competition for the next 20 years or so.
Okay. It will drive technological innovation. It will drive investment. It will drive everything. It could end the world if we have World War III.
But if you are an intellectually serious and engaged in the real world, then you have no excuse not to try to get smarter about what's happening in China. If you have the means, I would travel here and just take a look.
Welcome to Manifold. I'm recording this episode from my hotel room in Shanghai, overlooking People's Square. And for those of you who follow me on Twitter or who heard the last episode of Manifold, you know that I've been on a fairly lengthy trip in China. The last episode I recorded was entitled, Letter from Beijing.
Steve Hsu: And I recorded that with a guy called, whose pseudonym is Han Feizi, who writes for Asia Times. And uh, he's also a fan of Manifold, and so we were together in Beijing and we recorded that last episode. Today it's just me. I'm at the end of this trip. Tomorrow I will fly back to the U. S. And I just thought I would share my thoughts after this long and very rewarding and complicated trip that I've had in China.
Now I have so many things to discuss with you. I've actually got a list here that I'm going to consult, and of all the stuff that's happened in the last few weeks.
First, let me just say something about the knowledge problem for China. So You know, most of my audience are Westerners and probably Americans even, and you'll know that we're entering an era where the U. S. and China are engaged in increasingly intense geostrategic, economic, and technological competition. And so I think almost anybody who wants to be informed about what's going to happen in the world in the next 20 years. Needs to understand China better. And it's quite easy to be miscalibrated about China for a number of reasons.
There's the geographical distance, there's the linguistic and cultural distance. You know, you just can't, you can't just pick up a Chinese news source or a Chinese book and read it unless you really understand the language well. Furthermore, the country has been changing at such a rapid pace that even if you were well calibrated about China 10 years ago, even 10 years ago or 10 or 15 years ago, let's suppose you were the world expert on China 10 or 15 years ago, but you hadn't really kept up on what's changed in those in that ensuing time period, you would be miscalibrated.
The pace of change here is just super fast. Not just economic growth rates, which have been sort of 6, 7, 8 percent in the last decade or two, but also the rate of internal technological capability. Also the rate of improvement of human capital. So the fraction of children here who are able to get a good education and then get a college education, that has risen dramatically in the last 20 years.
So the older generations in China are very, very different from the younger. generations in China. That's something I'll try to talk about in this discussion. So I've just listed a bunch of reasons why, if you really want to understand what's going on here, you actually have to make an effort. And you probably realize, if you listen to my podcast, that the corporate media, the mainstream or legacy media that reports to you on issues like Ukraine or Gaza or the presidential election is not really giving you the full story.
It's heavily propagandized, the information that you get. It's heavily filtered. And, in the same way, you know, I would regularly meet people who are dubious about what they're told, say, about Gaza in the corporate media, legacy media, or about, U. S. Russia relations or the role of Russia in the presidential elections supporting Donald Trump or whatever.
People are regular, I regularly talk to people who are, say, suspicious about legacy media reporting on those topics, but then they're completely credulous they just accept what The Economist or the Financial Times or the Wall Street Journal or New York Times says about China. And I can tell you that the information that you get from those sources on the topic of China is just as distorted and reflects just as much a particular editorial agenda as reporting on those other things, okay. So I think you should just start with that as your baseline and then just try to correct if you really want to have a uh, an accurate, well calibrated picture of reality in these important areas like technological competition between U. S. and China. The state of the economy in China, the state of the military in China all of those things I think you, you just need to put some effort in and you need to have a very critical, epistemically careful approach to the problem, otherwise you're just going to be miscalibrated.
Okay, so that's my introduction and let me, or my motivation for why you might be interested in what I'm going to say in this,
part travelog informed discussion of the situation in China. That's what I'm going to try to aim for in the next hour, hour and a half of this podcast.
Now my trip here started with academic talks in Shanghai at universities and at the Chinese Academy of Sciences in Shanghai and Beijing.
So I'll, I'll talk a little bit about that, that'll be more of interest for physicists, I think, or, or some academics who are interested in how academia is working in China. a fun topic. I met in Beijing with He Jiankui. He Jiankui is the first scientist to have edited a human genome, the genome of an embryo, two embryos, and two twin girls.
And I met with him. He's a very controversial figure, but I wanted to understand better what he had done and what his current view is of this important set of technology. So I'll talk a little bit about my meeting with He Jiankui. That could be a whole episode. On all of these topics that I report on, just be aware that I have to maintain certain levels of confidentiality.
So I'm not giving you the full story of what I learned. Later I'll talk about SMIC, which is the leading chip fab here in Shanghai SMEE, which makes the new lithography machines for China. I cannot tell you everything that I learned about these topics because a lot of it was confidential, but I can, what I can tell you, I'll tell you, and let's just say I've been quite busy here in trying to learn about what's going on in China.
So I'll talk a little bit about He Jiankui. I met with some top venture capitalists and tech leaders in China, also when I was in Beijing. you might, might recall that I recorded an episode Letter from Beijing already
We focused mainly on macroeconomic topics in China. What is the quality of life in China? What is it like to live here? I suggest you consult that episode.
I'm not going to repeat all the things that we talked about there. I did get a bunch of feedback. There are many comments on the YouTube video for that episode, and there were comments on Twitter, on X. I just want to say, the main observation I would stand by is that the purchasing power parity comparisons of dollar versus RMB do suggest to me that there's about a 2x purchasing power differential between the nominal exchange rate between the RMB and the dollar and what you actually can buy in China.
And if you use that correction, that's in line with what the World Bank concludes in their PPP adjustment or PPP analysis, that suggests the Chinese economy is something like one and a half times as big as the United States, if you really apply that correction. It could be even twice as large as the U. S. economy. When you measure the size of an economy, you really have to decide what factors you want to weigh. Do you want to weigh productive assets? Do you want to define GDP in terms of transactions? So for example, if, if there's some, you know real estate sales and the realtor takes 6%, do you count that 6% as real productive activity in the economy or not?
you know, so, so there's a question of exactly how you want to define the size and quality of an economy. And so there'll be some difference in the conclusion you would come to depending on how heavily you weigh active production of physical goods versus services versus, you know, just counting of transactional value.
I think 1. 5 to 2x the Chinese economy being bigger than the U. S. economy by 1. 5 to 2x if we weigh more toward physical production, actual goods, things that can be computed or electrical power, things like that. I think that's not far off.
Steve Hsu: And so I won't say more about the topics that we covered in Letter from Beijing. I suggest people go and just watch that episode.
After I left Shanghai and Beijing, which are on the, the, the sort of highly developed eastern seacoast of China, I went to the far southwest. I went to a province called Yunnan, which is low latitude, high altitude. It's just north of Vietnam.
So if it were at sea level, it would be lush, tropical jungle, quasi tropical jungle. But because it's at six, seven, eight, ten thousand feet above sea level, you're really up in the mountains. And that you get this wonderful combination of really strong sunlight because of the low latitude year round. But cool temperatures and low humidity because of the altitude.
And it's just a really delightful place to spend time. It's much more relaxed than this part of China. I'm in Shanghai right now. It's got an incredible climate, incredible vegetation. They grow beautiful flowers there year round. exotic fruits and vegetables. It's just an incredible place to visit.
The, the main reason I went there though was because during the Second World War, when the Japanese were occupying the Northeast of China, the top universities, three of the top universities Beijing University, Beida, Tsinghua University, and Nankai University, combined together and moved all the way to Kunming, which is the capital city of Yunnan, and they established a wartime university there that only existed for eight years, and it was called Lianda. And my father attended that university during the war, and I heard lots of stories about, you know, how hard it was to travel all the way across China to this rural, this, this remote southwest region, but how beautiful the place was.
Kunming is known as the City of Eternal Spring. It's really just a gorgeous city. I heard so many stories about my dad's time there, I wanted to go there and visit this place. They now have a very elaborate museum about that university because it's a very special university. It only existed eight years, it was a combination of three other universities which then since migrated back to their original campuses in Beijing and Nanjing.
But during the war it was really the center of intellectual activity. in China. And so there's a, there's an amazing museum there and some, a memorial. I'll talk a little bit about that when I, when I talk more about Yunnan. Now I'm back in Shanghai and I've spent some time here. Some friends of the podcast have met with me here and shown me around Beijing Shanghai. So I got a very interesting look at what's happening in Shanghai SMIC, as I mentioned, and SMEE are both here. So I'll talk a little bit about that. That's kind of a rough outline of what I'm going to talk about in this episode.
So let me go back now and start with the academic talks I gave in Shanghai and Beijing. You know, these are very the talks I've been giving lately are on my core research activity, which is the Hawking problem of how quantum information is encoded in the Hawking radiation that escapes an evaporating black hole. So Hawking showed that black holes slowly evaporate. They emit through quantum fluctuations.
They emit radiation called Hawking radiation. They gradually lose their mass energy and eventually disappear. But the question is, if the interior of the black hole is cut off from the rest of us by something called a horizon, how does the quantum information that has fallen into the black hole, say it's formed originally from a star or something, how does the information about the quantum state of that star get encoded in the Hawking radiation as it comes out?
And it's a problem that me and my collaborator Xavier Calmet have been working on for years now and, and, and we. I think we've made significant progress toward the solution to that problem. And so the seminars I gave here in Shanghai and also at the Chinese Academy of Sciences in Beijing were on that topic.
It's very specialized. I can't really go through all of it. The slides and video, I think they recorded when I was at the Chinese Academy of Sciences. So I've got to post that at some point, probably on YouTube or something so you can hear the audio and look at my slides. I gave a similar talk, I've given a similar talk at a number of other universities recently, including Caltech. And I think there's, I have a Substack post describing the talk I gave at Caltech, which is materially more or less the same talk. And the slides are also available. So if you go to my Substack, you can find all this information.
I just want to comment on a couple of aspects of this.
So obviously having conversations with lots of professors, I learned more about the current state of Chinese science and academia. I have, I've been here since 2019. So it's been, you know, five years and, you know, things can change even in five years especially when it's China. So I learned a little bit about the academic setting here. Interestingly at the talk I gave in Shanghai and the talk I gave in Beijing, I can identify two individuals interestingly at one at each talk who really I could tell had a deep understanding of what I was talking about. One was actually an Indian postdoc at the University of Shanghai who had been a student of a guy called Padmanabhan. So if you're a theoretical physicist, you might know Padmanabhan. He died sadly fairly young, around 60. He was a leading Indian theoretical physicist who specialized in general relativity and gravity. And this guy had been a student of his. He's a postdoc here in China now, which is interesting. There was a, there was quite a mix of people at the seminars, mostly Chinese physicists, but there were some Indians and, and other international physicists.
shout out to that guy. He asked very incisive questions which showed that he understood what I was saying, and understood the main points that Kao Mei and I had made. Interestingly, or sadly, when we went out to lunch with the big professors, we all walked together to the faculty club, and when we got to the faculty club, the big professors pulled me into this private lunch room.
In China often they have these private dining rooms attached to restaurants and things like this. So we ate in this fancy private dining room, all the grad students and postdocs ate in the cafeteria, and then I didn't get to talk to that guy again. So, so if you're watching this seminar. I appreciated the relatively brief conversation we had after my talk when we were walking over to the faculty club about the work that I presented.
And similarly in, at the Chinese Academy of Sciences, there was one guy who was just finishing his PhD at the Chinese Academy of Sciences. And I think I had just written a paper on replica wormholes and put it on the archive just when I would just the day, a few days before I'd arrived. He clearly understood exactly what I was talking about.
And so It's always a pleasure, you know, when you work on such a specialized, deep topic that takes years to kind of get to the frontier on you have to treasure the times when you meet someone who really is fully up to speed on what you're talking about and can appreciate the main points, the main breakthroughs or advances that you've made in this subject. So just a little bit of I couldn't, couldn't help but express a little bit about the scientific aspect of this trip.
In talking to the Chinese professors, Chinese academia has gone through a big expansion as the country's gotten richer in the last decades. And so it's gone from being sort of behind the rest of the world, trying to catch up quickly, able to train in the past the situations they could train students to a sort of bachelor's, master's level so that they could then come out, say, to the United States or the West and finish their PhDs. But they couldn't really train students to the actual frontier of, research frontier of knowledge here in China, or at least maybe in most of China except just a couple of exceptional universities. That's all changed now. So if you go to a reasonably good Chinese university, you'll meet people in physics, for example, I can tell. and definitely in other fields like engineering and more applied sciences. You'll find many, many research groups that are at the frontier, that are following all the publications of you know, researchers all over the world, and they understand them, and they're pushing, they're making their contributions. They may not be the best university in the world, like the research group there might not be as good as the one at MIT or Caltech or ETH Zurich, but they're not that far behind. And so that gap closing is very important, and it's becoming much, much more common for top students in China to just stay in China and do their PhDs here. And so I think that's an important thing people need to understand. That transition has happened over the last 20 years.
Steve Hsu: one of the bad parts, though, that I've learned in my own field of theoretical physics is that, the internal culture within China, which is pretty typical of East Asian countries, is, is to be very metrics driven about like your promotion, your salary bonus or raise depends on numerical things computed, like how many papers did you publish? What journals were they published in? Exactly how many citations did you get? So there's a, there's a kind of rigid system which isn't really able to judge quality in a nuanced way the way the best universities in the United States or West are able to do. It's more of like a mafia system where, first of all, there's a bureaucracy which is controlling a big part of, like the incentive structure. And then there's a lot of, like, you know, this big professor tries to promote his former postdocs and students ahead of everybody else. And the devotion toward the higher goal of advancing the field is sometimes subordinated to this mafia like behavior. where people are really worried about their internal, their individual careers and, and advancement.
Now, if what I just said to you sounds like, wait, wait a minute, Steve, you're describing American academia or, or European academia as well. Yes, I'm aware that this mafia-like tendency is also becoming more and more prevalent in academia in the West. And so it's a sad thing. I was lucky to live through a more kind of golden age of theoretical physics when, you know, the field still was a very kind of high trust, idealistic field. People are really trying to push the frontier forward. This kind of mafia gamesmanship was less common. It's become more common in the West. But I think it is definitely still an impediment. At least the professors who were talking to me on, during this trip, described it as an impediment for China making that jump to the, the absolute sort of top level of innovation in really fundamental science.
I don't think it's a problem for them. in getting big, for example, scientific experiments built. They're able to build huge neutrino experiments, astrophysics experiments, high energy physics experiments, et cetera, et cetera. They don't really have a problem in applied sciences, but for this really deep, creative coming up with new concepts, kind of science, I think this, this mafia-like and sort of like mechanistic incentive structure here, is not good for that. And so they're had a fair number of conversations with professors about that.
When I was giving my seminar at the Chinese Academy of Sciences, it was in this very big seminar room and they had on the wall some pictures of some very distinguished scientists and those pictures had next to them a description of, you know, what, how are these individuals chosen?
There were people who had made central contributions to the two bombs, one satellite program in Chinese development. And this, this would have been in the late 20th century, a long time ago. And the goal, I don't know if Mao coined that term, two bombs, one satellite. It might have been Mao. But the goal was for them to catch up with the West. Very crucial steps were to build two bombs, one satellite. Now the word bomb in Chinese could refer either to something like a hydrogen bomb or atomic bomb, or to the ICBM. Which delivers it. So I think the missile, the word for missile is also, or what they meant by two bombs, is the ICBM, the delivery vehicle, the warhead, so that's the two bombs, and then one satellite, meaning the ability to get satellites in orbit.
So, there were these pictures of these people who had made important contributions, who were Chinese Academy of Science members to that work. And the very first one, the one given pride of place was a guy called Yu Min, whom I recognized immediately. Now Yu Min was actually, his identity was kept secret for like 30 years after the Chinese built their hydrogen bomb. And he's the father of the hydrogen bomb here. And the mechanism by which an atomic bomb is used to trigger a thermonuclear or hydrogen bomb process. Something that I've written a lot about on my blog or tweeted about, because it's an interesting aspect of scientific history, you can really trace all the intellectual work for that back to Ulam and Teller.
Okay, if you don't know who Ulam and Teller are, just go look it up. But Ulam and Teller at Los Alamos came up with the Ulam Teller mechanism, which makes possible these thermonuclear bombs, which in some sense have potentially unlimited power. You can basically make it as powerful as you want. very important technical conceptual breakthrough in nuclear weapons physics.
everybody else got it from Ulam Teller. The British got it from us. The Russians at least got part of it through espionage from us. Although there's some sense in which Sakharov, Andrei Sakharov may have invented the Ulam, reinvented the Ulam Teller mechanism itself. What's interesting is that in China, this guy, Yu Min not only came up with the Ulam Teller mechanism independently because they didn't have an espionage resource, but also invented, it is claimed sometimes, although this is still highly classified, it's claimed that he's invented a superior mechanism to Ulam Teller, which is implemented in the Chinese bombs.
And that's still pretty controversial in the West, though people in China seem to believe that. And actually in some conversations before I gave my talk, I noticed this picture on the wall. Lee was looking down on me the whole time I gave my talk. I noticed this picture of Yu Min on the wall, and I started asking the professors there about it.
Now, the professors I talked to, as far as I knew, were not involved in any classified research in China. They're all sort of very academic. The type of professors that would think about black holes and stuff. But, you know, on the other hand, people like Saharov and Ulam and Teller would also think about black holes, so there's no telling who knows what in our business, right?
So, I was asking them about the Yumin mechanism, whether there really was a separate improvement by Yumin to the Ulam Teller mechanism. Apparently, this makes Chinese bombs more stable and a little bit safer than the corresponding Western thermonuclear bombs. And that's it. At least someone who seemed to know what they were talking about confirmed that yes, there was a different Yumin mechanism that was used by the Chinese in Chinese weapons.
And yes, it was, it was invented by Yumin. So, anyway, that rumor, it's only kind of a speculation in the West. At least I had it confirmed to me by someone who claimed to know at the Chinese Academy of Sciences. So that was an interesting thing that I learned from my trip.
After these academic talks, I met with He Jiankui.
So, he's the guy who genetically edited the two embryos for a family. The father in the family had HIV. He had been studying very carefully how to edit genomes. He had already edited a monkey, maybe more than one monkey. Those monkeys actually are in the Kunming primate facility, just by coincidence. And he had done a ton of work. Jiankui's background is actually biophysics, and his specialty is sequencing DNA.
The actual physical mechanisms for how to sequence DNA and then how to process the information, the data that you get from sequencers. He had done a lot of work on figuring out trying to detect off target edits. So if you use a gene editing tool like CRISPR, you have a problem. One of the problems is that you might make an off-target edit and he has done a lot of work on trying to detect off-target edits.
He went ahead and did an edit, which conferred HIV resistance. There's a single mutation, single edit that you can make, which confers resistance to HIV in these two girls, I think twins of this family, in this family, who's, where the father had HIV. Okay, so he felt this was a well motivated thing to do.
very well defined genetic edit. He did it in these embryos. The girls are perfectly healthy and happy. The family is happy. But because of the uproar that ensued, He Jiankui went to prison for three years in China and he lost his position at a prominent university here in China. He actually did his PhD in physics, biophysics at Rice University.
He did a postdoc at Stanford with a leading physicist who has moved into genomics named Steve Quake, who's quite a superstar in that area of research, actually invented in some sense, noninvasive prenatal testing. So he comes from a very good scientific lineage. I talked to him. He is actually a careful thinker. He knows what he's doing. Okay.
When he first announced the work he had done, there was no negative reaction as far as I know from the Chinese government. They only later went after him after a bunch of Western scientists and bioethicists really decried his work as being unethical, that there were problems with his work.
And then there was a petition signed by a lot of Chinese scientists, but many of whom really are not experts in this area, condemning what he had done. And in any case, he got into a bunch of trouble. This is well documented, at least somewhat well documented in the media, so I won't go through the whole thing.
He served his time. He's out now. He runs a biotech company in China. And he still thinks in the long run he's going to be vindicated. that gene editing of human embryos will become commonplace. There are good arguments for certain applications of CRISPR of gene editing in that setting. And he thinks he in the long scope of history will be vindicated as the first person to do it and as correct in his arguments for why this is a useful technology.
And so it was interesting to talk to him to learn about the state of biotech, specifically genomics in China. We had a great lunch. We actually met with the founder of, essentially the founder of 23 and me, the Chinese version of 23. And I came to lunch with us. So it was a really good meeting. I can't say too much about it, because lots of confidential things from her that I just, just can't discuss.
But it was, you know, quite a thrill to meet with him. He's followed my work for many years. I obviously was aware of him and so we had a wonderful day together.
Steve Hsu: I guess on my own, from my own perspective, I think, yes, it is only a matter of time before humans start to do germline genetic engineering. As my colleague, George Church, often says, look, once it's shown to be safe and effective, okay, safe and effective, effective meaning confers some medical benefit, then we'll just do it. And, you know, embryo selection now, which is what my company Genomic Prediction does, if you look at polling by bioethicists, by their bioethicists who studied this subject and they've been doing a bunch of polling of people, very large fraction of people, maybe 70% or 80% approve of embryo selection to prevent to, to reduce health risks, to reduce, reduce disease risks. So that's pretty much mainstream. And I think editing to prevent genetic disease is something like 40 -50 percent approval right now in these polls. And all these things are just going to go up. People just get more familiar with the technology or they realize a concrete scenario where it benefits some family and they just realize, well, we should do that. We should not, you know, prevent that good based on some abstract argument which may be, you know, misconceived.
. So I, let me not say more about quai, but anyway, it was, it was, it was great to meet with him. I, I tweeted, I sort of have been tweeting a whole, like, live stream kind of thing while I've been in China. So if you go and look at my feed, I'll probably try to put a link in or something in the show notes. But you can see like the, the, the, the photos that we took together, you know, at a Starbucks and at his lab. And anyway I refer you to that stuff.
While I was in Beijing, I also met with some top venture capitalists and technologists. I again can't say too much about it. I just want to say that there's quiet confidence throughout all, among all the people in China, whether it was academic scientists, technologists, investors, venture capitalists, business people, just quiet confidence that nothing the outside world, specifically the U. S., can do is really going to stop the rise of China.
And in particular, a lot of conversation was about AI and the chip war. And there's a sense of quiet confidence here that China's going to get the AI training done that it needs to do. It's not going to fall way behind in the race for AGI or ASI. There are government national level plans in place to build the data centers, to produce domestically the chips necessary to run those data centers, to power those data centers, and to stay abreast of developments in AI and also in frontier chip manufacturing.
Let's just say that there's quiet confidence here. That, you know, they may not fully catch up. They may not get their EUV machine for some number of years, but they're not really worried. And so, and many people have said to me that the very stupid Biden Jake Sullivan chip war against China has only helped Chinese companies. This is something I've discussed in other podcasts, when the U. S. cuts off access for Chinese companies to key products and technologies used in the semiconductor supply chain from the U. S. and say Dutch companies like ASML, Japanese companies as well. When the U. S. starts to threaten that, it only causes a coalescence of effort here in China. It creates a necessary coordination of effort here that then lets the Chinese supply chain ecosystem for semiconductors advance very rapidly.
And so it was, it was a stupid policy by the Biden administration. And it was also based on a miscalibrated estimate of how fast we were going to get to AGI. They thought, Oh, if we just, if we just kneecap the Chinese right now, since we're AGI is right around the corner, this will let America get to super AGI and the Chinese will be behind and then they'll be screwed. And it doesn't look like it's playing out that way. Let's just put it that way.
I can't say much more about the details of what I learned on this trip.
But I think quiet confidence and a sense of inevitability in that sector, but across all sectors here. No, people here are just confident that like, oh, if there's some product that needs to be produced, batteries, photovoltaics, cars, robotics, factory automation, 5G, 6G, whatever it is, even leading edge CPUs, leading edge semiconductor nodes. There's just a quiet confidence that China's going to get there or is already there. And actually, in many of these things, they just don't feel like Westerners can compete. They just don't feel like it, if it's something that has to be made in a factory, it's eventually going to be made by Chinese companies, not by Western companies that the Westerners just can't compete with.
I mean, literally that, that may sound very jarring for you to hear that, but between two Chinese people who are technologists and know their stuff, it's a very common sentiment. You know, it's just a very common sentiment. Once China figures out how to produce it, they can generally produce it much more efficiently than Western companies.
And it's not just a matter of labor costs. There is a labor cost advantage here, but it's much more than that. It's the power of the infrastructure here. It's the ability of the government and the companies to work together to be efficient. It's the willingness of the teams to work really hard here. Okay, I'll comment a little bit more about that when I talk about, say, SMIC and other stuff.
Okay, After Beijing and Shanghai, I flew out to Yunnan. As I mentioned, my father went to college there. I went to this very famous, well, I went to this very elaborate museum, which is at the site where the Lian Da campus was during the war. And I was, I went there, when I went there, I didn't realize how elaborate the museum was.
I knew there was a memorial there. I knew maybe some limited museums. I didn't realize there was a very elaborate museum. And I was just hoping to find some trace of my dad and something related to all the stories that he had told me about wartime being there. And so I went through that huge museum and I looked at every face on every photograph in the museum, looking to see if I could find my dad.
And finally I did find one photo of a group of people who had, maybe it was a basketball club or something. It was a, it was athletic, it was in a, it was in a display about the athletic activities on the campus during the war. And I saw, I think it's a picture of my dad. I wasn't sure. I checked with my mom. She's sure it's him. Okay, so I was very pleased that I found a picture of my dad on the wall of the museum. And uh, my mom confirmed that it's, that's actually him. I should mention that at the time my dad was a student there, Li and Yang, who are two, if you're a particle physicist, you know who they are.
They discovered CP, and they came up with a theoretical framework for CP violation. Yang is the guy who introduced non abelian gauge theories into theoretical physics. And if you know anything about theoretical physics, you know that all of our fundamental theories are effectively gauge theories. And Yang is maybe the single guy who deserves the most credit for introducing that.
For many years, we didn't use the word gauge theory. We called them Yang Mills theories. Yang and Mills, his PhD student Mills. Yang and Mills wrote the first papers on this stuff. Anyway, they were all there at the same time. And Yu Min, the guy that I mentioned who came up with, is at least the Ulam teller of the Chinese nuclear weapons program and maybe did something a little bit better. He was also, it turns out, at Lian Da at the same time as my dad.
Now, in searching through the museum, I was also looking for any mention because there were various places where they listed students in certain groups or this class of graduates, things like this. And I came across a war memorial, a huge thing carved in stone, which lists all the Lianda students who volunteered for the KMT military to fight the Japanese. And I went down that list, there are probably something like 500 or 1000 names on that list, and I found my dad's name. That was a very emotional moment for me. It's there, it's engraved in stone. in this very big monument on the Lianda campus. And that monument is reproduced. So that same unscripted list, a carved list of names, is on the Nanjing University campus, the Beida, Beijing University campus, and the Tsinghua campus.
So there's four versions of this monument. And so I was pleased to think that my dad's name will remain carved in that stone for, you know, potentially another thousand years. During my trip, I saw lots of other things like that, that were, you know, thousand years old, even 2000 years old of things carved in stone in China that had survived that long. So maybe my dad's name will survive that long. That was a very positive experience that I had out in Yunnan.
Steve Hsu: Another thing that happened was that we climbed up to the near the peak, well not the peak, but very high up an area called Jade Mountain. So there's a very, in one of the sort of famous ancient towns in Yunnan province called Lijiang, you can look up and you see this Jade Mountain, this beautiful famous mountain, and you can go up fairly high, up to about almost 5, 000 meters, and it's kind of a, it's kind of like you take a, you take a cable car up, but then you have to kind of march up to get to the top, the highest observation post. And most people who do it take oxygen tanks. So you can buy these little oxygen things. They cost only 10 RMB, which is just another example of the purchasing power parody thing. You buy, you pay 10 RMB, which is like a dollar 50 in the town of Lijiang or at the base site for this little oxygen tank, which you can periodically, it's not like you wear it all the time, but you just periodically take breaths out of it as you're doing this climb.
Now, being an athlete and a former competitive swimmer, I was just curious whether I could do this climb without using the oxygen tank. And so I tried it, and I did a little calculation. Being a physicist, I did this calculation. So at that altitude of 5, 000 meters, the oxygen density is about half. The oxygen content of the air that you're breathing is about half of sea level at sea level. And so I thought, oh, if I just breathe at twice the normal rate, which, you know, if you're sprinting an event or you're running or whatever, you are also processing oxygen at a faster than normal rate. So I thought, oh, if I just, if I just maintain that during this half hour, 40 minute climb, I'll be okay. And of course I had a little, I had a canister in my backpack just in case. Okay.
So I just practiced constant hyperventilation. You actually do this if you're a swimmer, you know that you do, you're familiar with this. So when you're on the blocks, when you're psyching up for your event, most of the swimmers are behind the blocks, hyperventilating.
They're basically oxygenating their system so that they need less oxygen during the race. And so I was used to that. So I just basically consciously tried to breathe, tried to process air at twice the normal rate throughout this 40, 45 minute climb from the base where the cable car leaves you all the way up to the highest point and then come back down.
So it worked for me. I didn't actually need to open up my oxygen canister and I was able to return it at my hotel and I didn't have to pay 10 RMB for the, a 1. 50 for the, for the use of the oxygen tank. They're so nice. People in China are so nice. It's like, you know, it's becoming a very high trust society.
Unlike when it was developing, it was a very kind of like every man against every man thing because of so much scarcity and, and the economic system was unfamiliar to everyone. But now it's reaching a sort of much more mature situation where people are just very nice. You could say because of the, there's lots of surveillance cameras here, it's very hard to get away with any crime. Maybe that's why people are so nice. You can leave your cell phone or your laptop on your table at the cafe and no one will touch it. A lot of vending machines actually are honor systems. You take, you take out what you want, you take out what you want to buy, like some bottle of coffee or whatever, and then you just scan using your phone to pay for it.
And it's all honor code. That's very common here in China now. It's unbelievable to Westerners, considering what's happened to U. S. cities in the last 10, 20 years. The situation here is almost unbelievable to people who come visit. But anyway, I was able to make this climb without using oxygen. And the climb happened because of the time difference. It was afternoon here, or early afternoon here. It was late at night, election night in the US.
And before I went on this trip, I was very pleased to say to myself hey, I'm gonna avoid all the craziness all the You know wasted mental energy thinking about this election By just being in China because because of the distance I didn't really think about the election that much but I was monitoring it while I was doing this climb. My phone has Google Fi roaming and has free international roaming. So on my plan, I was able to connect to the Google Fi network, which doesn't have any firewall limitations here in China. I did it via the Huawei 5G coverage on this mountainside. So I'm on this mountain at almost 5, 000 meters. I have Huawei 5G connectivity through Google Fi because Google Fi has had relationships with China Mobile and other telco companies here in China.
So I was able to monitor the election while I was at 5, 000 meters, hyperventilating, you know, going up this mountainside. And I got to experience the triumph of Donald Trump in returning again, after four years of fighting the deep state, years of fighting ridiculous lawfare attempts to interfere with our democratic process and for him to win in a landslide and for me to experience that at 5, 000 meters where I, you know, at some point I just shouted out, you know, something like, MAGA, Trump's winning, Trump win, is win, Trump is winning in a landslide or something like this and all the people around me and You know, actually, people in China do speak a little English, almost everybody, because they have to take it in school. They were all looking at me like I was crazy, but they understood what I was saying. Okay, and so anyway, that was a peak experience, peak experience. Being at 5, 000 meters, experiencing an election, experiencing the triumph of Donald Trump over really unfair attempts to prevent him from being president and to prevent his supporters from being able to cast their votes democratically and elect him president of the United States.
Now, I'm not saying that Trump is perfect. I'm fully aware of all of his faults, all of his problems. If you don't support Trump, I fully understand that, but I don't accept people who say things like, Trump is so evil we should be allowed to subvert the democratic or legal process in order to keep him out of office. I think that's ridiculous. That is incredibly un-American.
Okay, so, again, you don't have to like Trump. I mean, in many ways, I don't like Trump, but I, I think we have to, we have to respect our own process. And the benefit of democracy is that everybody gets a vote. So, the downside of democracy is the average person might elect somebody that you as an elite, highly educated American don't like? Too bad. Okay. It's democracy. Okay. So enough about that. But anyway, I just had to relay that it was a peak experience for me to follow the election on Huawei 5G on a mountainside at 5, 000 meters and for Trump to win in a landslide.
Okay.
After spending that time in Kunming, I returned. to Shanghai here. So I've been in Shanghai for a few days enjoying the city. It's actually not, the city's so massive. It's not really for me. It's not my cup of tea, but let me just report that the metro system works beautifully. You can take a maglev train from the airport into the city. It takes like seven minutes to get from the airport into the city because the train is so fast and so smooth. There are beautiful museums here, incredible hotels.
A friend of the podcast and several friends of the podcast actually contacted me about meeting up in Shanghai. One of them showed me around. He picked me up in his NIO. For those of you who don't know, that's one of the leading kinds of cutting edge electric vehicle companies in China. So we were driving around in his NIO. He's got a little AI bot. at the front of the car that talks to you. You can ask it, you can tell it. You need some navigation instructions. You can ask about the weather. You can have it called your wife. Pretty advanced stuff. Way more advanced than the tech that we see in the United States and, and this guy just has it. He's just driving around.
He's a guy who grew up in the United States, moved here, is ethnically Chinese, moved here 20 years ago, hasn't looked back, and showed me his beautiful apartment in Shanghai. Um. I got to see parts of Shanghai that you wouldn't ordinarily see as a tourist. You know, beautiful malls mixed kind of indoor outdoor malls like the kind you would see in California, with really good restaurants, all kinds of stuff. Just the side of Shanghai that you wouldn't necessarily encounter as a tourist per se, where tourists are usually either riding in a DD car, like an Uber type car, or they're in a, in the metro.
Whereas having somebody just kind of show you around, is really very interesting. We went by the SMIC facility, where they're making the 5- and 7-nanometer chips for Huawei, etc, etc. They're the leading edge chip that, they're the, they're the tip of the spear in the US China chip war. Okay, so we went there . We also went by SMEE, which is one of the leading companies in the US creating a deep ultraviolet and extreme ultraviolet lithography technology to compete with ASML. I cannot say very much in detail about what I learned. but I'll just refer back to this concept of quiet confidence that people here are not that worried about long term competition with the U. S., especially in technology. So let me say that.
One thing that I tweeted about while I was here was that I got to ride the high speed rail from Shanghai to Beijing early in the trip. And also from Lijiang to Kunming when I was out in Yunnan. And on one of those we were able to book business class seats on the high speed rail. So, so, on one of the trains, there are seats, something like, oh, typically, oh, in some cases over a thousand seats on a typical train. So you get on the train and you're going from Shanghai to Beijing. There might be over a thousand people on that train with you at the same time. There's one little car at the front which is reserved for business class. Business class on the train system here is the highest class. Business, then first, then second. Okay. Business class has full reclined seats. Incredibly comfortable. Like, I slept for I think three hours when I was in the business class seat. We just, we just reclined it flat and I just slept. And it's so smooth.
I think I didn't look, I didn't watch the speedometer the whole time, which was on the screen the whole time, but I'm sure we did get probably, I did get up to like 350 kilometers per hour. I'm told the system is rated at 380 kilometers per hour, but it doesn't necessarily always go up to that max. The system here is incredible. You go to the train station. It's very fast. It's not like the airline, it's not like the airport where you have to arrive hours early to make sure you don't miss your flight. You can get to the train station, you know, relatively soon before your departure. There's lots of restaurants there.
You get on the train. There's also food on the train. It's, it's, it's just a super comfortable experience. Super easy. advanced infrastructure. The Internet works really well on the train. There's a famous, you can watch tons of videos where people take a coin and they balance it on the windowsill of the train or on their table as the train is going at 350 kilometers per hour and the coin just balances perfectly.
So, I would say my overall impression here is well, first of all, you have to come here. If you're a serious person, it's worth it. Okay, I think it's totally fine if you just say like, you know, I don't know anything about China, Steve. I'm an American, or I live in Germany, or whatever. I don't know anything about China.
And, you know what, I just, I just know what I read in the Economist, or the Financial Times, or the Wall Street Journal, or the New York Times. And yeah, okay, I understand what you've been saying, Steve. I should ascribe a very wide window of confidence level in, in what I read. In what, to say, in English about China.
Okay, I think that's a totally fair position to take, but the fair part of it is that you should accept that you may be miscalibrated on lots of issues related to China if you only get your information from legacy media in English. But it's okay, if you don't have the means or the intellectual energy to try to do better than that, I just want to say you should have a very large range of confidence levels, epistemically.
Okay, that's my advice to you. However, if you're a serious person and you say, wait a minute, the most important thing in terms of human affairs that's going to happen in the next 20 years is the U. S. China competition. Everything else is secondary. Okay, whatever tragic events are happening in Gaza, if the U. S. gets into a war with Iran, all of that is still secondary to two potential global hegemons competing in all spheres, military technology, nuclear technology semiconductors, AI, genetic engineering. Everything else is secondary to that competition for the next 20 years or so.
Okay? It will drive technological innovation. It will drive investment. It will drive everything. Okay? It could end the world if we have World War III. Okay.
If you're intellectually serious, and in the real world, you could be intellectually serious and just say, hey man, I only care about quarks and black holes and quantum fields and other stuff. Let, let my cousin who's an economist worry about it or whatever. Fine, that's okay, a reasonable position as well. But if you are intellectually serious and engaged in the real world, then you have no excuse not to try to get smarter about what's happening in China. If you have the means, I would travel here and just take a look.
If you can't travel here and take a look, the next best thing I would say is just go on YouTube because China did a very smart thing. They, they were, they reduced the visa requirements for almost all travelers. So many, I think most Europeans can just come to China with no visa. There's a limited period of time they can stay over, like it's maybe one week or two weeks, and they can just travel around.
So there are tons of travel vloggers just going all around China. And if you just even have a couple hours, just go on YouTube and do some searches. And you can find videos posted by these travel vloggers. Now, of course, if you read regime media, regime media is always trying to intimate that like, oh, these people are being paid by the Chinese government to make their videos or whatever.
No, they're being paid by the YouTube algorithm to make their videos. You know, these guys are not being paid by the Chinese government. Maybe there are some that are, but by and large, they're not. And those guys might be a better source of information for you than reading the FT or uh, whatever New York Times because trust me those guys are totally miscalibrated often on what they say about China.
Now, so if you don't have the means to come here at least go on Youtube and watch some of these travel videos And in particular you can see people traveling in Xinjiang You this area where they say there's a genocide going on. You can, you can just go and you know there's guys just roaming around Xinjiang, talking to Uyghurs, talking to ethnic Hui muslims talking to you know. The whole thing is ridiculous. It's a little bit like Gaza. Like, you might get one picture from official sources about what's happening in Gaza, but if you just watch some actual video from real people about what's happening there, you realize, oh, there's this incredible gap between what I've been told. Even if you read, for example, Israeli newspapers, if you read the Israeli newspapers, you realize, oh my god, they're reporting all kinds of things about what's happening there that are filtered out for the mainstream, say, English audience. Okay. Same thing about China. Go online, watch videos of people who've traveled extensively in Xinjiang, even bicycled across, you know, there are people who have bicycled across Xinjiang.
Okay. How much can you hide from a guy who's like bicycling from small town to small town or riding a scooter? There's a lady who would scooter through Xinjiang and just talk to all kinds of locals and stuff. How much can you hide from her? I mean, you know, if a genocide is happening, people are usually pretty nervous. Okay. Right? There's a little tension if people are getting genocided, right? But if you're a tourist and you spent like a month bicycling across this region, you would probably notice it, right? you know.
So anyway I just encourage you to try to get a little bit smarter about this part of the world. Something like 60 percent of world GDP is concentrated in this region. Asia, East Asia, or Asia Pacific. And, you know, there's, if for your next vacation, even if it's just for fun and not even to sort of raise your consciousness or do research on geostrategy, just come to China because there's so much here. There's such a huge range of climates. It's relatively inexpensive. The flight might be a little bit expensive, but once you're here, it's very cheap because of this two X undervaluation of the RMB. Everything is cheap here. Food is cheap here. Taxis. The internal train system is really cheap. you can have a, effectively the kind of low cost vacation you might have in like Latin America, Central America, or India or something. But, at a much, much higher quality level because all these cities now are very highly developed first world cities and you're riding a high speed train, etc, etc. So, anyway I guess that's enough about my trip. This is my letter from Shanghai. And thanks for listening. I'll see you in the next episode.