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Tyler Cowen had Dan Wang (author of Breakneck, originator of the 'China is run by engineers, US is run by lawyers' meme) on his podcast last week. IMO, Tyler's podcast is at it's best when he's debating rather than interviewing, part of why his year-end reviews are some of his best episodes. It's particularly interesting watching someone intelligent actually defend America and moreover champion causes that inevitably would code as lower-status to the intellectual class.
tl;dr, Tyler's views —
Massive quotes incoming. Skip ahead if you don't want to read Tyler's arguments:
And honestly, this seems to me to be the revealed preferences of most people. Europeans and Chinese who move to the US largely move to the burbs and buy the big car even while (at least the former) tut-tutting about how barbaric it all is. People, at least once they hit a certain age, want the SFH and the big yard with the fence and the space to raise their children.
On the pandemic and vaccines:
And yet. And yet! At one point we have this brief exchange:
I can buy some of Tyler's takes, and as I mentioned it's refreshing to see an actual contrarian take about the competence of America. But at some point, it just transcends a contrarian take into cope territory. Why are we complacently accepting that China is going to be the global center for auto manufacturing on top of drones and everything else? Life might be good now, but if China is just 1950s America, and 1950s America was just 19th century Britain, aren't we headed for the same stagnation and broad irrelevance of the UK today?
Maybe some of the catastrophizing about China is overwrought and some of America's apparent weaknesses are just the invisible hand of the market moving in mysterious ways, while the gleaming bridges and HSR to nowhere are albatross projects and a drag on growth. Maybe our apparent decadence and vice are really just the product of a system optimized for giving it's people a good life, while Chinese grind 996 work weeks for shit wages to stroke Xi Jinping's ego. But man, I don't want to get hit with the rare earth metals stick whenever the POTUS doesn't kowtow to the emperor. I'm still torn between whether the economists should be running the show or whether we should keep them as far away from the levers of power as possible.
Make some actual tariffs that bite and laws that promote onshoring; and if consumers don't even notice an increase in prices it ain't working. If your argument is that we can't match the Chinese in whatever way, deregulate or bring Chinese companies here so we can learn from them or do whatever it takes to compete. Instead, we just decided to sell them H200s and erode one of our few remaining advantages (maybe someone more plugged in can comment on how significant this is?).
While there is a population difference, I think the primary reason China is so much more capable than the west isn't cultural but economic. They have a much more potent economic model than the (more or less) free market capitalism that exists in the west. They limit the places their citizens can store money to largely just banks and real estate. They then hyper focus that pooled capital towards very unprofitable ventures in order to super charge industries. While this model is not particularly pleasant for the individuals involved, it is highly competitive on the national scale. The west, with its focus on individual rights, just can't compete.
I think a lot of the cope on this comes from people that have internalized the whole "capitalism is optimized asset allocation" thing. I don't see why that's necessarily the case. Clearly it outperforms feudalism or true centralized command communism, but why should we believe that it's the best possible economic system with so few data points. It seems to me like the Chinese have threaded the needle between communism and capitalism and created something better. Is it sustainable? Who knows. Centralizing economic authority can lead to some catastrophic failures when that authority becomes incompetent. But for now, being able to focus a country's pooled resources into any industry looks a hell of a lot better than the western economic model, where our best and brightest are incentivized to spend their prime years shuffling assets from one pile to another to make a buck.
I disagree on the Chinese model. China wins by not allowing foreign companies to compete in its markets, stealing everything in sight, and subsidizing industry well below cost to purposefully drive under international competition (dumping). The rest of the world could win too, if it did that.
Which is why VW makes 60% of their profits in China (they're so cooked) and the Western world has 100% tariffs on Chinese EVs right?
The CEO of Ford, Chris Farley, who I find quite insightful, will tell basically anyone with a podcast mic that western car manufacturers are about to get absolutely fucked if they don't get their shit together, or in his words, "we're facing a fitness test"
That there are some exceptions does not disprove the point that China places heavy restrictions on foreign businesses operating there.
Yeah they also do this, however to dismiss them outright because "muh restrictions, muh IP theft" is very stupid
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I'd argue that China wins first by having a lot of resources, cheap labor, and a government that is, all commentary aside, stable. They were willing to accept large amounts of pollution to establish themselves. Western stockholders were happy to kill their golden goose to get their money this quarter.
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No, the rest of the world could not win by selling massive amounts of cheap products at a loss.
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Define "potent"? GDP growth? Per Capita / PPP? If we're talking economics, your terms should be defined and quantitative.
So they're more "potent" (however that is defined) by generating a negative return on investment? That doesn't make any sense. To be as charitable as possible, perhaps you mean the investments are high CAPEX and have long cycles towards net ROI benefit? If they are by definition unprofitable, they are by definition bad investments that will guarantee that the given industry fails.
You have to mean international scale, right?
This post is so poorly written and argument by assertion that I debated even posting a reply. But, I think the spirit of the Motte is often best exemplified by being hyper charitable to the other side, steelmaning poor arguments, and then presenting the opposite view.
My argument against China is the theses in The Great Demographic Reversal combined with an obvious failure mode of the Chinese tech innovation system.
The TLDR, for brevity:
China's demographics SUCK. They're going to have more olds than they know what to do with. The one child policy was a disaster. People aren't having children together now. And there's a semi-nomadic horde of about 50 - 100 million men who work seasonal migrant jobs from place to place. Their middle class isn't nearly large enough.
This means that China has no choice but to rigidly control their population. But at their scale, that's incredibly expensive to do. The social credit score system is an experiment; can we pay one half of our population to spy on the other half, and then use computers to spy on the first half? In a perverse irony, China, that does not have nearly the same social security safety net that the US does, is perhaps (the budgets are secret) spending more to not have one!
Technology wise, the Chinese model has been to find / steal western tech, reverse engineer it to the best of their ability, and re-deploy. People can quibble over if this is real innovation or not, the extent to which China has produced any new and meaningful "inventions" but it doesn't matter. This style of technological management eschews what has been the real engine of tech development over millenia; lots of compounding, happy accidents shared across a large population. An interesting quirk of history is that from about 800 - 1200, the Muslim world of MENA was the most scientifically advanced on the planet. But they fell behind technologically; they knew how stuffed worked and were very smart, but lacked the infrastructure to actually build and disperse scientific knowledge into material things that normies could use to improve their life. Starting at about 1200, Europe starts to overtake in both science and tech because they deploy tech more broadly, and science and tech have a mutually re-inforcing feedback structure.
Chinese GDP per capita is about $15k. Even with the CCP trying to shit out new tech as fast as it can, most of their own people can't really afford it. Secondly, most of their people don't have a cultural aptitude for tinkering, exploring, developing in a truly creative sense. When the high esteem strategy in life is to grind 996, be an excellent bureaucrat, and a cold bug person, you're not going to get weirdo genius inventors and you're especially not going to get weird genuis asshole corporate leaders --- Jobs, Musk, Bezos, Gates et al would've been hammered into shit in childhood in China because they're non-conformity is off the charts. Jack Ma is the only homegrown Chinese "visionary" who didn't leave, and he was either some sort of plant by the CCP or became a permanent political prisoner because he did a good job and built a compelling tech company.
The tension at the core of all Chinese history is balancing a pathological need for control of a giant population and a giant geography against the economic growth potential of ceding some control. If the CCP let their people just do their thing, I would be a lot more worried about a Chinese Century because of the sheer numbers. But the CCP has not only chosen, but accelerated toward clamping down harder and "controlling" more.
As promised, I'm responding in more detail. Much of the below I could nitpick at myself, but I'll leave you the pleasure. My confidence in being directionally right is underpinned by having been optimistic about Chinese trajectory for years of seeing «Xi bad» and «China collapse» narrative. I was even right in expecting their failures – such as no EUV breakthrough or quick solutions to fertility and real estate problems. I was, however, wrong in predicting a stronger American showing in response to their success.
Disclaimer: the load-bearing phrase in your spiel is «cold bug person». Your perception of China is downstream of finding Han Chinese people, politely, uncharismatic, and bluntly – not hot, in terms of a vibe rather than mere looks. You are inclined to believe that «not hot» people are categorically lesser than hot ones, incapable of True Creativity/Courage/Honesty/Ambition/Valor/Decisiveness etc., and unconsciously reason backwards from that about object-level evidence. This is compounded by the historical and contemporary distortion that the Chinese themselves have done to their image, like painting a 1.9m tall cannibal commander from that famous "decisive Tang strategic victory" meme as a pompous literati with long nails, and today taking advantage of leftist grievance narratives. A PLA soldier can point a Dongfeng DF-17 missile in your face, and you'll laugh about how it's filled with water and compensating for something, Bugs Bunny style. It's similar to the blindspot the Kzinti had for human females. More controversially, this is a common bias that I think is genetically hardwired in peoples of Northwestern European extraction/WEIRD cluster, due to greater historical female mate choice and thus disproportionate returns to thinking about mate value and general charisma signaling on evolutionary timescales. This being basically a misgeneralized instinct, arguing about it is a waste of time. I will argue about downstream confusions, though.
As a Russian, I don't really mind – actually, I'll welcome it – if China becomes the preeminent power of this century (which seems more likely by the day) and you guys get knocked down a peg with your flabbergasting ill-earned provincial chutzpah. Given their traditional isolationism, I estimate the damage to be mostly confined to morale. I am not cruel, however, so these cowboy jeers are worrying me, because their popularity, coupled with populist incentives and low cultural level of American officials, implies you may wade into a serious war in the South China Sea and get mauled, with massive economic devastation and losses for you, them, and everyone else. You'll directly drag other nations into it, too, it has already happened on trade, and the escalation potential is pretty much uncapped. So we can't be too cautious and I will present my attempt at dismantling this theory of Chinese doom and American exceptionalism.
What I want to accomplish, however, is not just dunking on this particular laundry list of assertions. Ideally, I want you is see how your very frame of thinking, embedded in (the quite recently established version of) your civilization, is just one of possible frames. Your notions of how to evaluate success, what is hard and what is easy, what makes nations strong or weak – those are just opinions of a 21st century American (or mental American). China doesn't think in this way, it has a compelling claim to the priority of the very different Chinese stack, and it's not some vague Orientalist wisdom but a comprehensible, pragmatic product of millennia of social evolution.
One aspect of it is the theory of Mandate of Heaven, which amounts to a claim that the source of legitimacy is neither birthright nor opinion of some constituency, but undeniable object level performance, and that the people ought to obey performant rulers but topple those who had clearly lost their touch. It has its shortcomings, of course, but I am not sure if the justifications for representative democracy with universal suffrage are stronger than the case for Mandate. Another is focus on cultivating everything under the state's control, starting with human capital, which is the only truly irreplaceable resource. Mencius, 4th century BC: «The people are the most important element in a nation; the spirits of the land and grain come next; the sovereign counts for the least.» The clearest example of this is how they played the Rare Earths card. In 1992, during his Inner Mongolia tour, Deng Xiaoping had proclaimed «The Middle East has oil. China has rare earths». This wasn't because he had stumbled on the biggest pile of REEs known to man, like Americans in Bumfuck Indiana often boast of; it was because dominating REEs required long-term grit and investment that he could expect other nations to prove deficient in. In 1995, Deng's sons-in-law bought out Magnequench from General Motors. Over the next 30 years, China has indeed invested in relevant education, capex and R&D, evolved from mucking around in toxic sludge to 6N HREE refinement, consistently forced ≈everyone else out of business, and now can make Trump play ball with a single export controls announcement, even as it's building actuators for legions of robots of all kinds (flying, wheeled, legged, seaborne, industrial…) using a late evolution of this very Magnequench technology and others. All of that has been done more or less in plain sight, documented in official 5 Year Plans of the Communist Party of China and programs like MiC 2025, inciting decades of WTO-mediated outrage, «maybe we can substitute it» procrastination and «wake-up call» rhetoric on the West, and yet nothing has been done successfully to counteract it. That's one measure of each system.
On demographics, the problem is overstated. To return to the meta level, people often assume that if the Face-Saving Paper Dragon China admits a problem that's because the situation is too catastrophic to deny. No, they simply communicate clearly to coordinate their own policies. Yes births are plummeting, population contracting, median age and dependency ratio climbing, there are miserable men etc etc. It's rough. The same and far worse is happening in Korea, which despite some efforts hadn't had a comparably strict One-Child Policy (ironically enough, TFR had never reached 1.0 during 1CP, and only reached it once Xi abolished all limits and turned pro-natalist) and has no plausible policy response either, same as everyone else sans Israel. China is de facto running a massive research program, in parallel across provinces, counties and towns, with some promising results, so if anyone figures it out, I reckon it'll likely be them. But any success will take 20+ years to manifest so it's probably irrelevant in the grand scheme of things. And in the grand scheme of things they're retiring peasants and construction workers who've seen Cultural Revolution, and graduating more STEM cadres than the rest of the world combined, so even with the unfortunate pyramid shape the total productivity is expected to grow. The Party itself is becoming a hive of Tsinghua STEM Ph.Ds who (just a guess) might become even better technocrats than the current set of boomers in control, nevermind boomer lawyers or the US.
More to the point, the median age of a White American is ≈44 years vs 40 for a Han Chinese in the PRC, White American TFR too is well below replacement, and the population contraction has been offset via immigration, largely of people who aren't doing that well on MSAT and often don't speak English well. Around the time when average ages are projected to converge (2040s, age 49-51), non-Hispanic Whites will have become a minority at home, and equal to roughly 1/7th of the PRC's population. This community knows well what Trump thinks about such a strategy, and many agree. (Btw, contra racist stereotypes, South American fertility is in free fall and I expect Mexico to join soon, so this gig isn't going to work forever anyway). Given such factors as a) poverty level pensions for rural citizens of the PRC (citizens who were largely excluded from the 1CP, had TFR ≈2.5 in the 80s, and so actually have > 1 children today, unlike urbanites and party members – there's a fascinating aspect of an accidental inter-class contract), b) retirement age only ≈60 in the PRC, and c) 17% youth unemployment at 5% economic growth… I'd say they have plenty of gas left in the tank, are more demographically robust than the West and even the US specifically, and Zeihan-level doomposting is simply innumerate.
One last note on this. India also tried to implement population control, psyoped by the same Limits To Growth style western concern trolling, but India doesn't have Chinese state capacity, so after an atrocious sterilization campaign they gave up and now they're the most populous nation. They're also probably the only nation in modernity that has seen height decline without ethnic mix change, because they're unable to feed themselves and now their children are fucking stunted, exactly as had been predicted by the big bad Ehrlich; and now young Han Chinese men are like 10 cm taller than young Indian men, which no doubt adds to the cross-border seethe. On the economic growth side, both nations having started from subsistence agrarianism and Subsaharan poverty level in the 70s (with sizable Indian per capita lead), enough has been said. I am still ideologically quite disgusted by the 1CP, but like most things Chinese, it deserves deeper consideration.
Bullet point 2 is pure assertion. High tech surveillance is not very expensive when you make all the tech for it and are surveilling unarmed 40+ year old East Asians. By all accounts the primary goal is genuinely to improve public conduct and it had already been largely achieved, the people are more polite, they drive lawfully, there's less scam, corruption and squalor, and on the ground level China is looking more «Japanese» than ever since the Southern Song Dynasty probably. It's a pity that this is now mostly seen by Russians because Western tourists don't want to come after Covid. «Social credit score» as commonly imagined is a mythologization of ad hoc regional programs to do stuff like penalize public transport misbehavior (which you sorely need) and, well, actual credit scores you already have. And they do have a social safety net which is evidenced eg by virtual absence of homelessness, it's just implemented via in-kind transfers (6-7% GDP) such as community canteens, rather than direct cash redistribution, which makes sense given that they're a materially productive socialist society. It could be more robust but, again, the issue is blown out of proportion: «Social expenditures in China have more than doubled as a share of GDP since 2010 and are on par with Mexico and Turkey.»
On technology, I have pretty strong opinions. The catch-up growth with IP «theft» (overwhelmingly, not theft but joint ventures, M&A and other above-board mechanics that foreign entities myopically signed on to) is tale as old as time, from Britain-Germany to USA-Japan, only made special by their sheer scale. At this point they have everything, invention AND innovation AND tinkering. They fucking license anti-cancer drugs to you, Intel is testing their wet etch equipment, they run circles around you in hypersonic warfare and EMALS and radars and power electronics… but certainly they are doing better in the «lots of compounding, happy accidents shared across a large population» department. That's the whole story of Shenzhen – a giant singularity of small shops with narrow expertise, doing swarm process innovation. That's what they build dozens of technoparks and industrial zones for. That's why they rapidly churn through zany concepts like here– semi-autonomous truck caravans, the exact sort of product-oriented tinkering innovation Americans were doing before they had assembled their own centers of basic research (mostly from European human capital fleeing Apocalypse). Their ever-growing trade surplus, driven by expansion of exports and contraction of non-commodity imports, is not about «weak RMB» or «subsidies» (you also do subsidies, you're just bad at subsidizing structural growth factors) – it's about trivial, brutal and unceasing productivity increases. Per unit of labor, a Chinese worker produces 2-3 times as much equal quality physical output as an American one:
That's not because they're superhumans who work 996, that's decades of learning and coming up with ideas, on a level that Americans have forgotten how to think about, and now cannot even conceptualize as a dimension of innovation. You have like one guy who's thinking about this and screams DESIGN IS OVERRATED MANUFACTURING IS UNDERRATED, and half your country wants to cancel him for being an asshole. Well, Elon Musk is venerated in China, because he's the apex of what every Chinese industrialist wants to be, and there are thousands of these guys. Accordingly every Chinese EV company is now an AI company and a humanoid robotics company, and other companies try to catch up and differentiate, and XPeng IRON 2 is in my humble opinion a more impressive piece of hardware than Optimus 3 (to the extent that people were suspicious it's amputee in a suit), and UBTech will be the first company to ship thousands of factory-grade units with Walker S2 while FigureAI CEO Brett Adcock is hyping on social media and trying to deboonk their video as CGI, and so on and so forth, in every single industry. What MENA now.
On domestic market side and weak demand, this is again a problem acknowledged as a big one by the CPC (Xi's entire «dual circulation» agenda) and thus overrated as a catastrophe. They are still heavily dependent on exports but that isn't an existential problem, seeing as they've cultivated an enormous and growing market in the Global South/ASEAN, for high-margin capital goods (that these industrializing nations can't afford to tariff heavily) rather than Walmart trinkets, while the US and EU have stagnant demand for material exports, tariffs or not. They're eating up German capital goods market share even in Germany, anyway. Historically, raw superiority in productivity wins against contingent trickery, it's what defeated China the last time, shattering their self-conception as the most productive civilization (indeed the only real civilization, because for them the civilization is largely about productivity), and they have a very clear «never again» position here. As with other points, I don't seek to deny real problems, but the doom narrative gets somewhat embarrassing when put in proper context. This is what is supposed to collapse them? They're «merely» consuming about the same volume of goods as the US, while producing more electricity than the next three biggest entities combined? They're a much bigger economic power than the Soviet Union ever was, and you had a decades-long meltdown about the genuinely poor and dysfunctional Soviets, but China is a nothingburger? Sure I'll grant that us Ruskies are more charismatic. And more handsome. Gagarin, Korolev, Zhukov, Kasparov, Baryshnikov… But please, guys, that's getting weird. Be real.
On «cultural aptitude for tinkering, exploring, developing in a truly creative sense», maybe you need to install RedNote and see what they're actually doing, because they absolutely tinker like mad, as they have been tinkering for centuries, it's the same energy as young Palmer Luckey but on an incomparable scale. They are natural shape rotators and tinkerers, what they lacked was precisely systematic scientific inquiry (and risk-tolerant patient capital). Do you realize that this is the people who've developed treadmill-driven paddleships in the 5th century and mechanical landmines in 15th? That «four great inventions» is just a PR term and they had invented vastly more stuff along the way? When Meta is desperately trying to build a Superintelligence Lab at any cost, paying $100M sign-on bonuses to highest-alpha talent, this is what the list ends up looking like, 20 out of 30 «research scientists» are Han Chinese (18 of them holding PRC citizenship). VAUK is a furry weirdo who tinkered with wolf-head exosuits and now works with the PLA to build actual exoskeletons for «wolf warriors». Here's a more Reddit-coded example of their tinkering (considered lame in the Mainland because it's «not hardcore»). But more to the point, I'll just repeat what I've already quoted:
Liang Wenfeng proceeded to tinker his way to National First Prize in the Electronic Design Competition, then to tinker full stack marine navigation systems, then he tinkered away 3 years in isolation as he developed quantitative trading strategies, then he tinkered into building one of the 4 biggest quant funds in China, then he tinkered and somehow now we have DeepSeek in the open source, from their in-house file system to weights and methods published in Nature (he's on top 10 this year). All that said, Liang agrees with you that the default Chinese mindset is suboptimal:
Their slogan is «Unravel the mystery of AGI with curiosity. Answer the essential question with long-termism» and they're the highest-prestige lab in China, with 5 IOI Gold winners on a team of ≈200 and a crapload of comparable talent. Liang is a hereditary teacher and I think he'll succeed in teaching China that his way is the right way, as I've previously argued. He's already impressed Xi and Li Qiang a year ago, he's just matched GPT-5 on a shoestring budget after a year of pundits saying that 100x compute advantage will erode his competitiveness, I think that's a big part of the reason Trump has abandoned Biden era containment and greenlit H200 exports. That's a very compelling set of facts, much more compelling than Jack Ma's (btw Jack Ma was at the same meeting with Xi and he's back in control, only now Alibaba is building AGI rather than shady fintech; that said, Ant Group also has an AGI division doing DeepSeek-style MoEs) and… it's pretty clear which way the process is going.
Can the US change its process after seeing new facts? Or do you lack the self-awareness to notice its defects?
On self-awareness. I think one of the greatest Chinese strengths – in addition to their sheer intelligence, endurance, their concept of the performance-based Mandate and the legitimacy (in fact, moral imperative) of rising against a degraded power, their notion of cultivation of the realm on all scales – is simply that they're an old, continuous, cultured civilization. They're jaded. They have seen it all, usually centuries before us; before you. Military overextension, proto-capitalism, proto-fascism, proto-Nietzscheanism, currency debasement, religious zealotry, multiethnic assimilation politics, infrastructure boondoogles, whatever. They can draw on an immense wealth of examples, positive and negative, and unlike modern Americans it's not restricted to the 95th percentile of cultural elites. Along the way they have developed a language to talk practically of how societies on the scale of modern Western powers fail and collapse, what moves people, how to make them act better, what is the «superior person» and how he differs from a «thief of virtue»… They have all these terms like «mianzi» and «guanxi», and Westerners look at it with condescension, Orientalist excitement or cold zoological curiosity, not realizing that these are human univerals, that Westerners themselves are driven by fairly similar if not cruder mechanisms. From what I can tell, the US today is a lot like late Qing, and its people are trying to save face before a more productive and well-ran civilization that they have grown used to regard as a barbarian shithole (and also, as I've said – «not hot»). And there's a whole lot of Guanxi going on in this Administration, too. Trump is trying to do a Self-Strenghtening Movement. Godspeed, I guess.
P.S. On cope. One of the most popular copes about China is «we've already heard all that about Japan». To me, that alone exposes Americans as an intellectually washed people. You heard that about Japan because Japan was seriously challenging you in trade, like it had previously challenged you in the war. In both cases, Japan was doomed. It's simply too small, too resource-poor, has too few people, and after the war it was under occupation and dependent on your security umbrella. Still it became enough of a problem to prompt that unhinged prophesying of the sexy scary neon-illiminated Japan Inc. turning the US into one big Detroit, and force Congressmen to smash a Toshiba radio on the Capitol lawn, like a bunch of rabid chimps. No other nation, save the USSR, had merited the distinction of such fear. So you won again. So what? The correct takeaway is not this self-congratulatory «America fuck yeah baby, our values!» attitude, but understanding that a structurally disadvantaged nation of 120 million East Asians can push you to the ropes; that in some very relevant ways they are more productive than you. Then, you ought to have noticed that China is 12 times larger in population, 25 times larger in territory and resources, is fully sovereign, and (contrary to the very strange stereotype divorced from what we see in everyday individual performance) Chinese people are not racially inferior to the Japanese. It's more or less Japan times 12, with unsurprising extra benefits of scale, clustering and on top of that a more competent industrial policy (MIIT>METI, as evidenced by the rigid embarrassment of Basic Hydrogen Strategy vs the civilization-scale triumph of the «New Three»).
To predict that they'll somehow fizzle out before eclipsing your global power (ie, more than 25% of your «per capita power») is to assert that either you have some near-supernatural tricks up your sleeve or that they're, bluntly, subhumans. Bugmen. An euphemism like «barbarians», «commies» or something also works. You're free to say that, but I think it's a bit too bold of a strategy to bet your nation's future on.
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I'll respond in more detail later, but for now I'll share a translation from a Zhihu post because it addresses several points here in an amusing way.
Who is Liang Wenfeng, the Founder of DeepSeek?
Qingfeng Xuezha (The Breeze Academic Underachiever) North American Computer Science Professor; Technological Innovation and Entrepreneurship; Providing Value, Emotional, and Knowledge-Based Services. Navigator Duan Xiaocao and 4173 others agree.
I've seen a lot of discussions about Liang Wenfeng online. Yesterday, I happened to have a phone call with a close friend from the same university year, and we also talked about Liang Wenfeng. So here I am, brazenly invoking my university classmate Liang Wenfeng. Some netizens want to know what Liang Wenfeng was like during his undergraduate days before he ventured into investment and the AI industry. This answer is meant to satisfy a bit of everyone's curiosity. I hope these "revelations" won't affect Liang's privacy. If they do, please remind me promptly, and I will modify or delete the answer.
The answerer and Liang Wenfeng were both in the 2002 cohort of Electronic Information Engineering at Zhejiang University (ZJU), not in the same class, but participated in the same Electronic Design Competition. Although we had some contact during the four years of university, because we weren't in the same dormitory or class, my impressions of Liang Wenfeng are limited and fragmented.
Impression 1: In our sophomore year, while we were obediently attending classes, doing homework, and preparing for exams, Liang Wenfeng was already self-studying digital circuits and analog circuits and had begun his own engineering practice. What left a deep impression was that he personally handled everything from circuit design, PCB layout, microcontroller programming, to UI design, creating something like a miniplayer software (doing Software UI in 2004 was a high-skill endeavor). He modified an ordinary guitar into an electric guitar, where the guitar's string sounds could be controlled via a UI on the computer. This project seemed incredibly impressive at the time; we all looked at it in awe. He humbly said the guitar's tuning wasn't great and it would be better if it could tune itself automatically. This can be considered a testament to the seed of his ideas about AI intelligence back then.
Impression 2: He rarely attended classes; most courses were self-taught. The answerer speculates the reason was he felt the teachers' pace was slow, a waste of time, and self-learning was faster. The downside was not following the teacher's emphasis on key points, which could hurt during exams. Liang Wenfeng's GPA in the major back then wasn't outstanding; it was upper-middle, not reaching the line for guaranteed postgraduate admission (保研线) (at ZJU back then, the proportion for guaranteed admission to the university's own postgraduate programs for ordinary majors was the top 5%). He later secured guaranteed postgraduate admission through winning the National First Prize in the Electronic Design Competition. This will be mentioned below.
Impression 3: During university, Liang Wenfeng traveled around several provinces in East China on his bicycle. Surprisingly, he often spent nights finding a spot in the wild to sleep on the ground, completing the trip without spending much money. This matter hasn't been verified; the answerer learned about it from the hot post "Liang Wenfeng, the Pride of 02 Telecommunications" on the 88 forum during graduation. The poster back then was also one of his teammates from the Electronic Design Competition, so the credibility should be quite high.
Impression 4: Liang Wenfeng and two other classmates from the same department signed up for the National Undergraduate Electronic Design Contest during the summer of their junior year. None of the three were top students in terms of academic grades, but their competition performance was outstanding. Naturally, Liang was the main force of the team. During ZJU's internal training camp, he single-handedly completed many design tasks. In the final competition, their team won first place in the province and the National First Prize. All three earned the qualification for guaranteed admission to ZJU's postgraduate programs without examination (免试推荐). However, because the national award announcement for the Electronic Design Contest that year was in October, they missed ZJU's guaranteed admission timeline for that year. Therefore, Liang could only start his postgraduate studies one year later. This explains the one-year gap between his undergraduate (2002-2006) and postgraduate (2007-2010) studies. It is said that during this gap year, he continued working on electronic sensing system design and products, something related to marine navigation, handling hardware, software, and algorithms all by himself. Every electronic system he built during his undergraduate years could easily suffice as a master's thesis for an electronics major.
Impression 5: Liang Wenfeng has always been low-key, just like he was during undergraduate days, so much so that many classmates in the same major weren't very familiar with him. Many heard of him through the National First Prize he won in his senior year. Therefore, it's not surprising to us, his university classmates, that he didn't come out to publish an article, say a word, or record a video amidst the overwhelming popularity of DeepSeek earlier. Ordinary people don't possess such composure and steadiness. (Addendum: Thinking back now, Liang Wenfeng isn't deliberately low-key; rather, his incredibly strong focus on his work makes him appear low-key - like Huang Yaoshi's final evaluation of Zhou Botong: "Old Urchin, Old Urchin, you are truly remarkable. I, Huang Laoxie, am indifferent to 'fame.' Master Yideng sees 'fame' as illusory. But you, with a mind empty and vacant, never had the notion of 'fame' in the first place, which puts you a step above us.")
Conclusion: Liang Wenfeng created his own success in his own way. He didn't live his university life according to the traditional standards of a "good student," nor did he study worldly social skills. He is a classic case of "Be Yourself" among Chinese university students and an example of contemporary intellectual youth entrepreneurship changing their own destiny (even the nation's destiny). Huanfang (幻方) was just the appetizer; DeepSeek is only the beginning. As an old classmate, I'm very happy to see him making outstanding contributions to the world's technological development and also honored to have seen the fledgling eagle before it soared across thousands of miles.
I hope the above sharing can provide some inspiration and motivation for China's tech-savvy youth. Chase your dream, and be yourself!
Yixiao Daxia (Smiling Hero) History and Current Affairs Enthusiast, Secretly Observing the World. 4358 people agree with this answer.
The answers are very fragmented. I carefully collected some information to try and organize it.
1. Birth Background and Early Experience
Liang Wenfeng was born in 1985 in Mili Ling Village, Qinba Town, Wuchuan City, Zhanjiang, Guangdong. His family circumstances were indeed ordinary; both parents were primary school Chinese language teachers, basically with no significant background. Liang Wenfeng made it mainly through studying.
Liang Wenfeng attended Meiling Primary School near his hometown in Wuchuan for elementary school. Both his junior and senior high school were at Wuchuan No.1 Middle School. He had some talent in mathematics; during junior high, he had already self-taught high school mathematics and started reading university-level math textbooks. In the 2002 college entrance exam (Gaokao), Liang Wenfeng scored 806 points, ranking first in Wuchuan No.1 Middle School, 14th in Zhanjiang City, and around 100th in Guangdong Province that year.
His first-choice application was for the Electronic Information Engineering major at Zhejiang University, graduating with a bachelor's degree in 2006. The year after graduation, 2007, he entered ZJU's Communication Engineering postgraduate program, graduating with a master's degree in 2010 (if it were a continuous bachelor's-master's program, graduation should have been 2009. Whether it was because he took the exam twice or something else is currently unknown).
2. Liang Wenfeng's Stock Market Life
As mentioned above, Liang Wenfeng had some talent in mathematics, and his undergraduate major was Electronic Engineering. Combining these two, the best application field he discovered was undoubtedly stock market trading. Therefore, during university, he developed a strong interest in financial trading. In 2008, Liang Wenfeng was 23, likely in his second year of master's studies, and began experimenting with automated trading in the A-share market with a principal of 80,000 RMB.
In 2010, the year he graduated, the stock market was in a downturn. However, it is said that Liang Wenfeng, through partly automated trading strategies, made 1 million RMB, gaining significant fame at the university and being called the "Campus Stock God."
After graduation, Liang Wenfeng did not seek employment nor start a business. He remained a retail investor, tinkering in the A-share market, continuously trying to write quantitative, automated strategies, testing them in the market to see if they could generate returns. It is said he once left Hangzhou and rented a place in Chengdu, closing himself off to trade stocks for three years.
If this stock trading venture hadn't succeeded, Liang Wenfeng would have been a typical negative example criticized by many. Imagine, a graduate from a prestigious university, not pursuing a proper career, and stock trading easily criticized as having a gambling addiction.
It wasn't until 2013, presumably after making considerable money from the stock market, that he began to end his status as an unemployed retail investor and started institutionalizing himself.
That year, he and his classmate Xu Jin established Hangzhou Yakebi (雅克比) Investment Management Co., Ltd. Generally, such asset management companies issue private fund products, get registered, and then raise money for investment. However, I guess it's likely that during the Yakebi phase, Liang Wenfeng and Xu Jin were similar to their previous retail investor status, probably lacking the qualifications and fundraising ability to issue products. The difference was having a company identity; their main work still focused on continuously researching, refining, validating, and improving their quantitative trading strategies.
After two years, the Hangzhou Yakebi company might have encountered issues, or perhaps they wanted to become a sunshine private fund (阳光私募), and the company didn't meet certain requirements, so it was abandoned. In 2015, he and Xu Jin together established a new company, Huanfang (幻方) Technology, and began the process of becoming a private fund manager (奔私).
In 2015, a recruitment post by Huanfang on Tsinghua University's Shuimu Community stated that Liang Wenfeng personally grew his 80,000 RMB principal from 2008 to 100 million RMB in profits over 7 years. It's unknown if this is true. If true, that's 1250 times in 7 years, basically tying with "Beijing Trader" as one of the fastest money-makers among retail investors in A-shares, and should be the domestic stock market's return champion. If the 100 million was accumulated through profit sharing during the Yakebi phase by raising significant external funds, then it involved substantial external leverage.
The period 2015-2017 was likely the most critical phase for Liang Wenfeng's stock trading. During this stage, all the quantitative trading explorations accumulated earlier finally bore fruit, and he successfully transitioned to a private fund institution, with asset management reaching a certain scale.
In 2016, Huanfang launched its first complete AI strategy. In 2017, they fully AI-ized their investment strategies. Presumably, their high-frequency trading AI strategy fit the characteristics of the A-share market very well, performing excellently. In 2017, Huanfang Quantitative's assets under management (AUM) broke through 30 billion RMB, and in 2018, they won the Private Fund Golden Bull Award (私募金牛奖).
Then things took off uncontrollably. In 2019, their managed funds exceeded 100 billion RMB. In 2021, they broke through 1 trillion RMB. However, by the end of 2021, perhaps due to the sheer size, over 100 products under Huanfang Quantitative saw declines exceeding 10%, causing investor losses. Subsequently, Huanfang Quantitative gradually reduced its funds under management.
By the end of 2024, Huanfang Quantitative's AUM was 45 billion RMB, with 63 fund products under its umbrella. However, performance differentiation is noticeable; 29 stock quantitative long-only products mostly maintained slight profits, while all 36 quantitative hedge-type products incurred losses. Of course, this is also related to the 2024 market conditions and policies. In 2024, the China Securities Regulatory Commission (CSRC) imposed significant restrictions on quantitative trading, likely preventing their high-frequency products from functioning normally.
So, here I must also advise my fellow A-share investors: you must work harder, diligently study the market every day, analyze companies, and focus on operations. Only then can you better compete on the same stage with Liang Wenfeng in the A-share market and defeat him.
3. Liang Wenfeng's AI Breakneck Advance
On October 21, 2016, Huanfang's first stock position generated by a deep learning algorithm model went live for real trading. They began using GPUs for computation. Before this, algorithms mainly relied on linear models and traditional machine learning algorithms, with model computation primarily depending on CPUs.
Since then, his breakneck advance in AI began. In 2019, Liang Wenfeng started large-scale procurement of GPUs, self-developing the Huanfang "Firefly One" (萤火一号) AI cluster, equipped with 500 graphics cards, interconnected with a 200Gbps high-speed network. In 2020, "Firefly One" had a total investment of nearly 200 million RMB, equipped with 1100 accelerator cards, and was officially put into use that year, providing computing power support for Huanfang's AI research. In 2021, presumably having really made money, Huanfang invested 1 billion RMB to build "Firefly Two" (萤火二号), equipped with about 10,000 NVIDIA A100 GPUs, breaking through the physical limits of the first phase and doubling computing capacity expansion.
After Huanfang's hardware and funding scale expanded, quantitative trading likely encountered some difficulties. Firstly, making money isn't as easy when the volume is too large. Secondly, the A-share market in 2023-2024 experienced a "Northern Myanmar"-like trend (a metaphor for a difficult/unpredictable market), with investors complaining bitterly, and regulators began supervising quantitative trading. Huanfang started reducing its funds under management from 2021, almost halving it. So, the hardware and computing power prepared for quantitative trading became idle and needed a new direction.
In 2023, Liang Wenfeng recognized the prospects in the field of Artificial General Intelligence (AGI). In July, he officially founded Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd. (深度求索), focusing on the research and development of AI large models. In less than a year, in May 2024, DeepSeek released the mixture-of-experts language model DeepSeek-V2. On December 26, they launched and open-sourced the DeepSeek-V3 model, the version most of us used during the Spring Festival. The entire training process used less than 2.8 million GPU hours, costing about 40 million RMB.
On the evening of January 20, 2025, they released DeepSeek-R1. Its performance in mathematics, coding, and natural language reasoning tasks is comparable to OpenAI's o1 official version. They simultaneously open-sourced the model weights and training techniques, causing a huge stir worldwide.
DeepSeek directly shattered the American plan to monopolize cutting-edge AI technology and computing resources because it is both free and open-source. Anyway, I just made it casually; anyone who wants to use it can take it. I'm not making money from this, just for exploration and fun.
OpenAI: I'm getting a headache. I charge $150/month, $1800/year, and you're giving it away for free. What am I supposed to do? You're not charging either; what are you after?
Liang Wenfeng: It doesn't matter if I make money or not. What's important is that you can't make money!
I await your thoughts, not a copypasta of a chinese forum.
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If you oppose China, you should be scared and try to actually learn about it instead of repeating comfortable copes. Chinese capacity and progress is truly impressive - reassuring for human industrial civilization, but horrifying for me as a Christian who wants true freedom.
People have been repeating these same copes for hundreds of years, about the US then Germany then Japan and... 40 years already about China. The Chinese market is freer than the US and US government spending is a higher percentage of GDP than China's. Even with rather high (new) environmental regulations, Chinese companies can just do things, build factories quickly etc. which take 5+ years to receive planning permission in most of the US.
China has much more competition than in the West. Even when the government directly orders something, it's just broadcasting goals which many smaller governments try to reach in many different ways. Once an effective method is found, the people behind the effective method are promoted to try to implement it elsewhere while new competitions are started. In the US the 50 states have long since stopped experimenting with weird policies and the federal government offers many carrots and some sticks to standardize everyone on mediocre stagnation.
You repeat copes like "China just steals" but China has been inventing leading technology for at least a decade. Materials science, engineering, chemistry, mathematics etc. high impact papers have 60-80% Chinese authors.
Chinese demographics don't matter, because those old people don't have much wealth and won't bend half the economy to care for them. Those old people were also poorly educated. They are being replaced more educated people, who grew up with better nutrition. 1.4 million engineers graduate per year vs 200k in the US. Their factories are also heavily automated. Their elites have no need to replace the people - indeed, they even emphasize traditional culture and architecture in a way we can only envy.
The truth is somewhere in the middle. What you see is a project, the same as everything else. What you don't see is also a project.
In China, while innovation has definitely gotten much better, the method of thinking and philosophy seem better suited in America, because Americans will rake themselves over broken glass for that one 0.001% of optimization. They are obsessed with it. Silicon valley breeds techbros by the boatload who want to move fast and break things so they can "disrupt the market" or optimize even the act of drinking a smoothie. And they have all the money, so there's a market and funding for these things.
On the other hand, China absolutely dominates speed of deployment and iteration. Time to market, time to launch, time to prototype. This is partly a result of having all the manufacturing clustered so tightly together, and partly a result of the wonky path of development they went through, where they skipped entire fields and built newer, different infrastructure without the problem of having to deal with creaking legacy. Greenfield will always be easier than brownfield.
The biggest problem China has is systemic corruption. The biggest problem I consider the West to have in comparison is bureaucratic apathy and a lack of political will. These manifest in different ways in the society they are in. The Chinese failure mode is naked power law; the corrupt can win every time, so you either have to be even more corrupt or even more powerful than the corrupt (this usually ends up in winner-take-all Politburo games). Smarter Chinese governments work around this by playing smaller factions against each other. The Western failure mode is abdication of responsibility; an endless chain of committees, regulation and lawsuit risk management so nobody bothers anymore, and real power isn't in the political organs so why bother? Put me in government, so I can draw a salary without governing.
Meanwhile, in China, Xi can just say "I want that mountain gone" and everyone will fall over themselves to get it done ASAP, by whatever means necessary. Blasting powder, industrial equipment, artillery, slaves with pickaxes. The method (and potential fallout) doesn't matter anywhere near as much as the result. But hey, that's the benefit of an autocratic system.
Chinese demographics really, really matter. The thing is, that problem is the same problem everyone else has, and China is unwilling to import foreigners by the boatload. The state is really concerned about the demographic problem, because it keeps them paid. My worry is that if they throw their entire state apparatus at "solving" this, I don't know what that solution looks like. I do have a sneaking suspicion that it's something nobody from the West could stomach, even if Western governments may privately wish they had the same level of power over their citizens.
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Yeah, I'm not going to bite.
"But muh state capacity!" is just another variety of cope that technocrat loving Lee Kuan Yew fanboys use to hand wave away pesky little things like civil liberties, the concept of federalism, and actual free markets. "State direct capitalism can totally work, man." There's a joke in here about how just a little, teeny bit of authoritarianism will be really good for us, like a teaspoon of arsenic to boost the immune system.
I wonder if this leads to gamification of easy to quantify objectives like GDP, but fails for other things, like, I don't know, food safety.
From this article and interview:
Coordination problems! Ah, so easy to fix, those.
All
livesdemographics matter. As does geography. My geopolitical worldview and formula is pretty much demographics + geographic determinism / naval warfighting and sustainment ability. China's prospects in all three of those are ... suboptimal.Also from the article I linked to above:
200 to 300 million small scale farmers who haven't leveled up meaningfully since maybe the 1950s.
Hey, but they do have cool lookin' EVs.
This is a funny callout given the fact the PLAN is quite literally doing the part of the movie where the protagonist does a training montage to "the eye of the tiger"
What do you think about the Type 003 EMALs, the pending type 004, and the fact they're launching type 054x and type 055s at a pretty hefty clip?
Put another way, why do you think basically every INDOPACOM leader sounds like they're shitting their pants in interviews and press releases?
There's a pretty large difference between production of new combat systems and experiencing in highly complex naval operations in combat.
China hasn't done the latter since 1979. Even basic seamanship atrophies quickly without constant training and re-training. Ask the U.S. Navy's 7th fleet.
Aquilino and Paparo - both aviators, by the way - mostly make noise about the issues of sustainment in the event of a crisis with taiwan. Amateurs talk about strategy, professional talk about logistics. The biggest issue is that China is like, really far away and shit. Our sealift capabilities plus ammunition, refit, maintenance, repair in theatre isn't enough to keep pace when PLAN has all of their naval industry right there. In strict force-on-force, the US is still winning, hands down. The problem, again, is when timetables stretch.
But that's just talking about a hypothetical right off the coast of mainland China. In terms of true ocean going naval fore projection, what has China done more than park a flotilla in the Gulf of Aden (after getting lost one time, lol) and then doing weird joint floats with the Russians sorta-kinda near Japan?
Running a truly global Naval force is shit crazy expensive, hyper complex, and requires a training pipeline and practice that you have to develop through decades of trial and error. Human capital, culture, and experience still matter far more than sleek new hulls and neato weapons.
Why do you think US would win when a carrier group doesn't have enough interceptors to even get close to China?
Getting into a shootout with a small continent sized landmass isn't what a admiral is looking to do.
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Nice to talk to someone who knows their shit!
While I agree, "X country hasn't done real combat since Y" is kind of a tired trope. The US Navy hasn't fought a peer opponent since 1945 but we all agree they could wipe the floor with any other navy, and debatably could take on a large fraction of the world simultaneously.
Experience is great, but training is so close to as good it almost doesn't matter? And basically everything I see about China is they're getting in more and more training hours, and running bigger and bigger exercises.
Yes, that's why I said it's the "training montage" part. They're not there yet, but they're fucking grinding to get there. They have a CATOBAR carrier to git gud on, they'll soon have more. Eventually they'll have nuclear powered ones so they can learn that too. There in the middle of the "decades of trial and error" part, meanwhile the US Navy is now 3/3 on failing to acquire new major surface combatants, and even if they could procure worth a damn, they barely have the shipyard capacity to make them.
I'm Canadian, I love Pax Americana, I do not want a world in which China is strong. I am scared because it seems like my team is eating crayons, going to lobbyist dinners, and laughing at the Chinese for being "IP theft bugmen who can't innovate" while the Chinese are hitting new deadlift PRs every month (still smaller than us, but growing!) and drinking a river of creatine.
Yes. But their naval exercises keep getting bigger and better. They're slowly expanding their global base network. Their recent "totally not practicing to cut Taiwan off" drills continue to expand.
Also, the unfortunate reality is that the fight, if it happens, will be in the first island chain, and maybe tickling the second (I'd imagine that would be a round #2 some years later depending on round #1).
The PLAN won't be forcing the straits of Magellan, where both navies have to bring their shit with them. It'll be in China's backyard.
Will Chinese Type 055s ever sail off the coast of LA? Absolutely not.
Is the PLAN on a trajectory that results in the US being pushed back deeper into the Pacific? It's looking increasingly likely, and I don't like it.
Okay, so we actually agree on more than we disagree on. And we're probably 99.9999% aligned on the current state of affairs.
The difference is just in the prognosis of the outcome.
I'll combine these three things from your last post:
Time and timing are the big issues here. We've all heard the 2027 deadline / prediction for shit popping off. I don't really think it matters if that's actually 2026, 2028, 2030. But I think it's true that the CCP has a closing window of opportunity before (a) They experience something live COVID again (b) Power struggle at the top after Xi dies or (c) The demographic wave breaks and they actually HARD lose for another century. Truly, I think it's no later than 2035 (that's stretching it) before CCP has to shit or get off the planet.
Will their eye of the tiger training montage be complete in that amount of time? I'd argue no. Again, multiple decades of naval experience really are necessary. Maybe you can shave it down to 20 years starting from .... 2009? 2013? But I don't think you can just fuck around and find out how to do large scale amphibious work in 5 - 10 years.
Note to the Mods (@amadan, just tagging you off the top of my head) -- can we self-submit this as a "understanding actually developed out of some initial rounds of shouting" award?
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Americans counter that in case of Taiwan invasion they're just going to keep sinking and stealing Chinese cargo ships everywhere else and that PLAN is too small to stop them.
They're also talking about allowing privateering again.
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I didn't praise state capacity once but argued the opposite: China is not state directed like you describe.
My recent post history is full of criticisms of such metrics! You literally have no idea what I'm talking about and recycle the same copes.
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