Xi Jinping’s paranoid approach to AGI, debt crisis, & Politburo politics — Victor Shih

AI apparently is one of the higher priorities for Xiinping. The party is very very paranoid that some actor outside but even inside the party is going to use it as a tool to usurp the power of the party. The Chinese leadership, they're not going to play golf three days out of a week. Xiinping and his colleagues are having meetings about policies 270 days out of the year.

If Xiinping expresses a preference over a policy direction, that is a direction you have to go toward no matter what. If he observes that you're dragging your feet, uh you will be purged. What is the succession plan after G is gone? There are no plans right now.

I think this transition is going to be more ruthless, more bruto, and potentially more disruptive. Today, I'm talking with Victor Shei who is the director of the 21st century China center at UC San Diego. China is obviously the most important economic and geopolitical issue over time and doubly so if you believe what I believe about AI. I was especially keen to talk to you because you have deep expertise not only in Chinese elite politics but also its economic system, its fiscal banking policies.

We'll get into all of that before we get into the AI topics. Is China actually a more decentralized system than America? If you look at government spending by provincial governments versus the national government in China, it's like 85% local versus provincial, 15% national. In the US, it's actually, if you look at state and local, it's 50% national federal government is 50%.

Um, when you think of an authoritarian system, you often think of it as like very top down. The center controls everything. But if you look at these numbers, it just seems like it's quite decentralized. Or is that the wrong way to look at the numbers?

Uh, I think for a while, China was quite decentralized. Um, so this is kind of in from the mid 1970s all the way until the mid 1990s, China was very decentralized where local governments generated a lot of revenue, but they also spent a lot of money. Uh, and it incentivized them to do, you know, kind of basically good things such as trying to attract as much FDI as possible, trying to attract as much uh local investment as possible, give ...