Why China's manufacturing economy is dominating — Arthur Kroeber

The communist leaders in China have a lot in common with the technoists of Silicon Valley in their what I would call technological fetishism. The number one job of the government is to figure out how to mobilize the resources of Chinese society to maximize technology acquisition. Think of China as like a giant VC fund that is just willing to lose huge amounts of money for a really long time on the assumption that a few of the bets will pan out. The Chinese have seen this coming for a long time.

They have long had the view that the US was going to try and constrain them and they say, "Well, how do we get around this?" And their answer is not. You build a block, I'll build a block against that. Their answer is I will operate so that it is impossible for you to build the block that you want. Today I'm interviewing Arthur Kroger who is the founder of Gavcow Draconomics which is a research consultancy focused on China and author of China's economy what everybody needs to know.

A friend while I was in China recommended it to me and it's been the most valuable and useful resource that you can get today on how China works. So Arthur, thanks for coming on the podcast and taking the time to chat with me. It's great to be here. Thanks.

First question, what really is the problem if China becomes as wealthy or if its economy grows as big as America's or grows even bigger? I know maybe it's not your perspective to be a China hawk, but I've never really understood why this is a problem in the first place. Uh yeah, it's a very good question. It's a very good question.

Uh there's a lot of criticism of China from the standpoint of okay, you're trying to get rich, that's fine, okay, but you're basically trying to get rich on the backs of everyone else in the world by running this gigantic manufacturing export machine where it seems like the Chinese ambition is to produce all the manufactured goods in the world uh for everyone uh run an enormous trade surplus which means that they are depending on other people's buying power to support them and that this is basically not fair, not sustainable, not a stable way to participate in the global ...