December 17, 2024 • 44 mins
Host Elizabeth Economy sits down with Jimmy Goodrich to discuss the technology competition between the United States and China. Goodrich argues that the competition is far from settled with leadership in many emerging technologies still up for grabs.
He describes China’s model as one defined by state-led investment in key sectors, tremendous depth in their ability to innovate, and leading the race in advanced technology and patents. He also outlines China’s long-term ambition to dominate the next wave of advanced technology such as high-energy physics and quantum computing. But he cautions that a weak private sector and venture capital landscape, as well as constraints on access to foreign technology, pose real limitations in some areas.
The United States, in contrast, is led by a dynamic private sector with a strong startup ecosystem, and world-class universities. It is also viewed as possessing more advanced capabilities in the current generation of technology. Goodrich concludes that whichever nation can better attract the top talent, create the best companies to diffuse AI into their economy, and effectively integrate AI into the military will shape the world we live in for generations to come.
Recorded on December 2nd, 2024.
ABOUT THE SPEAKERS
Jimmy Goodrich is a leading expert on technology, geopolitics, and national security with a focus on China and East Asia. He is a senior advisor for technology analysis to the RAND Corporation and a nonresident fellow at the University of California Institute on Global Conflict and Cooperation, where he works in various capacities on research regarding China, technology, and national competitiveness. Jimmy was previously the vice president for global policy at the Semiconductor Industry Association (SIA), where he led the industry’s supply chain, international trade, export control, global market research, and China efforts. His work at SIA included researching Chinese industrial policy and chip industry economics, successfully securing $52 billion in funding for the CHIPS and Science Act, and navigating complex multinational export control and other national security issues. Jimmy was also the director for China policy at the Information Technology Industry Council (ITI) in Washington, DC, and prior to that spent seven years in the tech sector in China.
Elizabeth Economy is the Hargrove Senior Fellow and co-director of the Program on the US, China, and the World at the Hoover Institution. From 2021-2023, she took leave from Hoover to serve as the senior advisor for China to the US secretary of commerce. Before joining Hoover, she was the C.V. Starr Senior Fellow and director, Asia Studies at the Council on Foreign Relations. She is the author of four books on China, including most recently The World According to China (Polity, 2021), and the co-editor of two volumes. She serves on the boards of the National Endowment for Democracy and the National Committee on U.S.-China Relations. She is a member of the Aspen Strategy Group and Council on Foreign Relations and serves as a book reviewer for Foreign Affairs.
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ABOUT THE SERIES
China Considered with Elizabeth Economy is a Hoover Institution podcast series that features in-depth conversations with leading political figures, scholars, and activists from around the world. The series explores the ideas, events, and forces shaping China’s future and its global relationships, offering high-level expertise, clear-eyed analysis, and valuable insights to demystify China’s evolving dynamics and what they may mean for ordinary citizens and key decision makers across societies, governments, and the private sector.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
[MUSIC]
>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insights and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy, Hargrove, Senior Fellowand Co-Director of the US-China and
the World Program at the HooverInstitution at Stanford University.
Today I'm joined by Jimmy Goodrich,Senior Advisor for Technology Analysis to
(00:30):
the RAND Corporation and a leading experton the global semiconductor industry.
Welcome, Jimmy.
>> Jimmy Goodrich (00:36):
Thanks Liz, it's a pleasure to be here, it's really exciting.
>> Elizabeth Economy (00:39):
Great, so
the US has declared China its greatestlong term strategic competitor.
And there's probably no issue in thatcompetition that's received more attention
than technology.
But I think that it's hard for peopleoutside the small group of experts like
yourself to understand exactly what thistechnology competition is all about.
Is it about national security oreconomic competitiveness?
(01:02):
Does it include every technology or justthose somehow tied to national security?
How do you organize your thinkingon this technology competition?
Do you have a framework that youfind to be particularly helpful?
>> Jimmy Goodrich (01:15):
Well, thanks, Liz.
And as you know, on this question youcan ask a hundred different people and
they give you 100 different answers, butI'll offer my thoughts for what I think
are some of the important ways you canthink about the US-China Tech Competition.
I mean, clearly it matters fornational security, it matters for
economic well being,it matters for national pride.
(01:36):
Who's gonna lead the nextgeneration in technologies that
are gonna shape our lives,change economies and
improve home and health, andalso secure national security.
Particularly for these general purposetechnologies like artificial intelligence,
robotics, fusion, they have hugeimpact to both the economy and
(01:57):
our everyday lives, butalso to national security.
And as tensions between the US andChina have increased, I think there's been
a more acute understanding amongstpolicymakers that in the 21st century,
we're talking about competitionin these frontier technologies.
Who can attract the best talent,create the best companies,
(02:20):
who can diffuse that into their economy,who can rapidly integrate these
innovations into their militarybetter than the next country?
That's really what this is about.
China is now the secondlargest economy in the world.
They have tremendous depth in termsof their ability to innovate.
(02:40):
China has been able to create some ofthe world's most leading companies,
scientific laboratories.
I think the story of China20 years ago stealing and
replicating technology isreally the story of yesterday.
We're looking at a China thatis fundamentally changed,
leading a lot of the indicators inbasic science and chemistry and applied
(03:01):
materials science in semiconductor relatedresearch and development in many areas.
Basic R&D for AI, aerospace, other areas.
So we have to think about Chinanow as not just a country that is
a copycat innovator, butan original innovator increasingly so.
>> Elizabeth Economy (03:20):
Yeah, so is there a way to think about or
a set of metrics that kind of you use forwho's winning and
who's losing, ordo you think that's even helpful at all?
I remember reading a paper by ASPI,
the Australian Strategic Policy Institutethat came out I think
(03:40):
last year where they said thatChina was leading in 37 out of 44
sort of crucial technologies basedon sort of the level of original and
quality research that wasbeing done in those areas.
I mean, is that a metric that we shouldbe thinking about or is that win,
lose sort of framing the wrong one?
>> Jimmy Goodrich (04:03):
Well, I mean, there's a lot of different ways to look at it, but
in general you can think about techpower as a measure of your creativity,
your level of innovation,your economic productivity, and
also adoption of the technology.
It's one thing to create it,but if you don't diffuse it and
adopt it across your economy.
We've seen that happen for example, wherein the US the Department of Energy funded
(04:27):
a lot of the original research forthe battery technology and solar cell
technology that's used today, but Chinaled in scaling up of that technology.
And it's brought the cost down where it'snow the dominant producer of these items,
even though they didn't inventthe original technology.
So it matters that you can both createtechnology but also diffusion adopt it.
(04:48):
I think getting both of those right.
In fact, there is a professor at GeorgeWashington University, Jeffrey Ding, who
recently wrote a book about how diffusionof technology is really important.
I recommend it.
And he looked at everything from theelectricity to the automobile and more.
Thinking about AI in terms ofnational power, is it who creates or
who diffuses it?
(05:09):
I think the answer is both.
So you really need to look holisticallyat both the macro and micro level.
At the macro level,it's thinking about R&D intensity.
How much of your government expenditureare you reinvesting back into research
development as a percentage of GDP?
How much talent are youproducing on an annual basis?
(05:29):
What's the quality of it?
Is it PhD, is it applied?
Is it basic?
Is the work that they're doing orientedtowards the needs of the economy or
the scientists in the country?
What kind of firm level startupcreated activity do you have.
For example, we know that China looks atall these metrics cuz you can look back to
(05:52):
early speeches from Xi Jinping in 2013/14where he said, China's losing the race.
We're behind in terms ofadvanced science and technology,
we need to catch up in talent and patentsand papers and other different indicators.
But more recently, Xi actually said, hey,
at this meeting in Shandong,if you recall earlier this year where he
(06:14):
kind of signaled some recognition thatthe economy was not doing very well.
He gathered some expertsof domestic economists.
One of the things he asked is why don'twe have as many unicorn startups in
China like we used to?
So we know that the Chinese governmentis actually quite acutely aware of a lot
of these metrics andfollowing them very closely.
If you look at the 20th party congress,there was a huge section on science
(06:37):
technology and the Plenum document thatlists very proudly all the accomplishments
they've made and exactly how manyof those metrics that I mentioned.
That's exactly how if you look to sciencetechnology organizations in the US,
the National Academies,National Science Foundation,
ITIF they're alsoassessing in many of these.
The thing though is you cantake the exact same metrics and
sometimes come to different conclusions.
(06:59):
I think that's where it's important tothen look beyond what's going on at
the macro level and look at case studies.
I think that's really important becausethe macro picture doesn't give you
honestly the full sweep of what'shappening on the ground in China.
And that's when you have to look atindividual firms, go out, visit China,
(07:19):
meet with the factory managers,the folks working on an R&D.
Talk to researchers around the worldthat are engaging with their Chinese
counterparts and really have a bottom upassessment as opposed to a top-down as to
the level of innovativeactivity in different sectors.
And it varies between ship building,EVs, cars, robotics, semiconductors,
(07:39):
foundational versus advanced ships.
You can write a different story foralmost every sector in China.
As a analyst who does research onChina's science technology space,
why it's so fun and sointeresting is that there's
such a wide variety offacts on the ground.
(08:00):
Ground that, you know, either impressyou or leave you thinking, wow,
they're not doing as well as theywould have liked in this space.
>> Elizabeth Economy (08:09):
So, I mean, that was terrific, and
I wanna come back to a couple of thosecase studies to get your sense because of
what's taking place onthe ground in China.
Because you are, I think really one ofthe people who has spent the most time
certainly in the semiconductor space,but I think also increasingly in AI.
The most time thinking and
(08:30):
engaging on the ground in China tounderstand what's really taking place.
But let me just take one stepbefore that and ask you,
do you think the United States and Chinaapproach this competition in the same way?
I mean, you've laid out, you know,
a number of different really importantmetrics that we should be thinking about.
(08:50):
But does the United States tend tostress sort of one approach and
does China stress a different approach?
Do we understand the techcompetition in the same way?
Do we frame it in the same way?
>> Jimmy Goodrich (09:02):
I think sometimes it's very different, however,
I'd say the US approach isbecoming more oriented towards
a national competitivenessagenda than it used to be.
If you go back maybe ten years,it was our basic research is conducted
in universities, corporations tappedinto it if they want to or not.
We didn't have industrial policy toattract chip making or battery or
(09:26):
solar panel manufacturingin the United States.
But fast forward now,the US is doing a lot of that.
On the flip side, if you go into China,there's always been a five year plan,
an industrial policy, someone inthe halls of Beijing drinking tea and
thinking they need to achievethis target or that metric.
But, frankly, you can go out,
talk to some of the companies who don'teven recognize they're part of a plan.
(09:49):
They're just trying to make profitbecause this is an attractive industry.
And frankly, some policy signalinghas meant they can probably get more
investment in capital andsubsidies because of that.
But I would say that the Chineseapproach is, the way I look at it is
the government sets the goalpost,it identifies long range targets, but
(10:11):
it doesn't give an intentionally a lotof guidance of how to get there.
It says, we wanna create a worldleading semiconductor industry by 2030.
That was the target in theirintegrated Circuits plan in 2014 or
by 2025 they want to achieveX amount of innovation
increase in whatever sector you name it,robotics and so on.
(10:36):
And then they really leave it to theprovinces, to the mayors, the governors,
to the CEOs of local government financingvehicles who often dole out a lot
of the cash to these companies,to those state owned enterprise bosses,
the entrepreneurs to figureout how to get there.
And then you kind of open up the spigots,funding comes out.
There's a tremendous amount of waste,but that's kind of by design really.
(10:59):
Thinking about China's government effortsat developing their science technology,
I think of it as a venture capital state.
I'm not the first to coin that term.
Others have used that where they've gota portfolio of bets in the semiconductor
space, for example, they might fund two orthree companies to produce the same thing.
Or in super competing, there's always beensort of managed competition of four or
(11:23):
five players, butthey'll pick the best out of the pack for
their ultimate deploymentof the technology.
Much like a venture capital investorsthinking, they've got 20 investments,
two or three out of the 10 might win andthat's enough for
them because it's the end,not the means that they got to.
And if the end is for a VC return oninvestment or for China for moving up
(11:45):
the ladder and creating jobs, then all themeans that they got there were justified.
Can they sustain that in sort of a moreconstrained budget environment with
a slowing economy is one of the bigquestions out there amongst the China
policy community.
So for the US, we're kind ofmoving more in that direction.
(12:06):
And again as I mentioned,we're much more laissez faire.
Industrial policy wasa taboo word in Washington.
But now with Chip's Act,Inflation Reduction Act,
possibly more investments for thingslike shipbuilding and a new Congress and
administration, we're movinga little bit in that direction.
Not as intensively as China is.
(12:27):
I think China's much moretop-down mobilization but
also bottom up at the same time andvery flexible where I think also one of
the biggest differences is that there'smore tolerance for failure ironically
in the Chinese political system thanthere is in the US political system.
Because a lot of thisindustrial policy is so new.
(12:47):
There's a real fear that say withthe Biden administration they'll make
a wrong investment decision, lead toa cylindrical like bankruptcy that could
weaken the political consensusaround these type of things.
Whereas in China they've had so manyfailures but so many different successes,
I think there's a higher tolerance forthose failures in their system.
>> Elizabeth Economy (13:05):
Yeah, although I think arguably there's a high
tolerance for failure in the venturefield in the US economy.
>> Jimmy Goodrich (13:12):
Yes.
>> Elizabeth Economy (13:12):
Maybe not in terms of the political system engagement with
it, but I think it's one ofthe strengths of all the Silicon Valley,
Silicon Valley, etc,that in fact there is that tolerance for
companies rising and falling and exitingand new ones springing up all the time.
>> Jimmy Goodrich (13:30):
I think that's one of our greatest assets is the healthy venture
capital, private equity financialcommunity that helps create a lot of these
startups, invests in companies thatjust have a small idea in their garage.
China's struggling, if you've read a lotof the reports over the last two years,
VC funding has really,
(13:51):
particularly private backed VC fundinghas really been in a drought in China.
Now the government stepped in and becomethe predominant LP to a lot of these
venture capital startups,VC funds in China.
But that means, though the government hasmore say, they're more focused on job
creation, is a new factory gonna bebuilt in my district versus, five, ten
(14:11):
year returns and is this widget going tobe successfully developed on the market?
That's the orientation of the US system.
But the Chinese system, when you'vegot the government as a shareholder,
obviously is going to havea different set of metrics.
On the flip side, that might meanthat some areas that the sort
of quick return VC community isnot interested in hard tech,
(14:33):
maybe more prone to investment in China.
>> Elizabeth Economy (14:36):
Right, and
that's why we have the Chips andScience Act in good part, I think.
Let me just ask you quickly thoughto that point about the private
venture capital drying up andthe government stepping in, why is it?
I mean, I know that certainly Westernventure capital has dried up for
a variety of reasonstied to sort of changing
(14:58):
political circumstances inthe relationship, increased tensions.
And so I think greater concernsabout US money being used to support
technologies in China that couldundermine our national security.
But why is the Chinese privateventure money drying up in China?
>> Jimmy Goodrich (15:19):
I think there's a couple of reasons, one, of course,
is the pandemic and then the drag onthe economy that that's had since then.
And so, and on top of that, a lot of thereally active funders of tech in China got
their money from the Internet economy,from the E commerce boom.
With the Internet crackdown, thegovernment conducted over the last couple
(15:41):
of years, that's really spookeda lot of the investors.
It's fizzled a lot of investment activity,and
it's also reduced a lot of their holdings.
So there's just less money,there's not as much confidence.
And now, people that would havebeen investing in Widget startups,
fusion technology, AI,they might be opening up a bookshop
(16:05):
in Thailand now instead of investingin a lot of these new startups.
It's not to say there'sa complete drought,
there's still companies out there.
You've got Lee Kai Fu and Zinovation andothers that are invested in the economy.
But I think it's a confidence issue,it's also just a single fact.
With a slowing economy,there's going to be less capital.
(16:27):
And that's where the government has triedto step in and fill some of that void.
It's interesting, it's again, I guess it'sall roads lead back to sea sometimes.
And he mentioned unicorns.
30 days later, the State Council hada guidance document on, my gosh,
we need to get venture capitalfunding revved up again.
And just what they need another governmentdocument to tell them what to do.
>> Elizabeth Economy (16:50):
Right, so you mentioned sort of the industrial policies,
something that the United States, I mean,
the United States has had industrialpolicies in the past, but clearly,
China's been sort of the kingof industrial policy.
And now the United States with chips andscience and
Inflation Reduction Act hassort of elements of that.
(17:11):
Are there any other things youthink that China should learn?
Sorry, that the United States shouldlearn from the Chinese model?
I personally think back tojust Chinese persistence, and
I've just been readingEva Do's new book on Huawei.
>> Jimmy Goodrich (17:27):
Huawei.
>> Elizabeth Economy (17:28):
Right, and she mentions that the Chinese government had
invested a billion Yuan in 1996in semiconductor industry.
And here we are today.
There's still, now it's hundreds ofbillions of dollars that China's putting
into the semiconductor industry.
But nonetheless, you mentionedbatteries and EVs, and they persist.
(17:52):
Whereas sometimes the United States,as I think you were suggesting,
we develop the technology,but then we don't continue.
President Carter was putting solar panelson the West Wing of the White House in
1979, and then President Reagan came inand ended the renewable energy program.
And so one of the downsides of ourdemocracy and flips in government.
(18:16):
But what else do you thinkthe United States might take away
from the China model?
>> Jimmy Goodrich (18:21):
Well, I think that's really important.
Just look at other East Asian economiesthat have done very well in innovation
industrial policy.
Take Taiwan and the semiconductor miracle,
Taiwan Semiconductor ManufacturingCorporation, which today produces around
90% of all the world's mostadvanced chips, the smallest chips.
They started out as a Joint venturebetween the Taiwanese government,
(18:42):
48.5% owned by the Taiwanese government.
For over two decades,the Taiwanese government sat there as
a patient shareholder bufferingthem from market forces.
They gave 20 years of tax credits to thosethat purchased the equipment to build
out their factories.
And no surprise, at their early stageof inception when they really weren't
(19:06):
able to on their own make profit, thegovernment buffered that and persisted.
When the going gets tough, for examplewe're seeing Intel struggle in the market,
you have to keep going,
you can't just walk away assoon as it gets a little dicey.
I think the other important takeawaythat China doesn't do well, that we
should not replicate is China doesn'tknow how to exit their investments.
(19:31):
The Taiwanese government, as soon as theysaw TSMC become successful, also in Korea,
when the Korean government had its heavychemicals initiative in the 1970s,
then in the 1980s they builtup their semiconductor plans.
The government of both Korea andTaiwan, as soon as they saw Samsung,
LG, TSMC become successful, theyreduced their investments, they reduced
(19:53):
the government policy cuz they realizedthat it worked and they don't need to
create these companies dependence onthem for their financial success.
I think the other thing we can learnfrom China of what not to do is don't
create companies where the governmenthas overriding control.
That's one thing that's remarkableabout China is that if you look at all
(20:16):
the industrial policy success of differentEast Asian developmental states.
Most of the actors who implementthe industrial policy are private
entrepreneurs running privately heldcompanies, Samsung, LG, Sony, TSMC.
Whereas in China,
vast majority of the government dollarsare not going to Tencent and Alibaba,
(20:36):
they're going to China ResourcesCorporation, and Tsinghua Unigroup,
and AVIC and the China Minerals EnergyExtraction Corporation Limited,
etc, everyone under the centralgovernment's SAC group.
That's starting to change a little bit.
What's interesting is overthe last five or six years,
particularly as US-China techtensions have escalated,
(20:59):
what China's been talking about is Ithink learning from those past mistakes,
something called whole of nation,new type of innovation.
And this means mobilizing the state, butinstead of just these old line state
ministries and SOEs bringing inthe private companies and work together.
And Huawei is actuallythe best example of that,
(21:20):
back to the fantastic book that Eva wrote.
Huawei is now the sort of vanguard ofthat new model where Huawei is partnering
with state-owned enterprises like SMIC or
Research Institutes like the China Academyof Sciences to work together
to take private market orientation,business process, R&D,
management skills and the good techcoming out of the labs and push forward.
(21:43):
Is this a sign they've learned entirely?
I think this might be a one off but it'sinteresting that they're experimenting
with the model that has worked forother countries.
So I would hope that for our industrialpolicy, we're not gonna create
state-owned enterprises, the government'snot gonna have an overriding share that.
They've got an exit strategy, and
then we can make our industrial policy asmarket based and oriented as possible.
>> Elizabeth Economy (22:06):
Yeah, I mean,
I do think that that's builtinto the design as it is, right?
Because we're kind of governmentcapital at about 39 billion and
private capital at 10 times that.
So I think that's the directionin which we're moving.
But I also think that you're warningabout when the going gets tough,
(22:27):
the tough get going but not like goingout the door, but stick with it,
I think is really important andhopefully all these programs
are gonna weather the transition,the political transition.
>> Jimmy Goodrich (22:40):
I think there's a bipartisan consensus around rebuilding our
manufacturing base.
I think the Republican Partypreference is tax
policy to get there insteadof fiscal subsidies.
But remember the Chips and Science Actsincludes a tax credit that's probably
actually exceeding the total amount atthe end of all of this of the subsidies.
>> Elizabeth Economy (23:04):
Yeah. >> Jimmy Goodrich
Right, you're right.
>> Jimmy Goodrich (23:07):
Tax credit is 25%, it's like twice that size.
>> Elizabeth Economy (23:10):
Yep, yep, yep.
But Inflation Reduction Act I think reliesmore on incentives and tax credits and
things like that.
So that was less bipartisan.
>> Jimmy Goodrich (23:20):
So there's something in there for everybody I would hope.
>> Elizabeth Economy (23:22):
Yeah, and now I think a number of Representatives,
members of Congress, even Republicanones have come to embrace the IRA and
the advantages that they've seen fortheir districts.
>> Jimmy Goodrich (23:34):
I see the jobs being created and the job creation, it's real.
I think the part of the challengeof the last four years
is that a lot of these investmentsare huge, they take time.
It's hard to see the immediate results butyou know,
at the end of the dayit'll benefit the country.
So at the end of the day that's great.
>> Elizabeth Economy (23:53):
Right, so you mentioned Lee Kaifu, and
he has been a reallyimportant player in China.
I remember back in 2018,he wrote the book on AI Superpowers.
He said, basically, China eventuallywas gonna win the AI race,
in large part,because it was the Saudi Arabia of data.
(24:16):
[LAUGH] Because it was investingmore money, had great entrepreneurs,
had huge engineering class,huge Internet companies.
And he also said that the Americanapproach is more about like academic
research, whereas China is going tovalue the use of AI in manufacturing.
And I think this brings us back tosome of the first points that you
(24:41):
were making about needing tohave the full cycle, right?
So do you think that this isthe way that AI is playing out?
I mean, the AI competition is playing out,
that the United States is maybe overlyweighted on the academic research and
not enough on the deploymentthroughout the economy.
And whereas China's alreadymoving into deployment but
(25:02):
maybe isn't quite leading in the research.
How do you see this playing out?
>> Jimmy Goodrich (25:06):
Yeah, I remember reading that book at the time and
it's a great book.
And Kai-Fu is obviously one ofthe most knowledgeable people around
China's tech ecosystem, has greatinsight and expertise on the topic.
But did get one prediction right,
that the US was gonna lead inthe hardware, and they still are.
Whether it's in advanced node chips orthe semiconductor production equipment,
(25:29):
the US and the allies still lead.
And he had sort of predicted that wasgonna be an area where the US is gonna
have a strength.
I think in data, it didn't quite turnout to be the way we thought it would.
China is a population of over a billion,but
the rest of the world is four times that.
So at the end of the day,actually I think we had to look bigger.
When you look at Google or Meta orOpenAI, they've got the world's data
(25:52):
available to them, whereas Chinahas data that's created within,
sort of inside the walledgarden of the Chinese Internet.
It's useful within China, butit's not as useful outside of China.
In addition, I think of Chinese AIdevelopment as basically two waves.
The first wave really,when Kai-Fu wrote that book,
(26:13):
was all about facial recognition andneural networks.
And that was really the first wave of AI,and China exploded.
They took off, they lead that technologybecause they had a huge market led by
the government, fueled by demand forsurveillance and security cameras.
>> Elizabeth Economy (26:32):
Exactly.
>> Jimmy Goodrich (26:33):
Every Chinese startup in that era, SenseTime, Megvii, they
were almost entirely focused on policepublic safety surveillance applications.
Or if you go to the street corner in Chinanow, there's 20 different cameras from 20
different agencies that are hookedup to 20 different systems.
And that's really what drove thatfirst wave of AI development in China.
(26:57):
The second AI wave,which is happening now,
is taking fundamentalbreakthroughs in research around
transformer models andlarge language models and
using prediction to figure out howyour phraseology is going to work.
If I say boom, then what'sthe likelihood of the next 20 words and
(27:19):
the models can predict that for you?
The US has created that whole technology,is still leading, but
China is very close behind.
And we're seeing today thatsome of the Chinese companies,
like DeepSeek, StepFun,Kai-Fu's company, 0AI,
are quite innovative on these kind ofrankings of who has the best models.
(27:44):
Chinese companies are holdingtheir own weight.
I think one of the big questions is withthe export controls that do constrain
China's access to the chips,which you need to fuel these AI systems,
is that gap going to getbigger over time or not?
That's an open question that a lotof people are trying to figure out
(28:04):
the answer to.
>> Elizabeth Economy (28:05):
Yeah, so you've spent some time figuring that out.
What do you think?
>> Jimmy Goodrich (28:10):
I think it takes time for these controls to have an impact.
China is able to stockpile,purchase a lot of things.
They're able to, unfortunately, theywere getting access to things like TSMC.
They've been able to smugglea bunch of chips in.
Your rules are only as goodas the ones you enforce.
And I think we've learnedover time that 200 page
(28:34):
regulations are great if they're enforced.
And that's an area where I think that'sbeen lacking over the last couple of
administrations.
But it's very difficult.
I mean, these are huge,deep global supply chains.
They span multiple countries andjurisdictions,
arcane rules that require teams of lawyersto understand, this is not easy stuff.
(28:59):
I think it's a work in progress.
The export controls and whether or notthey're gonna deliver the sort of results
that whether the China hawks say theywill or those that criticize them won't,
I don't think we really havean answer one way or the other yet.
It's too early.
Remember, the Biden administration'sbig package was just two years ago.
(29:22):
And so that's not even reallya full technology cycle.
For example, the semiconductor industry,it takes two or
three years to design a new chip.
So we're still at the very early inningsof this and we'll see over time.
There's one thing however,
is that there's no doubt that China'sfully committed to localizing as
(29:43):
much as fast as they can in every areathat we're trying to constrain the PRC in.
And so it's a big question of small yard,high fence strategy,
have the most delicatenarrow controls as possible.
You also send a signal to China atthe same time to double down and
build out its injuriesindustry as fast as possible.
(30:05):
Do you use all that leverage now,later, when?
It's a complicated question.
>> Elizabeth Economy (30:10):
Yeah, I mean, and
recognizing of course that China wasalready committed to indigenization,
what I think the controls have doneis to accelerate the process, right?
To force them to move faster,to invest more.
>> Jimmy Goodrich (30:25):
Yeah, in every area that we're talking about today with
semiconductor equipment, materials,software, AI chips, memory chips,
China was investing in everysingle one of those before that.
They've certainly increased the intensityand the scope of the investment.
Was that because of export controls orjust a breakdown in US-China relations?
(30:45):
Who started it all?
I mean, that's a hard question to answer.
>> Elizabeth Economy (30:50):
Right, right.
And well, I guess we'll, we'll give ita couple of years, but I would never want
to see certainly the export controls bethought of as the one arrow in our quiver.
>> Jimmy Goodrich (31:02):
Silver bullet, yeah.
>> Elizabeth Economy (31:03):
Funding the science part, for example,
of the Chips and Science Act, I thinkshould also be an essential part of
our competitive strategy whenit comes to semiconductors.
>> Jimmy Goodrich (31:15):
There's a lot of focus on semiconductors,
on TikTok, on batteries, you name it.
Those are all applied technologieswhere we are going to win.
And sort of the future of the next waveof innovation is gonna be leveraging
our amazing university andnational lab infrastructure to invest in
(31:38):
the basic science that then wecan apply and commercialize.
Whether it's in fusion technology,next generation chemistry,
or bioengineering that's gonnabe useful for life sciences.
What's interesting is that China isreally almost at a breakout stage
of investment in basic science.
(31:59):
And it's something thatreally is not covered well,
The Economist did a piece about sixmonths ago on China's basic science rise.
It's really now a science superpower,they're building 20 new national labs and
scientific facilities across the country.
And everything from experimentalfusion reactors to deep earth
(32:19):
exploration platforms,mining colonies on the moon,
deep space probes,everything you can think of.
It's like Xi Jinping has a fascinationwith journey to the center
of the Earth andevery other sci-fi book, in fact,
I think at one point theywere on his bookshelf.
But it's interesting,I recently spoke to somebody,
(32:42):
senior individual in the Chinese sciencesystem, and they said, we're not gonna
catch up anytime soon in these sortof applied technologies of today.
But when it comes to the next wave oftechnologies and high energy physics and
quantum, they're much more confident thatthese big investments they're making five,
ten years down the road are gonna pay off.
Much like the big investments the USmade into its science infrastructure in
(33:06):
the 1940s during World War II, and then onthrough the Cold War paid off with GPS,
the internet,the semiconductor, you name it.
Those were all big government investmentsthat had spillover effects, and
I think China's watched that model,they think it's gonna work for them.
Again, I come back to the bigquestion of like, well,
is that funding gonna be aroundforever and can they sustain it,
(33:29):
particularly if the economycontinues to shrink the way it is?
>> Elizabeth Economy (33:32):
Right, but I think we've also seen that despite the economy
slowing significantly, that thisremains a priority for Xi Jinping.
And so, I think we should not takeour foot off the gas pedal in
anticipation that somehowthey're gonna start to retrench.
>> Jimmy Goodrich (33:50):
Yeah, I should have answered my own question there and
saying I don't think it will,I agree with you.
>> Elizabeth Economy (33:56):
That's fine, I mean, [LAUGH].
>> Jimmy Goodrich (33:58):
0%, you could still take 30% of all that economic output and
dedicate it to science,technology, investment.
Just look at Japan, the zero growtheconomy of the last several decades,
they've added all sortsof new infrastructure.
They're still world leading power,you don't have to be growing at 10%
(34:19):
per quarter to have a hugedent on global development.
>> Elizabeth Economy (34:22):
Let's send that message to the new Congress,
I think it's an important one forthem to hear.
So let me ask one last question,a slightly different area,
and that's on our science andtechnology cooperation with China,
because there's still a large area ofcooperative work that is going on.
(34:44):
I think that many people would arguecertainly in the US scientific community
should be going on.
A lot of synergy amongscientists across the Pacific,
the US has let the science andtechnology cooperation
agreement that had been in place for45 years lapse.
(35:04):
It missed its formal renewal deadline,is that a mistake,
or are we at a point where we reallyshould just be hunkering down and
battening down the hatches andclosing off our research universities?
How do you see that dynamic in terms ofthe cooperation versus the competition?
>> Jimmy Goodrich (35:28):
Well, I mean it's interesting.
>> Elizabeth Economy (35:30):
Element of it, because so
we've benefited here inthe United States to such a significant
extent from that free flowof talent coming from China.
I mean, many, many, of our top researcherstoday hail originally from China and
from other countries, buthow do you think about that?
>> Jimmy Goodrich (35:53):
Well, I think with anything, there's benefits and
trade-offs andthere's no doubt that science is global.
And if you talk to anyscientist in their domain,
whether it's physics,chemistry or semiconductors.
What they're doing requires globalpartnership because no one country
has a monopoly on good ideas and people,
it's just fundamental rule of humanity andidea creation.
(36:16):
In fact, I think it's our greateststrength is that if you look at
the research labs andthe innovation in China.
Despite a lot of efforts,they're not recruiting as many and
as good as global talent that theywould like into their research labs.
Now, you read every day about thisscientist and that scientist that's going
back to China, but the overall trendis that if you're a top scientist,
(36:39):
you wanna work in a Western university.
Or Japanese or South Korean becauseyou're gonna have more freedom,
you're gonna have less bureaucracyprobably, and frankly,
you can create a startup,usually a lot easier.
On the other hand though,
I think we were a bit naive in some areaswhere there was joint collaboration on
super competing technology that wentstraight into nuclear weapons simulation.
(37:03):
Or working with the Chinese Academyof Engineering Physics,
which is their nuclear weapons lab onthings that will benefit their nuclear
modernization program.
Or Bill Gates wanted to do smallmodular nuclear reactor technology in
a partnership withthe Chinese National Nuclear Corporation,
which is working to develop SMNRs fortheir nuclear submarine program.
(37:25):
So there's areas when there's a cleardual use application should be just more
mindful.
I think a lot of it just stems fromeducation working with the research
community to ensure they'reaware of the risks,
to ensure that researchintegrity is really important.
That if you're a university researcher,
you're disclosing where yourfunding's coming from and
(37:47):
that's not something that applies tojust researchers engaged with China.
It's any researcher working withuniversities around the world,
I think MIT has actually done a great job.
They put together a task force,
they looked at how can they help improveresearch integrity and security and
get the buy in from theirresearch staff and professors.
(38:09):
Because it helps them in their work getmore funding and have more credibility
if they are perceived as living up toa really important code of conduct.
And I'm seeing more universities kind ofgo that direction, it doesn't have to be,
and it should not be targetingone group over the other,
frankly, it's a global conversation.
(38:30):
So, I still think we should maintainas robust as links as we can,
recognizing that we shouldput guardrails on technology
engagement where there's gonnabe a clear military application.
And also frankly,
it benefits us from knowing whatthe state of the research is in China.
If we're all drawbridge is closed andbehind our own walled garden,
(38:54):
we're not gonna know what they're doing.
And in some areas, particularly for
strategic applications that could put usat a disadvantage, likewise that means
we'll have to let China knowa little bit about what we're doing.
But frankly, a lot of the researchis published anyways.
>> Elizabeth Economy (39:11):
[LAUGH] >> Jimmy Goodrich
particularly when itcomes to basic research,
I think there's a good waythat we can balance things.
I think we're headingdown that path whether or
not the next four years, it's gonna go ina different direction we don't know yet.
Yeah, okay, so now we're into our quick little lightning
(39:31):
round of questions, so give me yourmust-read book or article on China.
>> Jimmy Goodrich (39:38):
Well, I was gonna say Eva Doe's new book on Huawei,
that's a good one.
>> Elizabeth Economy (39:42):
Okay, [LAUGH] that's fine.
>> Jimmy Goodrich (39:43):
Of course, any book from Liz Economy, I recommend.
>> Elizabeth Economy (39:47):
Not necessary.
>> Jimmy Goodrich (39:48):
The new book on Xi Jinping Thought from Steve Tang and
others is a good one.
I have not read blocking outa few of the others, but anyway,
those are the couple ofthe ones I recommend.
The article, I go back to the Economistarticle on basic science on China.
I think it was a good tip of the icebergprimer of, and something that people don't
(40:09):
think about a lot is the innovation,the labs, the basic research.
And thinking more about China as a sciencesuperpower, as a science imitator,
I think is an important concept.
>> Elizabeth Economy (40:19):
I also think, frankly,
your article on Fortresseconomy is a great one.
Tell me where you published it.
I read it in draft form.
So where was it published?
>> Jimmy Goodrich (40:29):
I published it at University of California, San Diego,
their Institute of Global Conflict andCooperation.
>> Elizabeth Economy (40:35):
That's a terrific article for understanding the direction,
sort of overall direction, of Xi Jinping'sthinking about security and economy.
I think nothing is [INAUDIBLE].
>> Jimmy Goodrich (40:46):
I recently read Xi Jinping's thought on science and
technology innovation.
I'd recommend that one.
Really, if you're gonna try andunderstand how he's thinking about this.
Well, it's all written down foryou in a abridged version, and
it's available on Amazon.
>> Elizabeth Economy (41:00):
[LAUGH] There you go.
For those who are not faint of heart.
Okay, what's one thing that you wishthe Biden administration had done
differently with regard to China policy?
>> Jimmy Goodrich (41:11):
I drive back a little bit to what I mentioned earlier is having
better implementation ofthe export control rules.
I think, is an area that they couldhave done a little bit better,
could have improved upon.
If you're gonna commit to using all thispolitical capital to expend with allies
and industry,spend months drafting a rule,
(41:32):
you have to be committed toactually implementing it.
And I think that's an area where,hopefully over the next administration or
two, there'll be some improvement.
>> Elizabeth Economy (41:42):
Yeah,
what China issue do you thinkwe don't know enough about?
I think you probably answered this, but
just in case you wantto toss out something.
>> Jimmy Goodrich (41:51):
I go back to the basic science area.
I think it's really hot and interesting.
I meet a lot of PhD students,master's students,
young kids starting theircareer in think tanks, and
they're all interested in semiconductorsand AI, AIA, all the time.
But you know what,
there's 20 other domains oftechnology that are really important.
(42:12):
There's very few people worldwide whothink about Chinese science technology,
basic science technology policy.
In fact, I think there's only onefull-time program in the world,
which is the Max Planck Institute ofScience has a two-year study program
on Chinese basic science,and that's about it.
And Marix and UCSD,they've co funded a few projects.
(42:35):
But I can count the number of peoplewho do this in one or two hands.
So I really do hope that the Chinacommunity spends more time thinking about
not just the technologies of today,but basic science and
the technologies of tomorrow.
And there's somuch going on in China in this space.
There's a new national commission,there's a lot more party ideology.
(42:58):
What does that mean forthe future of science?
Who's decoupling fasterthan whom in basic science?
In many areas,you might come to the conclusion China is.
>> Elizabeth Economy (43:07):
Well, sounds to me like you have your hands full with a very,
very large research agenda.
And I hope you can recruit somemore people who are like you,
really outstanding researchers to do thiskind of work, because I agree with you.
I think it's incredibly importantnot only to understand sort of
(43:29):
where China is today interms of its technology, but
what it's doing to position itself,for the next decade and beyond.
So, Jimmy, let me say huge thank you toyou for joining me in this conversation.
It's been terrific, andI really appreciate your taking the time.
>> Jimmy Goodrich (43:49):
Thanks, Liz.
It's always a pleasure.
It's just been a fun chat.
>> Elizabeth Economy (43:54):
So if you enjoyed this podcast and
want to hear more reasoned discourse anddebate on China,
I encourage you to subscribe to ChinaConsidered via The Hoover Institution,
YouTube channel orpodcast platform of your choice.
In the next episode,I'll be speaking with senior director for
the Atlantic Council's Global China Hub,who until this past summer,
helped lead the State Department's work onreducing US economic dependence on China,
(44:17):
Melanie Hart.
And I will talk about her work and
the broader efforts in the US governmentto develop more resilient and
diversified supply chains acrosscore technologies and commodities.
[MUSIC]
[MUSIC]
>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insights and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy, Hargrove, Senior Fellowand Co-Director of the US-China and
the World Program at the HooverInstitution at Stanford University.
Today I'm joined by Jimmy Goodrich,Senior Advisor for Technology Analysis to
(00:30):
the RAND Corporation and a leading experton the global semiconductor industry.
Welcome, Jimmy.
>> Jimmy Goodrich (00:36):
Thanks Liz, it's a pleasure to be here, it's really exciting.
>> Elizabeth Economy (00:39):
Great, so
the US has declared China its greatestlong term strategic competitor.
And there's probably no issue in thatcompetition that's received more attention
than technology.
But I think that it's hard for peopleoutside the small group of experts like
yourself to understand exactly what thistechnology competition is all about.
Is it about national security oreconomic competitiveness?
(01:02):
Does it include every technology or justthose somehow tied to national security?
How do you organize your thinkingon this technology competition?
Do you have a framework that youfind to be particularly helpful?
>> Jimmy Goodrich (01:15):
Well, thanks, Liz.
And as you know, on this question youcan ask a hundred different people and
they give you 100 different answers, butI'll offer my thoughts for what I think
are some of the important ways you canthink about the US-China Tech Competition.
I mean, clearly it matters fornational security, it matters for
economic well being,it matters for national pride.
(01:36):
Who's gonna lead the nextgeneration in technologies that
are gonna shape our lives,change economies and
improve home and health, andalso secure national security.
Particularly for these general purposetechnologies like artificial intelligence,
robotics, fusion, they have hugeimpact to both the economy and
(01:57):
our everyday lives, butalso to national security.
And as tensions between the US andChina have increased, I think there's been
a more acute understanding amongstpolicymakers that in the 21st century,
we're talking about competitionin these frontier technologies.
Who can attract the best talent,create the best companies,
(02:20):
who can diffuse that into their economy,who can rapidly integrate these
innovations into their militarybetter than the next country?
That's really what this is about.
China is now the secondlargest economy in the world.
They have tremendous depth in termsof their ability to innovate.
(02:40):
China has been able to create some ofthe world's most leading companies,
scientific laboratories.
I think the story of China20 years ago stealing and
replicating technology isreally the story of yesterday.
We're looking at a China thatis fundamentally changed,
leading a lot of the indicators inbasic science and chemistry and applied
(03:01):
materials science in semiconductor relatedresearch and development in many areas.
Basic R&D for AI, aerospace, other areas.
So we have to think about Chinanow as not just a country that is
a copycat innovator, butan original innovator increasingly so.
>> Elizabeth Economy (03:20):
Yeah, so is there a way to think about or
a set of metrics that kind of you use forwho's winning and
who's losing, ordo you think that's even helpful at all?
I remember reading a paper by ASPI,
the Australian Strategic Policy Institutethat came out I think
(03:40):
last year where they said thatChina was leading in 37 out of 44
sort of crucial technologies basedon sort of the level of original and
quality research that wasbeing done in those areas.
I mean, is that a metric that we shouldbe thinking about or is that win,
lose sort of framing the wrong one?
>> Jimmy Goodrich (04:03):
Well, I mean, there's a lot of different ways to look at it, but
in general you can think about techpower as a measure of your creativity,
your level of innovation,your economic productivity, and
also adoption of the technology.
It's one thing to create it,but if you don't diffuse it and
adopt it across your economy.
We've seen that happen for example, wherein the US the Department of Energy funded
(04:27):
a lot of the original research forthe battery technology and solar cell
technology that's used today, but Chinaled in scaling up of that technology.
And it's brought the cost down where it'snow the dominant producer of these items,
even though they didn't inventthe original technology.
So it matters that you can both createtechnology but also diffusion adopt it.
(04:48):
I think getting both of those right.
In fact, there is a professor at GeorgeWashington University, Jeffrey Ding, who
recently wrote a book about how diffusionof technology is really important.
I recommend it.
And he looked at everything from theelectricity to the automobile and more.
Thinking about AI in terms ofnational power, is it who creates or
who diffuses it?
(05:09):
I think the answer is both.
So you really need to look holisticallyat both the macro and micro level.
At the macro level,it's thinking about R&D intensity.
How much of your government expenditureare you reinvesting back into research
development as a percentage of GDP?
How much talent are youproducing on an annual basis?
(05:29):
What's the quality of it?
Is it PhD, is it applied?
Is it basic?
Is the work that they're doing orientedtowards the needs of the economy or
the scientists in the country?
What kind of firm level startupcreated activity do you have.
For example, we know that China looks atall these metrics cuz you can look back to
(05:52):
early speeches from Xi Jinping in 2013/14where he said, China's losing the race.
We're behind in terms ofadvanced science and technology,
we need to catch up in talent and patentsand papers and other different indicators.
But more recently, Xi actually said, hey,
at this meeting in Shandong,if you recall earlier this year where he
(06:14):
kind of signaled some recognition thatthe economy was not doing very well.
He gathered some expertsof domestic economists.
One of the things he asked is why don'twe have as many unicorn startups in
China like we used to?
So we know that the Chinese governmentis actually quite acutely aware of a lot
of these metrics andfollowing them very closely.
If you look at the 20th party congress,there was a huge section on science
(06:37):
technology and the Plenum document thatlists very proudly all the accomplishments
they've made and exactly how manyof those metrics that I mentioned.
That's exactly how if you look to sciencetechnology organizations in the US,
the National Academies,National Science Foundation,
ITIF they're alsoassessing in many of these.
The thing though is you cantake the exact same metrics and
sometimes come to different conclusions.
(06:59):
I think that's where it's important tothen look beyond what's going on at
the macro level and look at case studies.
I think that's really important becausethe macro picture doesn't give you
honestly the full sweep of what'shappening on the ground in China.
And that's when you have to look atindividual firms, go out, visit China,
(07:19):
meet with the factory managers,the folks working on an R&D.
Talk to researchers around the worldthat are engaging with their Chinese
counterparts and really have a bottom upassessment as opposed to a top-down as to
the level of innovativeactivity in different sectors.
And it varies between ship building,EVs, cars, robotics, semiconductors,
(07:39):
foundational versus advanced ships.
You can write a different story foralmost every sector in China.
As a analyst who does research onChina's science technology space,
why it's so fun and sointeresting is that there's
such a wide variety offacts on the ground.
(08:00):
Ground that, you know, either impressyou or leave you thinking, wow,
they're not doing as well as theywould have liked in this space.
>> Elizabeth Economy (08:09):
So, I mean, that was terrific, and
I wanna come back to a couple of thosecase studies to get your sense because of
what's taking place onthe ground in China.
Because you are, I think really one ofthe people who has spent the most time
certainly in the semiconductor space,but I think also increasingly in AI.
The most time thinking and
(08:30):
engaging on the ground in China tounderstand what's really taking place.
But let me just take one stepbefore that and ask you,
do you think the United States and Chinaapproach this competition in the same way?
I mean, you've laid out, you know,
a number of different really importantmetrics that we should be thinking about.
(08:50):
But does the United States tend tostress sort of one approach and
does China stress a different approach?
Do we understand the techcompetition in the same way?
Do we frame it in the same way?
>> Jimmy Goodrich (09:02):
I think sometimes it's very different, however,
I'd say the US approach isbecoming more oriented towards
a national competitivenessagenda than it used to be.
If you go back maybe ten years,it was our basic research is conducted
in universities, corporations tappedinto it if they want to or not.
We didn't have industrial policy toattract chip making or battery or
(09:26):
solar panel manufacturingin the United States.
But fast forward now,the US is doing a lot of that.
On the flip side, if you go into China,there's always been a five year plan,
an industrial policy, someone inthe halls of Beijing drinking tea and
thinking they need to achievethis target or that metric.
But, frankly, you can go out,
talk to some of the companies who don'teven recognize they're part of a plan.
(09:49):
They're just trying to make profitbecause this is an attractive industry.
And frankly, some policy signalinghas meant they can probably get more
investment in capital andsubsidies because of that.
But I would say that the Chineseapproach is, the way I look at it is
the government sets the goalpost,it identifies long range targets, but
(10:11):
it doesn't give an intentionally a lotof guidance of how to get there.
It says, we wanna create a worldleading semiconductor industry by 2030.
That was the target in theirintegrated Circuits plan in 2014 or
by 2025 they want to achieveX amount of innovation
increase in whatever sector you name it,robotics and so on.
(10:36):
And then they really leave it to theprovinces, to the mayors, the governors,
to the CEOs of local government financingvehicles who often dole out a lot
of the cash to these companies,to those state owned enterprise bosses,
the entrepreneurs to figureout how to get there.
And then you kind of open up the spigots,funding comes out.
There's a tremendous amount of waste,but that's kind of by design really.
(10:59):
Thinking about China's government effortsat developing their science technology,
I think of it as a venture capital state.
I'm not the first to coin that term.
Others have used that where they've gota portfolio of bets in the semiconductor
space, for example, they might fund two orthree companies to produce the same thing.
Or in super competing, there's always beensort of managed competition of four or
(11:23):
five players, butthey'll pick the best out of the pack for
their ultimate deploymentof the technology.
Much like a venture capital investorsthinking, they've got 20 investments,
two or three out of the 10 might win andthat's enough for
them because it's the end,not the means that they got to.
And if the end is for a VC return oninvestment or for China for moving up
(11:45):
the ladder and creating jobs, then all themeans that they got there were justified.
Can they sustain that in sort of a moreconstrained budget environment with
a slowing economy is one of the bigquestions out there amongst the China
policy community.
So for the US, we're kind ofmoving more in that direction.
(12:06):
And again as I mentioned,we're much more laissez faire.
Industrial policy wasa taboo word in Washington.
But now with Chip's Act,Inflation Reduction Act,
possibly more investments for thingslike shipbuilding and a new Congress and
administration, we're movinga little bit in that direction.
Not as intensively as China is.
(12:27):
I think China's much moretop-down mobilization but
also bottom up at the same time andvery flexible where I think also one of
the biggest differences is that there'smore tolerance for failure ironically
in the Chinese political system thanthere is in the US political system.
Because a lot of thisindustrial policy is so new.
(12:47):
There's a real fear that say withthe Biden administration they'll make
a wrong investment decision, lead toa cylindrical like bankruptcy that could
weaken the political consensusaround these type of things.
Whereas in China they've had so manyfailures but so many different successes,
I think there's a higher tolerance forthose failures in their system.
>> Elizabeth Economy (13:05):
Yeah, although I think arguably there's a high
tolerance for failure in the venturefield in the US economy.
>> Jimmy Goodrich (13:12):
Yes.
>> Elizabeth Economy (13:12):
Maybe not in terms of the political system engagement with
it, but I think it's one ofthe strengths of all the Silicon Valley,
Silicon Valley, etc,that in fact there is that tolerance for
companies rising and falling and exitingand new ones springing up all the time.
>> Jimmy Goodrich (13:30):
I think that's one of our greatest assets is the healthy venture
capital, private equity financialcommunity that helps create a lot of these
startups, invests in companies thatjust have a small idea in their garage.
China's struggling, if you've read a lotof the reports over the last two years,
VC funding has really,
(13:51):
particularly private backed VC fundinghas really been in a drought in China.
Now the government stepped in and becomethe predominant LP to a lot of these
venture capital startups,VC funds in China.
But that means, though the government hasmore say, they're more focused on job
creation, is a new factory gonna bebuilt in my district versus, five, ten
(14:11):
year returns and is this widget going tobe successfully developed on the market?
That's the orientation of the US system.
But the Chinese system, when you'vegot the government as a shareholder,
obviously is going to havea different set of metrics.
On the flip side, that might meanthat some areas that the sort
of quick return VC community isnot interested in hard tech,
(14:33):
maybe more prone to investment in China.
>> Elizabeth Economy (14:36):
Right, and
that's why we have the Chips andScience Act in good part, I think.
Let me just ask you quickly thoughto that point about the private
venture capital drying up andthe government stepping in, why is it?
I mean, I know that certainly Westernventure capital has dried up for
a variety of reasonstied to sort of changing
(14:58):
political circumstances inthe relationship, increased tensions.
And so I think greater concernsabout US money being used to support
technologies in China that couldundermine our national security.
But why is the Chinese privateventure money drying up in China?
>> Jimmy Goodrich (15:19):
I think there's a couple of reasons, one, of course,
is the pandemic and then the drag onthe economy that that's had since then.
And so, and on top of that, a lot of thereally active funders of tech in China got
their money from the Internet economy,from the E commerce boom.
With the Internet crackdown, thegovernment conducted over the last couple
(15:41):
of years, that's really spookeda lot of the investors.
It's fizzled a lot of investment activity,and
it's also reduced a lot of their holdings.
So there's just less money,there's not as much confidence.
And now, people that would havebeen investing in Widget startups,
fusion technology, AI,they might be opening up a bookshop
(16:05):
in Thailand now instead of investingin a lot of these new startups.
It's not to say there'sa complete drought,
there's still companies out there.
You've got Lee Kai Fu and Zinovation andothers that are invested in the economy.
But I think it's a confidence issue,it's also just a single fact.
With a slowing economy,there's going to be less capital.
(16:27):
And that's where the government has triedto step in and fill some of that void.
It's interesting, it's again, I guess it'sall roads lead back to sea sometimes.
And he mentioned unicorns.
30 days later, the State Council hada guidance document on, my gosh,
we need to get venture capitalfunding revved up again.
And just what they need another governmentdocument to tell them what to do.
>> Elizabeth Economy (16:50):
Right, so you mentioned sort of the industrial policies,
something that the United States, I mean,
the United States has had industrialpolicies in the past, but clearly,
China's been sort of the kingof industrial policy.
And now the United States with chips andscience and
Inflation Reduction Act hassort of elements of that.
(17:11):
Are there any other things youthink that China should learn?
Sorry, that the United States shouldlearn from the Chinese model?
I personally think back tojust Chinese persistence, and
I've just been readingEva Do's new book on Huawei.
>> Jimmy Goodrich (17:27):
Huawei.
>> Elizabeth Economy (17:28):
Right, and she mentions that the Chinese government had
invested a billion Yuan in 1996in semiconductor industry.
And here we are today.
There's still, now it's hundreds ofbillions of dollars that China's putting
into the semiconductor industry.
But nonetheless, you mentionedbatteries and EVs, and they persist.
(17:52):
Whereas sometimes the United States,as I think you were suggesting,
we develop the technology,but then we don't continue.
President Carter was putting solar panelson the West Wing of the White House in
1979, and then President Reagan came inand ended the renewable energy program.
And so one of the downsides of ourdemocracy and flips in government.
(18:16):
But what else do you thinkthe United States might take away
from the China model?
>> Jimmy Goodrich (18:21):
Well, I think that's really important.
Just look at other East Asian economiesthat have done very well in innovation
industrial policy.
Take Taiwan and the semiconductor miracle,
Taiwan Semiconductor ManufacturingCorporation, which today produces around
90% of all the world's mostadvanced chips, the smallest chips.
They started out as a Joint venturebetween the Taiwanese government,
(18:42):
48.5% owned by the Taiwanese government.
For over two decades,the Taiwanese government sat there as
a patient shareholder bufferingthem from market forces.
They gave 20 years of tax credits to thosethat purchased the equipment to build
out their factories.
And no surprise, at their early stageof inception when they really weren't
(19:06):
able to on their own make profit, thegovernment buffered that and persisted.
When the going gets tough, for examplewe're seeing Intel struggle in the market,
you have to keep going,
you can't just walk away assoon as it gets a little dicey.
I think the other important takeawaythat China doesn't do well, that we
should not replicate is China doesn'tknow how to exit their investments.
(19:31):
The Taiwanese government, as soon as theysaw TSMC become successful, also in Korea,
when the Korean government had its heavychemicals initiative in the 1970s,
then in the 1980s they builtup their semiconductor plans.
The government of both Korea andTaiwan, as soon as they saw Samsung,
LG, TSMC become successful, theyreduced their investments, they reduced
(19:53):
the government policy cuz they realizedthat it worked and they don't need to
create these companies dependence onthem for their financial success.
I think the other thing we can learnfrom China of what not to do is don't
create companies where the governmenthas overriding control.
That's one thing that's remarkableabout China is that if you look at all
(20:16):
the industrial policy success of differentEast Asian developmental states.
Most of the actors who implementthe industrial policy are private
entrepreneurs running privately heldcompanies, Samsung, LG, Sony, TSMC.
Whereas in China,
vast majority of the government dollarsare not going to Tencent and Alibaba,
(20:36):
they're going to China ResourcesCorporation, and Tsinghua Unigroup,
and AVIC and the China Minerals EnergyExtraction Corporation Limited,
etc, everyone under the centralgovernment's SAC group.
That's starting to change a little bit.
What's interesting is overthe last five or six years,
particularly as US-China techtensions have escalated,
(20:59):
what China's been talking about is Ithink learning from those past mistakes,
something called whole of nation,new type of innovation.
And this means mobilizing the state, butinstead of just these old line state
ministries and SOEs bringing inthe private companies and work together.
And Huawei is actuallythe best example of that,
(21:20):
back to the fantastic book that Eva wrote.
Huawei is now the sort of vanguard ofthat new model where Huawei is partnering
with state-owned enterprises like SMIC or
Research Institutes like the China Academyof Sciences to work together
to take private market orientation,business process, R&D,
management skills and the good techcoming out of the labs and push forward.
(21:43):
Is this a sign they've learned entirely?
I think this might be a one off but it'sinteresting that they're experimenting
with the model that has worked forother countries.
So I would hope that for our industrialpolicy, we're not gonna create
state-owned enterprises, the government'snot gonna have an overriding share that.
They've got an exit strategy, and
then we can make our industrial policy asmarket based and oriented as possible.
>> Elizabeth Economy (22:06):
Yeah, I mean,
I do think that that's builtinto the design as it is, right?
Because we're kind of governmentcapital at about 39 billion and
private capital at 10 times that.
So I think that's the directionin which we're moving.
But I also think that you're warningabout when the going gets tough,
(22:27):
the tough get going but not like goingout the door, but stick with it,
I think is really important andhopefully all these programs
are gonna weather the transition,the political transition.
>> Jimmy Goodrich (22:40):
I think there's a bipartisan consensus around rebuilding our
manufacturing base.
I think the Republican Partypreference is tax
policy to get there insteadof fiscal subsidies.
But remember the Chips and Science Actsincludes a tax credit that's probably
actually exceeding the total amount atthe end of all of this of the subsidies.
>> Elizabeth Economy (23:04):
Yeah. >> Jimmy Goodrich
Right, you're right.
>> Jimmy Goodrich (23:07):
Tax credit is 25%, it's like twice that size.
>> Elizabeth Economy (23:10):
Yep, yep, yep.
But Inflation Reduction Act I think reliesmore on incentives and tax credits and
things like that.
So that was less bipartisan.
>> Jimmy Goodrich (23:20):
So there's something in there for everybody I would hope.
>> Elizabeth Economy (23:22):
Yeah, and now I think a number of Representatives,
members of Congress, even Republicanones have come to embrace the IRA and
the advantages that they've seen fortheir districts.
>> Jimmy Goodrich (23:34):
I see the jobs being created and the job creation, it's real.
I think the part of the challengeof the last four years
is that a lot of these investmentsare huge, they take time.
It's hard to see the immediate results butyou know,
at the end of the dayit'll benefit the country.
So at the end of the day that's great.
>> Elizabeth Economy (23:53):
Right, so you mentioned Lee Kaifu, and
he has been a reallyimportant player in China.
I remember back in 2018,he wrote the book on AI Superpowers.
He said, basically, China eventuallywas gonna win the AI race,
in large part,because it was the Saudi Arabia of data.
(24:16):
[LAUGH] Because it was investingmore money, had great entrepreneurs,
had huge engineering class,huge Internet companies.
And he also said that the Americanapproach is more about like academic
research, whereas China is going tovalue the use of AI in manufacturing.
And I think this brings us back tosome of the first points that you
(24:41):
were making about needing tohave the full cycle, right?
So do you think that this isthe way that AI is playing out?
I mean, the AI competition is playing out,
that the United States is maybe overlyweighted on the academic research and
not enough on the deploymentthroughout the economy.
And whereas China's alreadymoving into deployment but
(25:02):
maybe isn't quite leading in the research.
How do you see this playing out?
>> Jimmy Goodrich (25:06):
Yeah, I remember reading that book at the time and
it's a great book.
And Kai-Fu is obviously one ofthe most knowledgeable people around
China's tech ecosystem, has greatinsight and expertise on the topic.
But did get one prediction right,
that the US was gonna lead inthe hardware, and they still are.
Whether it's in advanced node chips orthe semiconductor production equipment,
(25:29):
the US and the allies still lead.
And he had sort of predicted that wasgonna be an area where the US is gonna
have a strength.
I think in data, it didn't quite turnout to be the way we thought it would.
China is a population of over a billion,but
the rest of the world is four times that.
So at the end of the day,actually I think we had to look bigger.
When you look at Google or Meta orOpenAI, they've got the world's data
(25:52):
available to them, whereas Chinahas data that's created within,
sort of inside the walledgarden of the Chinese Internet.
It's useful within China, butit's not as useful outside of China.
In addition, I think of Chinese AIdevelopment as basically two waves.
The first wave really,when Kai-Fu wrote that book,
(26:13):
was all about facial recognition andneural networks.
And that was really the first wave of AI,and China exploded.
They took off, they lead that technologybecause they had a huge market led by
the government, fueled by demand forsurveillance and security cameras.
>> Elizabeth Economy (26:32):
Exactly.
>> Jimmy Goodrich (26:33):
Every Chinese startup in that era, SenseTime, Megvii, they
were almost entirely focused on policepublic safety surveillance applications.
Or if you go to the street corner in Chinanow, there's 20 different cameras from 20
different agencies that are hookedup to 20 different systems.
And that's really what drove thatfirst wave of AI development in China.
(26:57):
The second AI wave,which is happening now,
is taking fundamentalbreakthroughs in research around
transformer models andlarge language models and
using prediction to figure out howyour phraseology is going to work.
If I say boom, then what'sthe likelihood of the next 20 words and
(27:19):
the models can predict that for you?
The US has created that whole technology,is still leading, but
China is very close behind.
And we're seeing today thatsome of the Chinese companies,
like DeepSeek, StepFun,Kai-Fu's company, 0AI,
are quite innovative on these kind ofrankings of who has the best models.
(27:44):
Chinese companies are holdingtheir own weight.
I think one of the big questions is withthe export controls that do constrain
China's access to the chips,which you need to fuel these AI systems,
is that gap going to getbigger over time or not?
That's an open question that a lotof people are trying to figure out
(28:04):
the answer to.
>> Elizabeth Economy (28:05):
Yeah, so you've spent some time figuring that out.
What do you think?
>> Jimmy Goodrich (28:10):
I think it takes time for these controls to have an impact.
China is able to stockpile,purchase a lot of things.
They're able to, unfortunately, theywere getting access to things like TSMC.
They've been able to smugglea bunch of chips in.
Your rules are only as goodas the ones you enforce.
And I think we've learnedover time that 200 page
(28:34):
regulations are great if they're enforced.
And that's an area where I think that'sbeen lacking over the last couple of
administrations.
But it's very difficult.
I mean, these are huge,deep global supply chains.
They span multiple countries andjurisdictions,
arcane rules that require teams of lawyersto understand, this is not easy stuff.
(28:59):
I think it's a work in progress.
The export controls and whether or notthey're gonna deliver the sort of results
that whether the China hawks say theywill or those that criticize them won't,
I don't think we really havean answer one way or the other yet.
It's too early.
Remember, the Biden administration'sbig package was just two years ago.
(29:22):
And so that's not even reallya full technology cycle.
For example, the semiconductor industry,it takes two or
three years to design a new chip.
So we're still at the very early inningsof this and we'll see over time.
There's one thing however,
is that there's no doubt that China'sfully committed to localizing as
(29:43):
much as fast as they can in every areathat we're trying to constrain the PRC in.
And so it's a big question of small yard,high fence strategy,
have the most delicatenarrow controls as possible.
You also send a signal to China atthe same time to double down and
build out its injuriesindustry as fast as possible.
(30:05):
Do you use all that leverage now,later, when?
It's a complicated question.
>> Elizabeth Economy (30:10):
Yeah, I mean, and
recognizing of course that China wasalready committed to indigenization,
what I think the controls have doneis to accelerate the process, right?
To force them to move faster,to invest more.
>> Jimmy Goodrich (30:25):
Yeah, in every area that we're talking about today with
semiconductor equipment, materials,software, AI chips, memory chips,
China was investing in everysingle one of those before that.
They've certainly increased the intensityand the scope of the investment.
Was that because of export controls orjust a breakdown in US-China relations?
(30:45):
Who started it all?
I mean, that's a hard question to answer.
>> Elizabeth Economy (30:50):
Right, right.
And well, I guess we'll, we'll give ita couple of years, but I would never want
to see certainly the export controls bethought of as the one arrow in our quiver.
>> Jimmy Goodrich (31:02):
Silver bullet, yeah.
>> Elizabeth Economy (31:03):
Funding the science part, for example,
of the Chips and Science Act, I thinkshould also be an essential part of
our competitive strategy whenit comes to semiconductors.
>> Jimmy Goodrich (31:15):
There's a lot of focus on semiconductors,
on TikTok, on batteries, you name it.
Those are all applied technologieswhere we are going to win.
And sort of the future of the next waveof innovation is gonna be leveraging
our amazing university andnational lab infrastructure to invest in
(31:38):
the basic science that then wecan apply and commercialize.
Whether it's in fusion technology,next generation chemistry,
or bioengineering that's gonnabe useful for life sciences.
What's interesting is that China isreally almost at a breakout stage
of investment in basic science.
(31:59):
And it's something thatreally is not covered well,
The Economist did a piece about sixmonths ago on China's basic science rise.
It's really now a science superpower,they're building 20 new national labs and
scientific facilities across the country.
And everything from experimentalfusion reactors to deep earth
(32:19):
exploration platforms,mining colonies on the moon,
deep space probes,everything you can think of.
It's like Xi Jinping has a fascinationwith journey to the center
of the Earth andevery other sci-fi book, in fact,
I think at one point theywere on his bookshelf.
But it's interesting,I recently spoke to somebody,
(32:42):
senior individual in the Chinese sciencesystem, and they said, we're not gonna
catch up anytime soon in these sortof applied technologies of today.
But when it comes to the next wave oftechnologies and high energy physics and
quantum, they're much more confident thatthese big investments they're making five,
ten years down the road are gonna pay off.
Much like the big investments the USmade into its science infrastructure in
(33:06):
the 1940s during World War II, and then onthrough the Cold War paid off with GPS,
the internet,the semiconductor, you name it.
Those were all big government investmentsthat had spillover effects, and
I think China's watched that model,they think it's gonna work for them.
Again, I come back to the bigquestion of like, well,
is that funding gonna be aroundforever and can they sustain it,
(33:29):
particularly if the economycontinues to shrink the way it is?
>> Elizabeth Economy (33:32):
Right, but I think we've also seen that despite the economy
slowing significantly, that thisremains a priority for Xi Jinping.
And so, I think we should not takeour foot off the gas pedal in
anticipation that somehowthey're gonna start to retrench.
>> Jimmy Goodrich (33:50):
Yeah, I should have answered my own question there and
saying I don't think it will,I agree with you.
>> Elizabeth Economy (33:56):
That's fine, I mean, [LAUGH].
>> Jimmy Goodrich (33:58):
0%, you could still take 30% of all that economic output and
dedicate it to science,technology, investment.
Just look at Japan, the zero growtheconomy of the last several decades,
they've added all sortsof new infrastructure.
They're still world leading power,you don't have to be growing at 10%
(34:19):
per quarter to have a hugedent on global development.
>> Elizabeth Economy (34:22):
Let's send that message to the new Congress,
I think it's an important one forthem to hear.
So let me ask one last question,a slightly different area,
and that's on our science andtechnology cooperation with China,
because there's still a large area ofcooperative work that is going on.
(34:44):
I think that many people would arguecertainly in the US scientific community
should be going on.
A lot of synergy amongscientists across the Pacific,
the US has let the science andtechnology cooperation
agreement that had been in place for45 years lapse.
(35:04):
It missed its formal renewal deadline,is that a mistake,
or are we at a point where we reallyshould just be hunkering down and
battening down the hatches andclosing off our research universities?
How do you see that dynamic in terms ofthe cooperation versus the competition?
>> Jimmy Goodrich (35:28):
Well, I mean it's interesting.
>> Elizabeth Economy (35:30):
Element of it, because so
we've benefited here inthe United States to such a significant
extent from that free flowof talent coming from China.
I mean, many, many, of our top researcherstoday hail originally from China and
from other countries, buthow do you think about that?
>> Jimmy Goodrich (35:53):
Well, I think with anything, there's benefits and
trade-offs andthere's no doubt that science is global.
And if you talk to anyscientist in their domain,
whether it's physics,chemistry or semiconductors.
What they're doing requires globalpartnership because no one country
has a monopoly on good ideas and people,
it's just fundamental rule of humanity andidea creation.
(36:16):
In fact, I think it's our greateststrength is that if you look at
the research labs andthe innovation in China.
Despite a lot of efforts,they're not recruiting as many and
as good as global talent that theywould like into their research labs.
Now, you read every day about thisscientist and that scientist that's going
back to China, but the overall trendis that if you're a top scientist,
(36:39):
you wanna work in a Western university.
Or Japanese or South Korean becauseyou're gonna have more freedom,
you're gonna have less bureaucracyprobably, and frankly,
you can create a startup,usually a lot easier.
On the other hand though,
I think we were a bit naive in some areaswhere there was joint collaboration on
super competing technology that wentstraight into nuclear weapons simulation.
(37:03):
Or working with the Chinese Academyof Engineering Physics,
which is their nuclear weapons lab onthings that will benefit their nuclear
modernization program.
Or Bill Gates wanted to do smallmodular nuclear reactor technology in
a partnership withthe Chinese National Nuclear Corporation,
which is working to develop SMNRs fortheir nuclear submarine program.
(37:25):
So there's areas when there's a cleardual use application should be just more
mindful.
I think a lot of it just stems fromeducation working with the research
community to ensure they'reaware of the risks,
to ensure that researchintegrity is really important.
That if you're a university researcher,
you're disclosing where yourfunding's coming from and
(37:47):
that's not something that applies tojust researchers engaged with China.
It's any researcher working withuniversities around the world,
I think MIT has actually done a great job.
They put together a task force,
they looked at how can they help improveresearch integrity and security and
get the buy in from theirresearch staff and professors.
(38:09):
Because it helps them in their work getmore funding and have more credibility
if they are perceived as living up toa really important code of conduct.
And I'm seeing more universities kind ofgo that direction, it doesn't have to be,
and it should not be targetingone group over the other,
frankly, it's a global conversation.
(38:30):
So, I still think we should maintainas robust as links as we can,
recognizing that we shouldput guardrails on technology
engagement where there's gonnabe a clear military application.
And also frankly,
it benefits us from knowing whatthe state of the research is in China.
If we're all drawbridge is closed andbehind our own walled garden,
(38:54):
we're not gonna know what they're doing.
And in some areas, particularly for
strategic applications that could put usat a disadvantage, likewise that means
we'll have to let China knowa little bit about what we're doing.
But frankly, a lot of the researchis published anyways.
>> Elizabeth Economy (39:11):
[LAUGH] >> Jimmy Goodrich
particularly when itcomes to basic research,
I think there's a good waythat we can balance things.
I think we're headingdown that path whether or
not the next four years, it's gonna go ina different direction we don't know yet.
Yeah, okay, so now we're into our quick little lightning
(39:31):
round of questions, so give me yourmust-read book or article on China.
>> Jimmy Goodrich (39:38):
Well, I was gonna say Eva Doe's new book on Huawei,
that's a good one.
>> Elizabeth Economy (39:42):
Okay, [LAUGH] that's fine.
>> Jimmy Goodrich (39:43):
Of course, any book from Liz Economy, I recommend.
>> Elizabeth Economy (39:47):
Not necessary.
>> Jimmy Goodrich (39:48):
The new book on Xi Jinping Thought from Steve Tang and
others is a good one.
I have not read blocking outa few of the others, but anyway,
those are the couple ofthe ones I recommend.
The article, I go back to the Economistarticle on basic science on China.
I think it was a good tip of the icebergprimer of, and something that people don't
(40:09):
think about a lot is the innovation,the labs, the basic research.
And thinking more about China as a sciencesuperpower, as a science imitator,
I think is an important concept.
>> Elizabeth Economy (40:19):
I also think, frankly,
your article on Fortresseconomy is a great one.
Tell me where you published it.
I read it in draft form.
So where was it published?
>> Jimmy Goodrich (40:29):
I published it at University of California, San Diego,
their Institute of Global Conflict andCooperation.
>> Elizabeth Economy (40:35):
That's a terrific article for understanding the direction,
sort of overall direction, of Xi Jinping'sthinking about security and economy.
I think nothing is [INAUDIBLE].
>> Jimmy Goodrich (40:46):
I recently read Xi Jinping's thought on science and
technology innovation.
I'd recommend that one.
Really, if you're gonna try andunderstand how he's thinking about this.
Well, it's all written down foryou in a abridged version, and
it's available on Amazon.
>> Elizabeth Economy (41:00):
[LAUGH] There you go.
For those who are not faint of heart.
Okay, what's one thing that you wishthe Biden administration had done
differently with regard to China policy?
>> Jimmy Goodrich (41:11):
I drive back a little bit to what I mentioned earlier is having
better implementation ofthe export control rules.
I think, is an area that they couldhave done a little bit better,
could have improved upon.
If you're gonna commit to using all thispolitical capital to expend with allies
and industry,spend months drafting a rule,
(41:32):
you have to be committed toactually implementing it.
And I think that's an area where,hopefully over the next administration or
two, there'll be some improvement.
>> Elizabeth Economy (41:42):
Yeah,
what China issue do you thinkwe don't know enough about?
I think you probably answered this, but
just in case you wantto toss out something.
>> Jimmy Goodrich (41:51):
I go back to the basic science area.
I think it's really hot and interesting.
I meet a lot of PhD students,master's students,
young kids starting theircareer in think tanks, and
they're all interested in semiconductorsand AI, AIA, all the time.
But you know what,
there's 20 other domains oftechnology that are really important.
(42:12):
There's very few people worldwide whothink about Chinese science technology,
basic science technology policy.
In fact, I think there's only onefull-time program in the world,
which is the Max Planck Institute ofScience has a two-year study program
on Chinese basic science,and that's about it.
And Marix and UCSD,they've co funded a few projects.
(42:35):
But I can count the number of peoplewho do this in one or two hands.
So I really do hope that the Chinacommunity spends more time thinking about
not just the technologies of today,but basic science and
the technologies of tomorrow.
And there's somuch going on in China in this space.
There's a new national commission,there's a lot more party ideology.
(42:58):
What does that mean forthe future of science?
Who's decoupling fasterthan whom in basic science?
In many areas,you might come to the conclusion China is.
>> Elizabeth Economy (43:07):
Well, sounds to me like you have your hands full with a very,
very large research agenda.
And I hope you can recruit somemore people who are like you,
really outstanding researchers to do thiskind of work, because I agree with you.
I think it's incredibly importantnot only to understand sort of
(43:29):
where China is today interms of its technology, but
what it's doing to position itself,for the next decade and beyond.
So, Jimmy, let me say huge thank you toyou for joining me in this conversation.
It's been terrific, andI really appreciate your taking the time.
>> Jimmy Goodrich (43:49):
Thanks, Liz.
It's always a pleasure.
It's just been a fun chat.
>> Elizabeth Economy (43:54):
So if you enjoyed this podcast and
want to hear more reasoned discourse anddebate on China,
I encourage you to subscribe to ChinaConsidered via The Hoover Institution,
YouTube channel orpodcast platform of your choice.
In the next episode,I'll be speaking with senior director for
the Atlantic Council's Global China Hub,who until this past summer,
helped lead the State Department's work onreducing US economic dependence on China,
(44:17):
Melanie Hart.
And I will talk about her work and
the broader efforts in the US governmentto develop more resilient and
diversified supply chains acrosscore technologies and commodities.
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