Dwarkesh Hirani

Today, I'm talking with Victor Shi, who is the director of the 21st Century China Center at UC San Diego.

China is obviously the most important economic and geopolitical issue over time, and doubly so if you believe what I believe about AI.

I was especially keen to talk to you because you have deep expertise not only in Chinese elite politics, but also its economic system, its fiscal banking policies.

We'll get into all of that before we get into the AI topics.

Is China actually a more decentralized system than America?

If you look at government spending by provincial governments versus the national government in China, it's like 85% local versus provincial, 15% national.

In the U.S., it's actually, if you look at state and local, it's 50%.

Federal government is 50%.

When you think of an authoritarian system, you often think of it as very top-down.

The center controls everything.

But if you look at these numbers, it just seems like it's quite decentralized.

Or is that the wrong way to look at the numbers?

Let's start at the very top.

If you look at the members, first I want to understand the personnel.

If you look at the members of the Politburo and you look at their past, a lot of them will be provincial leaders and then some local thing before that.

But in many cases, they'll have stints, as you said, as they were the head of this chemical engineering SOE or they studied.

Xi Jinping himself has a PhD in chemical engineering, right?

Something.

Some kind of.

Well, but I... Yeah, that's what you want to ask about.