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Arthur Kroeber

lines on the record: 156
first: 2025-06-19
most recent: 2025-06-19
sittings or episodes: 1
sources: podcast

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“That we need to live with. So we need to have a more a strategy that recognizes this is a reality, that there are a lot of strengths that the US has to bear if it's willing to play them, and that we have the advantages of a dynamic system and frankly a lot more Sort of creativity and flexibility in our financial system than the Chinese do. So it's perfectly possible to come up with a coexistence scenario in which we do really well. We have domestic policies that sort out our own imbalances, both economic and social. And we have a significant degree of engagement with China that is competitive but hopefully can be bounded so that we don't wind up in a hot conflict situation, which would be the worst of all possible worlds.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll build a block against that. Their answer is I will operate so that it is impossible for you to build a block that you want. So you look at China's international engagements More countries have China as their number one trade partner than any other country in the world. 140 countries trade more with China than they do with the United States, which is not true during the Cold War. So if you go to Southeast Asia, you go to Latin America and you say, how would you like to join our anti-China alliance, they will say, no way. This makes no sense for me. I import a lot of my industrial inputs from China, a lot of my consumer goods. This is really a critical relationship. I might have some concerns about the trade balance and blah, blah, blah, but I am not going to go up against this country that is now either my number one or my number two economic partner. Certainly on the trade side and increasingly on the investment side. So that is a non-viable strategy. It will never work. China has integrated itself into the global economy very successfully. And this is just like a fact.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Understanding of what's happening in China and how they're interacting with the rest of the world. So I think one of the Big danger. We have in the current Trump administration strategy in this, which was also to some degree apparent in the Biden administration strategy, was there is this belief that China can be contained and that you can essentially construct an alliance of countries that will stand up to China and try to constrain it with you. It's kind of a replay or a dusting off of the Cold War playbook where you had Soviet Union and the Warsaw Pact, you had United States and NATO and all of the informal allies everywhere else and you had the blocs against each other and the bigger and more economically productive bloc won and that is just not going to work because the Chinese have seen this coming for a long time. They have long had the view that the US was going to try and constrain them. And they said, well, how do we get around this? And their answer is not you build a block.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Exist, but you know, don't even generate enough revenue to pay the interest cost and their debt. That's going up. There's a lot of pressure that's building within the Chinese system because of this obsessive concern with the supply side of the economy. So they'll continue to do, I think, quite well overall in technology production, but the financial constraints are rising. So they, I think, have some self-interest here in coming up with a more balanced economic model and having some pressure from the outside to get them in that direction. I think that would be good. But I guess the final point I would make on this, though, is on the US side, which is of course where I generally sit, it really is critical to have a realistic”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And this creates rising trade frictions, not just with the United States, but with lots and lots of countries. And it does sort of contribute to the narrative that That China is not really all that interested in creating a situation where everyone benefits from their growth. It's much more of a, we're in this for ourselves. So I think it would be helpful for the world economy, helpful for the Chinese people, and helpful for general stability if the Chinese could recognize that they need to do a lot more to promote the demand side of their economy can't just all be about endless investments in new technologies. And I think they're coming to a point where they may be forced into that because if you look at most of the metrics that I and my team follow of return on investment in China, they're going down, the number of zombie companies that still”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, the obstacles to that are enormous, both because the US narrative that this is intrinsically unsafe and because, you know, I think the Chinese will be very reluctant to allow a lot of their technology high flyers to go and set up in the US and risk having their technology leak away there too. So I'm not saying that that is easy or achievable, certainly not in a few months. This would be over the course of a year or two or three. You might be able to negotiate some terms of engagement there. I mean, the big problem, I think, that China creates for the world as a whole right now is this fact that they just are unwilling or unable to generate enough domestic demand to keep their own economy running at full steam. That's bad for their own economy and it creates a lot of friction in the rest of the world because what it then means is that companies that can't sell in China are forced to export their surplus production.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Manufacturing system. I think we let those atrophy too much. So selectively, I think it does make sense for us to try and rebuild that. And rebuilding that should incorporate the best anywhere in the world. And some of that is now coming from China. And I also think just in terms of... Enhancing mutual understanding and getting better communication channels, investment is even more than trade is a very good communication channel because it forces you to go to the other guy's place and put down roots there and figure out how things work and figure out ways to communicate with one another.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And if you don't know what you yourself want and you don't know what you want from the other party, it's very hard to engage in a constructive negotiation. So I think that's my fundamental take on where we are right now. To me, what we should be, so this is normative statement, what we should be aiming for is trying to figure out what are the terms of coexistence between the US and China in the coming years and decades. The most desirable outcome would be some kind of an agreement under which we create a broader permission structure for Chinese companies to invest in the United States in a lot of these key industries that we're talking about. I think that's good for the United States because I think it is reasonable for us to try and rebuild certain aspects of our industrial...”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, my expectations for this are very low. Because I think the basic problem here is that we have on the US side we have a sort of a collection of Grievances and complaints that have not coalesced into a very coherent agenda of what we want from ourselves and what we want from China”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, and I think there's also a very strong pattern. There's been a few good books written about this, about how American attitudes towards China in particular have tended to swing from one extreme to the other. This great Americans and Chinese are kind of the same because they're both pragmatic. They like money. They like business. If you go to China, it's very easy, in my experience, to sort of like chat with people and get along. So that level of connection is fairly easy. And then the other swing of the pendulum is that they're this enormous amorphous force that is committed to a devilish system that we don't like. And finding the middle ground in that historically has been very, very difficult for the US to do.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“A few sort of big cultural hotspots where things happen, and then it's all kind of placid, right? So the sort of the variety of experience that you have in the US, I think, is still unrivaled. And I think you were talking earlier about that there's still this huge discrepancy between the average income in China and the average income in the US. This is partly a reflection of that, right? It's still on average a much poorer society in the US than the US. And so the surplus that's available for people to do stuff that's interesting but not sort of economically productive in a narrow sense. That space is much still a lot smaller. And it's not just political. Repression that's doing that, it's kind of like it's a combination of the level of income and just like the ingrained social structures”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Is often very uncomfortable to live through, and we're living through, I think, a very particularly uncomfortable moment now. And in China, there's some of that, but there's a lot of containment and there's a lot of, there's more stasis in a lot of the kind of fundamental sort of social relationships. So I lived in China more or less full-time until 2015. And then I started doing half and half after that. Now I principally live in New York. One of the things that always struck me when I would come back from China is to the US is just how much grassroots cultural activity you have all over the United States, right? We have a very distributed... Sort of system of sort of cultural activity here. And in China, you have”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Stable, it's more cohesive, it's more attached to rather deep rooted notions of gender relations, patriarchy, sort of how the society should hang together. So as we think about all of the change that's occurred in China, which is real, and some of it, the changes in social relations that has come with the essentially abolition of the planned economy system and the replacement with this basically capitalist system with the Leninist political carapace, those are very significant, right? So I don't want to underestimate how much transformation has gone on in China over that period. I think it's been substantial. But in the US, it's been, I think, in many ways, even more. There's a kind of intrinsic churning dynamism to the American system that is just always there.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Changes that have occurred in the United States over the last 40 years I think are substantially greater than the changes that have occurred in China over that time period in terms of people's fundamental understandings of how do we interact together in a society and partly that just reflects that the US is intrinsically a somewhat more complex society than China with all of these layers of races, the whole immigrant experience that you know was Just in terms of the number of foreign born people was much lower in 85 than it was today. But socially we are much more, there's just been a lot more change and a lot more, I would say, evolution of people's basic attitudes towards what they think about society and how we should interact. China, in that sense, I think has been more”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think one of the things I often describe China as Very turbulent and very deep ocean. So you skim along the top and you see the huge waves, right? So all the stuff that's been built, all of the cities, the high rises, the industrial parks, the high-speed rail and so forth. And then you go below that, and there's a very deep still ocean of. Ideas, concepts, bureaucratic tendencies, and so forth that have built up over centuries, that in a lot of ways does not change that much. So a simple example on this is how to make that more concrete. If I think about What the United States was like socially in 1985 compared to what it is today in terms of The space for gay and lesbian people, trans people, social acceptance of different lifestyles, awareness and attention paid to racial issues, all these kinds of things. We were the”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“There's so much better at what they do than the Chinese competitors. We're dealing with the rise of a new entrant on the global stage, and that's uncomfortable, and there's some jostling there. But we should also not overstate the degree to which even on a sort of a commercial industrial side that we are sort of existentially threatened by this. There's some real challenges there. But a lot of this notion that we will not have an auto industry in five years because of BID, that's, you know. Let's get a grip, folks. We could end up there, but if we end up there, it's because we will have made a bunch of really bad policy decisions that got us there, not because this competitive threat exists. So mostly it's on us to figure out how to get things right on our own terms within our own system.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“some impact, but mainly what the United States failed to do as the world was transforming in the late 90s, early 2000s. We failed to take seriously our responsibility to change our systems of redistribution, of helping people out of social. We failed in the social contract domestically. So there were failures of domestic policy, which got then blamed on China. And I think similarly, if you look at scare stories about how China is going to take over the world, okay, BYD, very good company, Huawei, very good company, CATL, very good company. You look at the total of the totality of the corporate universe in the world. It's still pretty big. U.S. companies are incredibly powerful and adept across many, many, many technological sectors. They are very good at what they do. In many cases, they still have very strong positions in China.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“You cannot find the Cold War, you cannot find the rise of Japan, you cannot find NAFTA, you cannot find China, you cannot find anything. What you find basically, I think is the march of technological progress. That's basically what that line. And so all of these stories...”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“That wasn't quite so right, and we have to take this more seriously. So getting away from the extreme narratives is important in general. And then I think also on the U.S. side, Also, to some case, some extent in China as well, is a lot of the things in the US political context that are blamed on the rise of China. We have this problem or that problem because of China. They are predominantly exercises and scapegoating, right? So we were talking at the beginning of the conversation about the change in the industrial sector, hollowing out of U.S. manufacturing employment and so forth. Look at the trend of US manufacturing employment as a share of total employment is a straight line from 1946 today that looks like this. You cannot find”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right, right Absolutely. Yeah, no, that is a really important point. I want to just dwell on that a little bit. The attraction that people have towards extreme narratives about China Total domination or total collapse or so forth. Very, very strong. In my view, again, it's a product of ignorance. The less you know about the realities of place, the more you can construct these fictional stories, which take some truth and then absolutize it, right? And the more you know about the reality, it's like, yeah, it's more messy than that. So neither that nor this, right? So that, I think, is just another argument for why you have to have much more deep engagement so people are engaging with realities rather than fantasies. You can see this again in very mundane ways. If you just look at the way that the Trump administration has conducted its trade negotiations with China, it was premised on the notion that China's economy was so weak that you hit them with tariffs and they will immediately habitulate. And that was a ridiculous idea. And it's taken them a couple of rounds to figure out, oh, maybe.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Right about that. I think we in the U.S. side have to get a little bit more attuned to the idea that this is just like there is no end point to this. This is a relationship which will go on forever. There's no winning, there's no losing. There's just managing and we need to do a much, much better job of figuring out how to manage it and keep the conflicts in a friction in a Is contained a zone as we can, not easy to do.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Have Yeah, I basically agree with that. I mean, I think there's, we should be spending a lot more time trying to figure out how to make this a workable relationship. There's going to be competition. There's going to be conflict. There are some real conflicts of what we define as core interests on either side which are tough to resolve. This is not easy. But we basically both have to recognize, and this is more of a problem on the U.S. side. I think the Chinese recognizes that the U.S. is not going anywhere, right? There is a little bit of a meme in Chinese foreign affairs circles. Oh, the decline of the US, the rise of the East. Which is very sort of officially popular, I think most people don't really believe that because they just have too much confidence in the long run resilience of the US system. And I think they're basically.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Decided that their Xinhua journalists are not really journalists, which is sort of true. So we forced them to register as government agents. The Chinese responded by kicking out a lot of our journalists, massive own goal for us. So the types of interactions that U.S. people have with China directly on the ground in China have been massively restricted compared to what they were a decade ago, partly as a result of Chinese government action, partly as a result of really misguided actions on our part, partly because of just like fallout from COVID and various other things. But where we are is bad. And there is an information asymmetry, which I think operates the disadvantage of the United States right now.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Get revoked. We're struggling to get to a thousand U.S. students in China. In the US, we closed down the Chinese consulate in Houston as part of a trade spat back in 2020, I think. Chinese responded by closing down our consulate in Chengdu. Complete disaster, whole sort of area of western China, really important that we have no eyes on officially anymore.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And frequently you would have this experience, you'd be sitting in a seminar room or think tank or whatever. And some Chinese expert would say, you know, we Chinese, we understand America much better than you Americans understand China, right? And for years and years, I basically thought this was BS, that most people in China don't travel. They have no idea, right? And even the expert class, they had fairly superficial kind of understandings. And so I always felt pretty confident that I and people in my cohort, we understood China just as well as they understood the US. And their blind spots towards the US system were very, very clear, right? So for years and years, that drove me nuts when people would say that. Now I think it's completely true, right? And all you have to do is look at the student numbers, 300,000 Chinese students in the US until their visas.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And I saw this, and it's totally different, right? That I'm convinced has gigantic impact. And I think it's really, really damaging if people in positions of authority in our government and our political system refuse to expose themselves to the actual reality of what China is, which is essentially what they're doing now by making it politically impossible for anyone to go to China and see what's going on there. That is a very, very dangerous place to be. It's ignorance. And one of the things that drove me and many sort of trying to Western China”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Then the classes that I did after COVID had set in, they weren't doing these study tours, so no one in the class had been to China as part of the program. And kind of luck of the draw, I didn't find any people who had been there as part of work or whatever. So I had zero direct experience of China in the class for a couple years. And the baseline view of what China was was A, way more negative, and B, much more stylized. And dare I say, cartoonish, that they were essentially getting their view formed entirely by whatever they were picking up in the media and from their preconceptions. And there was no check on that. And so I saw in just a very, very, very small but very concrete way that if you don't have people going back and forth and there aren't some people in the mix who say, wait a second, what you're saying doesn't make any sense because I was there.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“The class discussions were always much more nuanced, and people did not retreat into these sort of cartoon stereotypes of what China was like, because everyone who had been there could say, well, actually, it was a little bit different because here's my personal experience, right?”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Started. And in the years that I taught it before COVID, there were always reliably four or five people in the class that had spent some time in China. And many of them had done so just as part of this executive program, because part of what you got by signing up for this EMBA is that they took you on these global study tour trips and you would go to this country or that country and you would be there for a couple weeks and you would talk to a few companies and this and that. It's pretty superficial, right? But what I found was that when I had a class that had a few of these people sprinkled in that had that experience or a little bit of work experience or they may gone as a tourist, had some kind of like a student experience or something.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And at any given moment over the last 15, 20 years, there have been north of 300,000 Chinese students in the United States. And so I don't know what the total number is over time, but it is quite a large number, right? So the cumulative effect of personal experiences can be gigantic, right? Particularly if it is extended over time. It's really, really important. And then the impact of these more structured engagements, right? Yeah, so you go as a tourist, you talk to some taxi drivers, you see this and that. What do you learn? Well, I'll give you a concrete example. So one of my side gigs is for a number of years I taught an executive MBA course at NYU on China's economic rise and what that meant for companies and so forth. And usually have about 20, 25 people in the class. And I taught it for three or four years before COVID, four years, I guess, and then two or three years after COVID.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Right It's big. It is really big. It is really big. And it seems like a very banal observation. And yet I keep coming back to it as one of the fundamental facts that continues to be underestimated about China is just how big it is in geographically in terms of population. But yeah, so I mean, the question there is like, okay, so what is the value of these things? Well, okay, so it's a fabulous book. I'm very proud of Britain and a few thousand people read it, right?”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“It's very hard to see how you get them. So I agree with you that we need something like that. I'm kind of pessimistic that we'll get there anytime soon, unfortunately.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And I have to say, you know, I'm fairly critical both of the Biden administration and the Trump administration in different ways, how they handle this. I think the Biden administration could have done a lot more, a lot faster. I think they were sort of had the idea that it was good to have more communication, but they waited for two years before they did anything. And then they were very parsimonious about how they did it. And I think they could have been much more aggressive. They weren't. is a problem. And then I think the Trump administration, unfortunately, just doesn't have place strong value on having respectful communications with anyone in the world, frankly. And then when you compound this with the paranoia about China, then it just creates more, well, I don't want to say paranoia. That's too loaded a term, but the suspicion, the fear, the distrust of China that exists.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Self sufficiency industrial policy complex. The Chinese system has always had a lot of difficulty communicating with the rest of the world. This has been persistent for many decades and centuries. And so this gave them a great excuse to just like not do the thing that made them feel very uncomfortable, which is like engage in communication with the rest of the world. And they concluded it's kind of okay. They also retreated into a very sort of paranoid narrative about what the US is up to, which is to a significant degree justified, but not entirely. And I think lost sight of the value of really robust communications aligns with the rest of the world. So both sides are entrenched in very suspicious Self reinforcing narratives about the other, which makes it incredibly difficult to”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“China is this bad actor, they have an illegitimate government. They are a systemic rival. We basically have to contain, constrain, control them. And any kind of interaction with them is in and of itself dangerous. So you have people in Congress saying, I don't want to go to China. There's no point in going to China. A, because I'll pay a political price for it if I go there. I will be tarred as someone who went to China and therefore is tainted. And what can I possibly learn? I already know what I need to know, right? So you have a deliberate effort, I think, with the United States to reduce the channels of information that we have with China and direct experience, which is very bad. And, you know, I think one of the bad outcomes of COVID in China was that they kind of locked themselves off from the rest of the world for almost three years. They got really obsessed by this self-”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And that is a very, very dangerous situation to be in with regard to global public health, any kind of sort of global coordination, whether it be on macroeconomics or climate effort or whatever, and on these issues like AI, right? I think that's a really bad place to be. So we're starting at, I think, a rather dangerous position. I think it should be a priority to figure out how we can get there. And it's very hard to see how we get there given the political environment. Frankly, in both countries. So in the United States, you have this narrative that”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Within the Chinese system, there was no back channel that enabled us to get even a little bit of a head start on what was going on. And I think that had very, very dire consequences. You can probably trace many, many, many deaths and a lot of social chaos to the inability of the US and China to communicate at that critical moment, right? So we have essentially dismantled the whole structure of communication. The Biden administration basically took the same view. They introduced a few more things. So there's a few more. There were a few more communication channels that they handed off to Trump that I think have not been made use of. So we're back to essentially zero, except for the trade.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“His first term. That was the only basically mechanism we had of communication. Did this create a specific problem? It did. So if you look at the early stages of COVID, back when SARS came out in 2003, there were staff members of the United States Centers for Disease Control embedded in the Chinese centers for disease control or their equivalent organization. That relationship, in fact, grew significantly in part because of SARS over subsequent years. And that was a very, very useful channel of getting information out. It was not perfect. It had plenty of problems. But the absence of that channel, I think, was really catastrophic in the early days of COVID, where we literally had no way of understanding what was going on.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you create a game theory solution to this that is kind of stable? I think what you can say at a minimum right now is There are ways in which the US-China relationship today Rhesbles that of the United States and the Soviet Union in the 1950s, i.e. before the Cuban Missile Crisis, right? And I don't want to exaggerate this too much, but the sort of diminution in exchange, in communication over the last six or seven years, is really alarming. So give a simple example on this. When Trump came into office the first time in 2017, he inherited structure where there were approximately 100 working-level dialogues between U.S. government and Chinese government officials, plus all of this investment in private sector stuff that was going on. But just at the formal level, there were over 100 dialogues. He got rid of all of them 100%, right? And he then replaced them with one, which was the trade talks that he had.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And so having that one-to-one line of communication was an effective response to that particular problem. With AI, it's much more diffuse, much more decentralized, much more unpredictable what the problems could be. And it's kind of easy, I think, to create, easy, we say in retrospect, it was hard at the time, but it was a... sort of, if you will, maybe a two or three-dimensional process to come up with game theory to enable us to manage the nuclear balance of terror. So I don't want to minimize Thomas Shelling's achievement. It was great. But it was like a two or three-dimensional problem. I think with AI, you have more like a more than three-dimensional problem. So it is consequently more difficult to figure out how do you”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Two highly competitive zones, the US and China, basically, where they have to be able to operate with some degree of trust, right? And I think the problem that we face in trying to analyze this is a lot of the analogies that you might reach for break down at some point. So you brought up the red telephone, which basically is a reference to the line of communication that the US and Soviet Union had during the Cold War where the threat that you were trying to avert was nuclear holocaust, basically. In some ways, I think that's an apt analogy and we kind of need to think broadly along those terms. But the specific problem that we were dealing with there with these very self-contained systems that were clearly under highly centralized control by a couple of people.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“That is a terrific question. I think that really gets to the heart of a lot of stuff. And I don't have a great answer to that, right? Because fundamentally, what you're saying is that there needs to be. A communication system, a network of interactions between”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the ability to concentrate your limited compute resources in one thing instead of you scattered around. Yeah, no, I think that's a fair point, right? And then so that then comes back to how fast can they solve the chip problem domestically? If they can solve that really fast, then that constraint goes away.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think we can say with high confidence that that's not going to happen, that they're just as powerful as the Chinese government is they do not have the ability to force everyone into one room for this, right? So Huawei's got its own thing going Bite Dance is going to have its own thing going. Xiaomi is going to have its own thing going. Alibaba is going to have its own thing going. All of these have sufficiently large revenue streams. And access to capital that they can move independently and will be able to leverage their connections within the system, both at the central level and the local government level where they get a lot of their support to do their own thing. So yeah, it will be you will not have a national monopoly solution to this that almost never occurs in China.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“LLM model flowing out of my quant activities. Let's give it a go, see how it happens. And it worked great for him. And then the reports that I have seen suggest that this created a certain amount of disquiet in Beijing. They said, well, where did this guy come from and why is he not coming out of the official plan? So there is some risk, I think, that they would be a little bit nervous about. Freelancing on this, but on the whole, I think they'll see this as another basic enabling technology that they should promote and figure out how to control over time.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, this technology could be dangerous, it could be out of our control, but we think actually it's going to be really beneficial and that we can control it. And that bet paid off for them very, very well. And I think my hunch is that they will look at AI as a similar sort of thing. Yes, it's possible that this could sort of get out of our control. But we think unbalanced, this is really important technology. It's going to enable a lot of other things. And we'll probably be able to figure out how to control it because our control systems are so good. It is interesting because if you look at sort of the big development in Chinese AI recently, it was deep-seek, right? DeepSeek was not the result of some state program. It was the result of basically a quant hedge fund guy in Hangzhou sitting around and saying, oh, I could actually build a pretty good, you know,”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“I have a lot of respect for Victor, and he, I think, has a very good grasp of the Chinese sort of bureaucratic mindset and how political calculations get made. And that's his territory more than mine. So I'm very respectful of that view. I would, however, tend to think that actually the Chinese are going to be pretty in favor of high-speed AI development. And the reason is essentially the same reason that I was talking about earlier about informatization and electrification. This is essentially a basic enabling technology that is useful for all of the things that can flow from it. And I guess my hunch would be that they would make the same bet with AI that they made with the internet back in the 90s. The internet, they said,”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“Walt Garden. That would be my. So if you want the case for why does China not dominate? I think that would, something like that would be the reason why.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“What economic system Offers the most fertile ground for people figuring out how to use AI in specific zones. And there I would give the US a fairly strong edge over China because China has become more self-enclosed. They have become more obsessed with self-sufficiency. They've made it very, very difficult for other people to operate in China. And it's creating some difficulties in people operating outside of China. So they have this walled garden of Chinese people and whatever they do that creates applications. But whoever the big US or Western AI operators have, they have the entire rest of the world to play with. And that's a much bigger universe where I would sort of rate the likelihood that you get interesting applications higher outside the Chinese.”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source
“And what producers are doing. And his view is that we focus a lot too much, we focus too much on what the producers are doing and not enough on what the consumers are driving. And I think that's a pretty good insight generally. I think it helps explain a lot of why the US has maintained its position such a dynamic economy, even though a lot of we've sort of abandoned a lot of the physical processes that underlie it. And so my question is, okay, economically, when we say AI, what's the most important part of it? Is it the large language models? I think the consensus is no. That's just the substrate. And what really matters is the application, specific applications that get built on top of that. And that's where most of the economic benefit is going to accrue. If that idea is correct, then the question you want to ask yourself is...”
2025-06-19 · Dwarkesh Podcast · Why China's manufacturing economy is dominating — Arthur Kroeber · IDENTIFIED FROM THE TRANSCRIPT · source