The Future of Humanity Is IVF Babies and Chinese Domination
Conversation with Steve Hsu on the Russian-Ukraine crisis, the decline of the West, the Chinese system, embryo selection, and much else
This week on the CSPI Podcast, I was delighted to talk to Steve Hsu, an entrepreneur and professor of physics at Michigan State University. His blog is called Information Processing, and you should definitely read about his many passions and interests there. I was just on his podcast last week discussing my book.
For the CSPI podcast, I was excited to talk to Steve and thought we would be able to cover a wide range of the things he is interested in. I was mistaken; we started talking about geopolitics and the Chinese system, and that took up about an hour. This portion of the conversation covered issues like current tensions in Eastern Europe and American military power relative to that of China and Russia. We discussed how the state of Russian military technology gives the US less leverage than it thinks it has in the Ukraine crisis. As with the withdrawal from Afghanistan, which proved US assumptions about what it was doing in that country to be based in fantasy, a conflict over Ukraine may again expose American delusions.
Moreover, what would a Chinese attempt to conquer Taiwan look like, and what would the US be able to do in response? What should it do? This part of the conversation was followed by a long discussion on the strengths and weaknesses of the Chinese system and its differences with the democratic capitalist model, including the former’s reliance on standardized tests and institutions designed to evaluate and promote government officials. Steve has many interesting thoughts on how the rise of China is going to affect the West psychologically, something I have also written and thought quite a bit about.
In another part of our discussion, we do some thinking about how one should think about China. More specifically, how should a non-specialist go about trying to understand the Chinese system in terms of strengths and weaknesses? We had basically both independently come to the same conclusion, which is that you shouldn’t assume you can figure out how well it works from the outside based on a series of logical steps or by listening to specialists. Instead, you should simply look at important metrics over time in order to judge performance.
The conversation closes on the topics of genomics and embryo selection, including the state of the technology, its current uses, and cross-national differences in attitudes and regulations. The IVF revolution is already here. In Denmark, 10% of kids are already born through the procedure, although it’s closer to 3-5% in most of the rest of the West. Numbers like that are surely much higher among wealthier and better educated couples, and are only going to increase. Steve has been on the frontlines of this revolution, both as a researcher and an entrepreneur.
Some conversations are interesting because the participants find a lot to disagree on. This wasn’t one of them. Steve and I have many of the same interests, and we tend to think about them similarly. But that also made for an interesting conversation, although in a different way, as it allowed for us to get into the weeds on some fundamentally important issues we have both thought a lot about.
A transcript of the entire conversation is below, lightly edited for clarity, and broken down by topic. You can listen to the conversation at the CSPI podcast, or watch the video here.
Steve Hsu’s Background
Richard: Hi everyone, welcome to the CSPI Podcast. I’m here with a very special guest today, Steve Hsu. Steve, how are you doing?
Steve: I’m great. Great to be on your show.
Richard: We’re glad to have you. So I think a lot of our listeners probably won’t be familiar with your background. Can you just go into the short version of your biography? What’s your job and what’s your background?
Steve: I have a very strange background because I’m originally trained in theoretical physics, became professor of theoretical physics. Mainly worked in very esoteric things like quantum information, black holes, quantum field theory, stuff that really very few people [laughter]... You can’t have too many meaningful conversations with people about those topics, unless they are actually professional physicists. And they actually have to be theoretical physicists, not even experimental physicists.
So that’s my main intellectual background, but I’m also kind of well known in Silicon Valley because I’ve started several tech companies, was involved with the whole startup scene back in the day. So I started my first company around, I think, 2000. So that was the first bubble. So now I think I’ve co-founded or founded four tech startups. And then the other way people know me is through my blog and the fact that I do research in an area called computational genomics, which can be controversial, although I think needlessly so.
Richard: And your current job is?
Steve: Oh yes. I have been a professor for a long time. So started out as an assistant professor at Yale, then I moved to the University of Oregon. And then when I was at the University of Oregon, I was recruited to come to Michigan State to be the vice president for research, which again, if you’re not in the cloistered academy, you don’t even know what that position does or is. I can explain it. But anyway, I had a pretty…
Richard: It’s very important.
Steve: Yeah, it’s a big responsibility, like ultimately $700 million a year budget in research expenditures at a Big 10 university. And so I was VPR here until summer of 2020. And since then I’ve returned to being a physics professor, and I have a joint appointment between the physics department and this new department, which I help create called Computational Math, Science and Engineering, which is machine learning, AI, stuff like that.
Richard: So a very busy and full life. And actually, I know you not even from those things, but I know you from your excellent blog called Information Processing. It’s infoproc.blogspot.com. It’s still active, right?
Steve: Yeah. I’m a super old school blogger because I started the blog in 2004. And so it’s been 18 years of blogging, [laughter] so you can go back and look at posts where I’m like warning people about the housing bubble in 2004, 2005.
The Psychological Threat of China
Richard: And I just happened to see this by chance today, that in the early 2000s you predicted the continuing economic growth of China.
Steve: I have a 20 plus year prediction going about economic growth rates in China and what’s likely to happen, the knock on consequences for say US national security, geopolitics. And it’s amazing that roughly speaking my projections going back 15, 20 years have largely been correct. And so now I have more projections for the future that we can talk about if you want to go that direction.
Richard: Well, yes. There’s so much you write about. You write about China, you write about the startup world, you write about psychometrics, polygenic… these GWA studies and what we can do with them, fighting, you’ve done some jujitsu, so it’s hard to know where to begin. But since we’re on the topic of China, I guess we’ll start there because I think it’s a mutual interest of ours. So what kind of projections would you see from here on out?
Steve: I think by now, even five or 10 years ago when we were locked up in this phony war on terror and focused on somewhat irrelevant things happening in Afghanistan and the Middle East, and meanwhile, China was growing stronger and stronger. By now, people who think about national security and geopolitics are pretty focused on China. So the idea that, ok, China’s going to be a peer competitor. It’s probably significantly less fragile than some of the war hawks in the United States would like to think. It has a tremendous human capital base, it has a very high functioning technological and scientific research establishment. I think those are pretty well known things now. I think the part that I bring as a Chinese American and having grown up in a very different cultural era in America, I grew up in the ‘80s. I have been anticipating this.
If you fast forward, you think, when Japan became prominent, it was already a problem for white people, Europeans, to think that, ok, this other race of people are going to compete with us on even terms and actually maybe threaten us. There was a reaction, but that reaction was a tiny fraction of the reaction that‘s going to happen when, for example, China becomes the largest economy in the world or predominant, at least in its sphere of influence in Asia. I think the psychological ramifications and the culture clash between what is still a very Eurocentric view of the world, Western civilization, and a confrontation with this very old civilization, which has a totally different view of itself and of history than the West, I think that whole frame of reference is still underappreciated right now.
Richard: Yeah. I’ve had the exact same thought. Japan, it was rising, but it never had the population to become the biggest economy in the world. And economic growth just stopped at some point. I think they had a population problem and the returns to that started affecting them pretty early on. We classify countries into two camps, democracy and non-democracy. So the fact that Japan had something that we think of as the American system, although obviously it’s a much different system, sort of in our minds, it was somehow not alien or somehow friendly. And the country, I’m too young to remember this, but from what I’ve read, people were really freaking up out about Japan in the late ‘80s and early ‘90s.
Steve: Yes. I lived through that era where there was a famous book, I think maybe by Ezra Vogel at Harvard, Japan as Number One, where they made these crazy economic projections saying that Japan, actually this country with half or third the population of the United States, was going to be the leading economic power. And so there was a frenzy and there were actually things very parallel to what recently has been done to Huawei was probably done to Toshiba and other Japanese companies around that time. But the thing I would like to point your listeners to, if they’re interested in what my prediction is for what this US-China relationship or confrontation is going to be like, I would suggest to read a book by an MIT historian called John Dower. And the title of that is called War Without Mercy.
And in that book, he studies the Pacific War in World War II in great detail and compares it to the war, say between the United States, you know, the campaign in Western Europe after Normandy, and the level of ferocity and brutality when Europeans were fighting Asians was just at a totally different level from both sides than what was seen at least in Western Europe. Now, maybe between the Nazis and the Soviet Union, there was something obviously very ferocious going on there as well. But I think people don’t realize… All Asians know this, I think at a deep level, they know that the West would like to keep them down. The West is used to being on top and wants to stay on top and really would like to keep whichever civilization in Asia, East Asia is rising, would like to keep them down. And I think almost all Asians, even South Asians, appreciate this very intuitively, but Europeans can’t generally let it creep into their consciousness.
Richard: Do you think that perhaps, this is one thing that I wonder about… I agree with you on the fundamentals of China being strong and it has the population, it has deep societal strengths, including high human capital. And so I wrote a paper called, “The Inevitable Triumph of China” [note: actually “The Inevitable Rise of China”] or something like that. I forget the exact title, but the idea that China’s going to become the largest economy in the world. I think that’s pretty much baked in and you would have to have some black swan event for that not to be the case. But is our capacity for delusion infinite? We might not be the same, it seems like we’re less connected to reality than we were when Japan was rising 30 years ago.
So, for example, you shouldn’t get your information on how Americans are thinking just from like Twitter responses. But, I look at the people who are experts in foreign policy, they don’t seem much better. You put up any metric of how well China’s doing and people say, “How can you believe the Chinese Communist Party?” You could tell them anything, you could say, “China has fewer COVID deaths.” “How do you know that?” So it seems like we are very, very able to be smugly satisfied with who we are, compared to a country like China. As much as we hate each other and we have our domestic politics, I see Americans with just an incredible capacity to just continue believing what they want to believe. Is there anything that’s going to knock us out of that stupor?
Steve: It’s possible that for the majority of Americans left to their own devices, and even the majority of academics left to their own devices, they could stay in that blissful unreality for a long time. But you also have a whole population of people whose job is to look at tail risks and to look at threats from other countries. So this whole national security establishment now is very much engaged in ginning up a kind of anti-China narrative and really emphasizing the threats from China. And of course, it dovetails nicely with their self-interest because the military industrial complex would love to have a good enemy to point to, and they can build some wonderful systems, hypersonic weapons at a billion dollars a shot. So all of this I think is going to self reinforce toward... I’m afraid we will end up in a cold war, even though most Americans probably don’t have any strong reason to fear or despise the Communist Party of China.
Richard: Yeah. I think the same thing too. That’s the theme of my book that basically the threat perception adjusts to the reality based on what can sell and what can basically keep things as they are and keep funding the military, giving these people power, giving these people a sense of self-importance. That’s my model of the world too. So, they have an interest, ideological and a material interest, for ginning up a lot of anti-China stuff. But still, I think they have a little bit harder time. I don’t think it’s as easy to sell the country on a new cold war as it used to be.
So we had 9/11 and this was the biggest story in the world. So, 3,000 Americans die, they got a good 10, 20 years of wars out of that. [laughter] And then today, it seems like we’re so divided. If one side becomes very anti-China, it’s like the other side will not want to be so anti-China. So you find that with Russia, liberals really hate Russia now. They blame them for Trump. And so conservatives, they have a hard time getting mad at Russia. And it seems like conservatives are really going all in on China. And sometimes they go all in on China, just as a way to own the libs. They’ll say, “why do they focus on Russia, when China is the real threat?” But I notice that even though elite Democratic… the top levels of the Democratic Party tend to take a tougher line on China, their heart just doesn’t seem in it, and I feel like their heart isn’t in it because conservatives are so anti-China. So are we maybe a little bit too divided and fragmented to really do anything like a cold war without some major event, like 9/11?
Steve: Yeah, that’s a very interesting question. So the dynamic you just identified, I think is for real, although I have heard it said by many people that the one bipartisan issue in DC is anti-China competition.
Richard: I’ve heard that too.
Steve: So, it’s not clear which of those are going to win out. I want to say one thing though, just to clarify what I was saying about the national security state. If you’re in a think tank or you’re a military planner, you have to look at worst case scenarios. So you have to look at, this other country has four times our population, it might get to two times our GDP within our lifetimes, they’re technologically advanced. So in the worst case scenario, if they do want to be mean to us, we have to really worry about that tail risk. So, I don’t want to criticize those people. I think there are people who are honestly sounding the alarm that the US basically stopped developing weapons systems that are appropriate for peer competition, focusing more on very expensive wars of occupation and pacification in Iraq and Afghanistan. And we are actually behind the Russians and the Chinese right now in many specific areas of conventional military technology.
So I think those people are doing their job. It’s their job to warn about risks in the future. What’s different is then when the media get into it in the New York Times, and the CIA starts to manipulate public opinion about how concerned we should be about China. That extra step I think is a real problem, but I’m definitely not against people who are sounding the alarm that, “Hey, there’s a peer competitor that we’ve been ignoring for a while that we should at least think about.” I think those people are completely right.
Chinese and Russian Military Technology
Richard: I agree with all that. You mentioned... I read a little bit about this, about the Russians and the Chinese. I think a lot of people know the Chinese are good technologically, but as far as the Russians, they have some developments in missile technology that, from what I understand, some people say that they’ve just completely obviated the use of missile defense that we have in Europe. Do you know anything about this and the actual Russian... Because it could be very relevant given the current geopolitical situation.
Steve: Yes. I’ve been following this pretty carefully because, well, I have a technical background so I’m able to follow it somewhat carefully. And the real issue is that the technology is now mature for hypersonic weapons. So both in terms of guidance systems, sensors, and also the basic aerodynamics material science to protect the missile or the device, as it’s moving at a hypersonic speed through what could be actually a plasma that’s created in the atmosphere. And then also even things like scramjets, which are sustained propulsion systems for things that might be moving at Mach 5 or Mach 10.
The Russians have continued to develop that technology, the Chinese have also developed that technology. The US just dropped the ball and stopped being interested in it over the last, at least 20 years, I would roughly say. So we’re in a situation now where the Russians and the Chinese have missile systems that, my personal opinion is we do not have good defensive countermeasures against. So the moment things go hot in Europe, I think NATO headquarters, I don’t think there’s any way they’re going to defend NATO headquarters. If the Russians want to take it out with a missile – conventional missile, just a completely conventional missile – they can take it out.
And same thing with supply and fuel stockpiles in Western Europe, the main ports by which the US would try to reinforce Western Europe, they’ll be taken out very quickly at the beginning of the war. I think it’s amazing the people in the State Department or even the top political leaders in the US just have no appreciation of what even conventional, even if like hypothetically, which I don’t believe we could keep it from going nuclear, if it were just a purely conventional war with either peer competitor, China or Russia, the US is just not prepared for… it could be many thousands of casualties on the first day. And that would happen even if the Russians wanted to minimize casualties. Suppose they just said, “We want to kill as few American soldiers as possible, but there are just a bunch of systems that we want to take out on the first day when it goes hot.”
Compared to 9/11, 9/11 will seem like, oh, that was a holiday, or something because many more than that number of people would be killed on the first day. I just think people have no sense of what they’re dealing with when they... I don’t feel we have really strategic interests in Ukraine. So why are we poking this huge bear that could just swipe us with the paw and maul our entire face? Why would we do that? It’s just ridiculous.
Richard: So, I should say for our audience, we’re recording this on February 1st, 2022. So by the time this is released, the situation in Eastern Europe might have changed. Everything we’ve talked about might have already come to fruition. So just letting people know that. So the situation in Eastern Europe back from the Cold War, the theory was basically, you weren’t going to match the Russians man to man. They always had the manpower, they had the ground troops, and they had the tanks. And we put basically the troops in West Germany as a tripwire, so the US would be involved. What the US had was nuclear weapons. Russia had nuclear weapons too, but the fact that the US had a lot of nuclear weapons was sort of the equalizer.
So what you’re telling me is Russia still has basically the manpower advantage in Europe. It also has an overwhelming advantage in the air through its missile systems and the nuclear weapons, I think Russia has slightly more, the US slightly... We hope it doesn’t get to that. We’d hope it doesn’t get to that. But basically everything short of nuclear weapons, Russia has an overwhelming advantage. Add the energy supply control over Europe too. And so, the way we talk about this in the media and in the discourse, that understanding seems not to be there. It really seems like we are overestimating the US leverage here.
Steve: Absolutely. Just a minor correction for the military nerds out there. I think the one place where the US still has pretty strong advantage over the Russians is in air power. So, if our planes get in the air, in air-to-air combat between our fighters and their fighters, we have a significant advantage. But it won’t go that way, because with missiles, what they’ll do is they’ll try to take out our airbases right away and stockpiles and things. And so there won’t be the air dominance that we had in Iraq or other recent wars, even though we do have better planes than they do. Now, in terms of, the balance of power in Europe, we do not want to mix it up with the Russians right now. We have a hollowed out military that was really... To get promoted in the military over the last 20 years, you were doing entirely different things than preparing for a conflict with a peer competitor. And so we are not prepared in any way for it.
Richard: Yeah, right. And do you have a sense of … the other flashpoint besides Ukraine is Taiwan, maybe a more long term problem. If China wanted to retake it conventionally through military means, how do you handicap that? How do you see the situation there?
Steve: Well, I think there’s significant uncertainty about the actual landing and occupation of Taiwan. So just because of an amphibious landing involving very large numbers of soldiers, obviously very challenging for anybody. I think the things which I’m confident about are that Chinese missile technologies are for real, and here I’m talking about conventional weapons. So I think US carriers will not be operating anywhere near Taiwan in the future because they’re very vulnerable to attack by Chinese missiles. The distances between American bases and the first island chain and Taiwan are quite vast. And the F35 is a very limited range plane. So the ability for the US to reinforce Taiwan in event of conflict is very limited and very dangerous. So as I was saying, 9/11 seems like the most traumatic event you can think of in terms of loss of American life, but one carrier group going down and that will be it. The president of the United States will have an unbelievable political crisis on his or her hands. And that would happen, any carrier group that gets close to Taiwan is probably going to be taken out.
The other thing which I think people who don’t understand the technology fail to appreciate is that it’s very easy for the PRC to sea blockade Taiwan, even Japan and South Korea. Now those countries get about 90% of their energy and over 50% of their calories from food imports that come by sea. And the current state of Chinese ballistic missiles is such that they can hide their launchers deep inside, deep in continental China, but because of satellite targeting and all kinds of things like this, they can easily just say, “Look, any oil tanker we see within 1000 kilometers of the coast of Taiwan or the major port Kaohsiung we’re just going to take it out.” And they’ll take out one. And then there will be no more commercial services sending oil to Taiwan.
And there’s no countermeasure for this because other than going nuclear, there is no countermeasure for the United States to stop China from enforcing a sea blockade on any of the countries that I mentioned. So, they have a lot of cards to play. Now, of course, at that point it’s just war, it’s World War III but I don’t see a lot of really realistic analyses of how this is going to play out.
Richard: Yeah. People talk, they’ll focus on one thing, they’ll focus on the amphibious landing on Taiwan and how hard it is. And then I’m just looking at a map and I’m seeing here’s Taiwan and it’s just China and then there’s just the ocean. [laughs] It’s like, what about that? If you can’t get food, if you can’t get energy, it doesn’t matter. You don’t need the landing. You can pass...
Steve: I am willing to say that how an actual amphibious assault on Taiwan would go is still uncertain and needs to be gamed out much more seriously. And actually, if you could read Chinese, you can read all kinds of really detailed analysis of how it’s going to go, both by amateurs and also by the Chinese military. And it’s kind of amazing because we have highly paid experts in DC who are supposed to be thinking about these things, but I’ve yet to meet one who actually understands what the Chinese PLA is thinking, what even amateur analysts who are still pretty technical, like people with backgrounds in defense technology, even these amateur analyses of how a Taiwan conflict would go are not really incorporated into thinking of our top policy people in the United States.
Richard: My view of these things is, I think you’re right. I think we’re just not realistic about what US military power can accomplish. We’re not realistic about how much these conflicts in the backyards of China and Russia matter to us. I guess the one thing I am a little bit more optimistic about than most, and it’s optimistic in the sense of like, I think there’s a 10% chance… if China tries to take Taiwan, I think there’s like a 20% chance we go to war instead of like an 80%. So I’m optimistic in that sense. I think it’s very easy for the United States to give security guarantees when nobody’s paying attention. When the US was expanding NATO to the Baltics, nobody cared. There was no public discourse, there was no reaction.
I think back to when Obama said there’s a red line in Syria, and it was very easy to say there’s a red line in Syria. And then there was a chemical weapons attack. And then, there was an outcry in public opinion. And then basically, Obama just did more of a symbolic strike and really didn’t do anything else. And this is like conflicts, which just these countries can’t fight back. So that you know we’re talking Syria, Iran, like we haven’t been reckless enough to actually go to war with these countries in a serious way, like an invasion, like we did in Iraq or Afghanistan.
I think it’s easy to sort of war game how it works out, but I think that when foreign policy becomes the main issue, it’s more about what the president wants to do. And he’s looking deep into the abyss, right? And he’s got to make that decision, at that point it’s not going to be the lobbyist or whoever, who the biggest loudest mouth is. He’s going to be thinking about his own legacy and the future of humanity and his own politics, right? And so …
Steve: I hope you’re right because obviously mistakes can happen. And so I agree with that whole analysis, but still the US president could make a mistake. [laughs]
Richard: Sure. Oh yeah. Oh yeah. I mean, if China goes into Taiwan, like a 10% chance, 20% chance of a nuclear war is still a terrible scenario. I think a lot of people think it’s like a 70% chance the US would get involved. And, yeah, I wouldn’t be as confident as those people, I think a lot would change.
Steve: I think in the kind of think tank, policy think tank conversations that I’ve been in the last couple years discussing this exact issue, the future of the US in greater Asia, the following point is often made. So what is the real reason that the US has to defend Taiwan, right? We don’t actually have a formal treaty obligation to do it, but why do we have to do it? And the logic is something like this: If we give up on Taiwan, it will show all these other allies in Asia that we’re not serious. And if we’re not serious, then the Chinese will come to dominate the region and we can’t have that so we have to fight in Taiwan, and we have to risk actually nuclear escalation and multiple aircraft carriers going down in the first few weeks of the war.
So if you agree with that analysis, then what you’re basically saying is the US is going to risk World War III to remain the hegemon in Asia, right? So how important is it for us to be the hegemon in Asia? Is it worth risking World War III? And I think the US president might say, “Eh, okay, we don’t have to be the hegemon in Asia, we can let them have Taiwan.” So yeah, I think that’s what it’ll come to.
Richard: Yeah. I mean, it’s like, even if we don’t do anything, if we do nothing … Like, okay, let’s say China doesn’t move on Taiwan, but just sort of the trajectory of things is such that China’s going to be by far the largest economy, there’s more economic integration continuing, there was just another free trade deal in the last year, the RCEP. So the natural sort of state of East Asia is going to be China being the dominant military and economic power, even if it never moves on Taiwan. So it’s like, if that is unthinkable, that’s a scenario we have to risk World War III over, then even if China doesn’t go after Taiwan, shouldn’t we just go to war with China anyway, because it’s that important?
Steve: Well, I mean, if you’re Bannon, Bannon was already saying stuff like that a few years ago saying like, we got to stop them now. So, yeah, he was in a sense self-consistent in his thinking like, okay, big problem if China instead of the US becomes the hegemon in Asia, we have to stop that, it’s easier to stop it now than in the future, so we have to start.
Richard: I know Bannon has pretty out there views on China, did he actually say we need to go to war today a few years ago, was that actually his position?
Steve: I don’t know if he said that explicitly, but I believe that he and Pompeo both think that way.
Richard: Yeah. Well, yeah. I mean, I don’t doubt it, I just wonder if they’ve actually said that out loud.
Steve: Maybe not, if anybody said it, it would be Bannon because he was not even in official office for most of that period.
Richard: Yeah. Right. So yeah, it’s a fascinating topic and it’s great to just have someone with a little bit of technical background that can understand these things. And I just look at things like GDP and I just look at things like geography. And this is why my book on foreign policy is a little bit of an attack on the realist school, but the realists at least they take geography and they take power very, very seriously, and they can look at a map and they could say Eastern Europe... I mean, that’s not our place. And then some of them have actually more hawkish views on China, like John Mearsheimer does.
But still, I mean, these people are at least somewhat connected to reality while I think a lot of the people in DC tend not to be. I mean the same people, if you think the Afghanistan and Iraq wars weren’t run very well, and they weren‘t, you have to just understand this is the same class and these are the same people and there was no reform and there was no purge after these conflicts. It‘s the same people thinking about what to do about Russia.
Steve: Yeah, and to go back to the technology, it wasn‘t just that the officers that got promoted were the ones reading Petraeus’ books on how to fight insurgencies and stuff and not how to deal with hypersonic missiles. At the same time, we just didn’t upgrade our technology. So in, for example, this Syria conflict where the Russians placed a very small presence in Syria, but were able to basically hold off the United States, there was a point at which we launched, I forgot the exact number it might have been 16 tomahawks or some pretty large number of tomahawks we launched at targets in Syria.
And what wasn’t really discussed very much is a lot of those tomahawks were shot down. These things, these are subsonic so a fighter can go and shoot them down. I mean, they‘re pretty slow, dumb technology compared to hypersonic missiles, which are going Mach 3, 4, 5, 6, 7. So I mean, that’s old stuff and people who watched the Syria conflict carefully saw some interesting things about US versus Russian military technology.
Richard: Yeah. And just to be clear, what you’re saying is not just you were talking about the state of technology. The state of technology, it’s not just like the offense is now favored over the defense, it’s just that Russia, if you compare Russia’s offensive advantage versus the US advantage, Russia’s just ahead technologically, is that what you’re saying?
Steve: Yeah, I mean, if you get into the nitty gritty, say you want to build a hypersonic missile, you need to, for example, have hypersonic wind tunnels. You need to actually have wind tunnels where the speed of flow is well above multiple Mach. And the US doesn’t really actually have any and Chinese have like a Mach 30 wind tunnel, several of them I think. And so that’s a very expensive thing, you need very specialized people. My father was a professor of aerospace engineering.
Richard: Tell us what the wind tunnel looks like, just explain what it is.
Steve: Well, if you want to model the right shape of the missile that you’re going to be using and you want to figure out how superheated it’s going to get from the plasma friction as it’s moving, you’re going to want to develop sensors that can work through that plasma layer, you’re going to have to develop materials that can withstand that kind of pressure and temperature. So there’s all kinds of really gnarly engineering that’s super specialized, it has no commercial applications whatsoever, and you need really smart people doing it. So if you do not emphasize it, it’s not going to get done.
And so basically if you look at recent hypersonic tests of the United States, they’ve all been failures. You can’t just go like this and suddenly, oh, well we have smart people working at Apple. If we need hypersonic missiles, we’ll have hypersonic missiles, it doesn’t work that way. So the Russians never gave up on all kinds of aerospace, material science, aerodynamics kind of research that they were strong in during the Cold War and they managed to preserve enough of it that they’ve still been able to upgrade their weapon systems and the Chinese now are making very, very fast strides in advancing their weapon systems.
Richard: Yeah. And I mean, China, I think it seems like they’ve underinvested in their military relative to their economy and sort of their human capital. So if Russia is punching well above its weight as far as military technology, I think China is still punching way, way below its weight, right?
Steve: Oh, absolutely. They’re at 2% of GDP on defense and they could easily crank that up. I mean, if you think about where is the manufacturing capability, where is the ship building capability in the world? It’s all there, it’s not here. So I just think we do not want to get into a cold war with them, it’s not a good thing for us.
The Chinese System
Richard: Yeah, yeah, I think that’s right. So just to shift topics a little bit, but not too far, have you been following the cultural developments in China? Because it seems there’s some serious things going on. I mean, it seems like, they’re thinking about the birth rate issue seriously, they are clamping down on video games, clamping down on effeminate men on TV, just this cultural sort of right turn that’s really scared the media. I think there was an article, I think it was in The Washington Post saying “we have to think about it like a fascist regime,” right? It has fascist values, it wants people to procreate and it worships masculinity, and you could see how this could get liberals sort of on board with the cold war. What do you think is going on there? What’s your analysis of sort of what the government’s thinking and what they’re doing?
Steve: Well, remember I said that, this may seem overly dramatic, but going back to a kind of perspective on the world that anyone with a kind of either South or East Asian heritage would just naturally have, even if they grew up in the United States, they would from talking to their uncles or whatever, they would know a little bit about this. These guys feel like they’ve been under siege by the West for a long time. So they don’t feel like they can just let up and relax now.
So of course they wanted to use technology transfer, manufacturing capability, transfer to build up their economy, but they never lost sight of the idea that the West was very threatening to them. And so this idea that, okay, we have to be pronatalist, we have to get our reproductive rate back up, we have to make sure our society’s ready to bear hardship, we have to help the poorest people in the country. These are all important priorities of Xi Jinping. So these are real things that are going on there. Now, whether they’re ultimately going to pay off or work for China, it’s unclear, but there is a very different focus of the society there than say in the United States.
Richard: Yeah. Have you seen Dan Wang, some of his writings on the Chinese system? What he’s saying about basically the idea is to transfer human brainpower away from software and consumer products towards things like nuclear fusion, things in energy, things like tangible goods.
Steve: Yeah, it’s really amazing because if you go to Silicon Valley circa five to seven years ago, people would say things like, “I wanted a flying car and all I got was 140 characters of text,” the point of that being that it’s too easy to make money through social networking, kind of lightweight internet-based startup ideas. It’s much, much harder to make money through any kind of real hardware advance or physical system advance. And so that was a kind of clever take that’s persisted over the last decade or so in Silicon Valley. And now you have people like Eric Schmidt and others who are trying to reignite US innovation by starting up companies that are doing real physical things. And so it’s not a wrong take, but what’s interesting is that they have more state capacity in China.
So that take, which is not a wrong take, it’s a right take, the government said, yeah, that take is right. We don’t need another food delivery company or ride sharing company in Shanghai, what we need is some of those engineers to go and work on AI for missile systems or faster high speed trains, or whatever it is. So they have the state power to recognize that, and actually cause a shift by using market forces, by basically signaling that we’re not going to let Alibaba and some of these other companies make unlimited profits the way that Facebook and Apple –and maybe Apple’s not a good example – but Facebook and Google have been allowed to make here. We’re going to cap them. We’re going to kind of kneecap them a little bit and that will push some of the human capital into these other areas.
Richard: Yeah. And here, I mean, in the US, the fact that all this brainpower went into consumer products and software development, is that just sort of a market failure? These other things like new energy systems and stuff like that, I mean, that is a public good, and it just tends to be underprovided for while if you have a strong state, you can just direct people, or you can just actually clamp down on the stuff that you want less of, and just let the things you want more of take off and support them.
Steve: In a way it’s not a market failure in the sense that people like Zuckerberg were brilliant in figuring out that, hey, these social networks have a special kind of lock in characteristic, right? If you are the biggest, everybody’s going to want to be in your network and number two is going to disappear completely so you get sort of monopolistic kinds of advantages. So it’s totally a market success that a bunch of entrepreneurs figured this out. And so all the action was to try to do a land grab and become the dominant ride sharing platform, the dominant Airbnb.
Richard: Yeah. I was talking a market failure in the sense that these other things that are sort of public goods are underprovided for, right? So people were doing what made sense within the confines of the system and they were doing things that brought value to people, but there’s other things that they could be doing that would bring more value to society as a whole, but the producer of these things can’t capture enough of the profits from it so there’s just underproduction here.
Steve: That’s correct. And also, just another reality that intrudes here is just the reality of technology. How hard is it to advance the technology in batteries? How hard is it to advance the technology in flying cars or something like this? It’s just not easy. And so even if the market knew that that was a good thing to do, it doesn’t mean that necessarily the people who go and bang their heads on it are going to succeed. It may take them two decades to succeed.
Richard: So, yeah, that’s like a time horizon argument, right? It’s just that it can be done, but people want rewards, if not right away at least not in two decades in the future.
Steve: Yes, exactly.
Richard: Right, yeah. So this is a…
Steve: I mean, a lot of these social network innovations or sort of internet kind of applications didn’t require any new technology, actually, they just required sort of combining existing technology.
Richard: Sure. So going back to the cultural thing, my view of China and the birth rate issue, and I think it’s a huge issue for humanity because China’s one fifth of the world’s population, so what happens to their population is going to determine to a large extent the future world population. And it’s sort of an open question how much modernity causes low birth rates and sort of how fixable it is by government intervention. So I’m watching what happens to Chinese fertility in the next 5, 10, 20 years, I think it’s a very, very important metric. And my model of it is basically, look, if China wants to get it up, wants it bad enough, they can do it.
If it came down to it, you could just tax all single people at a hundred percent, right? You can tax people with children at 0%, you can just turn the propaganda up to 11 and value that above all other things. So if you really, really want to do it, you can, it’s just a question of how serious you want to be about it. And you pay attention to Chinese culture and Chinese media and Chinese elite discourse. What’s your understanding of how seriously they take the birth rate issue and how far do you think they’ll push on it?
Steve: I think that again, just as I think in your recent book you pointed out that a lot of what drives the actions of society are certain interest groups, right? It’s not like there’s some grand wizard who plots a strategy and then that’s the strategy that the country follows. China might be a little closer to that because you might say, ok, Xi Jinping is, in terms of being the single most powerful actor on the planet, maybe he is actually an autonomous actor. But he still has to bring along all the other power centers in the Chinese government to say, “Hey, a pretty significant chunk of GDP we need to spend now so that 20 years from now we’ll have enough workers entering the workforce.” And I don’t know whether he’ll be successful in turning the ship that dramatically.
So I think the government will… it is clear the government will try to, for example, all these pretty drastic things they’ve already done, like eliminate private tutoring and things like this, to make it less expensive to raise a child and allow less affluent families to compete with more affluent families, all these things are a signal that they do realize the importance of this and they are going to try hard. The question is, are they going to try that hard? And that, I don’t know.
Richard: Yeah. Okay. Yeah, that’s to be determined. There’s another thing I want to ask you about the Chinese system. This is an issue in the United States about standardized tests and meritocracy, what is the role of standardized tests in Chinese admissions at universities? And then it also has a role to play in the civil service. Can you talk a little bit about the role of these sort of psychometrics and Chinese government policy or any kinds of tests that they use compared to the United States?
Steve: Well, it’s interesting because they’re not as into the kind of abstract psychometrics that in the United States, things like IQ measures and things like this, that some Americans are focused on. But they are very invested in meritocracy. So the college entrance exam there is a monster test, and it’s both a cognitive ability and a, in a sense, conscientiousness test because you can’t do well on that test unless you study very hard. In the United States, if you were a smart but lazy kid, you could essentially, especially in the old days, when the ceiling on the SAT was super high, you could literally get a one-in-a-million score on the SAT and then people would look very seriously at your application, even if you had Bs and Cs in your high school transcript, or even if you just dropped out of high school.
But in China, it’s not like that. You have to basically do well on this gaokao. And the gaokao is both a knowledge test and an ability test. So there are really hard problems on the gaokao, but there are also lots of things where you just have to know a lot of stuff. So in a way they’ve not decomposed conscientiousness from raw g or cognitive ability the way a US psychometrician would think about it. However, they don’t care and so they have this system that does... I mean, they have plenty of people, plenty of talented people. So they are able to select very able people for their top universities.
And furthermore, the Communist Party itself, the whole system of promotion within the Communist Party, this is not understood by most Americans, is a very long timescale meritocracy. So anybody who reaches like the top level of say the top 300 people in the Communist Party has had to do things like run a city with population of 10 million or run a province which is the size of Germany. And for example, famously the current guy who is the boss of Zheijang province was previously the head of the maned space program. So there’s actually circulation between different parts of government, not just like political governance but also even technical development or major companies in China that are state owned. You might run or have a senior position at one of the state-owned companies and then become a city manager or provincial governor.
So all of these things, they’re long-timescale tests of your capabilities. And it is real. I mean, when you meet the senior people there, again, they could be dull, lifeless, bureaucratic type people, but they are pretty able. No one says like, “Hey, I had a conversation with somebody from the Ministry of Finance in China, they didn’t under actually understand how options pricing works.” No, they actually do understand how options pricing work. Whereas people here at the treasury or SEC often don’t understand how options pricing works. So anyway.
Richard: Yeah, well, yeah, there are some political science papers where they actually show that you can connect objective performance as far as GDP growth to promotions in China. So those that do well in growth at the local level, mayors or provincial leaders or whatever, tend to get promoted. And those that don’t tend not to. So there seems to be an evaluation system based on actual hard metrics.
Steve: And this is something that … I’m not a super expert on this, but I’m very interested in this issue. So I’m always asking real China specialists and typically Chinese China specialists about this. A lot of these functions, the idea of having bureaucrats that advance through good performance and then having actually a whole sub-entity within the Communist Party which there’s a whole separate independent entity that evaluates these people…
And there’s this whole tradition going back to imperial times of the idea that you have a core of bureaucrats, they’re supposed to be extremely able. And furthermore, they’re supposed to be monitored and measured for performance by an independent body. And all the subtleties of bribery, and you should assign a guy from this region to run that region so he doesn’t have a lot of local mafia connections locally, he’s just a stranger from totally different part of China and he’s got to run this thing and he’s going to be monitored over a five year timescale. All those ideas are very old, they’re not new ideas in China, they’re old ideas, they’re classical ideas. So the idea that, “oh, there’s this communist party that’s very brittle and it’s a lot like Stalin running the country” is actually wrong. It’s missing this whole cultural historical component of governance in China.
Richard: Yeah. And the people who select and manage the sort of the cadre system, that’s the Communist Party, right? So the Communist Party at one level up appoints the people at the level down, right, so it’s like national and provincial…
Steve: Yeah. But if you were to draw it, a kind of HR org chart functional diagram, like you would have for a company like Google or something, there is this pyramid where you’re rising in the party and to rise, you’re talking about a 20, 30 year rise. You join the party when you’re out of college and it takes you 30 years to become a senior official right? So as you’re rising in this pyramid and the pyramid is getting smaller and smaller, right? The base of the Communist Party, it’s 90 million people, right? But officials maybe have like a million people at this layer, but when you get to the top layer, it’s an order of magnitude at each step, it’s getting smaller.
But the thing which people miss is there’s a separate silo that you would draw over here, which is the evaluators, whose job it is to actually go around and investigate these guys and see, are they corrupt? What is actually happening in the city? Are the growth numbers faked? How did he raise the tax revenue? So there’s this whole separate evaluative organization within the Communist Party. And so again, you could imagine it doesn’t work well, maybe there’ll be periods of time that it is working well. I think it is probably working well right now.
Richard: Yeah. I think it’s fascinating as sort of an alternative model of governance, because if China didn’t exist, I don’t know if we would think that a modern government could work like this, because if you look at all the advanced states, they sort of look similar, right? The US, the UK, Japan, they have a civil service, they have elections, they have a market economy, and you might think this is what modernism is, this is the only way that government can function at the end of history. And then you have China and it’s just a completely different system, right? And so it’s sort of a proof of concept that whatever we’re doing – and if it’s not working, that’s pessimistic, because then you could say we’re going to be stagnating and there’s no other possibility – it’s at least a proof of concept that something different is possible.
Steve: So when the early contacts between European civilization and China were happening, people like Leibniz, the famous philosopher and mathematician, he was a huge fan of Chinese society and governance and all kinds of things. And so lots of ideas that were prevalent in China got popularized in countries like France and the UK. So if you actually ask, when did they start having examination systems for admitting people to Cambridge or top universities in the UK and France? Turns out that was an adopted system from China. So you can actually find arguments in Parliament where some of the parliamentarians in the UK, in England, are complaining that this is an unnatural system. It’s been adopted by China, and this is not how we should select students for university or the civil service. So even the civil service in these countries is somewhat modeled on... Maybe they didn’t have a really realistic idea of how it was being done in China, but they had the idea that there should be some kind of meritocracy, competent bureaucracy. And so, if you go back, many of these ideas were actually imported into the West from China. But it is true what you say that the system there is unique. It’s quite different from actually what they have.
Richard: Yeah. I did not know that. I didn’t know that the history of standardized tests in the West actually came from China. That’s accurate? So there wasn’t like a... Was there anything resembling a standardized test before we got them from China?
Steve: No. In fact, the debates in parliament are very interesting, because, obviously, there are a lot of people were saying, “This is unnatural. This is some strange Chinese invention. We should not adopt it in England.”
Richard: That’s interesting. And were the British the first to do this? Did continental Europe have anything like that?
Steve: I’m not sure if they were actually the first. But there are people who have both in France and the UK, or in England, who have written about how this adoption of examination systems, entrance exam systems, came to be adopted. And so you can find actual historical documents.
Richard: Do you have a reference for that so we can put it…
Steve: Yeah, I have some blog posts on this. I’ll send you the list.
Richard: Okay, great. And for people who want to read more about the Chinese system, do you have books or articles you particularly recommend?
Steve: That’s a good question. You mean like the current system, how promotion…
Richard: Yeah. People who just want to understand just how the whole thing works.
Steve: The most accessible discussions of this, there’s a guy called Eric X. Li, who’s a venture capitalist in China, but he was educated at Berkeley and he’s very fluent in English. And so he’s often been like an apologist for the Chinese system. And he gives TED talks and things like this. And sometimes he’ll actually have slides showing exactly how the promotion process works in the Chinese system. At a more rigorous level, there’s... I forgot his name now. There’s an American philosopher, political philosopher, who’s now at I think Beijing University or Tsinghua University.
Richard: Dan Bell. Bell is his name. It’s called The China Model.
Steve: Bell, yes. Daniel Bell. Yeah. So Bell and his circle, they’ve been writing a lot I think about a lot of these things. And so people in the West would say Bell is an apologist for the communist system, but at least you get some details of how he thinks it operates.
Richard: Yeah. I’ve read Bell’s book. I think the detail is actually ... It’s just a little bit of an apologist for the system, but it’s from a political theorist perspective. So it’s more considering the justness of it and then, if you just want the details to understand. There’s a…
Steve: Yeah. Eric Li is better for the actual details, like the actual diagram of how the whole thing works. You can find it in his talks.
Richard: Yeah, yeah. And Li is good. There’s a very accessible book by an Australian journalist, Richard McGregor, called The Party.
Steve: Yes, yes.
Richard: That one’s good too. And then there’s a…
Steve: I should say that we’ve been painting it as a functional, reasonably well, high functioning system.
Steve: But you can find many cynical Chinese who will just say like, “The party’s totally corrupt. It’s bullshit. Only private companies in China are the ones creating the value…”
Richard: Yeah. What’s the steelman for that? I think we’ve been given a positive spin, because I think the media is actually more towards the system is corrupt and terrible. So I think it’s good to have a counter to that, but what’s the best argument for the other side?
Steve: You can find academic studies on the level of corruption in the Communist Party. In fact, there’s... Gosh, sorry. I haven’t looked at this in a while, but there’s even a recent academic book by an American. She’s of, I think, originally from China, but she’s a professor here in the US and she’s studied corruption in China.
Richard: Yeah. I think you’re thinking of Yuen Yuen Ang. I think she’s actually at the University of Michigan, so she’s your neighbor. I don’t know how close that is to Michigan State. [laughter]
Steve: Yeah. Good. Yeah. You actually know this stuff, because your background is in political science.
Steve: Yeah, it’s tough to find really good sources. Obviously, if you read Chinese fluently, there’s a much more diverse set of discussions about all the stuff that you can find. But I think the main thing, someone who’s not in a position to spend a lot of time thinking about this and also has the linguistic capability to do it, you should just adopt a low confidence perspective. Like I’m not sure that the system... Okay, there’s some chance the system there is really messed up, and it’s fragile and brittle. But there’s also a chance that actually, for at least this period of time, like a few decades or couple generations, they’ve got a functioning system that we should really take seriously and it can actually get stuff accomplished. And I think there is evidence for the second thing, because they did build many, many kilometers of high-speed train, and they do have functioning nuclear weapons and they did manage to do lots of stuff. Right?
Richard: Yeah. My preferred way of looking at it is, look, it’s hard to say in the abstract how good the system is. Right? It’s just too hard of a question and you don’t have all the data and you can’t... It’s 1.4 billion people. You can build a narrative that says anything. I prefer just to look at hard metrics. I just like to look at GDP growth. I just like to look at living standards. I like to look at expectations of what’s going to happen to the Chinese system versus what’s actually happened. And then take a black box view and say, “Okay, whatever. If it looks like the outputs are good, it’s probably working.”
Steve: It’s also true that there’s no substitute for having a very long timescale over which you’re carefully observing what happens. So I had exactly this kind of argument with, or discussion, with a couple of colleagues who are Americans, but were living in China at the time. And this is about 10 years ago. And at the time the pollution level in Beijing was just unbelievably bad. You would go there and there were days where you’d just be hacking and ... Okay. And so one of the things one of my colleagues said, and this guy’s an incredibly smart guy, he just said, and he had been living in Shenzhen.
He said, “Look. Here’s a good test for these guys. They have every incentive to clean up the pollution problem in Beijing, because the elites actually are there and it’s giving them a bad reputation internationally. So let’s just see how fast they clean up the air quality in Beijing?” And they actually have. Now the air quality in Beijing is quite good, or at least much, much better than it was 10 years ago. So on that particular prediction metric, they did seem to do what they set out to do.
Richard: Yeah. Compared to Washington DC. And look at the... People are saying it’s getting worse in recent years with crime and the homeless encampments. So you’d think it’s the same logic.
Steve: Or the Metro.
Richard: Yeah, yeah. The infrastructure, everything. And you think it’d be the same logic, but apparently we can’t make Washington, DC presentable. So that might tell you something about our own…
Steve: Yeah. No, that’s a good test.
The State of Chinese Science
Richard: Yeah, exactly. So yeah, the China thing was going to be like one topic out of like 10 I hoped to cover, and we’ve got an hour already just on China. And so I think we should just keep going on China, and then the other stuff we can do some other time, because I think there’s a lot here.
Richard: So yeah. So what do you see as the ... What do you think about the state of Chinese science at the higher level? So something one thing people will say will be like, oh, China can produce a lot of STEM graduates. They could do, well on average, the population mean on standardized tests, but the highest level physics or the highest level engineering or the highest level math, that’s still an American advantage. What’s your impression there?
Steve: That is a great question. And the answer to that question, again, this is the advantage of having been around for a while. So I’ve been a professor now for, I don’t know, 30 plus years or something. So I can actually tell you how it’s evolved in the last 30 years and then make a projection going forward. Now the single most ... If there’s one takeaway for your audience, which I could give, it’s that if you make an estimate of the number of high ability STEM PhDs in China in the near future, compared to the United States, it could be an order of magnitude larger. I’m not talking about two times larger. We’re talking about 10 times larger.
So how do I get to that number? Well, the population base is 4X, the fraction of the population that can master kind of advanced mathematics, like score at the highest level on the PISA math test, is also a multiple of that tail population in the United States, per capita. And furthermore, I think students are about twice as likely to major in STEM in China as they are in the United States. So it’s easy to get an order of magnitude out, like a factor of 10. And that’s for real, if you then start looking at the numbers more carefully, you realize, yeah, they’re producing 10 times the number of high-level technologists than the United States.
Now that is just starting to happen now. So if 20 years ago I went to a Chinese university, even the best ones, there would be very, very few world class researchers there. Very few. There would be people who are competent to teach a student say to the master’s level. And then that person could come to Berkeley or Harvard and get a PhD in the United States. That was certainly the case 20 years ago. Now when you go back, there will be many, many labs on the campus that are doing world class work. And often the guy who’s running the lab, not always, sometimes the guy running the lab was trained in China, but often the guy running the lab was trained at Georgia Tech and went back to China. So it’s a moving target, but it’s moving very strongly in a certain direction.
I was speaking to a venture capitalist who held a very senior position at Microsoft for many years, who’s originally from China and he’s a computer scientist. And he was telling me things like, well, you know the arXiv, where papers in physics and math and computer science are posted, an American invention. It dates back to the early ‘90s, but the arXiv is where these papers, the top AI papers, will go there and things like this. He says, in China there’s this equivalent of Stack Overflow, which is a site which exists to discuss certain topics or questions or ideas in technical subjects. He says there’s an equivalent of a Stack Overflow discussing the top arXiv papers, which is completely in Chinese, completely in Mandarin. And so if you’re a Chinese engineer and you speak English and you also read Chinese, you have access to two deep pools of technical knowledge.
You can see a whole Chinese analysis of, ok, how well did these transformer units, modules, work in this particular AI image processing, implementation, et cetera, et cetera? And you can see the Chinese discussion of it and you can see the English discussion of it. And I’m reminded of when I first started in physics, there was still a hangover from the Cold War, and a lot of people were still learning German and Russian, because there was lots of stuff published in Russian journals that you couldn’t get access to, unless you could read Russian. My father had to learn German and I think, I don’t know if he studied Russian, but he definitely had to learn German as part of his PhD at the University of Minnesota.
So there is that dual kind of reservoir structure evolving now where there’s a separate technological reservoir of information in China. And it’s still in the early phase now, but in some particular areas like AI and software, it’s advancing very fast. Maybe some areas like hypersonics and things like that too. So I think it’s for real. I think they’re going to catch up, and maybe they won’t surpass us because the West has a much longer history of really the highest level, most creative kind of scientific activity. And it will take a while for them to catch up.
It took Japan a long time to catch up. So the Japanese, if you look at their progress, they were playing catch up for a long time, and it’s easier to catch up in applied sciences and engineering and harder in this really creative, purely scientific stuff. But if you look at Japan’s performance in Nobel prizes, it’s really accelerated a lot in the last few decades and that’s a lagging indicator. So I actually think that that final step, it’s not clear when they’ll finally draw even with say the West or the United States, but in terms of like technological innovation, implementation of big engineering projects, stuff like that, I think they’re already at parity.
Richard: Yeah. So another question I wonder about is that I know in a lot of countries, I know Korea is like this, that the American universities are sort of seen as like the most prestigious in the world. So we talked about the psychological effect of people thinking Westerners are number one and will always be number one. That’s the US perspective. If you’re like one of the smartest people in China now, if you’re a young person, you’re going to college, is something like Harvard still seen as the main thing you should aim for? Or do the Chinese universities in the minds of Chinese people, young people particularly, do they have that sort of prestige? Because Xi Jinping’s daughter went to Harvard. Did she not? Or is she still there? I think she went to Harvard, right?
Steve: She did go to Harvard, but I’m not sure she’s part of the actual intellectual elite in China [laughter], but definitely part of the elite, but maybe not the intellectual elite. So if you define some cutoff, like, ok, you’re at the one in 1,000 or one in 10,000 capability level, say for STEM, intellectually or for STEM or something, what does the world look like to a Chinese kid? I think most of them are going to want to try to get into the top Chinese universities. They’re going to want to get into Tsinghua … or basically the top layer of Chinese universities. But then the next stage right now, they would seriously consider trying to come out to MIT or something to do their PhD. And then they have a lot of optionality, because they could stay in the US and they could start a company in the US, start a company in China, get a faculty job in the US, get a faculty job in China. By coming out, they get a lot of optionality.
Now one thing that people, I think, underrate... So Westerners who go to China, they realize, like, it is pretty tough to learn Chinese. The number of Westerners who are really fully fluent in Chinese is very small. It’s equally hard for someone who grew up in China to learn English. So my father who was a professor of aerospace engineering, he always spoke with a very thick accent and he would not put the articles in the right place, because there are no articles in Chinese. So he was never fully fluent in English, and that was always a handicap for him working in the United States, living in the United States. Well, because of the linguistic challenge, there’s always going to be some inertia where even if there’s a big gain from coming to the United States, some fraction of people, even people say who are really good at math, will just prefer to stay in China. And we’re finally getting to that tipping point.
So for example, there’s very little immigration to the US from Japan now. Very few Japanese want to come to ... They want to come to the United States and visit, but there’s not a lot of net immigration from Japan to the United States. Even though maybe you could say incomes are higher, the quality of life is higher in the United States, it’s not as crowded. But the main reason is that the barrier to get yourself to the point where you can function well in this alien society is, there’s quite a big factor there. And so I think you’re going to start to see fewer and fewer Chinese who want to permanently come to the United States. I think that’s going to be a diminishing pool of people over time, barring some collapse or some nightmare scenario in China.
The Beijing Genomics Institute
Richard: Yeah. So let’s talk a little bit about where your interest in China and experience with China intersect with some of your other interests. So you were affiliated or you were consulting with a company called BGI, right? And they were trying to, if I remember correctly, gather basically, a large dataset, have a lot of people’s genome sequenced and then have things like intelligence test scores and trying to figure out predictors for GWAS kind of studies. Is that right? Is that what the company was doing? And what ended up happening?
Steve: So this is slightly ancient history, but I’m happy to go through it with you. By the way, there was an entire documentary called DNA Dreams, made by some Belgian woman or Dutch woman, a documentary filmmaker, who did this whole thing on our project and the company. So BGI, it’s an acronym. And it used to stand for Beijing Genomics Institute, but later they moved from Beijing to Shenzhen and they just called themselves BGI. And it was a huge company. And it’s one of these, if you know about how capitalism works in China, like local state governments will often come up with very attractive packages for entrepreneurs and scientists to found a company in their city. Because the bureaucrats, for them it’s a big win, if they can say, “Oh, we have the leading gene sequencing company in the world here in Shenzhen.” And that’s like a little check mark on their evaluation for economic development.
So that’s kind of what happened. These were researchers from the Chinese Academy of Sciences who were recruited down to Shenzhen in, I want to say early 2000s, to basically build up a giant gene sequencing company in Shenzhen. And so they were covered a lot in the media, The Economist, because at one point they had more sequencing power in their facility, which was in a converted shoe factory, it had been an old shoe factory they converted into this huge gene sequencing lab and I spent a fair amount of time there actually. They, at one point, had more sequencing power than anybody else in the world. And they were like Illimina’s… Illumina is a US company that makes the leading gene sequencing machines, and they were Illumina’s biggest customer. Ok?
So I read about them and I happened to be on sabbatical in Taiwan. And so I emailed the director, the leaders, the head of BGI, and I said, “Hey, I’m this physics guy, but since you guys have all the sequencing power, I have a bunch of interesting genomics projects you guys might be interested in.” And they said, “Oh. Well, come and give a talk.” So I went and gave a talk and I brought a couple of my collaborators, and we basically convinced them that it would be useful to ... It would be an interesting science project to try to figure out where in the human genome are the locations, which are affecting intelligence.
So we know that intelligence varies between people. We know it’s partially heritable, so it is influenced by DNA. And perhaps we could find – this is, remember, 10 years ago – so we could find maybe the first few hits of places in the genome that are affecting your intelligence. So having variant A in this location slightly raises your intelligence, and having variant B is a slightly detrimental effect to your brain development. And at the time, this was extremely radical thinking that this might be possible. And fast forward to today, we know of thousands of individual loci in the genome that are affecting intelligence. And we can even do a crude job of predicting someone’s cognitive ability from their DNA alone. But 10, 12 years ago, that was just crazy talk.
But we had this idea and they were interested. So they said, well, if you can assemble a good cohort for us to genotype, we’ll genotype them for you. And we’re like, “Awesome, unbelievable.” So I and our team started recruiting very high IQ individuals for this project to spit in a little tube.
Richard: Right yes, I remember this part.
Steve: And we collected their DNA. Now what happened is, and anybody familiar with tech companies, the story will not be a shock. So when these guys started out, they had a ton of money. It had come basically from state sources, because they had been recruited to locate this technology in Shenzhen by the local government. And at first they could just do projects whose payoff was prestige. So getting on the cover of Nature, because they did the first whole Panda genome, [laughter] that for them would still pay off, because they would say, look, we’re this Chinese company, but we’re on the cover of Nature, and we did all this. And that’s how I got to know of their existence.
But over time they came under pressure to actually generate profits. Like, what is your business model? What are you actually doing? Just doing all these science projects isn’t actually going to make you a viable company, and you’ve spent hundreds of millions of dollars of the government’s money here. So eventually they had to basically pivot away from doing these ambitious projects. And now their main revenue source is something called NIPT, which is non-invasive pregnancy testing. So prenatal testing, which means that you can take a little bit of blood from a pregnant woman, and there are enough DNA fragments from the fetus that are floating around her blood, that you can learn some information about the genotype of the fetus. And particularly you can test for Down syndrome. You can screen against trisomy 21. So that’s their number one, very practical, revenue driver right now.
And so we were working with them and we assembled this huge cohort, but they, at some point said, hey, we can’t afford to do the sequencing that we promised you, because we’ve now got to pivot and do more practical things. So we never really got the project finished. And we now know enough about, for example, the effect sizes of the most impactful variants in your genome. We know that had they carried through their end of the deal, we would’ve found those hits. So we would’ve been the first people to find gene variants that are associated with intelligence. But it didn’t work just because the business model, basically, they were forced to pivot and never completed the project.
Richard: Would it still be valuable to get that data because you have these people at the tail end of intelligence, right? So just to have a large sample. Can that still be... Are there swabs sitting somewhere? Or is it on a computer? Is there any way to still do this?
Steve: There are samples in Shenzhen that we don’t have access to that the company has.
Richard: How many intelligent people did you get and what was the criterion?
Steve: Well, I think we were recruiting people who were at least three-ish standard deviations above average, and we recruited thousands.
Richard: Wow. Yeah. That sounds like it could be valuable. Did you ever think of maybe they could go to the Shenzhen government or the provincial government and say, this will be good for the nation? We’ll figure out the genomics of IQ and this will help the country and help embryo selection and all that. Was that ever an option?
Steve: It’s very funny because the company switched from being this ... Because the original founders were all scientists, but it eventually became so practical and business-focused that all of these older projects, whose motivations were purely scientific, became totally uninteresting to these guys. There’s almost like this very negative reaction. The new regime comes in and they’re like, “Well, all this old stuff, the old regime was doing, just throw that all in the trash. We don’t... Those were the bad days of the company when they were just burning money.”
Richard: And when did this shift happen? Like when was the switch?
Steve: We started working with them around 2010. This would’ve happened around 2012, 2014. Again, there is even more detail to this story. So for example, they got into a big fight with Illumina. Illumina was their main supplier of the actual gene sequencing technology, and BGI bought a US company called Complete Genomics, which had a competing technology for Illumina. So, another big distraction for them was they spent, I don’t know, five plus years trying to fix the Complete Genomics technology, so that they would have a competing technology to Illumina for gene sequencing. And it’s still unclear. Right now, their market share in that gene sequencing hardware market is tiny, mainly their foothold is in China. And it’s still somewhat controversial whether their technology is competitive with Illumina’s or not. But you can imagine that was a huge distraction from doing some crazy science project on human intelligence. “We’ve got to make this new technology.” I think they bought Complete Genomics for $150 million or something. And they’re like, “We got to get this thing working. Sorry, I can’t talk to you.” And even some of our team, some of our most talented guys on the team ended up switching over to working on the Complete Genomics technology away from our project. So, it’s a very complicated story, but some day somebody should make a science fiction movie about it.
Richard: Yeah, it’s a fascinating story. What did it teach you about, and just from your own other experiences, what do you think about the Chinese attitudes towards things like genetic engineering, embryo selection? It seems like in America, it seems like to me, my view of the lay of the land is like, if this was debated openly, like this technology would be shut down. But the fact that it’s not really, it doesn’t really register, just allows the technology to proceed. So, it’s like unpopular, but still, I think, the technology is proceeding in the US. What do you, how do you see the situation in China?
Steve: It’s interesting. So as with everything, the answer’s a little bit complicated. So, if you ask the average Chinese person or you ask the average Chinese couple that are in an IVF clinic, whether that IVF clinic is in New York or Singapore or Beijing, they are much, much more open-minded about things like genetic engineering, gene editing, embryo selection. They are not queasy. Their initial cultural reference when you mention these things is not the Nazi party in Germany in the 1940s. I mean, they’re just like, it’s so Eurocentric and racist for Americans when they bring up this topic, they’re lecturing to some south Asian guy or some guy from Japan and saying, “Hey, don’t, you know about the Nazis?” And these other guys are like, “You guys did that. You guys did it to yourselves. We weren’t involved. And are lecturing me about reproductive technology in the 21st century? Fuck you basically.” That is literally the example of the kind of east-west culture clash that we’re talking about right now.
But at the same time, to give you an example, one of the populations that we were recruiting smart people from was the population of kids in China who had scored really high on the science and math Olympiads. And so we had a contact in the professors who were training these kids. So we said, “Can we genotype these kids?” Turns out their gene privacy laws, believe it or not, this is something like, no anti-China hawk could possibly believe, but already in 2010, the gene privacy laws in China were so strong that the Ministry of Education was telling us, “No, you cannot genotype these kids even if their parents sign a consent, you cannot genotype them.” And it’s complicated, right? So, the cultural attitude is very favorable toward these new technologies, but the specific regulatory situation in China actually at times could be worse than the United States, so…
IVF and the Future of Reproduction
Richard: That is interesting. There’s just sort of a discrepancy between sort of what people say and what they do. I think I read one of your blog posts, there’s something like 60% of people who do IVF do some kind of genetic screening in the US. Is that right?
Steve: Yeah. So in the US and in most developed countries now, if you do IVF, so I don’t know if I should go through the whole IVF pipeline for your…
Richard: Go ahead. Yeah. This is long form, so.
Steve: Okay. So in IVF, what you’re doing is, typically people doing it have a fertility issue. And what they’re doing is they are performing a hormone stimulation on the mother-to-be’s body so that they can extract multiple eggs at once. And then those eggs are fertilized outside the woman’s body. And then, you inevitably typically will end up with an embryo selection problem. You have to decide which embryo you want to use, out of, you might have five, you might have 20. And so the question is how do you choose which embryo that you’re going to actually, you hope will actually become your child. An additional aspect of this is that in order to give the mother’s body some time to recover from the hormone treatment, it’s become standard to freeze the embryos. So after you fertilize them, you let them grow to like a hundred cells. And then you freeze them in liquid nitrogen. And it’s been shown as far as we can tell that freezing and thawing them doesn’t do anything to them. They’re just very simple molecular machines.
And so, it’s standard now to take a little biopsy, this thing grows into a ball and before you freeze it, you take a little biopsy from something called the trophectoderm, which is the part that will become the placenta. It’s not going to become your kid. It’s going to become the placenta, but it has the same DNA as your kid. And so, they take a little biopsy and in most advanced clinics and in about two-thirds of all IVF cycles in the United States, the parents will have that biopsy taken and they’ll do at least some level of simple genetic screening. So, looking for chromosomal abnormalities, for example, is totally standard. And so what we built is a pipeline that connects there.
So that same sample that you take, this is the company, Genomic Prediction that I’ve co-founded, that standard biopsy, which has taken, there are millions of embryos biopsied this way each year around the world. So that little sample then, you can amplify the DNA from it and you can get the whole genome genotype of that particular embryo. And then you can have much, much more information about the character of the genetics of that particular embryo. And that helps, that informs the parents in making decision of which one to implant. I think the most bottom-line thing is, recently it’s been shown that if you do this kind of whole genome genotyping, you can increase the success rate, the probability that you’ll actually get a successful pregnancy substantially. And so, we think this is going to become just completely standard because…
Richard: What are you looking for to predict a more successful pregnancy? There’s some markers in the genome?
Steve: It’s actually related to chromosome structural abnormalities. So, it turns out a lot of embryos that are produced have some chromosomal abnormalities and that prevents them from implanting…
Richard: And then that’s beyond just like Down syndrome, you’re talking more mild abnormalities, right?
Steve: Yes. There are all kinds of structural rearrangements and all kinds of things that can happen. It could also be an extra copy of a chromosome. So, all these things that happen and if you have a very accurate way of determining what the chromosome structure is for the embryo, and then you rank order using that information, it turns out that enhances the success rate quite a bit. So, that’s kind of like a killer app in IVF.
Richard: Yeah. And is there a correlation between the likelihood of, so is there any kind of tradeoff where like, oh, they might be less likely to be successful in pregnancy, but they’re like, might be more intelligent or they might be healthier when they grow up? Or is it like, I mean, is there research on this or do you have just an intuition that a more successful pregnancy is likely to be a healthier baby and potentially adult?
Steve: Right. So, the kind of genotyping that’s most common right now is this kind of what we would call crude chromosome structure-like information. And that, as far as we can tell, is all bad. So, it’s just bad to have an extra copy of a chromosome. It’s bad to have a very big rearrangement in your chromosome. And we were just surprised that the existing technology, which is used for this is still crude. It still has a high error rate. And we didn’t set out to actually explore this particular aspect of embryo screening. We were mainly going to get like a really precise whole genome genotype, from which you could predict things like what’s your heart attack risk or are you at high risk for breast cancer, things like that, much more related to the health of the child later on, not at the success of the pregnancy.
It was by accident that we discovered that we actually, by probing the embryo DNA so much more precisely, we were able to make much better determinations about chromosome structure, and that had this impact. But as far as we can tell, and an answer to your question, these are just discreetly different things. Like, one is, do you have any problems with it, just the gross structure of the chromosomes? Yes, no. Yes, is kind of always bad as far as we know. Secondly, can we look in and see, like, okay, based on the specific structure of all the variants that you have, millions of variants in your genome, can we say like, oh, you’re at high risk for breast cancer, you’re not at high risk for breast cancer and that’s a whole separate step in the process.
Richard: Yeah. Got it. Okay. So, do you know any other countries, because I’m wondering, I’m worried we’re going to ban it in the West, like, I think it’s low probability, but I’m worried we’re going to just ban everything or they’re going to put regulations. Do you know anything about India, Europe? Can you talk about this a little bit, the laws and regulations here in a comparative perspective?
Steve: Yeah, no, it’s interesting. So, it’s very idiosyncratic. So, the British have this council that have to approve all types of genetic screening. And so consequently, we don’t work on the more advanced stuff, we don’t work with clinics in the UK.
Richard: So, are they pretty restrictive in what they’ll allow?
Steve: Yeah. It’s not that they wouldn’t approve us. It’s just, there’s this lengthy process. And we just haven’t had the bandwidth to go through it and no offense to my friends in the UK, but it’s a small market, it’s just one of many markets. So that’s an example of the most restrictive situation. In almost all other developed countries you’re allowed to do genetic screening of embryos. I think the realization that this kind of highly polygenic screening, which can predict breast cancer risk or hypothyroidism risk or something, that’s only become possible in the last few years as the machine learning and the amount of genomic data available has exploded. And so, I think the reaction to it is not really, so far, the regulatory systems haven’t really quite figured out what they’re going to do about this. I don’t think they’re going to ban it because most families really want it. If I say to you like, well you have five embryos and increasingly we see situations where people have 10 or 20 embryos…
Richard: So, you’re going to discard some of them anyway, right?
Steve: You’re already making a choice. Do you want to make the choice on no information or do you want to make the choice with lots of information? So, very few parents want to see this kind of thing outlawed, and very few IVF practitioners want to see it outlawed. And furthermore, once you show that it leads to a higher success rates per cycle, that’s just the killer app for the industry. So, it seems very unlikely it’s going to get banned completely.
Richard: That’s a relief. I saw another factoid on your blog that I just, I couldn’t believe you said, in Denmark 10% of children now are born through IVF. Is that right?
Steve: Yeah. So, let me run through the numbers for you here. So in Denmark, they have a single payer, they have a government healthcare system, right? And fertility is covered. So that explains partially why you get a lot of this, but it’s also because in these Nordic countries, right, women, there’s a lot of gender equality. Women can have their career. People get married late. It’s all the kind of Western, the way things are going with fertility in the West. And so yeah, about 10%, if you go to a kindergarten in Denmark, 10% of the kids…
Richard: That’s incredible.
Steve: But in the United States…
Richard: That happened without…
Steve: But in developed countries, in most developed countries, it’s 3 to 5%. So, you still can’t go to a kindergarten without meeting them.
Richard: Yeah. That’s amazing. So yeah, you have 20 or 30, kindergarten class of people today, one or two kids on average is going to be, that’s incredible. I remember I was a kid, I was born in 1985 and if I heard somebody was born through, I mean the technology probably didn’t even exist back then, but it would’ve been a very, very strange thing. And now, 5 to 10%, depending on the country is having a sort of unnatural birth, no judgment on that, but just different from the way birth has, having children has worked all through human history. That’s amazing, that’s a revolution that few people have noticed. I think people still see it as sort of anomalous, but it’s not.
Steve: So, the oldest US IVF baby is 40.
Richard: Okay. So, yeah, they’re actually older than me. [laughter]
Steve: Actually works for Genomic Prediction as a patient advocate.
Richard: Oh really?
Steve: And when IVF was first developed, the last surviving scientist who was on the team that did the first IVF baby, this was in the UK just a year or two before Elizabeth, the first American baby was born, Elizabeth Carr. So, the last surviving guy from that team is one of the scientific advisors for our company, Genomic Prediction. And he has unbelievable stories about, he was called a murderer, Frankenstein doctor. They were accused of being Nazis, ushering in eugenics, all kinds of things. So, they went from being pretty reviled and he had to actually hide because there were death threats against him and things like this. So, he went from having death threats against him to being somewhat responsible for 10% of births in major countries, right? So, when people come after us, I just laugh because I say, you’re after me now, but in 30 years, people are going to realize that we made a huge contribution to human wellbeing.
Richard: It’s strange because the abortion thing is so, such a hot button issue but people don’t think about IVF as much, although in theory, you think they might. There was a story, it was like some liberal paper or magazine, they were reporting on these pro-life bills in some Republican state. And they were saying, oh, the Republican state, they put some restrictions on abortion, but like, they didn’t do anything about IVF and discarded embryos. So, aha and like, they got the guy to admit like that doesn’t do anything about IVF, right? Like, aha, this proves it’s not about life, it’s about controlling women’s bodies, right? So, they put the left-wing spin on it.
And I was thinking, they probably just didn’t think about it. I mean, it’s not, I don’t think it’s that, that rational. I mean, rationally, you might expect those sort of views to like, people to have the same views on each. But it seems like they don’t. I mean, part of it is probably just different developmental levels, right? I think you can have a sophisticated sort of divide here between second trimester, third trimester, abortion, even six to eight weeks and the IVF, I mean, that is very early, right? Those are discarded when it’s…
Steve: We’re talking about a tiny molecular machine, it’s like a hundred cells.
Richard: It’s a hundred cells. Okay. That’s probably the difference. Yeah. I think that’s a better understanding give that difference…
Steve: By the way, if I could make some projections which are not speculative at all. So, I think that, I don’t know if it was a US number or the sort of Western country’s number that for the first time, the average woman is 30 when she first marries and most people are not aware of this but fertility decline in women starts typically in their early thirties and it can become pretty pronounced by the time they’re say 35, for example. So, the need for IVF is just going to skyrocket given the cultural things that are going on right now. And so, I wouldn’t be surprised if say five years from now, 10% of all births in every Western country, 10% plus are through IVF. And if you then segment down to say high SES couples, it could be much higher, it could be like 20%, 25%.
Richard: I’d like to see that class breakdown now, actually, have you seen any data on that, because it’s probably zero in many places? And so that must be 10, 20% in others.
Steve: Yeah. I bet in Denmark, if you’re in the highly educated class instead of 10, it’s 20 or more, and in the working class, it’s almost zero. So that’s the way we’re headed. And I think, given what we think will happen with the technology we’ve developed, and we think it’s going to be universally adopted. So eventually, I think in five or 10 years, easily 10% of all babies born will have been genetically screened using this kind of technology.
Richard: Yeah. Someone told me today, I didn’t have time to look up the number, but you tell me if this sounds plausible, that in Sweden now, the age of last birth of a woman is 57. Does that sound plausible?
Steve: The average age or the…
Richard: The average last child, someone’s last birth.
Steve: That seems too high, but you regularly read about women who are in their forties and they have through IVF, they have a child, so that’s not super uncommon. I mean, of course it’s a struggle for many women who are 40 and trying to have a…
Richard: So but 50, I mean, with the embryo selection, you can implant at 57, right? So that’s plausible….
Steve: Oh, yeah. I mean, if you have money. First of all, if you have foresight, so like, I think Apple famously provides as an employment benefit, egg freezing for its female employees. So if you had foresight and you froze 30 eggs. Because when you’re young, if you go through the hormone treatment, you can produce like unbelievable numbers of eggs, right? So, imagine like some girl, some young woman who works at Apple freezes 20 or 30 eggs, and then doesn’t get around to having a baby until she’s 57. She finds a sperm, she gets married, she gets sperm from her husband. But then they have a surrogate mom carry the embryo, because it doesn’t have to be transferred to the woman who originally made the egg, right? And so if you have means, you don’t even mess up your wife’s body. You just hire some surrogate mom to carry the embryo. And yeah. So that’s actually, to be totally frank, in IVF, you actually see this kind of happening with high net worth people now, where the mother doesn’t actually carry the fetus.
Richard: So, yeah, I’m just looking this up … Okay. I’m looking this up and I’m going to actually, I think, yeah, whether this number for Sweden is actually right. So somebody referenced me the paper, I’m just looking at the paper and yeah, I’ll post it in the links because whether this is true or not, I want to know and I think our listeners do want to know.
Steve: It’s a question of how you define the thing. Like, there’s maybe some definition like, oh, in a given year, the oldest woman to give birth is 57. Yeah. I totally believe that.
Richard: No, he told me that … Ok, I think this is wrong. I think this is the highest extreme age. I think this is the highest, I think I was misinformed, sorry for taking up so much time looking that up.
Steve: Still by historical standards, you have women who are much, much older. Like they would’ve been grandmothers through most of historical times, human history, they would’ve been grandmothers, but they’re having their first baby or something, right? So…
Richard: Yeah, I think. I mean, Steve, I’ve always found I would rather talk to a highly intelligent person who’s a generalist and who has good cognitive habits and who has genuine interest in things rather than talk to a specialist on most things. I think I would rather talk to you on most things you’re an amateur sort of researcher on than most people who are experts. So, it’s been a fascinating conversation. I wanted to get to you know 10 things, we got to China and we got to embryo selection. And I wanted to talk about, there’s like 10 other things on your blog. And then I wanted to talk about the attempted semi-successful cancellation of you at Michigan State, but yeah, let’s save that for next time.
Steve: Yeah. I’d love to come back, or I’d love to also have you back on my show because for your audience, I’ve got, I’ve had you on my show or we recorded it, but we haven’t released it yet. And so maybe we should do a regular thing where we talk to each other.
Richard: Yeah. I think so. I think we didn’t even scratch the surface here, so. Absolutely. Yeah. Is there any place before I let you go, any place people can follow you or your blog, anything you want to plug right now?
Steve: Oh, it’s the usual boring stuff. My blog, my Twitter feed, and then my podcast. So, all three exist. I can get you the links before you post this show.
Richard: Okay. Yeah. We will include those links. Okay, great, Steve. It was great talking to you, and until next time.
Steve: Yeah, my pleasure, take care.
Ezra Voegel, Japan as Number One.
John Dower, War Without Mercy.
Dan Wang, “2021 Letter.”
Dan Bell, The China Model.
Richard McGregor, The Party.
DNA Dreams (documentary film).
Richard Hanania, “The Inevitable Rise of China.”
Richard Hanania, “Fertility as the Final Boss in Chinese Development, and Richard Hanania Prediction Markets.”
Steve Hsu, “Sustainability of China Economic Growth.”
Steve Hsu, “Les Grandes Ecoles Chinoises.”
Francesco C. Billari, Hans-Peter Kohler, Gunnar Andersson and Hans Lundström, “Approaching the Limit: Long-Term Trends in Late and Very Late Fertility.” p. 163. (On Swedish fertility, extreme births)
Steve’s Podcast, “Manifold.”
Excellent convo. Hsu is one of the smartest generalist bloggers on the internet, with impressive real-world accomplishments to boot.
Much less bullish then you are on Chinese fertility. Many governments going back to the Roman Empire have tried to raise fertility, including almost all developed countries to some extent in the past few decades. France has been trying since the 1920s IIRC. Some of them have managed to squeeze out a few tenths of a point of TFR, but nothing dramatic. Even highly-competent govts like Singapore haven't been able to do better. Only Israel combines an urban, wealthy, high-tech society with above-replacement fertility, and while the CCP is clearly highly capable and willing to do unusual things, I doubt a mass conversion to Orthodox Judaism is in the cards (would be hilarious though). If the Manospherians are correct that patriarchy is the prime determinant of fertility, very hard for the CCP, which has been ideologically feminist since its inception, to walk that back (and a shrinking, male-dominated young population gives young women enormous power from simple supply and demand, making it even harder). If religion, hard for the officially atheist CCP to deal with that either. Economics and nationalism historically can give a few tenths of a point of TFR, but not enough to dig the PRC out of "lowest low" fertility. My prediction is China goes down the same demographic route as S. Korea, Japan, Taiwan, Singapore, and Hong Kong. Easily the biggest headwind for medium-term Chinese dominance, although every other major country (except Israel - blessed by G-d!) has similar trends, so relative power is less affected.
Great post/ discussion.
If China really is able to maintain a meritocracy in its Chinese National Communist (=fascist) economy, and military, it will continue to increase in formidability. It seems that Xi has become a "fuhrer", a semi-God emperor - but will he attack Taiwan too soon? Or ever?
If no attack, when and how is the next succession? One huge advantage of democracies is changing their leaders peacefully. Deng started 30 years of that in China, but it looks like Xi is ending it - isn't he leader for life, now?
A "China as paper tiger" take is here:
Neither the positive here nor the negative there include the factoid about some never-occupied modern apartments being torn down in China sue to sub-standard construction. In USSR dominated Europe, lousy building was endemic. We won't know for years, decades, how common it really has been in the last decades of China's astounding growth.
IVF babies seem unlikely to be 10% of Chinese babies for the next 10, nor 20, years. I can easily imagine poor Uyghur or Tibeten women becoming surrogate mothers for (spoiled?) Chinese career women unwilling to bear more than their first child, if even that. In the hundreds, even the thousands. But not millions.