This video features a conversation between Dwarkesh Patel and Victor Shih, an expert on Chinese politics and economics, about China's political system, economic challenges, and approach to Artificial General Intelligence (AGI). The discussion covers various aspects of China's governance, including the Politburo's decision-making processes, the local government debt crisis, and Xi Jinping's leadership style. The conversation also explores the implications of AGI development for China's future.
The transcript provides several examples of suboptimal policies resulting from Xi Jinping's focus on preserving power:
Zero-COVID: The prolonged and arguably excessively harsh implementation of Zero-COVID policies is cited as an example of genuinely stupid policies that went on for far too long. The speaker notes actions such as scrubbing down airport runways, highlighting the inefficiency and lack of pragmatic decision-making.
Suppression of economic liberalization: The speaker argues that the Party's instinct to preserve its power leads to policies that hinder economic growth and efficiency. Restricting the independence of scientists and banks to maintain tight control is presented as an example.
Overbuilding and local government debt: The massive overbuilding of infrastructure and real estate, fueled by local government debt, is presented as a consequence of the incentive structure within the system. The construction of numerous empty buildings in Tianjin is given as a specific example of wasteful spending driven by the pursuit of promotion and rent-seeking behavior. The excessive construction of Buddhist temples, one with multiple, successively larger shrines hidden from view, is another example given.
These examples illustrate how the prioritization of political power and control over rational economic decision-making leads to inefficient resource allocation and negative outcomes.
