Below is a complete transcript of the episode. Thanks to CadreScripts for their great work, to Oana Grigor and Natalia Polom for checking and formatting, and to Zhou Keya for the image! Listen in the embedded player above.
Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China. In this program,
we’ll look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.
I’m Kaiser Kuo, coming to you today from the lovely town of Shaxi in Southwest China’s Yunnan Province, where I’m almost three weeks now into a month-long musical retreat with other members of my band, Chun Qiu — Spring & Autumn — which reformed in the spring of this year. We are here working on material for a new album, which we anticipate we’ll record later this year, and hopefully release early next year.
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Well, it just so happens that my friend Adam Tooze has been in China for much of the last month as well for the World Economic Forum event in Tianjin, for various meetings and talks. And, as luck would have it, he was in Yunnan this week. He was able to pop over to Shaxi to visit me here, meet my band mates, and was even able to join us for some early morning mushroom hunting, and in which you were successful. Yes.
Adam Tooze: Yeah, I got a good one.
Kaiser: Yeah. You got a really good one.
Adam: I’m very pleased.
Kaiser: We will be dining on that tonight. Listeners will know Adam from his own podcast, Ones and Tooze, from his fantastic Chartbook newsletter, an absolute must-read, from his many excellent articles and op eds in all sorts of publications, and most of all from his numerous books. He’s also been a guest on this program on three previous occasions. Adam is an economic historian who teaches at Columbia, where he directs the European Institute there. But in recent years, his work is increasingly related to China, and especially to China’s role in the energy transition, something that will be a major focus of the book he is now working on. Adam, it’s just been so wonderful having you here in Shaxi.
Adam: It’s been an absolute pleasure being here and meeting your band. The album is going to be great.
Kaiser: Yeah. Well, thanks. Yeah, we subjected him to a little bit of our rehearsals, and I think you’re going to hear some more later when we’re done here. How do you like the town so far?
Adam: It’s truly a magnificent spot. And one hastens to advertise tourism in China because the flows are so gigantic when they’re unleashed, but this is the most intact medieval-feeling Chinese town that I’ve ever seen. It reminds me of, you know, from an European point of view, it reminds me of Italy, of Tuscany, something like that.
Kaiser: Yeah. So, the unspoiled towns in-
Adam: Absolutely. It has a market square, a 600-year-old beige town gates. It really is quite unique in China, I think, in this way. So, the modernization and the history of the recent past has been so dramatic in its impact on the urban space in China that it’s very rare to see something like this.
Kaiser: We don’t want to ruin it. So, let’s not talk it up too much.
Adam: No, no, it’s terrible. You shouldn’t come. But I’ll find it on a map — we didn’t tell you. It’s difficult to get to. There’s no train, right? There’s no train.
Kaiser: You got to either fly in or take a train into either Dali or into Lijiang.
Adam: Because it’s high up, right? It’s 3,000…
Kaiser: It’s 2600 feet or so. Yeah, but it’s been great. But let’s get back onto the ground in China, since you’ve been here now for a few weeks, I imagine. You’ve been speaking with a huge range of people — academics, businesspeople, policymakers, or just local folks or rock musicians. From your vantage point, what stands out to you about the… let’s start with the domestic economic situation, are there indicators that you’ve noticed? I mean, not necessarily in official data, but just in conversations or in atmospherics that tell you something about where the country is economically at the moment.
Adam: I guess my points of contrast with the great 2022 shock that we all remember, very important listeners, you know, COVID in China is not a 2020 story as a dramatic socioeconomic break. All of the data and all the evidence suggests it’s really the 2022 break, which makes the difference. That’s when consumer confidence collapses. And thinking back to last year when I was here as well for an extended stay, then it felt in 2024 as though we were still in the long aftermath of 2022. And the pain and the damage and the recessionary tendencies in the Chinese economy are still very real. But I think psychologically it doesn’t feel quite the same way as it did last year when there really was a kind of note of anxiety about levels of stimulus.
And I’m thinking here, you know, I saw two speeches by the Chinese Prime Minister Li on issues of economic policy. And last year at the Summer Davos, there was a distinct feeling of defensiveness about the speech this year. Absolutely not a kind of create a confident sense that they won the Trump transition. That’s the kind of one side of this. But any of you are specifically about the real estate market, and this really is, I think, the key story. And you and I, I know Kaiser agree that the decision-making history here is complicated and goes back to 2020 in the mood of optimism, a hubris almost on the part of the regime. In that summer that they thought they could do everything — they could humble the techs, you know, people, they could crack down hard on Hong Kong. And then they also decided to very deliberately deflate the…
Kaiser: The real estate sector.
Adam: Yeah, exactly. Which was the driving force of China’s growth, and is a world-historic force. This is the driver of urbanization on a gigantic scale. And there was a feeling earlier this year, early 2025, that things might be stabilizing and turning in the better direction. But the data for June in the housing market have been disastrous again. And speaking to decision-makers in Beijing and specifically asking them, when do you expect stabilization and turnaround? The answers were more pessimistic than I expected. So, they were not the end of this year. The end of next year. If you follow the Chinese business press closely, there’s a huge wave now of very heavy-duty restructuring of debt.
So, it’s not the other grandees who had going down, but it’s the companies that hope to survive that are now restructuring their debt. There’s big moves afoot of the structural level in changing the way in which Chinese people buy and sell houses, some of which are very damaging to people, the existing properties, some of which are going to prevent the building of these pre-payment schemes. So, I think we are not out of the tunnel there. And that came as something of a surprise to me because, following the Western coverage earlier in the year, there was a sense of greater optimism, and I don’t see that. So then it’s all about the gearshift. What else is coming in place? Well, what are the new growth tendencies?
Kaiser: This idea of national mood in China is slippery. It’s particularly slippery, I think, for observers. But I wouldn’t say it’s meaningless. And yeah, I think I’ve picked up on a lot of the same thing. There’s I think, probably earlier this year I would, on earlier trips, I would have said, “It looks like 25 is the big turnaround year.” I may have to recalibrate and push back a little bit. But have you picked up on anything while here that might speak to how ordinary Chinese people are thinking about their economic future? I mean, are they seeing that this is bottoming out right now and that things are better going forward? Because I do sense that. My distinct sense is that there’s still quite a bit of optimism about next year and years to follow.
Adam: Yeah. I mean, my Chinese is nowhere near good enough to have any real sense of what folks are feeling, who can’t speak English to me. But amongst, I think, maybe one aspect of this is interesting is generational. And in that, I think the really heavy shock is, as elsewhere in the world over the last five years, has been to the group of people most vulnerable because they were finishing education and entering the labor market. And that’s the most critical phase. And it was truly traumatizing and existential during COVID itself, but also the aftermath in China after 2022 has been dramatic. And I do get the sense that because this, it’s a move, it’s a generational move. So, we have to think of this as a demographic flow.
The generation most immediately shocked, which are the generation of 2022/23/24 graduating years, all now, in one way or another, have or have not found their way into the labor market, and the coming generations are adjusting to a world of 5% official growth rather than 7% or 8% growth. And their expectations are reset. And I think that’s something that I was able to observe in conversations with young colleagues who are young journalist that is who were interviewing me, and it’d be a lot about trap, before and afterwards in the conversation. And I did get that distinct sense that the scarring would be real and forever because this adjustment basically means that future cohorts of Chinese cannot expect the gigantic growth experiences of their parents and grandparents. But with that also comes a degree of stabilization, of expectation, and a diminishing of panic, perhaps, and just outright, you know, that sense of really quite profound depression, which was caught up in various slogans that percolated into the West, like lying flat, and so on.
Then as a historian, of course, I think back to the generations that you and I were both born into because we are part of the growth adjustment generation in the West, in the United States and Europe. And it does mark the generation. And China is going through that kind of process.
I mean, what comes out the other end is, at this point, still 5% growth, or maybe three or four, which is rapid by historic standards and qualitatively different. It isn’t just, I think, regime propaganda to say that these are new quality, productive forces that are taking over. And to that extent, and we’re talking about much higher levels.
So, though the growth rates experienced by parents from grandparent generations were phenomenal, they were also much poorer, the starting point, as the current generation were growing up, certainly in the more prosperous cities, into living conditions that no previous generation of Chinese have ever been able to dream of. So, all of that process of adjustment is happening before our eyes.
Kaiser: Yeah. So, China is now several months now into this round of new stimulus measures that was announced really… I was in town back in fall of last year when these things started to roll out. How do you assess their design, their likely efficacy? Do they signal to you a longer-term shift in the policy playbook, or are we still sort of in the mode of tactical stopgap measures?
Adam: They do look like that, right? I mean, these sort of consumer subsidies, which appear to be… their funding is decentralized, right? So, several big cities, provinces run out of funds that have capped them. And they just create shops to go and buy some white goods of some type. And that is not what anyone has ever really meant when we meant rebalancing towards higher levels of consumption. But you and I had a very interesting conversation the other night where you made this point, which I thought was really interesting, which is how do we assess Chinese consumption? And if you compare life in a Chinese city to life in an American city, the fundamental thing to understand is just the density and quality and availability of public services that sustain life in a way that makes life much more affordable than in the U.S. city. And so we may be systematically underestimating how much consumption effectively is going on. It’s just sitting in the wrong account.
But having said that, that proviso, there’s no question I think that rebalancing is still very much, you know, should really be on the policy agenda. And no, the policies of the last six to nine months don’t fundamentally shift in a six.
Kaiser: And I mean it’s clearly something that the leadership still wants to see happening, but with some caveats. I mean, they look at consumption of goods. They’re actually at levels that are comparable to OECD countries. If you look at consumption services, they’re considerably lower. So, they’re pushing, and the consumption of services is always local. So, that's good. Let me credit Arthur Kroeber and, I guess, he still wants to be unnamed, but a Bloomberg correspondent, I had dinner with them not too long ago, and we talking about this, that correspondent had a fantastic sort of a… I think it was something I’ve since repeated in an essay, but said if you say live in a dense metropolitan area, and it’s got an excellent subway system, and maybe widely available rental bicycles and you’re able to get around the city very easily, you’re not going to buy a car necessarily, or there’s a much higher chance that you’re going to forgo that large purchase. And that’s going to show up as lower consumption. But well, I mean, as you say, the public goods that are available to you sort of supplant that consumption, and maybe should be figured in, in some way.
Adam: Yeah. And it prompted us to that rather hair-raising speculation of just imagine a Chinese-sized city with American characteristics. And it’s the nightmare. And there’s a reason why there aren’t cities in the United States with more than 10 million people in them, like, not even close. Whereas, what were you telling this morning? 170, I think, over 1 million inhabitants.
Kaiser: Yeah.
Adam: So, there’s something here that’s quite deep about patterns of consumption. None of this, however, should take away from the macro data, which would just really show that the Chinese growth story over the last half-century has been extraordinary in the repression of consumption as a share of GDP, the focus on investment. And there is all over the shop evidence of the needs for a transition to, I agree, I think, actually, the key thing is probably the consumption of more human-related services. Right? This is also what’s showing up in the quality of life kind of indicators. People are not as happy, more miserable than they should be given the extraordinary success of growth in recent decades. And that reflects real deficits in social service provision, real anxieties around health costs, and so on.
Kaiser: There’s another word that shows up a lot besides consumption in conversations you have with economists or Western policymakers. And that, of course, is overcapacity. That’s something, and especially things like EVs and solar and batteries, you have critiqued that framing pretty forcefully. Could you walk us through a little bit about why you see that concept is flawed or misleading?
We talked about this a little bit when we spoke in, what was it? In Dalian last year. But what’s a better lens through which we can understand what’s happening in Chinese industry today?
Adam: Yeah, we did. I remember talking with us talking about it, and it just doesn’t go away. I mean, what’s interesting also in just in the last week in China itself, the topic has been sensitized by Chinese experts. But they discuss it principally not with regard to export dumping, but with regards to domestic dumping. In other words, ruinous competition in China, deflationary indeed. And the reason that that matters so much is it compounds deflationary risk. And I think looking at China’s picture from a macro point of view, that deflationary pressure is the thing to worry about, that there’s enough debt in the system to make deflation and debt deflationary dynamics a real worry. And it’s actually very interesting that the Chinese experts are, in fact, invoking the experience of the U.S. New Deal in the 1930s, which you also argue that to address deflation in this situation, you need a combination of macro and micro measures. And that if you have heavily leveraged firms fighting for their existence, who are willing to basically sell their output to gain market share and survive at practically any price, it’s a recipe for a downward dynamic. And it’s also, of course, a recipe for China’s Earth-shaking success in pressing the costs down of photovoltaics and electric vehicles.
And so there is, in fact, an opening in Chinese policy discourse to address this issue because there is such concern about this just cutthroat competition. The standard refrain from Beijing, and you see it, say, in the report of the DRC, the Development Research Commission and the State Council, they say, “Look, look at history. This is what creative destruction looks like. This is what the 19th-century American laissez-faire capitalism look like as well. This is how we break through to a new frontier. Hold your horses.” And, from a global point of view, it is still absurd, really, to talk about an excess of capacity in…
Kaiser: Renewable energy.
Adam: Renewable energy types. And, on the other hand, and one does have to say, you know, this report that was featured, I think, in the FT earlier this week, we showed that I think 75% of all renewable energy projects worldwide are either in China or being driven by Chinese contractors. So, there is very complex kind of line to walk, which is, on the one hand, the very real learning curve effects of just massive Chinese investment and competition and productivity gain.
The real impact of that in terms of deflationary pressures in China itself, the fact that this, on the other hand, liberates us from certain constraints in the green energy transition, which we took for granted historically, and now, it seems, can actually be broken. And then pushing back again, it’s like a Rubik’s Cube, it keeps moving on us. The fact that then raises profound concerns about Chinese “dominance”. So, it’s not even so much over capacity that’s the issue. I think, in the new energy sector, it’s really dominance. Chinese overwhelming preponderance in all of these key sectors. And again, the Chinese will say, “Well, look, at earlier points in industrial history, the Americans predominated, like in motor vehicle production in the early 20th century, easily three-quarters of cars being produced in the world were in the United States."
To which one says, well, yes, and that’s what gave them hegemony. And that’s exactly what you call Fordism. So, it does strike me in that some of the Chinese policy discourse, a kind of innocence, naivete. It’s hard to know whether it’s really in good faith. It’s like they surely must understand how this…
Kaiser: How this lands on the ears of the American-
Adam: Oh, and even more the Europeans, whoever runs the car. The Americans, just to say, no, there aren’t going to be a Chinese EVs in the market. The Europeans are in a much more ambiguous position.
Kaiser: Yeah. And we’ll get there. But just now you mentioned the FT piece showing China’s incredible preponderance in production. But maybe more influential still was the New York Times, which it took them a while, but they finally did get around to a quite high-profile, long and quite candid piece on China’s role in the global energy transition trend. Really, I think, contrasting it with the U.S. and the Trump administration, how it’s doubled down on fossil energy, how its exports of fossil energy have increased. What did you make of this piece on maybe its impact on the conversation around China’s immense strength in renewables?
Adam: I mean, I’ve been out of the U.S. too much to really be focused very much on the debate there. The crucial point to make is it isn’t Trump, right? I mean, the Biden administration didn’t significantly move the dial on America’s position in the energy transition. Sure, they changed the policy environment. Sure, they put incentives in place. There were various signs of green shoots in batteries. But if you actually look at installed capacity in renewables, you would never know that modern economics happened. The surge in American renewables started before Biden because it’s technologically driven. It’s cost-driven. There’s always been those types of tax breaks for renewable in the U.S. And with the Chinese costs coming down, in people, like in Texas, they were taking them up.
And even in the current moment, the House of Representatives in Texas, like it shot down an effort from the Republican right wing to end renewable investment in Texas because it doesn’t make any sense in terms of the development of the Texas electricity system. So, we need to step away from the discourse, which is kind of good King Biden, bad King Trump. That doesn’t do justice to the yawning gulf between China and everyone else in the world, with America being a kind of relative laggard, the Europeans being relatively stronger, but not all of them being completely eclipsed by what’s happened in China quite suddenly.
Again, it’s worth emphasizing the roots of this in China go back 20 years to 2005. The first push comes in the 2010s, but the giant surge we’ve seen that dominates the world right now is really, it pulls in that moment you and I keep coming back to. It’s like when the world went to sleep, or the otherwise obsessed with COVID, things were happening in China, and they changed the game because China came through the first phase of COVID relatively intact. And that’s where we see this just gigantic out of all previous experience surge in renewable capacity, which is gone on this year as well. It’s continuing, right? The build out of solar. So, it’s gotten to the point now where we actually think, they may have peaked emissions earlier this year, though, people I spoke to in Beijing were skeptical about this.
They think coal will come back. But, nevertheless, we are seeing a huge increase. The American conversation is parochial. That doesn’t matter whether it’s Biden or Trump. Neither administration was ever going to make America a leader in renewable energy compared to China. The boat has sailed. The train has left the station. We’re done on that issue. America can make a more or less constructive move here. And Trump obviously is deliberately obstructed. But just look at the profile of American energy production, and the Biden’s as well. The big story is tracking not renewables. The big story is oil and gas.
Kaiser: Yeah, and any green shoots that you did see during the Biden administration have now been killed by petroleum-based glycol phosphates. And it’s, yeah, sprayed a bunch of roundup and it’s all done with the big beautiful bill now having passed Congress. One of the great themes in a lot of your writing is this sort of entanglement of economics and geopolitics. And we’ve already touched on quite a bit of this. But we still hear a lot of talk about the U.S.-China relationship, about decoupling, de-risking. Still have a major export controls in place. Tariffs remain very, very high. Still a lot of talk of reshoring, friendshoring. Do you see at this point a plausible path back to something less than zero-sum and more constructive between China and the United States? Is that is that a possibility, or has the sort of logic of confrontation just hardened at this point too far?
Adam: It’s incredibly difficult to judge at this moment because of the sheer chaos of travel policy. I mean, between the time we record this and the time that you put it out…
Kaiser: Who knows?
Adam: Who knows what’s going to happen. I mean, literally, we just don’t know. And, at the meeting in Tianjin, the Summer Davos, all of the Americans there were humble and honest enough to admit their embarrassment, and indeed their sense of shame at the quality of the American policy in the current moment. There’s a lack of coherence. And that’s the first thing to say. The second thing to say is that all of the structural tendencies towards confrontation began, I would argue, in the late Obama administration, amplified under Trump will clarify, crystallized, really made much more powerful under Biden.
In terms of the chaos of Trumpian trade policy, though we did have the 140% moment, the reality with regard to China was not being distinctively different from, I don’t know, the threats to Canada, Mexico or Brazil. The odd thing about it is that China somehow being submerged in the general chaos. I mean, we were talking about this, I mean, can we really face the fact that it may, in fact, be possible that is only really a Trump administration, and I didn’t say this with any glee or enthusiam…
Kaiser: I know where you’re going.
Adam: But It’s conceivable that this completely cynical, deranged president is the one who would be willing to do some kind of deal, much presumably, to the dismay of the more ideological or more strategically orientated folks in his administration, the Elbridge Colby’s and people like that, who I think will be profoundly uncomfortable with any such deal. But it takes a Trumpian kind of presidency to even make that plausible at this moment. What the Biden people wanted were small yard, high-fence, various types of ways in which one could, as it were, corral and contain the damage.
I was always really profoundly skeptical about those kind of logics because they just underestimate the degree to which America’s policy quite explicitly challenges China’s sovereignty. And if there’s one thing that’s just not negotiable for Beijing, it’s that, right? I mean, you don’t have to buy in the centuries of humiliation logic to understand that China is not a state. Its sovereignty can be bargained away in that way, and they will simply not accept it. So, at that level, I’m pessimistic. I actually heard a delegate at the Tianjin say that they were relatively optimistic about the short-term and profoundly pessimistic about the long-term nature of Chinese-American relations. And the optimism came from the fact that there is a non-zero probability of Trump actually cutting phase two type deals.
Kaiser: Yeah, non-zero.
Adam: And the pessimism comes from the fact that in every other respect, it would seem, and this, you know, we’ve spoken mainly about America, but it’s clearly centered on the Chinese side. There are non-negotiables and there are hard lines, and they are flexing their muscles in trade policy. They know they have weight, they know they have leverage, and they’re using it. And so the big questions are what really is their agenda? And right now they’re in reactive mode, and in suits them very well, I think, to be in reactive mode. The longer term, of course, question is what do they want to do with that leverage?
Kaiser: Before we turn to sort of the cracks in the transatlantic alliance and then the possibilities of Europe and China, sort of in some sort of rapprochement, I want to first turn to the Global South. You just came back from Xishuangbanna. You were just down there. And I understand you had some interesting observations from your meetings there. I want to talk a little bit about how China is still very much a major partner on infrastructure and energy in the Global South. Is China’s economic engagement with the Global South deepening in its current environment, or is it was plateauing, even retreating, given domestic constraints? What are you even seeing?
Adam: But it did offer me a really interesting new perspective because, at one level, it’s kind of silly to refer to China as part of the Global South because it, sure, Bejing is where Beijing is. But when you’re in southern Yunnan, it’s like you are in the Global South. Sure feels, everything about it is… And we were facing Myanmar, right? Myanmar was a morning walk away from where we were at. And so you are surrounded by all of the massively unresolved and, I think, hugely underestimated tensions of Southeast Asia. When we think of Asia in its future, we tend basically to think either of South Asia and the Indian story or the East Asian settled modernity, if you like, of industrialism, Korea, Japan. And we just ignore this huge swath in between.
Kaiser: Or even when we do think of Asean, we tend to think of…
Adam: Singapore.
Kaiser: …. Malaysia, Singapore.
Adam: Yeah. And not Myanmar, not Cambodia’s incredibly unsettled politics, and not the potential massively destabilizing force of Indonesia, really, emerging as a major force. You spend any time in Singaporean policy circles, and you’re all over your back in Konfrontasi in the early ’60s. And these are China’s immediate neighbors. I’m totally hooked right now on this amazing series about, this YouTube series called Type 56, about the PLA early history. And the guy who does this has this extraordinary account of Chinese policy. And it’s all about the military district of Yunnan because that’s the interface, really, between China and the South.
And we were there, as guests of the Chinese Agricultural University in Beijing, which is one of the great centers of agronomy in China, rebuilt after the Cultural Revolution, a principal partner of the world Bank in what was then the great global development project, namely China, and is now involved twin track, on the one hand, in imagining a post rural post peasant Chinese countryside, the sort of space that you and I and we’re in right now. Agrotourism or digital nomad world.
And, on the other hand, very close partnership with Tanzania. China’s long-term partner in global south of development going all the way back to the Mao era, railway construction program and all this. And quite self-consciously in that legacy, and deeply involved over many years now in building partnerships in Tanzania. There were Tanzanian students on this summer school program that I did a little guest turn, and that’s where you see the sort of scale and seriousness of China’s development policy. And I learned a huge amount about the coherence, the system ethnicity of China’s moves there beyond Belt & Road, which everyone’s is talked about and beyond FDI lending stories, which we all know kind of tapered off in the late 2010s. These are China’s development people.
So, the different again, right? The ODS, they work closely with British to be deferred and would once have been partners of USAID. Not partners, but friendly rivals. They’re in the same space. This is that same world.
Kaiser: We were talking about agricultural extension, capacity-
Adam: Literally, agricultural extension studies, agronomical development, irrigation really like nuts and bolts of rural development. And what was impressive was that this isn’t going anywhere. This is not a fly-by-night thing. This is a permanent long term at this stage in commitment by the major bodies of expertise centered in Beijing now. The other thing to say about it is that it’s coming from different levels in Chinese society. You might say NFA was driving there. So, you talk to the training, the Chinese colleagues and not it’s actually the aspiration of China’s agricultural university itself to be a global player, to be a centerpiece of global thinking about agriculture development, which is driving this.
So, this is not a top-down centrally controlled, coming from Beijing, but it’s not Beijing in the political metaphor, is folks in Beijing trying to make a China-centered vision of global development real. And so, I think, to that level, you could almost say resilient as well because it’s coming from different points in Chinese society. It’s not it’s not just policy somebody cooked up in the State Council.
Kaiser: Or that somebody could just shut down with one decision.
Adam: Shut down. No. These are people who have been at this for, since the ’80s, of deep partnerships in Germany, with the German development agencies. It was a profoundly interesting… should have some of them on the show. So, they’d be really good. Professor Lee is the key figure in the agricultural business.
Kaiser: I would appreciate an introduction.
Adam: He’s an extraordinary guy.
Kaiser: And if not on my show, then on the China Global South Podcast, which I think would be much more appropriate. And it’s good time to get a plug in for Eric and Cobus’s fantastic long-running show, The China Africa and China Global South podcasts. They’re just literally my favorite podcasts. I mean, there’s nothing I look forward to more, even more than Ones and Tooze. Let’s turn now — I think it was really great to hear about the stuff that doesn’t get so much attention. I mean, so much is paid to Belt & Road, to some of them. Yeah, and the FDI things. But let’s turn it back to Europe, to the Ukraine war and the aftermath of Trump’s return, which I did earlier about Beijing’s posture on the war in Ukraine. I kind of gave you my take on it.
And I’ve published about a little bit about that before. It’s been such a major obstacle in Beijing’s relations with the EU. Where do you see things at this stage? Do you see any evolution in Beijing strategic calculus? Do you see the change in the way that Europe understands China’s, well, pro-Moscow neutrality, D.C., Beijing simply hedging as long as possible? How does Europe read that positioning?
Adam: I mean, we have to put the U.S. in the picture too. It’s U.S., Europe, Russia, China, Ukraine as a key independent actor. I think you and I entirely agree that I just don’t find it plausible to think that Beijing wanted this war. I’m sure that this just doesn’t make any sense.
Kaiser: No, of course, not.
Adam: I did nothing. On the other hand, and, after all, Foreign Minister blurted it out, they also don’t want Russia to lose, right? But then getting that far, like everyone else, it’s very difficult for them to see a way forward. Because what does a piece mean that would involve Russia not losing that would be, by any standard, reasonable, acceptable to Ukraine? And what would be acceptable to Ukraine’s back as Europe and the United States, and Beijing then, more than anyone else, can actually see a road forward here. And so then they retreat, I think, into a position of relative passivity. And that then means that in negotiations with the Europeans, it takes the Europeans turning a blind eye to this for it not to become a huge issue.
And right now, the Europeans don’t seem minded to do that. And from what I gather about policy discussions, which I was quite optimistic about the forthcoming climate policy announcements, which everyone has to make for the United Nations General Assembly. It’s the last chance saloon, really. They‘re old overdue because we’re in the five-year cycle of the 2015 Paris Agreement and the need to be nationally determined contributions announced. And from reading the Chinese press, the Chinese believe that the Europeans are basically holding out or putting pressure on China over climate because they really want China to make concessions on Ukraine. Right? There’s a triangulation going on here. I don’t know how plausible that is actually from following the European debate.
But the Europeans are just in a panicked, traumatized shot state because they’re dealing with a Trump administration that is far more aggressive than anyone anticipated. And yet, then the NATO summit actually went, okay. And so we’re back in this world in which, as with trade policy, it’s not easy to distinguish. It’s not even the conjuncture. It’s really difficult to distinguish just the kind of randomness of American policy from structural pressures. I mean, in the longer term, my hope would be that the Europeans put themselves in a position where they’re less anxious about the Ukraine situation, not that that necessarily promises any kind of resolution of the conflict, which ultimately depends on Ukrainians, I think, deciding how much more pain they’re willing to take, and what they’re willing to sacrifice to get to some kind of stabilization, and whether or not that will get a green light from Moscow.
And if that were the case, if the Europeans could position themselves in a way which made them feel less insecure and less dependent on the United States, then that would allow a separation of policy towards China over this issue.
Kaiser: That is not the case right now.
Adam: And that’s years away. Yeah, and that’s years and years away because the rebuilding… I mean, I’m strongly of the view that Europe shouldn’t spend a single euro more on its defense. It should all be about reorganization. But that’s not the way this is going to go down. They’re going to spend more and hope that that allows them to reorganize and rebuild. But that rebuilding of an autonomous European defense capacity is a matter of a decade.
Kaiser: You probably saw a couple of days ago that the European Parliament published a paper calling for increase in strategic autonomy and specifically calling even for closer ties to China. I don’t know how impactful such things are, whether they’re significant at all. But, I mean, I look at that. But then, in light of what EDL's most recent, very, very hawkish on China speech that Xi gave, mark Reuters continuing secrets flattery of Donald Trump, I think that’s… I don’t know, as a European, how you feel.
I wonder how much more appetite there really is in Europe for, sort of, a lead away from the U.S. and toward meaningful strategic autonomy because that implicitly means sort of a rapprochement with the July meetings in China coming up. They canceled the Hefei segment of it. I think expectations have dwindled or diminished.
Adam: Absolutely. And we really are no longer, I was thinking back about this and discussing with Chinese colleagues as well.
Kaiser: Well, three months ago, it looked really rosy.
Adam: Exactly. You think back to the end of 2020 and where we were… Green investments. I think that’s the moment where, and then the subsequent tit for tat exchange of sanctions, that’s the moment where relations between China and Europe really broke. And it is interesting that such an initiative should come to the Parliament, in part because the Parliament has been a place of hawkishness, but a lot of the time. Not in it…
Kaiser: Well, usually on human rights.
Adam: Not one as a majority, but there's an allowed section there that prioritizes this is human rights issue led by, amongst others, the German Green party. But to go back to your bigger and broader question, I do not see right now the capacity is there for either the appetite for a major push on the European part towards autonomy. If they can keep the Americans on side, that’s plan A. And there really isn’t any leve that Rutte is not willing to stoop to, to do that. They realize this the first time around. I mean, that’s how they prevented the first from the administration producing a total blow up of NATO is just utter obsequious. This is the way to go with this mess. And that’s fair enough as a tactic. But I think it points to a deeper unwillingness on the European part to really conceive of autonomy. And I have to say, when I’m in conversations with senior figures in Beijing, I’m always trying to argue the case for then to think of Europe and the United States as a separate and as entities with which they might consider very different types of policy and systematic alignment on more, you know, climate is an option.
I fantasize about some harmonization of carbon pricing, to create the Greater Eurasian carbon pricing zone. Technically, I think all of those things are possible. And there are certainly experts on both sides. You could see a way to that. And I’m not saying, I’m not ruling that out as impossible. But at some point, you do begin to sympathize with the Chinese. So, the sole, the striking reaction, which is, “Yeah, we know, we know. We felt for this.” We just don’t see the energy there on the European side for large-scale action. And again and again, we’re disappointed. And I’ll say, “Well, no, I actually think last year, the clash over EV tariffs, very different positions in Europe, in the United States." The Europeans do want to deal with you. They do want to argue. They do want to discuss details of tariff levels and subsidy levels. I think that’s true.
Kaiser: Yeah.
Adam: But then, when, in the end, the matter of the question is of like saving a couple of 10 billion on European defense expenditure and holding Trump in the ranks. There really isn’t anything the Europeans about to stoop to saying. So, it’s a hard sell. And I kind of had diminishing conviction, on my own part, that this is actually the… on the U.S. And my advice is really just to write them off, to be honest, like if a deal possible with Trump, fine. But like otherwise, why would you anticipate constructive cooperation from the American side in the current moment?
I just think that’s kind of a waste of policy energy. But I do increasingly struggle with myself on Europe as well. It’s like where is it that I expect? I mean, the things you hear in Berlin, and I spent time in Berlin before coming to China, the thing that they really, the Europeans, I think, might be tempted by are the joint venture idea. So, they like the idea of inverting the logic of the ’90s and the 2000s and having Chinese joint ventures. And that’s where I would be looking whether you could get some traction with Chinese investment in Europe.
Kaiser: And my sense is that the Chinese would play ball on this.
Adam: Yes, I’m sure. And again, China’s complicated, right? Because there’s policy levels and then there’s the independent corporate level, which are elite in China, but relatively autonomous from each other. And so at the corporate level, I mean, perhaps there’s no question. The big Chinese players in all of these spaces would like to be able to do business.
Kaiser: Well, China, as you say, is very complicated. And you are embarking now, you’ve been embarking on a, well, along the path, toward learning about this very complex and sometimes very frustratingly opaque country. You’ve been working hard on that Chinese language, I see. I’ve been, just this morning, I saw you reading a book on Chinese history for children. I understand you’re already at HSK2 and on your way to HSK3 before-
Adam: Those are my ambitions for the coming year, yeah.
Kaiser: Oh, good. Language aside, though, I’m curious about how you’re approaching learning about China. I mean, you’re a deeply empirical thinker. You’re also somebody who I think is very alert to narrative and reframing. And, as you know, still a relative outsider, I still think of myself as a role of outsider as well. But, as a relative outsider trying to make sense of China, how have you approached the problem of learning about this country? What sources, what heuristics, what mental models, what social filters have you found to be particularly useful or, on the hand, particularly misleading?
Adam: I mean, I think I should say that I’m a relative outsider in several different field at once. I have substantial background in economics, but I’m not an economist. I did archival history for many years. I don’t do archival history anymore. I’m not a green activist or somebody who spent their entire life in climate policy, and yet that’s what I’ve been thinking about very actively for the last five years. And so I habitually occupy this position, I think, of sort of outside inside or the other way around, inside outsider. And the same applies with Chinese studies or China watching or, I mean, I am never going to be somebody who’s life is being dominated by that pursuit, though in the going forward, I see my life is inextricably tied up with China for all sorts of reasons.
But above all, it’s just driven by the overall… I mean, why am I doing this? I’m doing this because I started seriously thinking about China in the wake of writing Wages of Obstruction. When they embarked on writing that book, deluged about the aftermath of World War I, because rather the moment in World War I, when America emerged as essential to world affairs, what do you mean by world affairs? You mean a world which is, of course, the European empires, but above all, China is non-colonized, the non-semi colonial player. And that was the moment where I suddenly kind of joined up the dots and realized there were a generational challenge, I think for folks in the West who are writing the history of modernity or attempting to think the modern… there just is no reasonable way of doing that anymore without profound understanding or an effort, at least to not just think about China, but in a sense almost to think outward from China, like why think towards China in models on the West.
And this is I think, to really come to the answer of your question, like increasingly, I think, and I wrote a piece on Chartbook a while back on the basis of some work by a geographer called Jamie Peck, who’s thinking about the conjuncture using stuff coming from Stuart Hall, which I was interested in. And he and I agree that China isn’t just sort of an analytical problem. It is the lexical problem of the mastery. Developmental China is the master key, I think, to understanding modernity insofar as the is what and generally a pluralist, though, I’m going to say it’s one of the master teacher. And without it, you just don’t have a hope of grasping what’s going on.
And so that’s my starting point is, above all, therefore, a profound skepticism about any kind of cookie-cutter, any familiar theory that I’m going to take here that just that seems like the wrong move, if you ask me what my basic necessities is to question that as a move. I’m actually genuinely interested in what 21st century Marxism might be because, anyway, it’s going to come from here, and people profess to have some idea of what it is. And maybe we should try and take that seriously as an example. I’m very, very skeptical about the abdication of middle-income models to China because middle… The entire dataset of middle-income cases is like six Chinese provinces. And there’s just more human experience here than this is one of the foundations of this whole idea.
21st century Marxism. This is the biggest laboratory of organized modernizations there has ever been or ever will be at this level organization. So, that changes this game. All of our previous social theoretic theorizing was a prelude to this in some sense. I don’t mean by that, that shows this country its future alignment, but it literally was just a preface in Industrial History of the West was a preface to China industrial history, it turns up. That’s the message that comes out of energy history, for instance. And one of the reasons I’m fascinated by the climate problem is it’s a way for me of writing a book about China. It’s a way because this is the domain in which China has not just overtaken, but just, frankly, blown away every conceivable alternative center of relevance in the last ten years.
And so the energy transition is essentially a China problem at this point, as we were saying, 75% of all renewable energy projects right now are Chinese, 33% of global emissions are Chinese. Almost all of the, not all, but like a vast preponderance of the growth in emissions has been Chinese. And these things are linked to each other in that I think one of the things that China forces us to go back to is the relationship between growth, development and innovation, right?
One of the mistakes for, say, the Europeans thinking about the energy transition, who can take credit for the people as being the people who drove this hardest? And the Americans could have had a lead. California was the lead. Construct the ball, the Europeans picked it up. They ran with it. But they ran with it within a very, very narrow box, basically, which was a relatively stagnant European economy with virtually no growth. In fact, declining demand for energy in many areas. And then within that, what the Europeans, in a zero-sum trite way, tried to do was to do energy innovation, which was credits [inaudible 00:48:43] on the long Way.
Kaiser: But it’s a different game when you’re talking about…
Adam: A different game in China, where every single year, demand is growing by 7% or 8%. And, out of that dynamic of growth, the innovation comes, and I think that’s one of the central lessons, to give it example, concrete example of how thinking about China conceptually changes what we think a problem is. We thought of the energy transition as a static zero sum, how do I replace A with B. Well, China has shown us is the development is the master key, growth is the master key to understanding how we bring about really rapid and a change in energy technology. So, that’s, to me, a concrete instance. And that’s the heart of the book that I’m trying to write is to describe the transition of thinking about the climate problem from the North Atlantic European American perspective, where it was a zero-sum game, to the logic which China instantiates really in the last 20 years, which is the development problem as being absolutely central.
And that’s, of course, far more applicable to the rest of the world because there’s no point in talking to India about zero sum substitution, like starting with the Indians and telling the Indians to shut down their coal-fired power stations when their per capita energy consumption is a very, very low levels is absurd. And it’s even more absurd to tell African countries they shouldn’t have gas infrastructure. Tell African countries to model that economic development along lines prefigured by Europe and to prescribe and gas infrastructure, for instance. So, I thinking the world atlas from China’s growth rather than thinking China’s growth as an instance of growth in general or as some sort of exception to the general rule is really, I think, is key. China’s growth as the central dynamic of the world, I think, challenges-
Kaiser: Yeah. I mean, what really surprises me is that there aren’t more people who are sort of making that realization.
Adam: This is like it’s, at one level, kind of banal. And yet, actually, when you look in detail at Western discourse, again and again and again, there’s the shying away from this, this movement. There’s unwillingness to have to face, I mean why? Because it’s disempowering, right? I mean, what it really means is this is the material dethroning of the West as the central driver of world history. This is really what the provincialization of the West looks like. And you don’t have to spend a lot of time in China or go to a lot of places to see what that means in terms of physical manifestation, just the footprint, physical infrastructure here across the vast spaces of this country, the massive population.
Kaiser: Yeah. Absolutely staggering. And yeah, it’s a source of great frustration to me. I mean, I have paid some attention to your reception in the world at least of western, so-called China watchers, and nobody is treating you with hostility as a wide-eyed naive foreign interloper. It’s not like, as a group, we’ve been particularly unwelcoming. A lot of us working on China, we go through a confidence curve of sorts. We start out very unsure, with a lot of epistemic humility, I would hope, then we become kind of dangerously confident. And eventually I think we arrive at or we ideally arrive at an informed humility. Where are you now on this arc when it comes to making strong claims about China? Where do you feel like you are?
Adam: Well, see, my claims, are absolutely at the humility level, and there really isn’t anything more humbling as learning Chinese as an adult. This is my fourth language. So, this is an entirely different experience. It’s like learning to read again. It’s not like learning about language. It rewires your brain.
Kaiser: We were just talking about that this morning, about the rewiring of the brain.
Adam: There’s no question. The only way, it’s not even a marathon like it’s the rest of your life. It’s wonderful. It’s a huge tonic for somebody in the kind of middle age of their career in the way that I am. It’s profoundly right. I also would say that insofar as I have any kind of useful role, it clearly isn’t really in saying anything terribly original about China itself. It’s more about gleaning what for the discourse which refuses to be about China to the extent that it needs to be somehow like finding the wedges that you can drive in that will destabilize that self-contained, increasingly anachronistically self-contained Western-centric discourse. Like the thing about the New York Times and if only we had a good president, we would be a leading force in the energy transition.
But you say that, you just basically signify that you do not understand the energy transition. Full stop. You just don’t. And the only way of understanding it is spending some time thinking hard about what the scale of what’s happening in China… That’s the central nub. Or the kind of, you know, oh, China has a real estate problem. This isn’t Florida for heaven’s sake. This isn’t Palo Alto or the Bay Area. This is the urbanization of one sixth of humanity in the generation, which was deliberately stopped by the regime. Like, that’s never been done before, ever — either the surge or the deliberate stopping. I mean, we’re talking about a society where roughly 90% of people live in accommodation built since the late 1980s.
Again, completely unthinkable from a Western point of view. We just say, well, it’s a real estate boom that came to a gun because like all real estate booms do. So, these are these moments where I feel you don’t need to be… I’m not going to write. I’m not [inaudible 00:54:48]. I’m not like a d-expert of like a Chinese, real estate markets and finance. But if there’s some way in which I can take a genuine old sense, an informed sense of the scale of what’s happening and place it back in relation to Western history and say, “Do you understand this?” Like, these things are big and these things are small, and you have to understand the difference between the big ones and the small ones, I’m doing a useful thing.
That’s what I’m sort of trying to do. And it also helps us when we get to the tough politic which are tough, you know, we’ve talked about this before that my grandparents were Stalinist apologists, like, these are really profoundly tough historical issues. But unless you appreciate the historic scale of what’s happened in this country in the last 50 years, you’re not seriously in the conversation at all. If you reduce this to just another middling authoritarian development story or one of these other hopelessly inadequate descriptions, you’re not grasping the scale of the problem any more than you are to you think that World War II was won on D-Day? Right?
No, World War II was won by the Stalinist regime. The T34 is the decisive circle, in the same way as the BYD and the Chinese PV are maybe going to be the tools of our salvation. Right? And yes, they come from a regime that is not liberal, like full stop. Absolutely not, unapologetically so, and sees itself as the inheritor of the Marxist tradition. No liberalism which is not willing to reckon with this.
Kaiser: Is worthy of the.
Adam: It is. It is worthy of the name. Exactly. It’s in bad faith. It’s increasingly in bad faith because, once upon a time, you could have said this was new and difficult to understand. It’s literally got a reality now. And people are still like, “Oh my God, I can’t believe it. Chinese people make cars. How could this be?”
Kaiser: Incredibly blinkered. It’s so strange, the self-limiting assumptions that so many of them seem to-
Adam: But travel to a Chinese city? Ask yourself, is it surprising that these people can make cars? It’s like, no, it’s seriously. Why should the cars be German? That’s what I see as well. It comes from a position of humility. That’s the grounding. Right?
Kaiser: But you must keep doing this important thing that you’re doing. I'm thrilled to know that there’s somebody like you that gets it. And who is putting in the work, putting in the time, putting in the time on the ground, and being released, sort of, you know, you’re not you’re not holding back. And that’s fantastic.
Adam: And I should tell you also you were right to say that my reception in the western China Watch community has been, they’re not entirely uncritical, but certainly welcoming. But it’s also true in China itself.
Kaiser: Well, that doesn’t surprise me.
Adam: The conversations I’m able to have here and the patience with which people are willing to explain these to me, and it heightens my frustration because, at some level, this is less hard to do than… I mean, obviously, learning Mandarin really is…
Kaiser: I’m still doing it yeah.
Adam: But this is not impossible to do. I mean, China is hard to navigate as a non-Chinese speaker, but it’s possible to do it. There’s open doors. We even do like a Chinese edition now the of...
Kaiser: Of Chartbook, yeah. It’s on Ghost….
Adam: And it’s been widely syndicated in the series Chinese financial media. There’s an openness that is at first surprising if you start from the position of a von der Leyen, shall we say.
Kaiser: Adam, thank you so much. This has been so fantastic. And I’m so glad that you’re here for another 24 hours, and we’ll go back in and explore more Shaxi, hopefully play a little more music, have some more good picks. Oh yeah. Yeah. We’re going to have your mushroom. Adam had tremendous success this morning in finding what was by far the…
Adam: Perfect mushroom.
Kaiser: One perfect mushroom, the one perfect mushroom. That’s all we needed before we got rained on furiously. But that was a lot of fun. And, yeah, those of you who get the opportunity to come to Shaxi, please check it out. I think I’m going to be summering here every year from now on. If Adam and I were to put together some sort of a seminar here, curious what the listenership thinks about the level of receptivity for it. I think it would be…
Adam: I think it would be amazing.
Kaiser: Yeah.
Adam: I’d really love to do that.
Kaiser: Yeah, let’s do that. Let’s move on now. I have a segment of the show that I call Paying It Forward, where I ask my guests to name somebody, a younger colleague, somebody who’s maybe hasn’t earned or maybe hasn’t garnered the kind of reputation or attention that they’re certainly deserving of. So, if you want to just name check somebody, you know, at Columbia, perhaps, somebody who works with you on Chartbook, anything at all.
Adam: I’d like to name two.
Kaiser: Yeah, no, absolutely.
Adam: So, I think there’s two people that stand out for me, both of whom we’ve got Substacks, which are really great. I mean, they’ll be familiar to people, though I’d just like to add my enthusiasm. So, like Kyle Chan, and his amazing work on Chinese industrial policy.
Kaiser: I had actually instilled a ban. This is like the fourth person to name check Kyle. But no, he’s great.
Adam: Yeah. And then the Pekingology, and the entire team there.
Kaiser: Yeah, Zichen. Yeah.
Adam: Zichen. And he’s great. He’s got a great team.
Kaiser: He does.
Adam: Again, it’s a demonstration of how it is possible to just contribute in a really useful way to the mutual accessibility without compromising it. They walk a line, but that’s not the same as really compromising. That’s a matter of being intelligent in this environment.
Kaiser: Absolutely.
Adam: Yeah. Those are my two, like, heroes.
Kaiser: Okay. Those are excellent. I mean, obviously, Kyle is, my God… Seriously, you’re probably the fourth or even fifth person.
Adam: You know, as somebody doing that kind of work is just so great.
Kaiser: And he’s just such a great presenter, so well spoken. His mind is neatly organized. And we move on to recommendations. What’s a book you’ve read recently that you want to plug? It doesn’t have to be a book. It can be movies, music.
Adam: Oh, well, then, I’m sure people who think that Swept by the…
Kaiser: Caught by the Tide, Jia Zhangke.
Adam: Yeah, an incredible film. If you haven’t been to see it, go see it. I learned that the best advice is to find out about the film before you go or just sit in a film and suddenly realize what’s happening, because it’s what are the most remarkable pieces of moviemaking I’ve ever seen. Not because the story’s terribly tied too, it’s perfectly edited, but the project is this live, real-time recording on film of China’s development since the late 1990s, with these amazing sequences about the flooding of the Gorges Dam. It’s really quite something.
Kaiser: Yeah, yeah, it’s an excellent recommendation. Please, you can find a way to see it. Mine, I’ve got maybe two. One is a more serious one, which is Karen Hao’s book, Empire of AI: Dreams and Nightmares in Sam Altman’s OpenAI, which is just a tour de force of reporting. You get so inside. It’s meticulous and just fantastic. So, Karen was at the Wall Street Journal at MIT Technology Review. She’s been on the show before. She’s just a brilliant, brilliant person.
Adam: I’d like to double down on that, because, entering the world of seriously heavy-duty language learning as AI really becomes available to us, you were saying I was sitting in the garden this morning reading this grade school kind of history book, or lower middle school kind of history, but I can do it because DeepSeek Because what deep skill do is just like break it all down for me, show me the characters, read me, you know, take me to. And so it’s transformative for those of us who are involved in these complicated cultural linguistic exchanges. It gets so impairing.
Kaiser: Karen’s book is so… I mean, I think she does a very good job both of making plain the miraculousness of it and also being very candid about the deeply problematic nature of AI, and especially of the way that open AI has run things. So, that’s one of my recommendations. The other is Gary Shteyngart new novel, Vera, or Faith, which such is on a ten-year-old girl in New York who is the daughter of a Russian emigre who is a sort of a guy who’s taken over as editor in chief of a failing magazine and is trying to sell it at a very… Gary puts himself in there quite a bit, I think. But, in a way, and who has a mysterious biological mother who she doesn’t know who’s from Korea, and a stepmother and mom who is a central figure in the book as well. It’s a delightful, very short, very, very satisfied novel. So, Gary Shteyngart’s new novel, Vera, or Faith. Adam, what a pleasure.
Adam: Great.
Kaiser: Yeah, we’ll do this again soon, and let’s review up a mountain this winter too.
You’ve been listening to the Sinica podcast. The show is produced, recorded, engineered, edited, and mastered by me, Kaiser Kuo. Support the show through Substack at sinicapodcast.com, where there is a growing offering of terrific, original China-related writing and audio. Email me at Sinicapod@gmail.com if you’ve got ideas on how you can help out with the show. Do not forget to leave a review on Apple Podcasts. This really does help people discover it. Enormous gratitude to the University of Wisconsin-Madison’s Center for East Asian Studies for supporting the show this year. Huge thanks to my guest, of course, Adam Tooze. Thanks for listening, and we’ll see you next week. Take care.