China’s AI Push Reshapes Its Economic Future

[00:00:00] Speaker 1: And for almost a decade, Evan Osnos is a Beijing-based reporter. He's also the author of a book, Age of Ambition, Chasing Fortune, Truth, and Faith in the New China. These days, he's based in D.C., but he recently took a reporting trip to China in a new piece for The New Yorker. He writes that many of those changes have taken place since 2013 and saying, for a long time, China looked west for visions of the future. These days, it's favoring its own. [00:00:23] Speaker 2: Its approach to AI is one illustration of that. Evan Osnos is a staff writer for The New Yorker, and he joins us now on this Saturday. Evan, I want to start with AI, if I could, because I'm going to paraphrase you here. You'll forgive me for doing that. But you highlight the distinction between the way that China approaches AI and the way that the U.S. does. And I think what you sort of indicate is that in the U.S., the debate is about advanced general intelligence, sort of what that might mean for our society as a whole. It is a much more kind of commercially focused aspiration in China than it is here in the U.S. [00:00:53] Evan Osnos: It is, yeah. Yeah, the conversation in China is about how to get it out as fast as possible, as far as possible. And they're not just thinking about how do we get it into Chinese factories, but also how do we get it into Africa, Central Asia, Latin America. And so you have a very different conversation when you're going around, as I did, you know, visiting Chinese factories or going to AI consultancies that are looking at ways of bringing this into very old-fashioned factories. You know, there's not a whole lot of imaginings about, you know, a sci-fi future, even though there are elements of that beginning to present themselves in the present. It's really about, all right, how do we go into a brewery, for instance, that's a real example, and say, how do we take beer production and put it into the 21st century? So it is quite striking, David, when you're on the ground these days, about how AI and other technologies feel like they are already part of life. [00:01:50] Speaker 1: And it seems to me that the energy aspect is a huge part of that. We were talking earlier with Joe Quillen from Bank of America, talking about the spike we saw in solar stocks this week. And he said part of the reason is what we're seeing in the Gulf and this energy demand. And China has been really out ahead on energy diversity, and we're still seeing this, you know, mysterious drop in oil imports from China. Are they more able to throw their weight behind this and backbuild the infrastructure because of just the way they are structured with their government? They can long-term plan in a way that a democracy doesn't have to because we change presidents possibly every four years. [00:02:25] Evan Osnos: Yeah, this is both the blessing and the curse of having a centrally planned system. You know, the blessing, of course, is when you decide you're all in on all kinds of energy, as they have over the course of the last generation, they've gone from producing, you know, something like half as much energy as the United States to producing now much more. And actually, in many cases, it's cheaper. This is partly because they've been able to say from the top, this is what we're doing. And then that filters down through the system, even down into the localities where you get municipal governments that are, even on the individual level, you have politicians in the Chinese system competing for promotions by saying, look, we are investing in solar, we're investing in nuclear, whatever it is. The downside, of course, is that when they go off of true north by a few degrees and end up on an engineering project that turns out to be either out of step with market demands or, in some cases, like the one-child policy, which I talk about in this piece, something that produces a huge range of negative economic consequences, then it's very hard to shift that battleship before it can cause more damage. So what we're seeing right now is that this is the moment when those energy investments have paid off and it's been very helpful for them. [00:03:43] Speaker 2: Evan, you can count me among those who have been introduced to the new China through your book and through your writing. And I just wondered if you could talk a bit about what it was like to return there on this reporting trip. I think one of the things you observe is kind of the quiet of Beijing in a way that it wasn't before. Because there are so many electric vehicles now, the means of transportation has changed, the means of commerce has changed as well. The storefronts are less crowded because people are buying things with apps and using delivery services. How different is the new China today than the one that you wrote about now, you know, more than a decade ago? [00:04:13] Evan Osnos: It's very interesting to see it up close now. I mean, having lived there for all these years, you kind of absorb a certain street-level sense of what China is. And certainly in the first decade of this century, Beijing was a kind of cacophonous place. It was a noisy place. And I mean that in all senses of the word. You know, it wasn't just that the cars were noisy, but also there was a real contest of ideas going on. And you would also just go into the alleys. I lived in a Hutong house. And so it was, you never quite knew what was going to be opening up. There were businesses that would open. They'd be gone in a few months or something else would be built in its place. Today, there is a much more distinct feeling of the place that is run from the top. And so on the one hand, you get this feeling that it is quite literally quieter because of electric vehicles. But then you also get the feeling that some of that hive of activity that was happening in the margins, you know, the smaller communities of artists or ideas that were bubbling up. Those have been silenced in some ways. And that is a feeling of, that feels like a loss. And it also, you do get the feeling though, as you know, I was talking to somebody from Singapore not too long ago. And he said about Beijing, he said, When I go there, it feels to me like it now out Singapore's Singapore, meaning that it has that sense of orderliness. But then there is also that bit of sterility. And that's a, getting those two ideas into one sentence is part of the reason why I write a long piece of this kind, to try to give people as much a feel as I can of what it's like on the ground. [00:05:46] Speaker 1: You also wrote, which I thought was interesting, Chinese leaders seem to be betting that by speeding toward the future, they can outrun the mistakes of the recent past. You mentioned the one child policy. I'm wondering which other ones come to mind and what they're trying to reverse course on. [00:06:02] Evan Osnos: One of the things they're trying to address, of course, is the property crash. You know, since 2021, we've all been living through the effects of that economically. There are now, just to put a fine point on it, there are now as many vacant homes in China, apartments and villas, as there would be to house the entire population of Russia. So you had this enormous overhang from that property crash. And they're saying, look, if we can more or less catapult ourselves into a new phase of economic history, then perhaps we can light a fire again under people, get them feeling like they're no longer, as the saying goes among young Chinese, no longer looking to lie flat, maybe get people to start feeling more energized about the economy and about their own opportunities. That's really the core of it, guys. I think is this feeling of, can you reignite that feeling of opportunity? That's the thing that was running through Age of Ambition when I wrote about the China of the 2010s. And there are moments, there are little glimpses when you go to places in China these days, and you see this dynamic frontier of the new economy, that is happening. But then when you also talk to people who have felt like those opportunities are only for a privileged few, and they say, look, I'm not equipped for the AI economy. I'm not equipped for this new advanced manufacturing generation. Where do I fit in? And the irony is, of course, it's not a conversation that's all that different from one of the ones we're beginning to have here in the United States. So there's something to it. How do you make sure that many people feel a sense of agency in the new AI era? [00:07:41] Speaker 2: In the minute we have left, I want to ask you about what I found is kind of the most important part of the piece to my mind. Just in one minute. I think that, you know, there are a lot of kind of graybeards talking about political theory and the American order waning and what might rise in its place. And you write, spend enough time in Beijing and Washington these days, and the rivalry looks less like a clash of competing systems than a race between small oligarchic groups, tight circles of men with immense power over everyone else's future. Talk a bit more about that, if you would. [00:08:10] Evan Osnos: Yeah, it is a very noticeable feeling. After I've been working on this for a long time, I came away with the sense that this is the dark matter, the piece that doesn't get described enough and as clearly, which is that there is a feeling both in the United States and in China that these enormous decisions about what role will these new technologies play in our economies, in our private lives, in our own sense of how we educate our kids and how to prepare them for the future. It doesn't feel like we have a hand in those decisions. And that creates an enormous sense of uncertainty. And I heard this not only from regular people on the street in, you know, you could do that in the US, but even from some AI executives in Beijing who said, look, I too have these questions. How should I educate my kids to participate in the future? So in some ways, there is a point of commonality here, which is about how will these two big, important countries engage AI in a way that allows their regular citizens to feel as if something is happening with their involvement rather than happening to them.