Arthur Kroeber

I just think it's physically impossible to achieve that on the scale that China's been operating on of 1.4 billion people.

You look at the urban migration

It is completely unprecedented in the history of humanity, the speed at which they have converted people from rural residents into urban residents.

For many, many years, they were urbanizing the rate of 20 million people a year added to the urban population.

I forget the precise calculation that I made, but they were effectively, in terms of housing and urban infrastructure, they were building the equivalent of, I think, I calculated New York plus Philadelphia plus San Francisco every single year for 20 years.

No one has ever done anything like this before.

And so I think what this tells you, the lesson of this, is that there's an arithmetic problem there.

That even if you do this on this unprecedented scale and do it faster and bigger than anyone has done it before, if you're trying to move 1.4 billion people into an income of United States level, it just takes a really, really long time.

And now, of course, what's happened is because they have, I think –

gone too far off the deep end of industrial policy and the supply side will solve all of our problems.

Growth has slowed down quite a bit in the last few years.

It's probably well below potential.

I don't think that there's a lot of evidence that China's growth was below potential from 2000 until 2020 on average.

I think there's a lot of evidence that it's below potential now.

And so they are sacrificing the ability of the average Chinese person to do more rapid catch-up with the living standards of the West in order to achieve these industrial policy technology goals.

Yeah, well, and here you get to, I would say, a conceptual sort of fork in the road.

I would say that in many respects, the communist leaders in China have a lot in common conceptually with the techno-optimists of Silicon Valley in their, what I would call, sort of technological fetishism.

So let me see if I can break that down.

The Chinese leadership throughout the last 40 years, but even going back further, has

has had this notion that technological upgrading is the key to wealth and power.