YouSaid · the spoken record

Victor Shih

lines on the record: 100
first: 2025-05-29
most recent: 2025-05-29
sittings or episodes: 1
sources: podcast

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“Yeah, it depends on the person. I mean, some people are willing to be a bit more open. But frankly, yeah, there is this atmosphere in China where people are afraid of. Deviating from the party line because they can really get in trouble.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think that's very tough. Anyone who's been a mid level or higher official can no longer leave the People's Republic of China. There are some former vice ministers who can go to Hong Kong, so I think that's your best bet Reach out to one of these vice ministers type and to agree to meet with them in Hong Kong or Shenzhen even better yet. That could be okay if they've been out of power.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, because growth rates were slowing down anyway. And then now you have this trade pressure and so on and so forth. It's going to slow down. There's no big consumption stimulus in sight because of the high debt level. So they can't possibly push growth rates up through that mechanism. So they have to double down on more investment, more supply side, but then at some point is the world really going to switch to 100% buying BYD as opposed to Volkswagen and all these other cars. I don't know. I think there'll be a pretty big pushback, or at least some kind of limit, right? So, you know, let's say China takes over most of Latin America, most of Africa, most of Middle East, that's still not such big markets, right? You ultimately have to conquer Europe. You have to take North America. That's going to be really tough”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no. Well, yeah, if it's not PPP, then if it's just real income, I think it's like 70% of U.S. economy, something like that.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Just because the quality is very different in China, in some cases still worse. In other cases, increasingly it's better than US quality. So I'm not an expert, but yeah, like even controlling for inflation, so real income. Overall size of the economy would be similar to the US, maybe slightly larger by 2040.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, generally speaking, you have some people who are more pro market. These people tend to be people with more governing experience along the coastal provinces like Zhejiang Province, Shanghai. And then you have the status. People most of the careers in state owned enterprises, so all the military industrialists, I would guess that they're more pro-state power. So during, well, but actually those figures, I think, will ultimately be somewhat stabilizing because you basically saw this in the Soviet Union. For those people, they just want to preserve their vested interests. So it's like, okay, whoever is in charge, as long as you subsidize the state sector some more, I'll support you. So they, in the Soviet Union, after Stalin died or even between the sort of Khrushchev and post-Khrushchev transition, they were stabilizing politically, even though they ended up damaging the Soviet economy by demanding so many subsidies for their own sector. So the fact that you have quite a number of these guys from the military-industrial sector”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So, given that there isn't this social capital that we saw back in 1976, I think this transition is going to be more ruthless, more brutal, and potentially more disruptive.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“The Long March veterans, they were so close to each other that they worked it out among themselves nonetheless. So that was a pretty peaceful transition besides the purge of Zhangqing and her colleagues in the Gang of Four. These days, the Long March generation of officials who have spent decades with each other, governing with each other, that doesn't exist anymore. The people who are in the Politburo. There are different elements in it. Some of them, a few of them have worked closely with each other over the decades, but many of them worked in such disparate bureaucracies that there is not a lot of trust between them. And that probably is by design, right? So you don't want people in the Politburo to trust each other to be friends with each other too much because they could get together and usurp your power.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“The other way is to have someone that everyone trusts to represent the leader's opinion but cannot possibly become the number one person And Mao had Jiangqing, his wife. Xi Jinping can also do that for his wife, or increasingly we see his daughter taking a higher profile And the reason why these individuals cannot be number one in the party is because of this ingrained sexism in the party against women. And also they have never held official positions in the party and so on and so forth. So, I think having a transition figure who can basically stabilize the whole situation while the different factions fight it out peacefully, hopefully. Will be a very important ingredient. But sometimes even like these transitional figures are too weak. So Jiangqing was purged within weeks of Chiman Mao dying.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so there's historically a way that we know doesn't work, and then there's a way that could work. One way that we know historically doesn't work is to designate someone. It's like, you're going to be the successor. I mean, that person's going to die for sure in a horrible way. And we've seen this for Stalin. We've seen this for Mao.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“If there's a command structure. If people believe that they're going to go to jail the week after, even if they get $100 million in cryptocurrency, in Hong Kong or whatever.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's put it this way the foreign exchange reserve used to be like, oh my God, so much money, three trillion dollars. Right now, it's like less than five percent of money supply in China. So it doesn't take a panic. Like, so even if people want to just rationally reallocate 10% of their assets outside of China, foreign exchange has gone. Massive devaluation, et cetera, et cetera. You know, huge, they would have to jack up interest rates to like 20% to stop it. Then there's mass bankruptcy, blah, blah, blah, et cetera.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“That order will go from your bank to the state administration of foreign exchange in Shenzhen or in Shanghai and some bureaucrat will have to okay it large denomination outflows right now that bureaucrat is like if I approve this someone in Beijing is going to notice it and I'm going to be in jail within a week So, I will not approve it. But if that person was like, there's nobody in Beijing, no one's minding the store, and this guy promises me a hundred million dollars if I approve it, I'll go ahead and approve it. So if there's any sense that there's no command structure, In Beijing, even for like a week or two, I think we would have a financial crisis at least.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think that would be an issue. Yeah, if you were to drop that tomorrow. I mean, so what would this power struggle like? So the biggest impact is this, right? So right now, financial repression works. So let's say you're a billionaire, you try to get your money out of China, you know, you make up some fake paperwork, you know, I'm importing a million Rolex watches from Singapore. I need to pay an invoice for a billion dollars.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so there are technocrats or people who know a lot. But I guess, yeah, generally speaking, protecting the party, protecting the state apparatus and all the important tools of the Chinese government will almost always be a higher priority to any kind of technical considerations in a given decision making. So it's like, well, why protect all these pharmaceutical companies? Because they're sale enterprises. They need to survive the ordeal. They need to have a national brand name. And also, of course, pharmaceutical and what they call new biology is in one of these industrial plans in order to finance some of these future research in advanced biology these companies need cash flows.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think they do meet with experts a lot. Sometimes the experts are manipulated into saying certain things. Other times the experts are sincere. They listen to them, but they still choose to not implement what the experts recommend.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think the timing of it, also the decision not to bypax Lovit on a very large scale, that might have been some kind of political decision. We show, we have a paper, actually. I've sent it to you showing that basically the experts told them the US vaccines were better. MRNA vaccines were better. But the Chinese government said, okay, we believe you, but still, we want to help our domestic pharmaceutical industry, so we're going to only sell the domestic stuff in China. So that's very clear. If you look at the propaganda, they began to denigrate the Western vaccines and highlight the Chinese vaccines and so on and so forth”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Other times for political reasons, they will just ignore the experts. So they will never say, you know, fake news, we don't believe in science, and so on and so forth. Sometimes even though they know for sure the experts are right because of other political reasons, they'll say, okay, you're right, but we're not going to do what you want us to do for now for a bunch of political reasons”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it goes to the question of the role of expertise in the Chinese government. I think that's a very interesting question. I mean, frankly, I mean, I'm trying to use some kind of data to try to assess that. But my intuition is this. The top leadership always listens to experts. So unlike some cases in the US, the experts are respected they're listened to. interest groups that are close to leadership, they also know that. So they will present different kinds of experts. To tell him different sorts of expert opinions. So sometimes you would get these conflicting advice from different experts, and he will have to make some kind of gut call.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So, Ukraine, you have a case where Putin was very confident about taking over all of Ukraine within a short period of time. Turns out he was wrong. He was getting all this bad intelligence, so on, so forth. I think for Xi Jinping, he cannot discount that possibility.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's why they're doing Right. So, yeah, so then we've seen the Chinese government engage in all this behavior, stockpiling, this and that, like oil, grain, and so on and so forth, enlarging its navy, building all this landing capabilities and so on and so forth. So then one argument is like, well, so there's a threshold once he feels that he reaches that threshold, then he'll go for it. But then for me, it's like, I don't think that threshold is fixed. It's really conditional on a lot of different things. And there are some exogenous factors that will increase the threshold. Other exogenous factors will lower the threshold. So I would say more recently, one factor that might have increased the threshold for him acting is what happened in Ukraine.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, but in other words, he wants it so badly that he would just do whatever it takes to get it. He would have done it already.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Whoa, do you think that was reckless? Well, so that was actually conservative, right? So he preserved the lockdown longer than was necessary.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So, first of all, I think we do know something about Xi Jinping's preference mapping when it comes to this issue. He has said a number of times that obviously China should be united. So I do believe that's sincere. But clearly his desire to achieve that is not so strong that he would take a very risky gamble achieving it because if that were the case, he would have done it already. Been in power for 12 years. He hasn't done very much. I mean, you know, certainly the amount of pressure on Taiwan has ratcheted up. And also from his other policymaking, we know that he's not a reckless policymaker.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, that's something, you know, frankly, I worry about the U.S. If you cut back on Medicaid, it's going to encourage precautionary savings, which you can say, well, but that's a good thing, Americans, safe to little, maybe, but then your short-term consumption is going to come down”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Because, yeah, if you just get rid of financial repression, it will only benefit the savers, which is 10% of households. Net savors 10 20% of households. If you look at median households, they have very little savings, actually, besides the home in which they live. Yeah, so there's this misconception. It's like, oh, China has like the largest savings deposit in the world. And that's true. But if you look at the distribution of this savings deposit is highly concentrated in the hands of 10%. So even if you say, oh, okay, deposit interest rates suddenly goes up to 4%. It's only going to benefit the people with large amount of savings. Most people, they're not going to benefit from it. Most people, if they don't have better welfare services, they're going to save like crazy in anticipation of getting sick. So you do need better, you know, certainly medical care insurance in China.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“The Chinese government, of course, will never do that because it has a very high place, it's a very high priority over competition with the US across many different fronts and to get dominance over multiple supply chains. But in a world of global trade, why do you need that? I mean, the same thing goes for US. The US doesn't need dominance over every single supply chain.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So they actually don't need it. I mean, the tech race, I mean, I do, I'm somewhat sympathetic to China, you know, because now that there's U.S. policies preventing Chinese companies from buying all the chips and AI. So it wants its own capacity. It's spending a lot of money on it. So that part I'm somewhat sympathetic, but other aspects of industrial policies, you know, for some of the battery stuff or solar power, et cetera, it can certainly reduce a lot of subsidies. It can increase taxes actually on many export-oriented firms, which is one of the reasons why there's a big trade surplus in China and trade imbalance between the US and China. Get more revenue that way to finance domestic demand and to pay down local government debt over time.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so I would say, and of course the Chinese government will never ever in a million years do it in its current form, which is to reduce a lot of the other unnecessary spending like national defense, like a lot of the industrial policies And then use the savings to bolster domestic demand with welfare policies and to gradually decrease over amount of local government debt. That, I think, is economically sound because it's like China already has the largest navy in the world. Why doesn't need a navy that's even bigger than the largest navy in the world? It doesn't need that. I mean, it has more than enough for national defense. It has some of the best jet fighters in the world already, some of the best missile systems. Like no one is going to invade China or come close to it.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it is. So basically, all the regulations in the US, you know, environmental, this and that builds its own sort of stakeholders and lobbying group. And it is in the interest of these lobbying groups to prolong the process so that they can absorb a higher share of the rent. Whereas in China, because they have this command structure headed by the Chinese Communist Party, the Secretary of the city or province can cut through all the red tape because he's the boss of all the regulators at the local, most of the regulators, let's say, at the local level. So if he wants to do something, he can cut through all of it as long as he can benefit somehow himself. So, I think that would be, I would say that's the difference.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Promotion, then, like, oh, good job. You generated investment in GDP in this city. We're going to reward you with a promotion. In fact, there's really good work by James Kong showing this. It's like basically also like when you do real estate deal, you can sell land cheaply to politically connected princelings. And then they will lobby on your behalf for your promotion. And statistically, there is an effect. So if you sell land cheaply to Prince Lingslings, your chance of promotion goes up.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“And also, a lot of these people got arrested in the aftermath, right? So, what was incentivizing them to keep so when you invest in a large infrastructure project, a lot of money changes hand. And that is so well. So, this is a big debate in my field, also. You know, some people say, well, look, you know, like the more you invest, the more likely you're to get promoted. My argument is that it's not the actual investment. Interesting. It's the rent-seeking that comes along with the investment, right? So, you know, you have to get a contractor for cement. You have a contractor for this and that. You get a big envelope under the table as a kickback. Then that allows you to pay your superiors. Because let's say you did a billion dollar investment to build light rail or something like that in a city, you got a hundred million dollar payout from all the contractors, you can give your superior $50 million to thank that person and to up your chance of getting a promotion. Interesting. And so I would say that's more the realistic mechanism for linking investment.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so it was very productive. You know, I mean, I think you noted in this art Kroeber book review that you did in the 1980s and 1990s because China lacked a lot of infrastructure. But once you built the first high-speed rail between Beijing and Shanghai, you built the second one, you built the third one, there's very rapidly diminishing return. Also, as you know, the population is basically shrinking in China, and especially in a lot of cities in northeastern China and also in southwestern China. So you really don't need high-speed rails connecting those cities to other places in China because nobody lives there anymore.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“I think he said, Well, how can you run a government like that? Wouldn't it just collapse? But then you have to look at the outside options for your teacher, for your very low level bureaucrat, what option do you have? I mean, do you want to go back to delivering food to people, or would you rather at least tick six, seven months of civil service salary? At least you have healthcare, at least you can get your free lunch at your workplace cafeteria every day. People still choose to work for the Chinese government, even if that were the case. But a lot of the previously very generous fringe benefits and so on and so forth, that has all been cut down because of the local debt issue. But they're still pouring a lot of resources into national defense and AI and technology.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“But nonetheless, the case of China is that basically the financial system is geared toward fulfilling the priorities of the party, i.e. the priorities of Xi Jinping. So even if they can't do anything else, they will do the things that Xi Jinping wants them to do. And AI apparently is one of the higher priorities for Xi Jinping because he's held multiple study sessions. He's had different polybrom meetings and so on. So and Ding Xiang, who's one of his most trusted lieutenants, is in charge of it, et cetera.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so we can talk about that. I'm a bit skeptical about that for the case of China. But yes, indeed, as you said, some places like Shanghai and Guangdong, they're still in relatively okay fiscal positions. But then there are other sort of wealthier provinces with a lot of debt also. So Zhejian province, which is where Deep Seek is located, actually, and also Alibaba and all these tech companies, they have a high debt load. But because they start from a pretty wealthy place, they can still service the debt without too much difficulty. But actually, a trade war is going to make it worse for Derjean province because a lot of the manufacturing export firms are also in Djijiang.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“No, so the private sector stuff works a lot better. Do you have occasional successes from the state finance system? So I wouldn't say that there are no success cases, but I would say that for every success case you see, there are just maybe even over a dozen failed cases, which, you know, of course, you have failed cases everywhere, you know, in VC, but the amount of money being wasted in the state financial system would be much larger.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you see a lot of problems that the Chinese government has overlooked. So, this is why I'm saying they have a goal of making all Chinese people very happy and fulfilled. One part of it is being fulfilled, the technology part, but the other part of truly making people living a good life, they're not making as much progress as they should, I would say.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah. No, I mean, you definitely see it. Like, you know, for an economy that's been growing five plus percent for decades, you by this time you would expect, you know, pretty much the vast majority of the population in China having all the basic necessities, shelters, medical care, et cetera, et cetera, you don't see that. You know, a lot of migrant workers, they're barely getting by the homelessness is increasingly a problem in China, especially with the labor market being so fickled these days. Elderly care is pretty abysmal, you know, very basic level, let's say for a lot of people, not for everyone. So some people get very good elderly care if they work for the government or SOE previously.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So it doesn't work very well. I mean, of course, you have fraudulent cases in the US also, all that kind of stuff, but the scale in China, the waste in China is a much larger scale phenomenon.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. So the success cases actually are not that. I mean, but there are, you know, I'm sure I don't know the cases, but like there are, well, Huawei. So I would say like Huawei, it is there was a lot of state funding along the way and so on and so forth. So you have success cases, but there are so many failed cases and billions and billions of dollars just thrown down a hole basically for the failed cases. In fact, for a semiconductor, things got so bad that they had to arrest a whole bunch, dozens of people in the ministry of information or industry and information technology who were in charge of approving these semiconductor deals. They all went to jail because they were in a deal where some companies submit a bogus project, they approved it, they got a part of the money and so on and so forth.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, no. So there's selection bias. We see and pay attention to the cases that work. And there have been some fabulous success cases, which, by the way, does not include Xiaomi or BYD because those were mainly privately funded at the beginning.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“In conjunction with an expert panel who, again, with no any relationship with the company or with the bank, will sign off on these projects or reject these projects, gets sent back to the bank and bank say, okay, you know, these bureaucrats say that your project is good, you're good to go. Here's $100 million.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, so this is where the bureaucracy steps in, right? So it's like, well, how would a bank tell what's a good company and what's not a good company? So then there's a complicated system where the mystery of, so let's say for robotics or for semiconductors, there is a sort of expert group in mystery industry in informationalization technology that will assess all these different projects. So the banks will literally send them and say, okay, this company wants to borrow $10 million. Do they have real technology? Is this a good prospect? And some bureaucrat supposedly with no financial stake in the company, they're completely neutral, supposedly, I say supposedly, because in reality we've seen many cases of corruption.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, no, but because the financial system is socialist, they're forced into socialist-like behavior. You know, you can't go into a bank and say, look, I make robotics. This robot that I'm going to make is going to be highly profitable down the road, but I can only make like 10 of them. And then the bank would be like, well, this is BS. I know a lot of startups don't make any money. But at some point, notionally, you have to start making money. Whereas the socialist banking system basically says, you know, even if you never make any money or hardly any money, that's okay. As long as the Chinese government tells us that this is a strategic sector, as long as you can prove to us you can actually produce the thing that we want you to produce, if you never ever make money doing that, that's perfectly fine.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“When you maximize the output, you don't necessarily make money doing that. Whereas capitalism wants to maximize profit, which is, you know, as you know, the difference between the cost of production and the amount that you can earn from selling the output. For socialism, they don't care about that.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously Well, so at the deepest level, I would say there is a deep fundamental difference between capitalism and socialism. And it sounds very philosophical, but I think this might help sort of your Gen Z listeners think about this. Because for socialism, they only care about output. It's like, okay, whatever capacity we're thinking about, whether it's grain production or metal production or these days robotics, we just want more of it. Right, so then the state can use the state banking system, which they control to allocate a huge amount of capital to maximize the output of all these different things that they care about.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“And the point about financial repression is that without financial repression, an investor in China can invest in Silicon Valley. They can go to Sequoia and invest money. But because of capital control, they cannot legally move more than $20,000 a year out of China. They have to find domestic investment. So as a result, many of them choose to invest in Chinese high-tech, or they choose to put their money in the bank. So actually a lot of people just choose to put their money in the bank. And then the state banking system is then financed to, oh, they have the deposits with which to lend to local government cedar funds for industrial policies.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a lot of it depends on your social network and your connections So, if you're a startup at Tsinghua University, you have access to private sector funds, but also some of the central government cedar funds, if it falls in the right category, you know, semiconductors, AI, et cetera, et cetera Of your Liamfong because it started out as a financial institution, so it was mainly sort of private sector money from financial investors. But there are other AI, especially sort of more hardware driven initiatives in the provinces, which are seeded by local government funds.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, they build all the high speed rail, all the infrastructure, the beautiful infrastructure that you do see in China. And then more recently, industrial policies, right? So for example, if there's a new science park for AI, let's say, right, the land that they acquire, the infrastructure that's built is all built with borrowed money. Then there are these startups. And then the startups are partially financed by some of these central level investment funds that you read about industrial policies. But then actually the local government also have their own cedar funds, which uses borrowed money to finance some of these venture deals.”
2025-05-29 · Dwarkesh Podcast · Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih · IDENTIFIED FROM THE TRANSCRIPT · source