Carl Zha is the host of the Silk and Steel podcast, which focuses on China, history, culture, and politics.
Find Carl on Twitter @CarlZha.
Steve and Carl discuss:
1. Carl’s background: Chongqing to Chicago, Caltech to Bali, Life as a digital nomad
2. Xinjiang (35:20)
3. Ukraine (1:03:51)
4. China-Russia relationship (1:16:01)
5. U.S.-China competition (1:49:26)
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 (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 firstname.lastname@example.org or Steve on Twitter @hsu_steve.
What is Manifold?
Steve Hsu is a 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.
Steve Hsu: Welcome to Manifold.
Today, my guest is Carl Zha. He is the producer of the Silk and Steel podcast, which is a podcast about, I think Chinese history and culture are two of the main topics. But I think he sometimes diverges into other things like even geopolitics.
Carl is also a very well-known, I think he sometimes describes himself as a, shit poster. He tweets @CarlZha on Twitter, that's his handle. And he has something like a hundred thousand followers almost. So he's, he's quite a presence on Twitter. He was born in China, but grew up in the United States and like me attended Caltech as an undergraduate, worked as an engineer and now lives in Bali.
And he's completely fluent in both English and Chinese. So he has a very unique insight into China U.S. Issues. So I've been meaning to have Carl on the podcast for a long time. I saw that he was very active in discussions about the Ukraine crisis and that's something that we're going to get into. So I'm very happy to finally have Carl on the podcast.
Carl Zha: Thank you, Stephan. Thank you very much for the invitation.
Steve Hsu: Great. Now, what I like to do with my guests is just start out with a little biographical information. Cause I think it helps people understand your perspective and where you come from. So, as I said in the little intro, born in China. What part of China?
Carl Zha: I was born in the Southwestern part of China in this, largely unknown in the west metropolis, Chongqing. The whole Chongqing municipality has like 30, over 30 million people, but the urban area has about 8, 9 million people. So it's a big place, but I doubt very, very many people outside of China have heard of it.
It was China's war time capital during World War II. And I was born there in 1976, just one month after Mao died. So I was born. I'm the first post cultural generation post cultural revolution generation. And I spent most of my elementary school, all actually all my elementary school in China through the 1980s.
And I came to the United States in 1990, in the aftermath of the Tiananmen Square protest, because initially my dad was a first generation Chinese student who came to study in the U.S. after the Nixon visit to China. And so he came to the U.S. In 1985 to pursue his PhD. And his original plan was to get his PhD and return back to China where he was already a lecturer at the Chongqing University. Upon his return, he will basically be guaranteed like a 10 year professorship.
But 1989, Tiananmen Square protests happened, and like many overseas Chinese students. My parents also joined the protest. So both my mom and my mom joined my dad in 1987. so I was left alone with my sister in Chongqing, being taken care of by our grandma.
And after 1989, student protests crackdown, my parents like many of their generation, they also protested in the U.S. outside of the Chinese consulate. And they also, then they decided they will not return to China. And they started the process to bring me out to the United States. I was 13, almost 14, in October 1990, when I first came to the United States. So it's an interesting age.
but the China I grew up in in the 1980s was the China under then shell pins, open and reforming form era. Maybe I was sheltered as a child, but I had a very happy childhood in China. So I always have fond memories. And just from growing up, I can observe that lives were getting better and better.
I still remember in 1980, when I was four years old, my mom used her savings to buy my grandparents a black and white television. And that was the first television in kind of like the whole residential neighborhood. So all the kids will come to grandma's house to watch TV. That was 1980 and we didn't have our first color TV until I think 1986 after my dad already came to the United States, he sent back his savings at that time. At that time in China,you couldn't even buy imported goods freely. You have to have foreign currency. and so my dad sent back us dollars. My mom then got an exchange at cha bank of China for back then so-called foreign exchange certificates.
So with the foreign exchange certificate, you can go to a specific store called a friendship store, which was catered to foreigners and the people had hard currency. So, with that, they bought a Panasonic color TV. That was 1986. So I remember this vividly because this is kind of like the markers of my childhood. We changed from a black and white TV to color television.
and back then China didn't produce a lot of these consumer goods either because like I said, back in 1986, there were many I don't think, I don't know if there's any domestically produced color TV in China. So everything has to be important, you know, from fertilizer to transistor radio. You know, to get a Sony radio or, or like a, not even Walkman, just, just a radio. That was a prestige thing in China back then. Like to get married, there's like four big items you need got to have, you know, it was first, it was bicycle a sewing machine and that got changed to you know, you gotta have the radio, you gotta have a color TV, you gotta have a refrigerator. and China didn't even produce refrigerators back then.
I don't think, because we also bought our first refrigerator, which again was through remittance from my dad and we, my, my mom bought another Japanese made a refrigerator in, in the friendship store, but just a year later I started noticing my classmates' parents. They start to buy also by color, TV and fridge, but they're now being domestically made in China.
And that's, that's the beginning of the, the, the
Steve Hsu: Yeah.
Carl Zha: China train. I still remember coming to the United States in 1990. Like I was, it was a game for us to find made in China items in the United States. I would get so excited. On Christmas, 1990, they found a Teddy bear that was made in China. My parents and my parents bought it for me because it was an exciting thing to find a Made in China item back then. Of course, like a few years later everything's made in China.
So, yeah, go ahead.
Steve Hsu: It's interesting that, you know, like a true Caltech geeky, you know, it's electronic appliances that are the milestone purchases that your member. I want to ask you, do you remember meat scarcity? Like, not having a lot of meat or maybe your grandmother would give you her meat portion. That's something that I think Westerners, you know, they can maybe understand, even I can understand growing up in Iowa, remembering like when we got our first big color TV and it was kind of a big deal or something I'm older than you, of course.
Something like meat scarcity is something that I think Americans can't imagine.
Carl Zha: Yeah. So when I was growing up in the 1980s, China ration was still a thing. You know, you, you, you need ration paper to purchase anything from a state operator's store. So from sugar to clothes, to oil, to, to include meat. And it's only, only when I started to walk you know, maybe not, not, not starting to walk four to five years old, like in early 1980s, that's when they first started to allow so-called free markets, in China. Those are just basically farmer's markets where the farmers will bring their produce directly to the city to sell it to the consumers. Because before that, you have to buy everything from the state. The state, you know, they buy everything from the farmers and then they sell at the specific state designated store.
And in the city, as a city resident, we have to have ration papers to be able to buy. And there's quotas for each. Like for us, I remember as a 13 year old teenager, I actually have higher rice allotment than the rest of my family members, because that's a growing T team. I am entitled to have more rice. And the ration system only got phased out during the end of 1980s. Like, so just before I left China, the rations were used less and less. I remember it was when there were a lot of rural migrants who started to come to the city to work before, you know, before China, the movement was strictly controlled, you know, before the seventies. If you're a rural migrant, if your household registration is in the countryside, you can very easily move to the city.
But 1980s is when first that, that relaxation, there's a relaxation in that restriction. And a lot of rural youth start to come to cities for work, but they couldn't get the urban resident benefit, for example, for the ration papers. So I remember a lot of farmers, girls who would come around our neighborhood, bring eggs to trade for rice ration papers. And we have a lot of rice ration papers, so we will trade them for eggs. It was a thing back in the 1980s.
Steve Hsu: So, you know, you came to the U S at a very special age, so you, you, you were old enough to remember, to have pretty mature memories of growing up in China, and then it must've been quite a shock for you to, where did you, where did you immigrate to initially?
Carl Zha: I landed in Chicago. So, to give a little perspective, I didn't actually want to come to the U.S. because I was free in China. Like my parents are in the United States. My grandpa had some health conditions and my grandma spent most of the time taking care of him. So basically nobody really managed me and my sister. My sister is older.
And so I had a lot of freedom that I didn't want to come to the United States and be under the thumb of my parents again. And in China, before I came to the United States, I spent one year at home because I contracted Hepatitis A through sharing food with my friend. And I was hospitalized for a couple months. And then I wasn't able to catch up with schoolwork. So I stayed home for a month.
Oh, by the way, my hospitalization was all free because back then China was still running like a socialist central plan economy. If you are an urban resident, like my grandparents, my grandma was a school teacher at this textile factory attached school. So she, and each work unit, each like a factory, will have their own kind of complete welfare system, like kindergarten schools and hospitals. So I would go to all these for free.
But after two months, the Chinese schoolwork is serious for working kids. It's like after two months of not attending this school, I cannot catch up. So I have to just stay behind a grade. And the whole year I stayed at home and I read a lot, magazines, anything. At that time, a lot of the Western ideas are starting to filter into China, right? You know, I read a Chinese magazine talking about how small government is the best government. And so all the Republican ideas are also getting filtered into China. And I also read about how Japan is rising and the United States is in decline. This is the late eighties, right at the height of the Japan bubble.
So when I came to the U.S., my parents were poor because my dad was supporting a family of four on his postdoc income. He was working at University of Illinois at Chicago. And so we lived in like 31st Halsted, you know, you know, working class neighborhood. And we're so poor that I qualify for free lunch at school.
And I remember after eighth grade, because my English wasn't that good, there were not many, not many options for me to attend high school. So I ended up going to Kenwood Academy on the south side of Chicago in Hyde Park, just outside of University of Chicago. So I don't know if you know the University of Chicago, but University of Chicago is a ghetto within a ghetto, like I used to say. But my high school was just outside of It. So we are in the ghetto.
I mean, If you go to the description of Kenwood Academy today, you will say something like, oh, 93% of the student enrollment is minority students. Of course minority is a euphemism because I mean, what is, what is 90%? 93% of the student body is really not minority anymore. So my school was like 80% and like 85% Black, maybe 2.5% Asian. So I was 2.5% Asian. And I remember seeing people getting shot in the school yard, like one day I was getting off the math team practice, like a typical Asian nerd, and right as I leaving the school building, some girl ran in, so so-and-so got shot and everybody was rushed, rushing into see the body as kind of crazy, nothing about it.
Carl Zha: Oh, I wanted to go see too, but my bus was coming and I had an hour and a half bus ride to catch, to go home. So I took, I, you know, ran for the bus, only saw the crowd gathering around the body. And then later when I watch the evening news, he says somebody got killed in my school, a school yard shooting.
And I had to take one hour and a half bus ride through the south side of Chicago, you know, through all the dilapidated buildings and housing projects and at that time I really thought, oh my God, it's true what I read in the Chinese magazines that the United States is in decline. You know, I am too late. And you know, because, you know, I, I will see dilapidated infrastructure, just all the neighborhood in ruins.
And so for me, my strong motivation in high school was to get out, get out of the inner city, to get to, to the middle-class, right? The American dream. So I did that and I worked hard. I was like your typical, I guess like your model minority myth, right? I study, I bury my head in my books. I studied for the SAT and I tested out. So after spending freshman year in Kenwood Academy, I found this opportunity through my dad's friends. There's this school in Aurora,Illinois, called IMSA, Illinois Math and Science Academy. It's like a,
Steve Hsu: It's very famous.
Carl Zha: Yeah, it's an experimental school where they get state funding from basically the same pool funds for the colleges. So they are able to run an experimental curriculum on us. So they use us as guinea pigs, but they take like the top 2% or top 1% of the high school students from all across the state. So to get in, you have to take the SAT, you have to get a teacher's recommendation, write an essay, basically it's just like a mini college application process. And I worked for a whole, like. My first year in freshman year, I just basically spent the entire year studying English working on SAT, and, and eventually I got in and for me, that was my escape. You know, my escape from the urban decay of America.
Steve Hsu: Yeah, you were boarding there. Is that right?
Carl Zha: Yes. Yes.
Because you have to live on campus. Even if your home is like a block from the school, you have to live on campus. So for me, that was the greatest gift because I was, was like, what, 15, 15, 16. I was living away from my parents again, the freedom, you know, that's, that's what inspired me.
so I got, it's, it's like living on a college campus basically. And we have to go home once a month because school knows, otherwise we will never go home. So they kick us out. They kick us out. Once they shut down the school campus, once a month, force us to go home.
But that was my escape because our school was in the middle of the corn field. And to me that was paradise, you know, it's a totally different world from inner city Chicago where I, you know, where I was used to. That just kind of stiffened my resolve to get into the middle class, you know, joined the ranks of the American dream.
So, you know, I study SAT again, you know, apply for college, get into Caltech. And at that time I thought I'm kind of the, you know, I was, I really thought I was living the American dream. You know, I'm like this poor immigrant boy who got into Caltech through hard work. And so, yeah, so this is kind of my background, sorry for taking so long.
Steve Hsu: No, it was very interesting, but maybe I can ask you some questions. So, I'm curious because you are very conscious of wanting to climb out of deprivation and make it into the middle-class. Were you strategic about choosing, for example, going to an engineering focused school and pursuing engineering as a career? Maybe not because you like the subject so much, but just because you knew it was economically advantageous?
Carl Zha: That's definitely the reason. Also, because my dad was an engineer, right? At the time, my choices were either going to engineering or medicine. But, my dad finally landed a private sector job in 1995 after the economy got better, but still, I didn't want to burden them with having to support me through eight years of med school.
So I thought, you know, by choosing the engineering route, that's the fastest way for me to achieve financial independence or so I thought, so. I thought that that, yeah, definitely. That's one reason I chose engineering.
Steve Hsu: Yeah, that's a very immigrant kind of story. You know, for me, because my dad was already a professor, I actually grew up in a very similar environment because I grew up in Iowa. And so I lived, you know, my neighbors had cornfields and things like this too. I lived out in the country. And went to kind of, not as elite high school as the one that you attended, but kind of an elite high school, because it was the only high school in this college town.
But I had the luxury of not being worried about climbing the social ladder. I was already securely in the middle-class or upper middle class. And so I could say I'm going to do theoretical physics because I'm, that's what I'm most interested in. And Richard Feynman is my hero. Whereas, I think in your case you were like a lot of people choosing their course of study really for economic reasons.
Carl Zha: Yes. Yes. Very my, my is a very typical kind of immigrant. I guess I'm a 1.5 generation immigrant, so yeah. Yeah. It's very typical because my parents, they were, they just wanted, you know, their biggest hope for me is that I will get a good paying job that, you know, I will live my American dream.
Steve Hsu: Yep.
Coming back to Tiananmen. Your parents were actually involved?
Carl Zha: So, my parents were not because they're already in the United States. Right. So they would, they, they went to the protest rally outside of the Chinese consulate in Chicago. I was in Chongqing at the time. At the time, there were protests all over China, not just Beijing, you know, of course Kamin was a focal point.
I lived on the Chongqing University campus because my dad was a lecturer there and he kept his housing, you know, even though he was in the U.S., because at that time he was intending to come back, cause the university provided housing for its faculty. So at the time, initially I thought, oh man, these college students, they just don't want to go to school, man.
They just, this is just like a holiday for them, because I lived on campus since 1982, and there has been all sorts of student protests every year. The very first student protest I experienced was before I started the first grade. There was a lot of tunnels dug in Chongqing, both as a anti air raid shelter during World War II against the Japanese bombing of Chongqing. And during the Cultural revolution, when Mao's China thought he might have to fight two front war against both the Soviet Union and the United States.
Chongqing is a very hilly city. But the entire hills are being dug out and there's tunnels underneath. But after the 1980s, you know, when the cold war was already winding down and the U.S. China's relationship was actually in its honeymoon phase. So University of Chongqing rented out those tunnels to like enterprising farmers to raise mushrooms.
Carl Zha: And, and, and, when the farmers went in these tunnels, they somehow found something, some kind of nuclear, some radioactive, I guess, some radioactive stuff from some experiment back in the days. And then the Chongqing university student who organized a huge protest. I remember the banners there, how like Longwood shins were and, you know, give back my youth because they were outraged by radioactive materials stored on campus.
So when Tiananmen Square protests first started, I thought it's just going to be one of those. You know, I thought I was just those college students being frivolous again. They're, they're, they're they just don't want to go to school. I was a little bit resentful and jealous because our high school still, you know, I went to junior high in the seventh grade. So we still had to go to school. Whereas at college students, it didn't, they didn't have classes anymore. But at one point all segment of society was joining in. Yeah. You know, I even had my elementary school teachers that their, their teacher union went to the window on the street. So I also went to the Chongqing you know, the city's center. It's very exhilarating in any kind of mass movement. Like all these people, you look up to they're all like on the street protesting. And so I, I started something in my school in my junior year. I posted a poster calling because this was right around the time when the central government in China was kind of waffling back and forth on its position.
There, I guess there was a power struggle at the top between two different factions. There's always one point where they said, oh, the student movement is a patriotic movement. And so I took that opportunity to, you know, write a poster in my junior high to support college students. And then I got all that, because at the time, my motivation was just like, I, I don't want to go to school anymore. I want to, I want to stop classes. And then all my classmates, you know, they, they kind of fit me around as a hero and it felt good. You felt good.
But my plan didn't work. We still had to go to school. Our homeroom teacher was like an old communist lady and she's like, okay, yeah, yeah, yeah. Okay. Yeah. Yeah. We understand that the state said it's a patriotic movement. But, you know, to be patriotic, you first need to be educated. So in fact, in classes.
Yeah, so that was my experience of the Tiananmen Square, because Chongqing is one of the few cities that there wasn't, there wasn't a lot of violence. The only thing that happened was the new, really weird, Tiananmen Square because the state media CCTV was broadcasting live every day, you know, what's going on in Beijing and Tiananmen Square. So we saw the people of Beijing stopping the army trucks from going in, you know, the army was stuck outside of Beijing for a week. Right. And we saw that on state television. And then, again, I think that's because of the power struggle at the top, you know. But then on June 4th, I remember suddenly all the television broadcasts stopped. The TV went blank. Cause at that time everybody was glued to their television to watch what's going on in Beijing.
But from the afternoon to evening until the next day, the, the, the TV, went out for, for a whole 24 hours. And when you come back on again, they say, oh, there was a counter revolutionary riot in Beijing that the people's liberation army had to put down. So it was a big shock for a lot of people. Because at that time, the students actually had a lot of popular support.
And everybody was kind of whiplash by kind of the 180 degree turn of the, kind of the government stands. Cause one moment, this stays, if the student movement was a patriotic movement and that next thing they say, there was a counter revolution riot. We don't know what to believe. And then after school started again next year, actually it was before school started. So again, our homeroom teachers, the old communist lady, organized us to watch a state produced documentary of how everything went down.
Carl Zha: So we saw, we saw the burning of tanks. We saw like people's throwing Molotov cocktails at tanks and as soldiers being dragged from the burning tanks and then being lynched. And, then, and then getting there, getting disemboweled and the bridge. And so they say, yeah, this is why the army had to, to, to go in.
Steve Hsu: You think that was real? Do you think the film, the video that you saw was real, or do you think it was fake?
Carl Zha: Nah, it was real. I mean, there's a lot of people who can search, but of course, as the state exaggerated because like when they did announce the, the, the special, like the what they call it, the waste, the guard of republic to the soldier martyrs. But there were only a few, like only a handful of soldiers who died. So, you know, compared to the other casualties, because of the Tiananmen mother they found, they found out about the names of about 200 200 Beijing residents who died, you know, compared to a handful of soldiers. So, that's the first time I encountered this kind of differently cited narrative, because when I came to the United States, my parents showed me the CNN footage. Right? They show footage of the people's liberation army opening fire on the crowd. And, and that, that is when I kind of encountered this totally, kind of almost like black and white, you know, narrative.
At one point I remember at IMSA, I asked my history teacher, who is actually a Native American graduate from Stanford. And I said, look like the history I learned in China and the history of learning the United States is almost like polar opposites. Right? How do I reconcile these two completely different opposite narratives? You say, oh, you know, you just got to read a lot. I read all the resources and then you can flesh out the big picture. At that time, I thought his advice was totally useless. And you're like, well, my problem is they're totally opposite. How do I reconcile? Right? Just read more of them. How do I even make sense out of it? But it turns out, I think he's right. He's right. You gotta, you gotta read all sides and then come to your own conclusion.
Steve Hsu: Yeah. I think that advice is particularly appropriate at this moment. I'm not just talking about Ukraine, but just in general, there are so many competing narratives on almost every topic now. It's very tough to know what to believe. And you could even take a radical view, that history is kind of impossible in the sense that we don't even really know what happened, say, you know, in the last election or when Kennedy was shot or something, let alone what happened, say, 500 years ago or a thousand years ago. So, it seems like there's a high degree of uncertainty in almost everything.
Carl Zha: Yeah. That's, that's why I actually, I love history because history for me is like detective work. You have to know how to read between the lines. you gotta, you gotta read the official, you know, annals, and then you gotta read the unofficial history and then you gotta kind of tease out the truth from the official narratives.
And so, so for me, that's fun and like me, my original intent for starting my podcast, Silk and Steel, was to kind of share my love of Chinese history and Chinese culture to an anglo full audience. But yeah, but I, that, as you mentioned, I kind of got pushed into doing the politics of it because today in the U.S. China tensions, I just see a lot of this info floating around and I
Steve Hsu: Let's get to that, but just to finish up your biography. So you went to Caltech, you studied engineering at Caltech electrical engineering?
Carl Zha: Yeah, I graduated in 2000. You know, back then, there wasn't even a computer science department. But when I graduated, that was the height of the first internet bubble. And everybody, even English lit majors went into the internet startups.
So I joined an internet software company. I joined their professional service arm of Vignette, which was a content management company. That
Steve Hsu: remember What were you in? you in the Bay Area?
Carl Zha: Now, so is their headquarters in Austin, Texas, but my brother-in-law joined early. And so he got a referral bonus out of me and they, at that time, they just they just, at that time, all the internet companies, they just want warm bodies, you know, you can type, okay, good.
You're hired. And so yeah, so I got hired before I even graduated from Caltech. And because I had to go back to finish some classes and then, then yeah, I started working December, 1999, like just a few months left before the internet bubble burst. Yeah.
Steve Hsu: Yeah. So you worked in tech basically from that point in time until you wanted to take a year off. And so that's how you ended up traveling a year in Asia. What year was that?
At the end of 2018, actually 2018. The company that I was working for their largest client is Toyota. And Toyota decided they're going to cut costs by moving their headquarters from Torrance, California, to Plano, Texas. And I'm a surfer. I love surfing. And I know from Plano, Texas it is six hours to the ocean in either direction. So it's not good to move to Plano. And so I thought, okay, is this a good opportunity for me to just take, take some time off and travel around Asia.
Just so happened all while my friend, my internet friend, who is an Aussie English teacher in the most remote corner of China. He's working at this border town between China and Myanmar. And he told me that the place where he works is the largest water festival in China. The water festival is just like a tie song. Crown it's like the Thai new year and the Dai people in the region, they have a very historical tie with people in Thailand and Myanmar. so, the water festival is huge. Cause I always told him, you know, I wanted to experience a water festival because I saw a part of it as a part of a dance in the pre cultural revolution musical, the Yeast is Red.
Carl Zha: My favorite part of Yeast is that the Red musical is actually the national dance of different Chinese nationalities doing their traditional dance. And there was a party featuring a water festival, Dai women. And I, and he said, oh, he's invited me to go. So I just jumped at the opportunity.
At that time, I didn't plan to leave the United States. You know, I just put my stuff in storage. I went to China and then I traveled around. I haven't surfed for a long time, so I decided to go to Bali for a couple months to get my surfing on. And then when I was in Bali, I realized I distinctly remember I was at the surf line. I was talking to people, fellow surfers. I asked them, oh, how long have you been in Bali? I expect them to say, oh, the last weeks are like maybe a month. And they said, oh, I've been here for six years. I'm like, what, how do you do that? It's easy. You just do visa wrongs. You just fly to Singapore and Malaysia for a day and come back.
Because before the pandemic as an American citizen, you, you, you have you know, you don't, you don't need a visa. You know, you have visa free entry to places like Indonesia, you get an automatic 30 days. And when you land at the airport, you have the option to get a visa on arrival. You pay like 35 bucks for a visa on arrival, which allows you to extend for another month.
So a lot of people were doing that. And I thought, wow, why, why nobody told me it's about this, like 10 years ago, I could be involved for 10 years. So that 's that, that's my story. That's how I ended up in Bali.
Steve Hsu: So since then you've been living the digital nomad dream in Bali. Is that fair?
Carl Zha: Yeah, well, initially I was living on my savings. And then, eventually I built enough internet notoriety to get a small following on Patreon. So now, yes. Now I'm able to support myself on my Patreon income, me and my family. So I'm grateful for that.
Steve Hsu: So one of the topics I wanted to get to is the topic of Xinjiang. And I think I've seen a fair amount of discussion by you and around you about what is actually happening in Xinjiang. And this is a very controversial topic, obviously with, you know, the United States and the west going all, you know, getting to the point where they're actually charging China with genocide and pointing to, for example, satellite photographs of concentration camps in Xinjiang.
Carl Zha: Yes.
Steve Hsu: You know, I've traveled in China many times, but I've never been able to travel to either the southwest or the Northwest. So I've never been to Xinjiang, but because I was interested in eventually taking a trip there, I was watching a lot of YouTube travel videos. Both of the areas like United, but also areas like Xinjiang.
And I could tell from what the travelers were saying, that it was totally inconsistent with what I was reading in the media. About the state of, you know, there were some issues with terrorism and there was a crackdown on Islamic terrorism in Xinjiang. And I'm sure there were probably human rights abuses. I mean, it's an authoritarian government and they don't fool around and these, there was knife, I think it was knife, but also maybe bomb attacks.
Carl Zha: Yeah, both. Both. They had the infamous Kunming train station knife attacks where, I think 20 people were killed. And then there was bombing attack at the Urumqi train station to coincide with Xi Jinping's visit. Yeah.
Steve Hsu: Yes. So I guess one of my goals is to give the audience your best estimate of what is really happening there. And just to give my background of it, I mean, I was aware of these terrorist incidents, and then obviously you can expect that, you know, an authoritarian government like in China is going to react in a pretty decisive manner against that.
And so maybe there were some human rights abuses and maybe, you know, some action against, you know, groups that the government regarded as extremists. But because there were so many people traveling through Xinjiang including one famous Australian guy who was like bicycling through.
Carl Zha: Jerry, I interviewed him.
Steve Hsu: And so I watched all this stuff, not because I was particularly interested in the political situation because I was actually just thinking of traveling there on vacation, because it was an exotic place. I was always interested in it.
Carl Zha: That's something people don't know. So if you have a Chinese visa, if you are allowed inside China, then you can travel to Xinjiang. There's no extra restriction on
traveling to Xinjiang.
Steve Hsu: Absolutely. And your hippie friends in Shanghai can go to Xinjiang for the weekend
Carl Zha: Yup.
Steve Hsu: and take video and put the video online. And other people like me can watch it. So, so the idea that they could hide a genocide with so much flow of people, including Western tourists, including Chinese tourists from within China, and everybody has a cell phone camera, it just seemed to me absurd because just even by just sitting on my butt and watching YouTube, I could tell that what I was being told by the New York Times didn't seem accurate at all.
And so anyway, I just want to cue you up and maybe you can first just start with a general statement about what you think is really going on there. And then we can get into more details.
Carl Zha: Yeah, sure. So, the situation really came to a head in the 2009 Urumqi riot that July. July 5th, 2009, Urumqi riot where basically nearly 200 people were killed. 2000 people were injured and the victims were mostly Han Chinese residents in the city.
And after that, there has been a security crackdown in Xinjiang since 2009, because that was a pretty shocking incident in China. You know, something like this hasn't happened, you know, in, for decades. And then a spate of more serious, equally I would say not more serious, serious incidents happened around, around the time of Syrian war actually from 2012 to 2014.
So first there was an attack in Tiananmen Square. A group of Uighur separatists drove a van loaded with explosives onto Tiananmen Square, and they were ramming into the crowd. but it's, it's not, maybe it's not home. It's easier. I think there's a can of gasoline that they brought on board.
And so anyways, they, they, they rang into the crowd and the led the car on fire and exploded. And, but that, again, that was pretty shocking. And then the big shock was a Kunming train station attack because there has been a series of attacks inside Xinjiang, but people in the rest of China thought that was a localized Xinjiang problem.
And until the attack in Tiananmen Square, and then in 20 March, first 2014, in Kunming train station in the Capitol, Yunnan province all the way to the Southwest of, of China, as far as functioning, as young as possible aid oil or militant arm, always knives, star slashing at people killing only 20 people and injuring more.
And those got national headlines. And since, and then, as I mentioned, there was also series of bombings in Urumqi. People were driving SUV's into the morning market and, and throwing bombs at, you know, people setting up shops, setting up street vendors, basically. And, after that, the Chinese state started a series of security crackdown. First they blocked all the access of Xinjiang to central Asia.
And then I think that is why those Uyghur militants actually travel all the way to Yunnan. because starting from 2012, there's a stream of Uyghur refugees starting to appear in places like Vietnam, Cambodia, Thailand, Malaysia, but their end goal was to reach Malaysia in Kuala Lumpur airport.
When they reach Kuala, Lampur at the Turkish consulate where they will re receive the Turkish passport, allow them to fly to Turkey. And as soon as they step off their plane in Istanbul, they're greeted by jihadist recruiters to urge them to go on to Syria.
Carl Zha: Now this is reported in the Associated Press, right? So people can look that up and. You know, thousands of Uyghur fighters ended up in the province of Syria, Northwest Syria. So this has been an ongoing problem.
And starting from 2017. That's when the Chinese government really started the hard crackdowns. That's when they had the, they built so-called vocational training centers. I mean, they should, they might as well just call them deradicalization centers because that's what they are.
And then there are lot of people, who are suspected of harboring sympathies for the terrorists who were sent there. And, there's like different levels of kind of so-called reeducation.
One is you go, you just have to go spend like half a day during the daytime. And then you can get to go home. The other type of uh, reeducation is where you have to stay in the center, you know, basically incarceration and, and that's, that's getting picked up by in the west first, as it were to the primary reports.
That's all the Western media is based on. One is from the human China human rights defense. Which is an NDD sponsored founded group. And I read the reports, my, my, my friend cue me up to it. Their report supposedly is based on an interview of eight Uyghur villagers from eight villages in thousand Kashgar.
And based on the villagers testimonial, they extrapolated from the population of those eight villages to the entire population of Xinjiang. So they said, okay, we estimate about 10% of the people nine to 10% of the people from the villages they're being sent to these re-education centers. So if we extrapolate to the entire Uyghur population of Xinjiang, which is like 11 to 12 million, we get a 1 million figure.
That's that. They said that in the report, China human rights defender report. And so they even put the caveat in the report. We must, you know, be careful that this is an extrapolation.
But this kind of nuance is completely lost in mainstream media reporting. They take a 1 million figure as kind of the gospel truth.
Steve Hsu: Yeah, 1 million, 1 million being just 10% of 11 million people
Carl Zha: Yup. Yup.
Steve Hsu: they, which they extrapolate from some survey of eight people.
Carl Zha: Yeah. Eight people from eight villages.
And then the other report is from the German researcher working at the victim of communism foundation, Adrian Zenz. So Adrian says, came up with a paper where he based his claim primarily on this Turkish uh, the Uyghur exile group in Turkey which by the way, has ties with the Turkistan Islamic party, which is Al-Qaeda affiliate fighting in Syria.
So this Uyghur exile group provided a so-called leaked document that shows the number of people being sent to the reeducation camps. And, and based on that Adrian Zenz again, it's, again, it's another extrapolation extrapolated to the, to the whole of Xinjiang he estimated 1 million figure.
and so, so it's has always been an extrapolation, but it's always reported in CNN as kind of the, has some kind of hard figure. They have definitely have 1 million Uyghur in
Steve Hsu: what,
When I first became aware of this, I just thought to myself, if you're going to lock up 10% of the population of some region, you're going to need a very, very strong police state. And the remaining nine tenths that are not locked up are going to be very traumatized because almost everyone will know someone well who got locked up.
And if there really were a genocide, that would mean the person who was locked up probably died or had a good chance of being. So then, then if you then look at the video shot by Western tourists in that, during that period of time, when travel through Xinjiang was totally unrestricted, more video shot by tourists from other parts of China, and you just see the interactions, how relaxed they are between the police and the local people and the local people and the tourists.
It just could not possibly be that 10% of the population was being genocided or locked up. It just didn't seem consistent with what was in the videos that I watched.
Carl Zha: Yeah. And there's also the media. I know this is something, something I noticed about the language, you know, when they talk about Uyghurs being oppressed, it's, you know, they're talking about Uyghurs. When they talk about the police that always talk about Chinese police, you know, they're trying to create some kind of dichotomy between Chinese and Uyghur and what they don't tell you is most of the police in southern Xinjiang were majority of the Uyghur lived, most police are Uyghur. You know, that's their local police. It's not like they're sending the Han Chinese policemen all the way from Beijing to, to, to Xinjiang.
And another thing is that they try so hard to prove it's genocide, but as you mentioned, there's no mass death. So that's why Adrian Zenz came up with this restriction on birth because all of the UN definition of genocide is if somehow they're trying to reduce the population, through forcible, abortions or forcible birth control. Right? So that's a new area they're focusing on.
So China has had a one child policy since forever. It was already starting to get rolled out when I was born in 1976, because at that time, my parents were working in the Tibetan regions. They got sent there. During the Cultural Revolution, I was conceived on the Tibetan plateau, but my parents didn't want me to grow up there because they felt I could get better education and better healthcare.
If I stay with my grandma, my mom will go back to Chongqing to give birth to me, but she was having a hard time finding a hospital that would accept her because the first hospital she went to was kind of the model hospital for implementing family planning and then one child policy.
And so the question is, my mom, why are you having a second child? My mom explained, you know, cause that's 1976 is when they're first rolling out the one child policy. Chongqing as a big city was one of the first two selected. But that policy didn't affect the Tibetan area. So it didn't affect like the, there was no one child policy applied to Tibetans and for the Han Chinese working in that area, like my parents, they were allowed to have two children.
So I was legitimate. And, but the hospital director didn't understand because they only understand their government, a quota and directive for their hospitals. They're like, what do you mean Tibet is not part of China? Are you having two children? And so my mom had to like, you know, go through my grandma's connection.
Finally find a hospital that would accept her. And, and so I was born.
Steve Hsu: But I, I think maybe the point you're leading to is that for Uyghurs during all this time, they were not subject to the one child policy.
Carl Zha: Yes. So, so, for the Rebiya Kadeer, who was a crown, like the president of the World Uyghur Congress Zen being fed around us, like the courageous Uyghur leaders standing up to China. She had 11 children. You know, the first five children, first six children she had was before the, you know, rolling out before, I think before the 1970s, before the rolling out of the one child policy. And she had another five children after that because the one child policy was not applied to national minorities. But that started to change in the very, like the last few years, because now China is going onto this three child policy, but now that three child policy is applied equally across nationwide.
So for the first time, yes, birth planning is being introduced to Xinjiang but they're not being limited to one child to child, they're having, you know, a three child policy. We can, we can argue the, know, the, the merits or, you know, the ethics of family planning. That's a different, that's a different conversation, but they're essentially arguing that is same as genocide, right? I mean, so basically the Chinese government had been genociding the Han Chinese people since the 1970s.
Steve Hsu: Yeah, well, just clarify. So there was a period of time for a few years where, you know, they were actually trying to make noises about outright genocide against Uyghurs in concentration camp like structures.
Carl Zha: Yup.
Steve Hsu: And they seem to have backed away from that now. And now it's sort of shifted a little more toward either word.
Yeah. Either birth restriction, kind of genocide or cultural genocide, meaning like requiring immigrants to America to learn English or something.
And so my feeling is there's almost no questioning of this narrative. So, you know, if you read the New York Times or Washington Post, or, you know, even The Economist, there's almost as far as I can tell no question of this. And they now just routinely refer to some kind of nefarious activity. Anti-Uyghur activities in Xinjiang without, now they don't feel any need to clarify it or even go to the original sources.
Carl Zha: have Bill Maher recently in his talk show. He said, on his talk show, he said China is the entire Uyghur ethnicity. You know, he just threw that out there. You know, he pulled that out of his butt because there's a total of 12 million Uyghurs in China. He's claiming China is locking up the entire Uyghur ethnicity of 12 million,
Steve Hsu: When, well, again, going back to my, you know, I, so people are probably tired of hearing me mention YouTube. But you can go on YouTube right now and you can find some tourist videos that were shot, you know, in the last three months. And some tourist is talking to some Uyghur who owns a restaurant. You know, the restaurant could even be in Beijing or it could be in a warm tea or something. And they seem very happy and they're not locked up. And I mean, the whole thing can be undermined with five minutes of work, I think.
Carl Zha: Yeah, but I mean, I mean, there's, so there are people who get targeted. Those are like kind of the hardcore Islamicists that has been targeted in China. There's no doubt in the, like the people who are, are inclined to, hardcore Islamic fundamentalism, and their family that they have been targeted by the Chinese state. That, that, that is a fact. But there's not, not a, definitely not a blanket targeting of the entire ethnicity. That's not true.
And, and also, I just like to talk about that, that, that bursts so-called a birth genocide again, how the hell do you carry out genocide with a three child policy? You know. How? Mathematics is impossible.
Steve Hsu: Of course, I mean, I mean, you know, I'm sure the rate of the Uyghur population growth has always exceeded and still exceeds the rate of Han population growth in China. So it's, it's far from a genocide in that respect.
So in terms of how this kind of massive propaganda campaign is carried out, let me give you my model. And I have a little bit of experience with both NED and the CIA, because my tech startup, the first tech startup I did, which was right around the time you graduated from college, it was right during the first tech bubble was an encryption startup. And one of our investors was a CIA venture fund, which was just newly created around that time. And we worked with NED and Radio Free Asia to defeat the Chinese firewall, which was just being created.
Carl Zha: Yeah.
Steve Hsu: So I'm pretty familiar with the idea that, you know, NED funds these NGOs all over the place. Some of the NGO people are researchers, some of them are directly active in foreign countries and organizing, you know, pro democracy movements, pro-democracy organizations,
Carl Zha: The Chinese people do appreciate those free VPNs and gladly climb the firewall. Well, so sometimes the CIA and RFA do do some good work.
Steve Hsu: Oh, well, yeah, this is a whole different discussion. We could have a long discussion about my idealistic ideas that some of the technology we were developing at the startup could be used, you know, for this purpose, which is why we were working with organizations like CIA and NED.
But at least it gave me a little window of how the money flows from the federal government to NGOs in these foreign countries and how it is tied into U.S. national security intelligence operations.
So this guy, Adrian Zenz, and perhaps some of the other researchers that purport to document or analyze these anti Uyghur activities in Xinjiang, they're probably getting money maybe without knowing it, but at least indirectly from, you know, potentially actually Central Intelligence sources or NED sources.
Carl Zha: Oh, I'm pretty sure the Victims of Communism foundation is funded by the U.S. government.
Steve Hsu: yeah,
Carl Zha: yeah, people can just
Steve Hsu: Yes. So there's, so there's a long list of grants that come from NED.
And I'm familiar with this because you know, some of the funding for our startup came from U.S. government sources. And that was the whole purpose of one of the purposes of the CIA venture fund was defined technology companies that could help the CIA and its mission.
And so they would direct us to certain funding sources in the federal government. Those sources obviously then are, are, are in a sense doing what U.S. national security or, or intelligence services would like them to do. But then of course, they are then introduced to friendly journalists at the establishment papers like New York Times, Wall Street Journal, et cetera. And then those journalists who are kind of used to working with sources that are in the U.S. intelligence community will cover the research of these NGOs, which makes them allegations about some foreign government.
It might be true. It might not be true, but there's a pipeline from the product, the work product that seems to come from an independent, independent researcher at an NGO, but perhaps who is receiving NED funds, to prestige media in the United States. And then it's covered uncritically.
And eventually I think this case has been completely established now as the standard narrative, even though the whole thing is not reflective of actual reality.
Carl Zha: This makes so much sense because me and the Aussie biker guy that you mentioned, Jerry Grey. So not only are they pushing these narratives in mainstream media, but they're also heading out people who are challenging their narrative. So Coda stories wrote a hit piece against me and Jerry Grey, the Aussie biker, who went to Xinjiang. The title is pro-Beijing influencers and their rose-tinted view of life in Xinjiang.
And I had the foresight to ask Isobel Cockerell, who was the interviewer, if it's okay, if I record the conversation and she agreed to it. So when she, you know, totally posted the interview, our interview, and other context, I was able to upload the audio of our interview, you know, to my subscribers and followers on YouTube.
And she was trying to paint me as some kind of air head, surfer dude who just, you know, sprouting pro Beijing views without totally realizing what's going on, but it couldn't be.
Steve Hsu: Sorry to interrupt. But by the way, I advise everyone, you know, most people don't deal with the press very often. But I have had a fair amount of interaction with the press in my life. And you should record every interaction with every journalist and you should tell them that you're recording it so that they know they can't falsify what you said, or take it out of context and let them know that you'll come right at them on their Twitter if they try to pull something, you'll come right at them on their Twitter feed and post what you actually said in the context of what you said, if they quote you out of context. I think that's the only way to keep these people. It doesn't actually completely work, but it is a way to keep them more honest than they otherwise would be.
So in your case, yes. I think you guys got smeared. It's a total accident that I was interested in like northwest Xinjiang and southwest Yunnan are like the exotic, interesting parts of China that I had never been to. Because I didn't have time to travel there. I was thinking of traveling eventually, and I was just watching a lot of videos.
And so this guy, Jerry, bicycled across Xinjiang, I found that totally organically just because of my own interests. You know, the YouTube AI. You know, it watches what you like and it shows you more of what you like, not maybe not as well as Tik Tok, we can get to that later, but, but it is a decent learning algorithm.
And so it just started showing me more and more, tourists, essentially tourist videos of Xinjiang. And it kind of figured out that I would watch some occasionally like even Chinese language content. So it started showing me videos taken by actual Chinese tourists who went to Xinjiang. And because people don't realize there's a tremendous amount of internal within China tourism.
So some affluent family in Beijing or Shanghai or Shenzhen might go to Xinjiang as a week trip. You know, it's an exotic vacation or something.
Carl Zha: Yeah. My auntie found some jeans. They went to Xinjiang. I mean, tens of millions of Chinese domestic tourists go to Xinjiang every year.
Steve Hsu: Yeah. So you, so you get this totally different perspective of, oh, it's not a police state under lockdown where 10% of the population is getting genocided. It's actually a place where you just casually go and you fly there and you eat some lamb. And you know, the language written on the restaurant menu and on the wall is not Chinese characters. It's the Uyghur language, which is not surprising at all. And everybody looks pretty relaxed.
It's like, it doesn't seem like, you know, there are people hiding out like Anne Frank or something in Amsterdam or something, it's, it doesn't seem like that situation at all. So the whole thing just doesn't jive with the narrative.
So do you, but do you think there's any hope? It seems to me that particular narrative is totally locked in now. For any Western consumer of corporate media or, you know, mainstream.
Carl Zha: This is how the report on China in general. Right? For example, there's a famous social credit system in China. A report came out, it went viral. Everybody shared it. That became almost a meme about China's social credit system. Right?
And then, in 2018, Foreign Policy magazine came out with a debunking article that yes, the social credit system is actually a myth, but guess what? The debunk, nobody shares debunking articles. Like, nobody pays attention to that. It's. The same article. there was an article about this some some kind of red chip that the China, China is building this malicious
Steve Hsu: That might've even been Bloomberg. I think it was a pretty respectable source. It was hardware. It was actually a hardware backdoor that they were talking about, which I think very implausible. And I don't think there's a single serious technologist who believes that now.
Carl Zha: But the layman, the lay public still buys that. I mean like you can try to debunk them 10,000 times, they are still there thinking, believing this is true.
But this is, this is kind of the, all the full spectrum propaganda war we're in now, you know, like almost everything we consume about China from mainstream media, you have to be, you have to view it with a suspicious eye because of stuff like this.
Steve Hsu: Yes.
So, I mean, maybe now we can start spiraling in toward Ukraine because one of the things I noticed with this Ukraine conflict is that they're just wildly divergent narratives about what's happening in Ukraine and separately, of course, it seems to be just open season on Russians. You can just say any negative thing you want about Russians in general and discriminate against them without any repercussions.
And, and I think you may have said this on your Twitter thread. Other people have said the same thing that when things really go live against China, the amount of discrimination and, you know, aggressive action against individual Chinese living in America is going to be just off scale because we're not even white.
Carl Zha: Yeah. I mean, at least Russians can blend in. You know, if they just don't open their mouth, but we are our face. We wear the face of the enemy, right? Like people, not even just Chinese, anybody who looked remotely like East Asian is going to become a target in the United States. Like it is now. Now we have people, Nepalis, Sri Lankans, and even some Hispanic lady who got targeted because they thought that, you know, they're Chinese.
I mean, it's just going to get much, much worse if there's an actual hot war between China and the United States proxy even.
Steve Hsu: I agree with that. And I think just as anything said about Russia or what's happening in Ukraine, I think you, honestly, again, this is against the narrative, but you have to take it with a grain of salt and certainly that's by now also the case for anything you read about China.
Carl Zha: Yeah. Yeah, definitely. I mean, I actually saw a tweet somewhere. They say, because right now we're, we're, we're being flooded with stories of like Russian debacle and the incompetence in prosecuting the war. Right. And then I read a tweet. It says, well, reading the Ukrainian war report is like reading the ancient Egyptian higher graphic accounts of their victories.
You know, there is a victory coming closer and closer to the Capitol. You know, like we won a victory, a hundred miles from our Capitol. We won another victory 50 miles from our capital. Oh, we won a great victory at our capital. I mean, that's kind of what's happening right now. You, you see, see the accounts of how the Russian hardware had been destroyed, you know, the Russian army got bogged down, but then you'd look at the report where it's, this is happening.
It's getting closer and closer and closer to Kiev.
Steve Hsu: I do see some people preparing the readers. You know, the, I guess one nickname I could use for them is the NPCs, the non-player characters who actually consume this media uncritically. 10% of the Uyghurs have been killed in Xinjiang.
Carl Zha: Yep.
Steve Hsu: You know, they are preparing the NPCs for the fact that the Russians are eventually going to win this thing. I do see some of that occasionally. Right? So, I think it's sort of shifting toward, you know, Russians are bombarding civilians, now, without any concern. And they're terrible. And the brave Ukrainians are fighting like lions and defeating the Russian military. But, eventually the Russians will eventually win because they're just so overpowering. There are too many.
Carl Zha: They're a hoard?
Steve Hsu: Yeah, that's an easy attic. Russians are still going to win.
Carl Zha: Yeah.
Steve Hsu: I mean, aside from the day-to-day progress of the conflict, there's also the history that goes back to the Maidan coup. I think all of that is just way too complicated for the average American reader to absorb. And so obviously, you know, we'll just forget about that. And it was just that Putin went crazy and wanted to reestablish the USSR.
Carl Zha: Yeah. I mean, it's amazing how many Americans do think Russia is like the same Soviet Union. Like Russia today is a very conservative, very anticommunist state. It's it's, it's nothing like the Soviet Union. But somehow people think, you know, Russia is bringing back communism or something.
Steve Hsu: Yeah, I don't know if it's so much communism as a kind of just a very highly authoritarian state. But I think, you know, we could go on for a long time to talk about the specifics of the conflict itself and the background, the history of, you know, Ukraine and NATO and all that. But you know, the thing I really wanted to ask you about is that, I regard the U.S. using Ukraine to, you know, in a sense, incite this conflict by, by, by not compromising with the Russians, you know, on their doorstep.
Okay. We we've ended up in this conflict. Let's just leave it at that because we don't need to get into exactly all the all the history. People who are interested can read a long blog post that I wrote with a lot of sources in it. But, and quoting famous people like, you know, Mearsheimer and, you know, for, for the former ambassador to Russia, who is now our CIA director, who himself wrote all these forbidden things in his biography, which was just published autobiography, which was just published two years ago.
So you can go read what our current CIA director Burns wrote about what the U.S. was doing in Ukraine. Just two years ago, when his biography was published, you can see it's a hundred percent against the current narrative of who's responsible and what events led up to this invasion. But of course, now that he's CIA director under Biden he's got to keep quiet about it, but it's all recorded in his biography.
You can order his autobiography off of Amazon and just read it. But don't let those if you're an NPC, don't let those facts, you know, sneakers consciousness.
What I wanted to discuss with you, I believe this is a huge geopolitical mistake for the U.S. to force Russia into a tighter and tighter relationship, even verging now on a dependency because of the strength of sanctions on China. And I think you probably have thought through in more detail than I have, the ways now in which China is going to help Russia get through this period of sanctions.
So maybe we could talk about that a little bit.
Carl Zha: Yeah, I mean, it's, it's amazing to me that at the end of the war, Russia at the end of the cold wars, Russia wanted to join the west, you know, when Putin
Steve Hsu: join NATO at one point.
Carl Zha: Yes. That was Putin when he first became prime minister in 1997 or 1998.
Steve Hsu: Yes, Bill Clinton
Carl Zha: Yes. Yes. And because Russia was, they just wanted to be seen as an equal partner, but because we are so arrogant because we're the sole hyper power now, and that we thought we can just aggressively expand NATO to their doorstep with no repercussions.
There was a video surfacing of Joe Biden speaking in 1997 when the Russian foreign minister Zyuganov told him, like, if you, if you keep on pushing NATO to our border, we're going to have to turn to China. And Biden basically laughed in his face and said, well, good luck with that. Right. And that's, that's what's happening now, ironically?
Steve Hsu: I, you know, when you mentioned an old
Steve Hsu: of Biden, I thought you were going to mention one from maybe around 97, 98, where he says Ukraine cannot be part of NATO. This would cost World War 3. I mean, he effectively says again, what is the verboten and, you know, part of the narrative right now. And I mean, he just explicitly says it in this old, when he was a senator.
Carl Zha: Yeah. yeah. I mean that, that's when Biden was still coherent and lucid and he, that was 25 years ago, but.
Steve Hsu: But this particular brainwashing of the public is much more shocking in a way than the Xinjiang one, because no American can even locate on a map and you know.
But this is one where, you know, a pretty good chunk of the top strategic leadership of the United States has been warning against pushing too hard in terms of expanding NATO to the east and the status of Ukraine, you know, leading figures, former secretaries of defense.
I mentioned many ambassadors to Russia and the Soviet Union. People who actually won the cold war have been warning against this for a long time. And now that's all been memory holed, even though you can quickly in five seconds locate a video of our president Biden, you know, saying exactly these things when he was a senator. But apparently that's all memory holed too.
Carl Zha: But Stephen, who, who, who watched a government official talk nowadays. Now people get their information from Tik Tok influencers, right. And a White House just hosted a top Tik Tok influencer on Whitehouse to debrief them, quote unquote, of the Ukraine war progress. So yeah, I mean,
Steve Hsu: So that for sure the west is winning the information war and the information is primarily being conducted against their own people.
Carl Zha: Yes, yes.
Steve Hsu: And yeah, I, in the blog posts, sorry, I keep advertising, but I have a segment from Indian television where there's an Indian news person interviewing two generals from the retired generals, from the Indian military.
And they're calling the war the way you and I are calling the war totally against the Western narrative. And even saying things like that, the Russians are slowed down because they're trying to kill as few civilians as possible. It's not like when the U.S. went into Iraq in 2003, you know, they're, they're saying things which are completely remote and would get you banned from Twitter or YouTube.
I think this information war is not fooling generals in the Indian military. It is fooling average Americans who read the New York Times.
Carl Zha: You know, that's, it's actually, I hosted a Twitter space talking about China's role and also just China, Russia, Ukraine in this war. And I, to my surprise, I got a lot of people joining in, from the global south. And it was really refreshing to hear these global south voices. You know, people from South Africa, from Brazil, from Southeast Asia, from India and their views are expounding, just like the Indian generals are totally different from the kind of the mainstream narrative we hear in the United States.
Steve Hsu: I think that it's primarily people in the United States and EU and basically western countries that are, as I said, they're the victims of this information war. People from the global south, Brix countries, non-aligned countries, they're much more likely to actually see it from the Russian perspective, especially if we're talking about, say, our educated subclass. They can remember reading about what happened in my time.
They can maybe they've maybe heard the video or the tape of Victoria Nuland talking about installing a pro-American leader, you know, debating with the ambassador who that leader should be. You know, I mean, so they may remember some of these events from.
Carl Zha: Or even a Nuland handing out cookies to the protesters in Maidan.
Steve Hsu: The cookie monster.
Carl Zha: Yeah. It's really amazing that, because Russia and China at the end of the cold war, both wanted to have a good relationship with the west. Right. And in fact, both of them prioritize their relationship with the west over each other.
Cause it makes sense because the U.S. back then was still the world's largest economy. Well now it is still nominally in U.S. dollar terms. But back then the U.S. was so much more important. but we just thought we didn't need them. We, you know, we don't need to care about their security concerns. We can do whatever we want.
And, you know, because like, that's why Biden laughs at Zyuganov, it's like, go ahead, turn to China, see if we care.
Steve Hsu: So, so let's, let's focus in on the turn to China and exactly what forms , this cooperation is likely to take in, in particular to, to deal with the sanctions. Let's turn to that because I think that's, that's a part of the discussion, which I think maybe a lot of our listeners won't be so familiar with and there's a lot of detail.
Carl Zha: Yeah. So, I mean, for a lot of the American perception of China, Russia relationship is still stuck in the Sino Soviet split era. So I have to say, just say that, you know, the Sino Soviet split was over by 1989 when Gorbachev visited Beijing to meet Deng Xiaoping. You know, it's right in the middle of the Tiananmen Square protest.
After that, Russia, China had a great relationship and China had a friendly relationship with the Soviet successor state, Russia. China actually has friendly relations with both Russia and Ukraine.
You know, surprising us. He may be too many people. China also had great relations with both Saudi Arabia, you've wrong and Israel, right? All these states are now locked in antagonistic relationships because China pursues a noninterference policy. They focus on trade. China doesn't care about your domestic issues. And China also sees the current issue between Russia and Ukraine as a bilateral issue between Russia and Ukraine.
From China's perspective though, I think China will much prefer stability because they are currently building out the belt and road initiative. Part of it, the belt part of it, is a Euro Asian economic belt, which is on the Eurasian land bridge to build through Russia, to reach for the Chinese goods to reach the EU market.
Right. But with the war, the Eurasian land bridge is not going to reopen any time soon. So from China's perspective, China rather sees a conflict wrap up as quickly as possible. so we can return to business.
Steve Hsu: Yes. I think China, their preferred outcome right now is a quick end.
Carl Zha: Yes.
Steve Hsu: And a quick end in which Putin is not the loser. So he's not destabilized, but the sanction, you know, the, the damage from the war. And, you know, maybe the sanctions are lifted earlier because the war ends quickly before there's too much death and destruction.
And, nevertheless, the trauma, you know, between Russia and the west is so strong
Carl Zha: Yes.
Steve Hsu: Basically now there's no, there's no chance of Russia, China breaking up the Russia, China relationship. So I think China is the big winner from these events. As long as it doesn't go so long that Putin loses power.
Because for example, he's not able to
Carl Zha: Right, right. Correct. That's correct. I mean, there's a lot of complacency in the United States, to think that, oh, well, China, China and Russia, they're basically a marriage of convenience. Like this will never last, but, but at the same time, us is doing all you could to push Russia and China together since the 1990s.
Steve Hsu: Well also I think you are, you were right when you said a lot of the people who claim what you just said are stuck in this 1980s, Sino Soviet split, because they still think that China wants to recover. Vladivostok lots of territory, whereas, whereas they've settled all those territorial disputes, the Russians and frankly they, demographically, the Chinese are moving away from the Northeastern part of their country. Nobody wants to live there. So certainly nobody wants to live even further north in Siberia.
Carl Zha: Yeah. I mean, just like Chinese people are no different from, from the folks everywhere else. Nobody wants to move to the land of snow. You know, everyone is moving to the sun belt.
Steve Hsu: Yeah, and I think, I think an outcome where they're able to just trade for the national natural resources there and just buy it is to them preferable to to invade a country that still has thousands of nuclear weapons. I think the logic behind the idea that the Russia China relationship can't last is just wrong.
I think these people are poorly informed.
Carl Zha: Yeah. Because, and China, Chinese and Russian economy are fully complementary because Russia is a commodity producer and China is a commodity consumer. And, also buying from Russia also bypasses the chokehold the U.S. Navy has on the strait of Malacca. You know, the U.S. Navy made no secret about how the strait Malacca is a chokehold on Chinese energy supply if they wanted to. That's why the U.S. Navy is now in the South China sea carrying out so-called freedom of navigation patrols. This is the time when 80% of the shipping through south China sea is either to, or from China. And yet the U.S. 's claiming they're protecting, they're protecting the sea lanes from the Chinese, for the Chinese market.
It's totally ridiculous.
Steve Hsu: I agree with you and an interesting analysis of those artificial islands that now have been built by China in the south China sea. If you look at the missile ranges of what they will install or have installed, actually on those islands, it covers the Malacca Strait. So, you know, US Naval operations to dominate that region now are going to be much more challenging. I think they have to be conducted by submarines because surface ships can be taken out. And the satellite coverage that the Chinese have over that region is very good. So they're able to hit U.S. ships, even in the Malacca Strait or even in the, in the Indian ocean.
Carl Zha: Yeah. That's why the Russian land link is very important for China to get its energy supply because there's no way the U.S. can overtly attack pipelines. China, Russia pipeline without escalating into a nuclear war. Right. So, whereas as today, the Navy still has superiority over, over the Chinese Navy on the blue water.
Steve Hsu: Yes, obviously that would be a much more difficult, competitive struggle than just switching on the energy flow from Russia. Now, maybe talk about power. Are you familiar with Power of Siberia?
Carl Zha: Yes. So currently Russia already has a gas pipeline to China called the Power of Siberia 1. Now this, this, goes, connects the gas field in a part of Russia in the, in the Russian far east, that this is a gas that would never reach Europe because there's no pipelines to the west. So the only market they have is in east Asia.
So currently the Power of Siberia 1 is already supplying gas to China. Now there's also a plan for Power of Siberia 2. So now the gas in the Yamal Peninsula, which is in the Arctic circles, goes to Europe. That's the plan for the north stream too. You know, to supply a lot of these gas to Germany.
But now Germany held up the certification for north stream two because of the Ukraine war. The Power of Siberia 2 aims to connect the Yamal gas field in far north Siberia all the way down, possibly through Mongolia to China.
So this, this time before the energy market, the Russian energy supply to China and Europe were separate because they were from completely separate gas fields. But once Power of Siberia 2 is built, I think it will take maybe three to four, four to five years to complete. But once that's built, Europe can no longer count on itself being the sole receiver of energy from those big Siberian gas and oil fields. Because now Russia could easily just export them to China. And Russia will, you know, especially under sanction.
Steve Hsu: Right. And, I guess in some of the estimates I've seen from western European analysts just in recent days, is that they're planning on a decade to switch away from dependence on Russian gas. So, you know, to build LNG ports and LNG D liquefaction plants and things like this.
So it looks like it could be a race against time with the Europeans trying to wean themselves from Russian energy. And meanwhile, the Russians building this pipeline where they could just, instead of sending it to Germany, sending it to China.
Carl Zha: Yup. I, again, I think, you know, a lot of it's also Germany is also playing politics. Right. They're holding up the certification for north stream two, they're not the pipeline. So, you know, at any time that could reverse or that policy and let the gas flow.
Steve Hsu: It was the Lensky, you know, if they come to terms and they say, okay, Ukraine will write neutrality into its constitution, which was in its constitution. I think until Maidan, if I, if I'm not incorrect and then I guess there might be some territorial gains.
That's maybe a sticking point right now in the east, but definitely the breakaway republics will break away and Crimea will be recognized as Russian. It seems like that would end the conflict. And then after a polite delay, the Germans could just turn nord stream 2 back on.
Carl Zha: I think that's, that's probably the German calculus right now. But we don't know whether the U.S. will allow that to happen. There's a lot of hawks right now who want to turn Ukraine into Russia's Afghanistan, right? And to, to bleed the Russians to the last Ukrainians. and, and that's, I mean, th the goal was never to actually absorb Ukraine into us, a full member of NATO, because Ukraine is much more useful as a buffer zone where they can, you know, carry out proxy warfare against Russia, Russians, without having the fear of being escalate into a nuclear exchange.
Right. So, so I, I, yeah, we'll have to see how that is resolved, but in the meantime, you know, China is throwing an economic lifeline to Russia, as you rightly point out. China does not want to see Russia falter, to see Russia fail coming out of this. Because, you know, before the Ukraine war, let's remember China was fully in the crosshairs of the U.S.
So, you know, if Russia falls, you know, China will be much more isolated, in terms of U strategic in circle mint. That's why China will probably do its best to keep the Russian consumer supply with consumer goods, he can, the, the. Good.
Steve Hsu: Could we talk about the mechanics of that? Okay. There are no us sanctions preventing say Huawei, or Xiaomi from selling
Carl Zha: Yeah.
Steve Hsu: in Moscow. Right?
Carl Zha: so, so, okay. So four Xiaomi, U.S. could currently have no sanctions, but U.S. could apply sanctions on Xiaomi because Xiaomi is still building on a lot of the U.S. Made platform and US-made components, because Xiaomi is on Android platform, right? You realize on Android PA one of the, one of the reasons U.S. sanctioning Huawei is because while we're trying to build his own independent OS system and trying to, trying to do its own chip design, not using Qualcomm chips. And that's what led the U.S. to, to come down with the ton of bricks and Huawei. But on the other hand, Huawei has no incentive now not to sell to Russia.
Steve Hsu: So Huawei could sell Harmony O S handsets to that's there now Android alternative, they could, they could sell Harmony O S handsets to Russia, but th
Carl Zha: But yeah, Huawei still has a problem with the chip because that's a, because a is sounder, semiconductor sanctioned by the United States and China is still, I think, several years away from. Frank cracking the, cracking the code on how to make a, you know, seven nanometer chips, commercially, a commercial grade seven nanometer chips, domestically, because before, while we relied on T TSMC, the Taiwan semiconductors,
Steve Hsu: So, so, so in terms of phones, that need say seven nanometer or below 20 ish, nanometre, I don't know if this was your area of WWII or not, but, but the below 20 ish nanometre, which I think, you know, they have to go to Samsung or TSMC for,
Carl Zha: yeah,
Steve Hsu: uh, those products could be stopped from flowing into Russia.
Carl Zha: Yeah.
Maybe. I mean, that's how the U.S. pretty much killed Huawei's handset market like you before. I mean, in Indonesia there's like Chinese phones everywhere before. It's very easy to get a Huawei phone, but after U.S. sanctions, basically Huawei handsets disappear from all the shops because Huawei, they only, they only stock up, you know, a limited number of chips.
Their stockpile is running low and they have to give priority to their other business.
Steve Hsu: One of their sub-brands called Honor. They've spun out now.
Carl Zha: okay.
Steve Hsu: But the thing is that once, once it becomes a big item in Russia, it's still possible for the U.S. Just to sanction them and say, okay, fine, you, you guys are selling too much of this stuff in Russia. So now we're going to cut you off from TSMC chips, for example.
Carl Zha: Yeah,
Steve Hsu: So that's definitely a hole in what China could potentially provide Russia in terms of just general consumer goods that you buy on Alibaba on AliExpress, I noticed a lot of the reviews on Ali express or buy it from Russians. Actually, it seems like there's not going to be any shortage of consumer goods.
Carl Zha: Right.
Steve Hsu: They can get from China and not all Russian banks have been sanctioned. So I think even the transactions, or maybe that maybe the Russians can just download, you know, Ali pay or something.
Carl Zha: So, after MasterCard and Visa sanctioned Russia, Russian banks are in talks with uh, China.
Steve Hsu: Union. pay.
Carl Zha: Yeah, they're there. They're sinking up with union pay also. now after the Swift sanctions, Russian companies are in talk with China to switch to the CIP system, which China built in 2015 as an alternative to Swift for possible scenario like this for the scenario where, where U.S. is going to apply Swiss sanction to kick companies off the swift and initially was probably designed with Chinese company in mind, but there's this, the CIP system allowed, for example, the Russia, China trade to be settled in Yuan instead of dollars.
Steve Hsu: Right. So, in terms of general consumer products, setting aside CIPS for the moment, it doesn't seem like there's any problem either for Russian companies or even Russian individuals to order consumer goods from China.
Carl Zha: No.
Steve Hsu: That the amount of suffering I think is going to be quite limited in those categories.
Carl Zha: There's I, in fact, there's, there's some Tik Tok videos that's going around in China social media right now. It's Russian Tick Tokers. They're going to the mall right now in Russia and all the Western brands are closed. All the Western brands stores are closed, but the Chinese stores are still open, like Xiaomi. Right.
Steve Hsu: Or leading, leaning, leaning sneakers and tracksuits.
Carl Zha: Yeah, yeah.
Steve Hsu: Okay. What are the other vulnerabilities? So aircraft spare parts, have you thought at all about that?
Carl Zha: So that is a problem because China itself relies on, you know, a lot of the components, source foam, Boeing, AirBus, et cetera. So if the U.S. and EU decide to apply sanctions against his Chinese companies, they will be forced. They might be forced not to supply to Russia as well. So, that is an issue.
Steve Hsu: So is it possible that aviation commercial aviation travel within Russia say three months from now? It could be almost, you know, shrunk to zero because of the lack of spare parts.
Carl Zha: I, I'm not an expert on that. But a deal would definitely be impacted or I imagine so.
Steve Hsu: Right? Because they don't have an easy alternative.
Carl Zha: Yeah.
Steve Hsu: Even if, you know, there's this whole issue of they have leased planes and they're saying we're just going to keep the planes, you know, since you, by the way, this, the, the idea that our central banks could just take the foreign reserves of the rushing hundreds of billions of dollars.
If that's not an act of war, I don't know what an act of war is.
Carl Zha: I mean, they did that to Afghanistan just before that, you know, the Biden …
Steve Hsu: Well, we've done it many times to other countries, but to do it to Russia is kind of a big deal. But they're going to get away with it, I guess.
Carl Zha: Yeah.
Steve Hsu: But, although they will keep the, they may just keep all the least planes. They are not committed to flying them without spare parts.
Carl Zha: Yeah, yeah. That, that, that could be, I mean, it depends how much the U.S. wants to crank up the fire on China for doing business with Russia. That I mean, because it's really paradoxical because now you also have a Blinken in China for help, right. To resolve the huge Russia Ukraine issue. But at the same time, the U.S. still has all these sanctions on different Chinese companies.
Right. They, they just recently today's it was a news where Tik TOK Oracle deal was supposed to come into a, a close because know, there's a U us government is forcing a tech talk to, into a partnership with Oracle where they will have all these, experts, you know, vetted by the U S government to, be embedded with Tech-Pack to make sure the Tik TOK data stays us.
And, you know, the U.S. government can get a hold of that.
Steve Hsu: I saw that. You know, it is actually rational for the U S to do this because the information war is partially is on Tik Tok. And if they didn't have control over what kind of Tik Tok videos American teens could watch, then China could potentially win the info war. Yeah.
In the future. So I can, I understand why they want to do that.
So what do you rate the odds of a relatively near term settlement?
Carl Zha: Oh man, this is this, this is hard. This is, you know, predicting the future is always foolhardy because before the war, I honestly thought Russia Putin was just saber rattling and I thought at most he would do is maybe send troops into the down boss' region into the breakaway republics.
Steve Hsu: I also thought he wasn't going to go in big.
Carl Zha: Yeah. I mean, I had an argument. I had a debate with a military watcher guy in my Facebook group. He was saying there's a high chance of a full-scale Russian invasion. I didn't believe him. But now he turns out he was right. I was wrong because his argument was, you know, Russia put all his military assets around Ukrainian borders.
This would be just too expensive for a military exercise or just even just a high pressure negotiation tactic. It, you know, they, those troops had to do something. So he was right. so I,
Steve Hsu: Sorry to interrupt you. My guess is that Putin and his circle regret not doing this in 2014, 20 15, when it would have been easy. And so I think maybe he regards this part of his legacy that he's gotta, he's gotta settle this matter.
Carl Zha: So I, maybe this is a, , so people will make a lot of comparisons between, China you know, mainland China and Taiwan versus Russian Ukraine. This is actually a perfect transition point because, for one of the calculus, strategic calculus for Putin is because Ukraine was getting all these Western foundings and NATO foundings.
What Ukraine is actually doing is building up its military capability since 2014. So maybe he felt he had to act now rather than later, before he couldn't do you know, maybe, maybe at some point in the future, he would not be able to do what he's doing now,
Steve Hsu: I, I I agree with you because obviously they have strengthened the Ukrainian military quite a bit since, 20 14, 20
Carl Zha: And, and the argument against doing a full Normandy on Thailand speeches is that, the strategic calculation is quite different because, you know, in 1990, I lived in China in 1980. So I remember at that time, you know, Hong Kong was something like 25% of the GDP of the entire mainland China.
And, and, you know, back then Hong Taiwan's economy was many times bigger than Hong Kong. So, but that has shrunk significantly. And, you know, Hong Kong economies, like one, it's like one or 2% of the entire GDP of mainland China now. And, now, the cross Strait calculus, China is growing stronger and stronger by day.
Mainland China is strong, growing stronger and stronger by day. So it's a quite different scenario. Let's say Russia versus Ukraine. So China has a lot less time on China's side.
Steve Hsu: I agree. I agree with that. And I, I think that, you know, they would rather wait until the relative power. You know, the difference in relative power is so strong that they
Carl Zha: Yeah.
Steve Hsu: leverage a peaceful settlement out of
Carl Zha: Yep. And, and really the China tie tie, the mainland China Taiwan issue is really an issue between the U.S. and China. Right. So, China is really waiting for the, for the time when China was so strong that the U.S. couldn't say no.
Steve Hsu: the U S will sell Taiwan to China for some other confessions, but here's, here's a way here's a plausible scenario where things can go wrong and they're, they're going to be forced to go, which is that, you know, the us has not tried to develop the kind of intermediate range missiles that the Chinese developed.
So the Chinese right now have, within that theater of the Western Pacific, they can hit all the U S bases. They can hit all the Taiwanese bases easily with precision weapons and also aircraft carriers. But the smart American strategists want to, now that they've pulled out of the intermediate range, missile treaty with the Russians, they can develop similar kinds of missiles
Carl Zha: Yes.
Steve Hsu: all over the Pacific pointed at China. And that, that could actually make an invasion of Taiwan extremely difficult.
Carl Zha: I think that's what the thought was kind of the start of that, right? When they put that fat on, on Korea, that,
Steve Hsu: Well, Yeah, I'm not talking about anti-missile missiles. I'm talking about offensive missile capability, which can be used to take out ships easily because satellites now can image from low earth orbit. Satellites can track all the shit, not just military shows, but even commercial ships can be tracked in real time.
Now. if I know where your ship is, I, and I have a missile with a range of a thousand miles. just take your ship out. And just, it's a FA a weird oddity of history that the Chinese were not part of the intermediate range missile, a nuclear treaty, but the Russians and the Americans were so the Russians and Americans didn't develop these, this kind of missile maneuvering, terminal seeking, intermediate range, missile, the Chinese like
Carl Zha: yeah.
Steve Hsu: and lots of other variants.
Now they've now developed. They developed all this stuff the Americans didn't but now the American strategists realized they're going to need this stuff. So if they start putting the stuff in all around the bases in the Pacific, the calculus, it may be a little bit more like Putin's calculus here, where if he doesn't go now, he may not be able to go later.
And so that's the most worrisome thing for me.
Carl Zha: Yeah, I, I agree. I mean, there is a among the Pentagon that us have a short time window, from maybe 10 to 15 years, while China still hasn't fully developed its military capabilities to, you know, while, while U.S. do have military superiority for us to do something, Because the other thing is, after 20 years, Chinese economy will be so large that, you know, it will change U.S. If the U.S. wanted to do something, you will not be able to.
So 10 to 15 years is kind of the danger zone window. I agree.
Steve Hsu: I agree with that general observation, but, I would even say a little bit more strongly, I would say when you war game out a Taiwan conflict today, the U.S. gets beat. So, China actually can take the island and actually hold off U.S. forces, I think in most of these war game outcomes.
Carl Zha: But the problem is how do you prevent it from escalating into a nuclear exchange. I have not seen anybody talk about de-escalation, right? So there's a lot of talk about escalation, but if a U.S. aircraft carrier gets sunk. How is it not going to escalate into a nuclear exchange?
Steve Hsu: Oh, right, right. I think the gamble that Xi Jinping would have to make, like suppose they had to go now or three years from now or something, right. Say for whatever reason, like the U.S. tells Taiwan to declare independence and recognizes them. I don't think it's likely, but suppose it happens three years from now.
I think it potentially, if you're shooting ping youth, it's reasonable to think you can, you can take the island. And before the U S can marshal a response, you can present them with a fait accompli and very strong area denial capabilities because of these intermediate range, missiles, conventional missiles, and then even then have to gamble that the U S is not going to go for it.
If they go for it, then it's very tough to sort of retake Taiwan or, you know, cut off the oil to China, whatever it is. It's very hard then to avoid that escalating into a nuclear confrontation, if you can quickly go and get Taiwan before the U S can respond in, in, in, in large force, then it's up to them to decide, do they want to incite world war three or not?
And I think that's the only way that China can think about it, but that window could close. If the modern, if the pivot to Asia is a pivot to the Pacific that Obama wanted to start actually is executed properly, which means new weapons systems, hypersonic missiles, intermediate range, missiles stationed by the U S on its existing basis, all around the Western Pacific.
That actually prevents the scenario that I was just describing, where they can quickly grab the island. So it's a more subtle and complicated strategic situation. I think that most people appreciate
Carl Zha: Right. So the thing I look at it is that the government of Taiwan would not do anything big or drastic without explicit approval or support from the United States government. So, so only, we know what China's red line is, right? The red line is the Taiwan government formally declares for their independence.
So Taiwan will not declare formal independence unless the U.S. wants them to, the only reason the U.S. would want them to is to go to China to attack and to spark a war. But I don't, I don't see, even at this point, what the U.S. gains from that. You know, the U.S. military industrial complex gains a lot from continuing tension with China, right. They can continue the grift from a trillion dollar military budget. But what do they gain from an actual war? I fail to see that.
Steve Hsu: Well, I think if you're a long-term strategic thinker for the United States, the logic is that.
The U.S. is the hegemon in Asia. And we don't want China to become the hegemon or to displace us as hegemon because Asia is the center of economic gravity and on the planet is shifting steadily toward Asia. So, most of the GDP on the planet is in that region now. So if you're an American strategic planner, you just want to keep China from becoming predominant in Asia.
Carl Zha: This is basically the [John] Mearsheimer line, right? I mean, what he’s been proposing.
Steve Hsu: Yes.
Carl Zha: But, you know, even Mearsheimer’s proposal is not really being fully adopted by the U.S. leaders. You know that because part of Mearsheimer’s proposal is actually the U.S. make nice with Russia, you know, don't stare up trouble in Ukraine.
Steve Hsu: Of course, a correct execution of the pivot to Asia means you stabilize your relationship with Russia, stabilize Europe, you know, you maybe ideally neutralize Russia will be China, and then you can pivot to Asia and that's all in shambles. And that's all in shambles because of stupid execution by our neo-cons.
Carl Zha: Well, I mean, this is always, but this has always been the case though. I mean like Alan Greenspan talking about the reason we went to Iraq, right. Was to control the flow of oil. He says not to take their oil, but to control the flow of oil. But the idea was that the Persian Gulf is becoming a very important supplier to China and by the U.S. going to Iraq, the U.S. can dictate the flow of oil, but that, you know, we, we all know how that would. Right. I mean, you can't.
Steve Hsu: I agree with what you said and, and not only did we fail in Iraq and it was a monumental failure. If you look carefully at what the Saudis are doing, the Saudis, for example, the Saudis are not cooperating. MBS wouldn't even talk to Biden recently about increasing oil production. I think the Saudis are calculating. At what point could they switch their security guarantees from U.S. defense to China and Russia.
Carl Zha: Yeah. I mean, the people are hedging now. People are hedging because the U.S. in the past two to three decades hasn't been very encouraging. I mean, like, I remember watching Taiwan talk shows, you know, when the U.S. withdrew from Kabul. People are already making the comparison between, you know, kind of Taiwan and Afghanistan and now they're definitely watching what's going down in Ukraine.
Steve Hsu: Yeah, we left Afghanistan. We didn't win in Afghanistan against a very, you know not a very advanced threat. We are not going to even try in Ukraine. Right. And so if you're Saudi and you're saying, well, who's going to guarantee my security in the future, Russians and Chinese or Americans. Maybe at that point, for sure, you got to start hedging and maybe you're going to start selling oil in RMB denominated contracts.
Carl Zha: Yeah. The Saudi-U.S. deal to price oil in dollars back in 70, that was a basis for the petrodollar and U.S. dollar.
Steve Hsu: That is under threat. That is under threat now.
Carl Zha: Yup. And that's by U.S. policy. I mean, a lot of the U.S. decline in the last decade is self-inflicted.
Steve Hsu: It's entirely, I think it's entirely, self-inflicted. I mean, you'd have to give some credit to China for successfully modernizing and stuff like that, but they also had a lot of help from U.S. corporations.
So I wanna just talk even more broadly about U.S.-China competition in the future. I mean, that's the overall theme and these other things are just actually small theaters of the bigger conflict. You know, one of my theses, which I think is heavily overlooked is that if you look at the production of highly skilled engineers and scientists, if you really try to attempt a good, an actual, honest calculation of the rate at which the two countries are producing, you know, strong technologists, actually an order of magnitude in favor of China.
Carl Zha: Yes.
Steve Hsu: And you could even argue that about now, or maybe 10 years in the future, China will be producing, you know, highly skilled technologists at a rate, which equals the entire world X, China combined. So if you, if you look at the Piza scores of this piece as administered to 15 year olds in all OECD countries. And it’s a German academic who's done this whole analysis and published it. So if you, if you look at the kids who score at PISA level six, which is in Western countries, the top, roughly one to 3% of the population, you know, basically mastering a certain level of mathematics by the time they're 15.
And you just add up, you just take every country in the world, ex China, and then you take China and you add it up and you say, well, how many PISA level kids are there in the world?
China's roughly comparable to the rest of the world combined.
Carl Zha: I used, I used to tell people that if I had, I stayed in China, I don't have a very, I mean, I, I have, I don't have a very good chance of getting into top Chinese elite university, like or baking university, but look at me, I came to us and I got into Caltech. So, I mean, in China, there's a lot of smart people, you know, I remember in junior high, I was only as hard as I tried, I was only like, just barely above average. I was maybe like, yeah, bare, like in a class I'm thinking of my junior high class. Cause we, we did class rankings back then, you know, a class size of like 63.
I was like 29, the top 12.
Steve Hsu: But it is true that I think you are a little More from what you told me, you were a little more carefree when you were in China. And then when you came to Chicago, you were a
Carl Zha: Yes. More driven. Yeah. Yeah. That was definitely more driven in the United States. And part of that drive is also because when I came to us, I realized a lot of my peers don't really give a shit about studying. So, so if I just put in the effort and to actually study, I I'm able to get ahead
Steve Hsu: Right,
Carl Zha: That wasn't even possible for me back in China, because everybody was working hard.
But in the U.S., I realized by working hard, I can get ahead. I can become
Steve Hsu: Right.
Carl Zha: rank one or third in class, which to me wouldn't even be matched by notable back time, back in China.
Steve Hsu: So just to elaborate on this thesis a little bit, so it's easy for people to counter and say, well, these test scores, they don't mean anything. And we know these Chinese people are studying all the time. So of course the test, the test over inflates their capabilities, right. That the test is an over estimator of their capabilities versus people in other countries.
Maybe that's true, but I could take another line of attack of evidence, which is that if you do follow technology broadly
and you ask, what is the rate of progress say in the last 10 years of China in jet engines, Space exploration, satellite technology, microchip technology, software development, you know, AI materials, science, quantum, computer, you know, you make the entire list of everything and you see that they're competitive with the rest of the world in every single one of those categories now.
Carl Zha: And this was China, when I was born, that couldn't even produce its own chemical fertilizers, you know.
Steve Hsu: Yeah,
Carl Zha: Back in the 1970s, China was a raw commodity exporter. Yeah. Export crude oil to Japan and imported refined products like gasoline and fertilizers. I mean that's yeah.
Steve Hsu: But I think this trend really sped up in the last 10 years
Carl Zha: Yup.
Steve Hsu: 20 years ago, when I would visit other theoretical physicists, high energy physicists, for example, in China, I could see they were not at the research frontier. They could train students who would come to the top U S PhD programs, but they did not have taught PhD programs themselves.
That is not true anymore. Now they have top PhD programs and you know, you can just see across the board innovation. So, if you could compute a first derivative. Of tech, tech advancement rate and average it over all important areas of technology. Their first derivative would be astonishingly high, like, like unbelievably high compared to any country right now.
So, but, but people are capable of doing that analysis because they're not following China across all of these areas simultaneously.
Carl Zha: I mean, that's why the U.S. sanction on China was specifically targeted semiconductors because conductors are still one of the few areas where the U.S. still have a chokehold on China.
Steve Hsu: Yup. That's one of the few and there, you know, it'll be a very interesting question. I did a podcast with a guy in Taiwan who follows the semiconductor industry to discuss with him, you know, the rate of catch-up in, you know, cutting edge fabs and fabrication technologies. So yeah, it's interesting.
Cause that's, that's probably where the gap is. The biggest they're fully dependent on, you know, ASM ML and, you know, applied materials and other us, you know, somewhat U.S. controlled technologies in cutting edge semiconductors, but it's not true in many other areas. So for example, you know, there's a Rover on the moon right now.
Which is a Chinese Rover. There's a Rover on Mars, which is a Chinese Rover. a Chinese space station. It's not the international space stations. They're on a space station. And when you look at the teams of the engineers and scientists who built all the stuff, I just mentioned, they're young, they're so young.
And so I just think people are sleeping on this particular point. They're thinking it's just like before, where they kind of still need a little help from us companies, they need to steal some technology. They need grad students in the U S to bring it back to them. I don't think that's true
Carl Zha: That they don't realize the time I've changed. I mean, in the title of my father's generation, right? Like my dad, when my dad went to college in the 1960s, he was one of the few people in China who got into university. And when he was uh, you know, when he graduated in 1968 after the Cultural revolution, people like him got sent to the countryside to raise pigs.
My dad got sent to Tibet, Tibet regions. Like, when he was sent there, the local party secretary asked him, oh, so what do you do? You say I'm an engineer. You know, they say, oh engineer, great. We need somebody to build the roads because they don't even know what to do with him. That is not China today.
I mean, like, especially after cultural revolution, this is one of the reason you mentioned a lot of the people, you know, working on the Chinese based program are so young because these are the fresh new generation that was being educated, post cultural revolution, you know, like that that's when China's education system have got back on track, you know, China's economies start growing again.
Now it's a toll. Like China is finally getting back on track and that's what we're seeing right now.
Steve Hsu: you know, one of the, one of the areas where I kind of notice a similar effect is I compare the effectively the kind of recommendation engine and Tik TOK versus YouTube,
Carl Zha: Yeah.
Steve Hsu: It seems like the Tik Tok one is super genius compared to the YouTube one. Like it, it basically addicts you almost right away.
Like you just start playing with the tick-tock app for a little while, and then suddenly you're addicted. Cause it just keeps showing you stuff that you're interested in, you know?
Carl Zha: China has a huge advantage in AI because AI, then you have a lot of sample size, a lot of training, Chinese, large Chinese population. Give them that advantage. Give them tons of data.
Steve Hsu: I agree with that in general, and in particular applications, for sure. There are places where the Chinese data advantage is huge, but if you think about Tik Tok versus YouTube, YouTube's user base worldwide is pretty huge. I do not think, and take back is when it started was fairly small, ByteDance was not that predominant.
So I think they actually have better algorithms for, for addicting, you know, to their content than YouTube does. That's my judgment.
Carl Zha: Th that's why the U.S. government tried to force them to give up their source code.
Steve Hsu: Yeah.
Oh, the other, the other thing I was gonna say going back to, narrative information warfare and narrative control, I notice is that this information war, you know, say in the context of Ukraine or vis-a-vis China, It's a war on Americans because they're trying to control what Americans know or understand about the war in Ukraine or about the situation in China.
Things like this. But what's interesting is because there was so much suppression of the, you know, roughly half, maybe a little bit less than half, but roughly half of the population that liked Trump, those people have been suppressed so much that they've become a hundred percent distrustful of mainstream media and narratives.
I actually noticed if you go to the pro Trump conservative sites, now they are quite capable of detecting the falsity of the standard narrative about Ukraine. So I'm starting to see them cover the Ukraine war in a much more realistic fashion than a or.
Carl Zha: But I want to add a caveat on that because the U.S. always has this kind of divide, right? TheDemocrats want to go to war with Russia. The Republican wants to go to war with China. So RT always had, you know, a pandering for the right wing. And then for people like Fox news, like people like Chris Tucker, they see Russia as a fellow white Christian country and where they, you know, share much more similar cultural values than say China, this alien civilization.
I mean, in one of the Tucker videos, he, when he made a very good point about this disinformation warfare against Russia, by saying, you know, Russia didn't do this to us. Russia didn't do this to us, but he paraphrased a way to say that our real enemy is China.
Steve Hsu: Yeah. In fact, I think that he had a long segment on bio warfare, the bio research labs in Ukraine. And he completely undermined the Pentagon's narrative and the white house books, but then he said, our real enemy is China. We hate everything about the Chinese government or even China,I think he said.
So I agree with you that, so yes, in these conservative websites and media outlets, they're more prone to discover the falsity of the narrative vis-a-vis Russia than about China. And they're liable to embrace all kinds of untrue, unrealistic things about China as well.
I think that's definitely true. I think that's an important distinction, but they're just also just generally less willing to accept what is told to them by the Washington Post or the New York Times, or, you know, CNN. So, things are kind of broken. So the information war isn't completely a victory. Because half of our own population actually, you know, doubts large chunks of the narrative.
Carl Zha: Yeah. In terms of us context. Yes. But unfortunately it's still negative for China, even among the U.S. leftist, you know, they would decry the U S propaganda against countries like Cuba or Venezuela, but they will believe everything about Xinjiang, you know.
Steve Hsu: I agree. I think both left and right are in the U.S. are prone to believe all the negative things said about China.
Carl Zha: yeah. And I think because of that, the cultural aspect is a big thing because you know, they, for, for Latin America there is a cultural closeness or, you know, for people to get the context, to gain the understanding. And for them, China still remains this large alien civilization that they know nothing about.
Steve Hsu: Absolutely. I mean, if you look at the deep history of humanity, I mean, the Euroasian landmass is where the highest development happened, right. In terms of technologies and, you know, writing systems and, you know, all kinds of things, right? I mean, some exceptions, like, you know, ink, gins, and Mayans and things like this, but mostly on the Eurasian landmass, and then at the two extremes, right?
You have the far west, which is Europe and you have the far east. So the furthest points from each other on that Eurasian landmass, you have two great civilizations now, which are, the 21st century is going to see which one ends up on top.
Carl Zha: Well, I'm going to challenge you on that, unless you include the far west as a part of you know, middle east Mesopotamia and all that, because for the longest time that area was a center of civilization and the Western Europe was on the fringe, at least until the Roman empire, right?
Steve Hsu: No, no. I totally agree with you. I should refine what I meant. So most of the developments in any given time in human civilization were somewhere on the erasion
Carl Zha: Yes. Yes.
Steve Hsu: In the 21st century, those two powerful regions are the far west and the far east, but they are also the most culturally separated.
Carl Zha: Yes.
Steve Hsu: And so that's why it's, it's very alien. It's so easy for people with European backgrounds to believe the worst things about say China or Japan on the other hand, China or Japan. Having almost been colonized and being the underdogs, they understand the west much better than the west understands the
Carl Zha: Yes. Yes. And also because, you know, English became the language lingua franca, right? Like for Chinese and, and other east Asians, you know, learning English is a must, but not necessarily for mono lingo Americans. We don't need to learn
another language. Yeah.
Steve Hsu: Yup.
Carl Zha: Yeah.
Steve Hsu: So, okay. I've kept you for more than two hours, so maybe I should let you enjoy your Saturday morning now.
Carl Zha: I actually greatly enjoy this conversation. We could, I feel like I could geek out on this forever.
Steve Hsu: oh, good. Well, we can always follow up. I, you know, I don't know how many listeners can, I guess if they can put up with three hours of Joe Rogan, they can put up with two hours. But let me, let me and cause
Carl Zha: Yeah.
Steve Hsu: if, even if you don't have, even if you don't have to get going, I have to get going at some point.
You're in, I guess what we could call Southeast Asia and one of the most overlooked kinds of polities is ASEAN.
Carl Zha: Yes.
Steve Hsu: Which, you know, I think actually if you project a little bit, think the ASEAN GDP could be comparable to Europe, you know, relatively soon or at least it's not certainly non-negligible and it's something like 600 million people in ASEAN, right?
Carl Zha: Well, if you just take Indonesia, right? I mean, Indonesia is, is the fourth, most populous country in the world, just behind the United States, right by you, you don't, you don't, we don't really hear a lot about, you know, Asia us,
Steve Hsu: I mean, these are huge, huge countries and, and, and gradually actually becoming in terms of economic weight, significant,
Carl Zha: Yeah.
Steve Hsu: I guess I've been to Bali and I've also been to places like Kuala Lumpur. I just feel like it, that area, is incredibly important. In fact, to some extent, the competition, as long as it stays economic and not military, the competition in Asia
Steve Hsu: largely for example, whether China is going to become, you know, more influential on Asia than the U.S.
Carl Zha: I think in the economic sphere, I think the U.S. already lost in the competition versus China in the ASEAN. I mean, that's why, that, that is one of the reasons why the pivot Asia is mostly military, it's not even about economics because of, you know, China's poll in the region. It is just so much larger than the United States.
I mean, like, the only U.S. companies in Indonesia are all the extraction companies, right? Like the Freeport-McMoran, they operate mines in Papua, in western Papua. But China is in like every facet of the economic life in Asia, at least from what I observed on Bali. Right. Like the Chinese smartphone, you know, the Chinese made the smartphone affordable to a lot of people in the global south. You know, my babysitter has a smartphone. You know, they're all Chinese made phones. And yeah, right now I'm talking to you on Huawei build 4g infrastructure.
Steve Hsu: I mean, I think this is for insular Americans. It's hard for them or even Europeans. It's hard for them to imagine this, but throughout most of Asia, if you just walk around, like, I bet if you look up on your wall, like maybe the air conditioner is a Chinese brand, the refrigerator could be a choice.
It could hire, you know, maybe the, even, you know, almost everything around, you might be some kind of manufactured product that actually came to Indonesia from China. Right. So you know, I think it's just hard to understand how, you know, the leading trading partner for most of these countries is going to be China. And so it's, I think it's just, I don't see how the U.S. is going to reverse that trend. That trend is just going to continue building.
Carl Zha: Yeah. I mean, see, a lot of the U.S. could talk about, you know, oh, you know, China's taking over economically, but one of the things is large U.S. multinationals, some U.S. companies, they're just not that interested in investing in a lot of the global south places. You know, for example, African countries or Southeast Asian countries. Unless, you know, it's oil and gas or mines.
Steve Hsu: Yeah. I just don't see a lot of Americans wanting to, you know, get involved in winning business in those countries. It's almost like we're just seeding it to other competitors.
So um, you, do you see yourself living out the rest of your days in Bali surfing every morning?
Carl Zha: That's the plan. That's mine, you know, my, I always had a long-term plan that eventually I'm going to retire to some Pacific islands and surf, but I just got to move up my retirement schedule a little bit. So yeah, this is my, this is my life. I'm living my dream right now. And I'm grateful to my Patreon followers for supporting me.
Steve Hsu: That's fantastic. Well, I'm very happy for you and I'm glad I could finally get you on the podcast.
Carl Zha: Yeah. Yeah, it took, it took a long time.