Transcript: Schwarzman Scholars Capstone Showcase: The 2023 Winners

Meet four remarkable young scholars and hear them discuss their outstanding research in China

Below is a complete transcript of the Sinica Podcast published March 7, 2024.

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 the way we think and talk about China.

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And here is just such a show. So, every year at Schwarzman College, at Tsinghua University, require students to submit a Capstone Project, a significant piece of research that they carry out across the year, and submit toward the end of their term. These are done either individually or in teams and with the help of a faculty mentor. Last year, they held a hybrid online and in-person Capstone Showcase, and they asked me to put together a list of judges who went through the capstone projects submitted for competition in the showcase, and working with the judges to pick finalists in three broad categories — politics and international relations, economics, technology and environment, and society and culture.

So, Neysun Mahboubi of UPenn, and Lizzi Lee, who’s the host of “Wall Street Today,” 今日华尔街 Jīnrì Huāerjiē , and my former colleague at The China Project — the two of them joined me as judges across all these three categories and helped me to pick the finalists. Then we were joined by veteran journalist, Ian Johnson, of CFR, who helped judge the politics capstones, Damien Ma of MacroPolo at the Paulson Institute, who helped out for the econ/tech/enviro capstones, and Iza Ding of Northwestern University, who joined us for the society and culture segment. Each participant, three in each category, presented their capstones in 15 minutes each, and then answered questions from the judges. So, we were all in absolute agreement that each one of the presenters just did a phenomenal job, and really looking through all the capstones, the work was amazing. Judging was extremely difficult, but in the end, we did pick three winners.

And today, on Sinica, I speak with them about their work, about their personal stories, and their Schwarzman experience. Let me add that this was all done under the auspices of The China Project, whose untimely demise forced a rather long delay in putting this show out. But putting it together just reminded me just of how truly remarkable these young scholars are. Their work is genuinely insightful, and I know that you’re going to find it fascinating. So let’s meet the winners. First up is Shawn Haq, whom I had the chance to actually meet in person in November at our conference in New York.

Shawn Haq: I’m Shawn Haq. I just graduated from Schwarzman College at Tsinghua University as part of the seventh cohort, and the thesis I did was called “U.S.-China Expert Perspectives on Cross Strait Relations.”

Kaiser: Yeah, this one was really impressive in the research design and in the findings, as you’re going to see. For this, he spoke with foreign policy experts in both the U.S. and in China, and quite a number of them, not only having them do surveys, but also just extensive interviews to compare their understandings on the Taiwan issue, the likelihood of bad things happening, and also, importantly, what motivates the other side, their understanding of what motivates the other side. Oh, and Shawn wanted me to make sure he got this caveat in as, at the time of the interview, he had a job in government.

Shawn: I just want to say upfront that everything that I’ll express in this interview today is based on solely my personal opinions and absolutely does not represent the opinion of the U.S. government or any of my employers.

Kaiser: Okay, so next up is Corbin Duncan.

Corbin Duncan: My name is Corbin Duncan. I am just recently graduated as a Schwarzman scholar. Before that, I was studying in the U.S., but as you can probably tell from my accent, I’m an Aussie. My capstone project was called Only Children and Contemporary China. And it looks at the long-run causal effects of being an only child on an individual’s economic and social behavior later in life.

Kaiser: Corbin’s work was fascinating because it was one of the first studies that I’ve seen that looks at this first cohort of only children, now that they’re old enough to say something meaningful about the impact that growing up as a single child had on them. And that impact, as you’re going to see, looks pretty robust. The third winner was a group project with five participants that worked on decarbonization efforts by Chinese governments for really carbon-intensive industries — cement, steel, aluminum — in Shandong Province specifically. Only two of them actually presented. There were five total, like I said, but they are going to introduce the others in their group in a minute. So first, let’s meet Kelly Wu.

Kelly Wu: My name is Kelly Wu, and I am a Schwarzman Scholar graduate of the seventh cohort, as the same with all my teammates. I am originally from the U.S., Wisconsin specifically. And prior to Schwarzman, I had just finished a chemical engineering undergraduate degree. I’ve been interested in energy transition since high school. And the next steps for me are I’m going to start work soon at a nonprofit looking at climate change.

Kaiser: And her teammate, Manthan Shah.

Manthan: Hi, my name is Manthan. I was born and raised in this small town called Ahmednagar in India. I am a fellow Schwarzman scholar with Kelly and team. Prior to Schwarzman Scholars, I studied business and finance at a business school in India. During this time, I was working on my debut book with Penguin Random House. I’m passionate about sustainable finance, and after, like soon, I’ll be starting my year at Oxford, focusing on sustainability environment and enterprise.

Kaiser: They had a wide range of previous exposure to China. Shawn, for instance, had a relatively deep interest in China. It started in his college days. His year in China, a particularly eventful one, though, provided him with some really great opportunities to widen that lens and experienced China in a way that very few have.

Shawn: I focused on China at Cornell in undergrad, and then I worked on China issues for two years and some change before heading to Schwarzman. And so, I’d really looked at China through the political foreign policy, diplomatic, military lenses, and less so through societal anthropological lenses. But Schwarzman really gave me the opportunity to do a lot of travel in China. I was fortunate enough to travel to every single province of China and every single provincial level administration of China. I talked to people from all walks of life, students, professors, lawyers, doctors, soldiers on a train. And it was really informative, really fun and adventurous, and at times very sobering, especially traveling and, and seeing China during that time because when we got there, we had to quarantine and there were COVID lockdowns that were going on a couple months after we got there.

And then there were protests including, on Tsinghua University’s campus, and there was the Opening Up. And so seeing that and seeing how that played out, especially in southern China where I was at the beginning of the opening up was really cool. And so, it was truly a really meaningful experience, and to a lot of us there, it really did feel like you were kind of living history, right? So, it was in incredibly valuable experience.

Kaiser: By contrast, Corbin didn’t have much by way of language or even time in country, but that’s all changed now as you’ll see.

Corbin: I did one semester at Harvard before coming here, unable to speak the language by the time that I arrived. But I have spent the better part of the last 12 months now, I guess, studying the language and investing a lot of time into that. And I think that it’s completely worthwhile, has completely shaped how I have interacted with the country. And I find that consistently investing a few hours every day over the course of a year, you’d be quite surprised, actually, how far you can get and what you can learn about people and their lives, what they’re willing to share with you.

Kaiser: And Kelly had both personal connections and a professional interest in China.

Kelly: My parents actually immigrated from China to the U.S. back in the ’80s for continuing education and decided to stay here. And I am an American born Chinese. I think that my interest in China is a good, I think combination, of both my personal background and also my professional interest in climate. So, first of all, this experience in China, coming back to Schwarzman was a really unique opportunity for me to, I guess, like understand the country where my parents are from, and also the type of cultural setting in which I grew up in. So, this chance to be in China for a long period of time, and also as an adult, I think, it was great for me to really see the culture of China and what it’s become, I think, today, and also meet with family again. So, I think from a personal side, it was very rewarding.

And on the professional side, I think that China’s also a really key player in climate. So, I had spent a lot of time in the U.S. and maybe a little bit in Europe, like understanding their climate policies and maybe renewable energy development. But China is the largest emitter of carbon dioxide now today in the world. And so, it has a really important role to play in the climate conversation. So, I really wanted this year also to be a chance for me to learn about how China’s approaching the climate problem both in like international governance and also in domestic policy, such as through this capstone.

Kaiser: They had different skill sets and personal backgrounds that I think actually showed up in the work that they did. For instance, I, just from talking to Shawn, suspected that he had done debate somewhere along the way. And looking at his resume, sure enough, he was some kind of debate champ so I asked him about that. I told him about how I’d noticed that there was something that a lot of people with a background and debate had in common, and that was this ability to put the other side’s argument forward in good faith and to be able to sort of exercise that cognitive empathy that I’m always banging on about.

Shawn: Yeah, yeah, I would absolutely agree. It’s a really interesting subculture, but I did do debate in high school and in college, and we often tackle these big foreign policy issues, and I was always intrigued by Asia issues, also the complexity of the issues. You’re right, that sometimes, in some debate formats, you don’t get to pick which side you’re on, so you kind of have to argue for every side. And so that really trains you to understand other perspectives. It trains you to really get deep on each side, like really understand the literature and the evidence and like, oh, well, even if it’s a domestic policy issue, like if you’re advocating for the Republican or democratic position, you get really well read on the literature.

Oh, these are the think tanks, these are the studies that they cite. Here’s the methodology of these studies. So, you really get into the weeds on some of that stuff through debate. One of the reasons I got really interested in foreign policy and Asia issues is because a lot of those issues that came up, I genuinely did not know the answers to. I didn’t know what the U.S. should do in this case or that case. And so, it drove a lot of my intellectual curiosity.

Kaiser: Manthan was like this Olympic-level ping pong player. I asked him about that.

Manthan: I have always been driven to make an impact for my community and my background. So, sort of when I was seven to 17 years old, my aim was to play table tennis and win medals for my country. So after a lot of hard work, I first became national champion and played for India in Australia. And that is first when I was firsthand experienced the Chinese national team winner team’s dominance in the sport. And that was my first interaction with the Chinese players. And we lost to them in the semi-final rounds. But that was my initial stage of curiosity about how are Chinese sportsmen so much better than the ones that we produce at India so far. That stayed behind my back for a long time, while like in the next, after leaving table tennis, I wrote my book, Unstoppable, and I interviewed a lot of young overachievers and how did they go around becoming young overachievers.

And my book came out just at the month of my undergrad, like finishing my undergrad. And I got an email in my inbox. And the dean of my college suggested me, “Why don’t you apply for this amazing program called Schwarzman? This will enable you to join cohort seventh of Schwarzman programs with 150 scholars from around the world and it’ll be great experience.” And since then, I have learned a lot about China. I think any Indian would say, like, our understanding of China is very generalized about what China is and what China stands for, and our television shows and newspaper channels portray a very different image than what truly China and Chinese people stand for. So, one year in China helped me understand how nice the people are, how great the food is, but also Chinese psychology in terms of their policies and their government to public interactions.

Kaiser: Hey, ping pong diplomacy worked for China and the United States, so why not China and India, right? Anyway, let’s get into these capstones. Shawn, to remind you, looked at what foreign policy elites in both the United States and in China thought about the all-important issue of Taiwan and what they thought about the other side, what they believed. He conducted 21 interviews with American experts and 30 with Chinese ones. That is an awful lot of people who said yes to interviews. But Shawn’s faculty advisor, as it turns out, was Susan Shirk, who headed until recently, the well-known Global Policy and Strategy program, and the 21st-century China Center at UC San Diego, and she was formerly deputy assistant Secretary of State for East Asia and the Pacific during Clinton administration. So, she knows a few people. So, I asked Shawn what Susan’s role was in getting him access to all of these people.

Shawn: Yeah, yeah. So, she was a wonderful advisor. She was very helpful in connecting me to folks. She’s studied and traveled to China for decades, so she’s got really good relationships. And so, especially when it came to getting some of the more prominent scholars on the Chinese side, folks that had served as former government officials, worked in the MFA or worked in the PLA, getting those folks, she was very helpful. Also, a well connected like Tsinghua professor that was advising me on my research in China was also really helpful. And so, both of them were very helpful in getting folks to agree to interviews. And then, if I was introduced to one professor, then I’m at the end of the interview would ask the spider web method, right? Asking that professor of like, “Oh, are there other scholars at think tanks in this town that would be valuable to talk to? Do you think you can make an introduction?” And so that was helpful.

Kaiser: So, Shawn, you addressed the issue of just how much these Chinese analysts, the academics, the think tankers, and so forth, you interviewed actually wield any influence at all. It’s a fair question. How much do these people really matter to Chinese policymaking?

Shawn: Yeah, so that is a really important question. Essentially, my research doesn’t break any ground here. I conducted a literature view on what we know about this. And I guess the opinion that the paper comes to is that despite the centralization of decision-making power in Beijing, a wide range of literature over decades suggests that think tanks and university scholars have robust channels of input into the Party’s kind of foreign policy apparatus and some limited ability to impact kind of perceptions and policy. Now, that is heavily coveted with the fact that big picture strategy is probably not going to be shaped by these scholars. It’s probably shaped by party leaders. But at the edges, at the tactical level, how shaping these policies from the literature and from the interviews I had and the folks that I spoke to, scholars are still widely consulted and widely asked and tasked to write reports, kind of informing the policy process at a much more tactical level.

And so, they have input, but, of course, that input is limited and it’s not going to change the overall trajectory and course of national strategy, in my opinion.

Kaiser: There’s also the possibility that there’s some species of selection bias at work here creeping in somehow just because of the fact that the people you’re going to have better access to are people in China who’ve decided to, to swim a little closer to the American shores or swim a little closer to their Western counterparts who are going to at least deign to talk to them. You see the same thing happening all the time in all sorts of China fields where there’s the people who will talk to you and the people who won’t, and often it’s the people who won’t whose opinions actually matter more. What was your sense in this case?

Shawn: That’s absolutely true. And something that a lot of your listeners may already know is that a lot of the most prominent think tanks in China are actually directly subordinate organs of Party government or military bodies, kickers subordinate to the MSS. There’s PLA think tanks, there’s MFA think tanks, there’s think tank related… subordinate to the state council. And so folks in those think tanks are presumably much more directly shaping policy. And those are also folks that I had a harder time getting access to. In some cases, I did. But in general, it was much easier to get professors or other think tank scholars to talk as opposed to the few interviews that I was able to secure with some folks at these government think tanks or folks that were MFA or PLA officials that are now retired. And so, yeah, I would probably agree with your take that the folks that are less likely that they probably do have… They’re probably not talking to foreigners for a reason. Right?

Kaiser: Let’s get onto the meat of your actual research. What I loved about it was kind of the simplicity of the design, the number of sort of core questions that you asked that you looked at was manageable and finite, but also the good questions. So, talk about the upshot of your findings, the areas where you saw actually kind of maybe surprising consensus and where you saw really significant divergence between Taiwan, I mean on the matter of Taiwan between American and Chinese experts.

Shawn: Yeah. So, across the 51 total interviews, most interviews lasted like somewhere between an hour to two hours. And I started it off with a 17- to 19-question multiple-choice survey and then followed it up with the one to two-hour-long interview. And some of the more predictable findings. One was consensus between U.S. and PRC scholars that Beijing’s interest in unification was primarily driven by ideological historical nationalist aims as opposed to secondary factors such as domestic politics, security, or material value like Taiwan semiconductor industry. In terms of the U.S. in interest in Taiwan, this was the area of divergence between U.S. and Chinese scholars. U.S. scholars thought it was because we had to preserve U.S. credibility and our security architecture in Asia for the most part. While most PRC scholars thought it was for reasons of containing China and pursuing geopolitical competition with China.

Kaiser: “Nervous Hegemon” as opposed to what the American scholars thought, which is “Entangled Ally,” right?

Shawn: Yeah, yeah, absolutely.

Kaiser: I guess I should insert a little explanatory note. So, in his work, Shawn actually uses two terms that I quite like. He describes the views held by the PRC scholars of the U.S. intentions as nervous hegemon, where the view that seems to predominate among American scholars is that the U.S. is an entangled ally. That is, that its primary consideration is maintaining credibility in the region as a guarantor of security to its allies.

Shawn: One thing that was interesting was that some of the more moderate PRC scholars and even some U.S. scholars raised that they viewed the original intent of Washington as more focused on alliances, but that intent was increasingly being securitized as the U.S. kind of more centered, the strategic value of Taiwan for PLA force protection in the Western Pacific and the value that it would provide to the Chinese if it were unified by the Chinese.

Kaiser: Right. So, the Ely Ratner argument that he, in his congressional testimony that Taiwan is a strategic asset.

Shawn: Yeah, I think five or six different interviewees brought that testimony up specifically.

Kaiser: Not surprising. Yeah.

Shawn: Which, if I recall, that kind of line of argument hasn’t been repeated, but that has been brought up a lot.

Kaiser: I think it’s significant that it hasn’t been repeated.

Shawn: Yeah, yeah, perhaps. A couple of the other findings included some interesting stuff about the actual personal support that scholars had for the use of force. If Taiwan never declares formal independence, but still opposes unification and the PRC developed the military capability necessary, only 19% of the PRC scholars would support, strongly support using military force to unify Taiwan with the PRC, somewhat predictably, if there’s a formal declaration of independence involved, that goes up to 65.4%. It’s notable though that given those conditions in the first iteration, only 19% of scholars. And I tried to be roughly representative. I interviewed more hawkish and nationalistic scholars in China, as well as kind of the more dovish ones, and that was still the result. Another interesting takeaway from my perspective was the kind of high confidence that all sides had in U.S. and allied intervention in a contingency scenario.

Something like two-thirds of PRC scholar viewed a U.S. intervention in the case of a Taiwan contingency as either likely, or very likely 70%, 71% of U.S. scholars agreed in terms of allied involvement. The numbers were a little higher on the PRC side for this, but overwhelmingly, in each case between 70% and 80% of us and PRC scholars thought that Australia and Japan would dedicate troops, or at least provide base support. A substantial portion also thought that the Philippines would provide base support in the event of a contingency assuming U.S. intervention that would dedicate troops in support of the U.S. intervention.

Kaiser: A lot of this really confirms then, and I think in an almost comforting way, the ideas that are pretty prevalent in our policy community, one being that the Chinese generally do assume American intervention were China to forcefully take Taiwan. And secondly, that China sort of assumes that the United States would be less likely to intervene were Taiwan to first declare independence than if it were not to. I’ve heard that repeated so many times. It’s interesting to see that it bears out in what the PRC scholars themselves actually say.

Shawn: Yeah, absolutely. I would say that because, obviously they’re very limited sample size, these findings obviously are not anywhere close to representative, but they do suggest broader applicability because there was pretty overwhelming consensus on scholars from all sides of the spectrum. So, it’s definitely very plausible that that is the case.

Kaiser: I’m interested in some of the conversations that you had around these questions, for example, of why the U.S. is so invested in defending Taiwan in the first place. You asked and they said, “Oh, it’s the entangled ally’s thing.” Were you able to share, for example, what these American responses were with your Chinese interlocutors, and what did they make of that claim, of the entangled ally claim? Maybe that’s a little too mad. Maybe you can one more level removed. I’m just really curious how each side viewed the other’s responses in areas where they diverged.

Shawn: Yeah. So, I did not directly say that, “oh, this is what the American said and this is how they responded.” But our conversations did talk about those issues, particularly because all those options were listed in the multiple-choice questionnaire. And so, they would often read that, and when we would talk about it during the actual interview, they’d say like, “Oh yeah, this is a common American argument that it is an entangled ally.” I think one MFA scholar that currently works at an MFA think tank responded to the argument that the U.S. is interested in Taiwan for reasons of it being an entangled ally, as saying that U.S. has betrayed its allies one by one in the Middle East, and that that isn’t really credible.

Kaiser: It’s not a good look.

Shawn: Yeah. That’s not really the case. They talk about that the U.S. support for Taiwan isn’t a formal security commitment. And so, there’s kind of these responses that are also in the literature. It’s nothing new, but they did have those responses. Some scholars, like I mentioned, did say that, “Oh, that kind of basis for the rationale is still there, but it’s decreasing in prominence." Some said that it was still the primary rationale, but that security reasons were increasing in prominence.

Kaiser: Yeah, it’s interesting that they have thought so much about how the Americans think.

Shawn: Yeah. The third major finding, so the three major ones outside of intent would be like personal support U.S.-allied intervention. The third one was nuclear use, which was interesting because this was an area where there was kind of a majority consensus amongst PRC scholars that a potential U.S.-PRC conventional kinetic conflict over Taiwan was unlikely to escalate to the nuclear domain. I think 70%, something like 70% of PRC scholars viewed nuclear escalation as either unlikely or very unlikely. But U.S. scholars were exactly evenly split on this issue.

Kaiser: Were there more assumptions built into this? Like, for example, assuming no attacks on the Chinese mainland or no overflight of the Chinese mainland?

Shawn: Yeah. In the interview conversations, we went a little more in-depth into those kind of assumptions and kind of different hypotheticals. But the numbers that I just gave you, percentages, those were based on the questionnaire, which was intentionally meant to sidestep those and kind of just give a prediction-based assessment. Some U.S. scholars thought that there would be tactical demonstration detonation of a nuclear weapon by Beijing as opposed to a battlefield use, but that tactical demonstration could then escalate to offensive battlefield use.

Kaiser: So that was Shawn Haq, the judge’s top pick for the Schwarzman Capstone Showcase in the politics and international relations category. Though I should hasten to add that the other finalists had outstanding presentations as well. Now let’s turn to Corbin Duncan who did his work on the social and economic impact on individuals born into one-child families. So, Corbin, what got you interested in that particular subject? I mean, obviously, the one-child policy is something that anyone even glancingly familiar with China is aware of. But you took an interesting angle on this looking at the long-term effects of only child status on social and economic behavior. Were you fairly confident, first of all, that you would have data to pursue this kind of work? Were you surprised by the kind of paucity of literature? Actually, that was…

I’m frankly kind of surprised. I mean, granted, this first cohort is only now in their 40s and sort of at a period where anything longitudinal would sort of be kicking in. But still, you’re one of the early people to take this available data and look at it. So, what drew you initially to this question?

Corbin: Yeah, as you mentioned, everybody everywhere has kind of heard of the one-child policy. And so, I think for that reason, when you mentioned that you are researching it, eyes kind of glaze over because everybody thinks that we know all there is to be known about the one-child policy. I think that there has been a fair amount written over the last four decades, but in some ways, I thought that the most important question still hadn’t really been answered, which is, what are the legacies of this policy? How does it actually affect life in China today? How does it affect China’s culture and society? How does it affect its economy? And that, to me, feels most pressing, where bringing an understanding to bear on this question could actually, hopefully, inform policymakers and inform us all a little bit better about the changes that China is undergoing.

And so that was why I felt like this was an important question. And it is interesting that a lot of the literature on the one-child policy focuses on issues kind of adjacent to the individuals themselves. So, it looks at things like gender imbalance and sex ratios in society, where they look at the savings rates of parents who have only children. And the work that focuses on the children themselves is mainly qualitative, mainly small sample. And typically, it was in the first few years of the policy’s introduction. It was sort of looking at how five-year-olds interact in kindergarten under the policy. And so, I thought that, that most pressing question of how are people who have had their family structure altered have their childhood, for better or for worse, altered by the policy, how do they interact in today’s China? How does their behavior, which is shaped by that policy interact on a more aggregate level for how we should understand China today?

And so, I think that there was, to use that cliché term, a real gap in the literature of looking at the individuals themselves and then also projecting forward to think that, well, in a policy as ambitious as this, those effects are still being felt and it’s still kind of shaped how people, their characteristics to this day.

Kaiser: To be fair, of course, this cohort, the oldest of which were born in 1980, are only sort of right now at an age where it’s meaningful to study marriage patterns, divorce rates, and things like that, earnings over time, career success. I mean, maybe your fellow social science researchers can be forgiven for not having yet delved into this, but it’s also, you availed yourself of a really important data set in the China Family Panel study, and you were also sort of helped along by the fact that document seven relaxed the rules governing second children being born. So, if you only had single children to study, there would be no, as it were, a control group, right?

Corbin: That’s exactly right.

Kaiser: Can you talk a little bit about what you were able to draw on in doing this both in terms of that regulatory change and that available data set?

Corbin: That’s exactly right. I used the China family panel study, which is an amazing biannual survey sampled across the country of about 30,000 individuals. And that data is so important because it’s extremely rich. We learn kind of everything there is to know about somebody’s finances, about their social relationships, about their attitudes. And so that data allowed us, and its most recent incarnation being in, or its most recent waves being 2018, we could start to look at only children entering middle age. And as you kind of mentioned, every year is important, right? So, we actually start to consider only children as being born in 1977 because of this campaign called Later Longer Fewer, which was introduced in 1971.

And that meant that there was a four-year interval between births over that time. And so, if you were a child born in 1977, then by the time your parents were able to have another child, the one-child policy had actually kicked in, and therefore, you were effectively induced as an only child by that policy. And so, the family panel study is integral to being able to do this sort of work. And I think that I was very fortunate, I know social science researchers have had access to that for a long time, I think increasingly so, I was very fortunate to be in China to be able to access that dataset, and so hopefully that sort of work will continue. What was really important about document seven, which was, in effect, started to be introduced in 1982, but was then passed formally in April of 1984, was that rural township officials were empowered to relax the one-child policy in their area.

And they could relax the policy to be a one son two-child policy, which meant that if the first-born was a boy, that would be under the one-child policy, and if the first-born was a girl, parents would be allowed to have another child if they wish. And so that introduces some exogenous variants in whether individuals are only children or not in those townships which are relaxed. And I sort of look at three axes of randomness here, and they have varying degrees of exogeneity, and hopefully when we put them together, we can say that under these conditions, it’s as good as random that you’re an only child, or that you have a sibling. And those three conditions are that you were born in a township which has had its policy relaxed — that you’re born a girl because sex at birth, we assume, to be randomly assigned.

And then also the likelihood of having a sibling increases monotonically with your age. So, essentially, the younger the first child is when document seven is passed, the more likely parents are to have a second child. And so that allows us to construct a control group where we can then compare the outcomes, on average, of people who are only children as opposed to those who have siblings.

Kaiser: There is one sort of caution I would’ve raised, which is that you need to still be comparing apples to apples. I mean, if you’re comparing people with siblings in townships, rural townships, to only children in cities, that becomes a problem.

Corbin: That’s right.

Kaiser: So, you controlled for that, I imagine.

Corbin: Yeah. So, we use this beautiful thing called fixed effects. And so, in practice, what I’m doing is comparing people who were born within a township, male or female, and then across a number of years within that one county because we are sort of controlling to the effect of that county, its social attitudes, whatever sort of factors that we are not able to observe in the data. And so that means that we are only comparing people who look really similar and that it is effectively random that they have this different family structure rather than just comparing sort of bare averages between those living in cities and those living in rural areas.

Kaiser: So, to cut to the chase a bit, I mean, we don’t want to wade through too much of the methodology here, although the research design is really very clever and very good. But let’s jump to your results, which were really fascinating, and they were not small effects. The robustness of the impact of this only childlessness was what really made all the judges, when you were presenting, just sit up and take notice. Can you walk us through some of those remarkable findings, the ones that you detail in chapter seven of your paper?

Corbin: Yeah, absolutely. I was surprised I think at the consistency of the effect and that it was detectable and the size of it. And I think that it really does go to show that even if the effects are marginal at times that having siblings really does shape who we become later in life. So, the sort of effects that we’re talking about here is I found that only children are 33 percentage points less likely to get married at every age. They marry on average seven years later than their peers. And then we also find evidence that they’re significantly more likely to have experienced divorce. So, that shows a large sort of social effect, but ultimately, the effects which really stand out and which make the most sense to us as well those on the financial front. And so I would kind of argue that a lot of those social effects may also be driven by financial concerns.

Kaiser: So, that’s interesting. I mean, because how do you sort of establish the causal direction of this and how do you establish the financial considerations as being such a major driver of the social effects that you see?

Corbin: Yeah, so the limitation of our research design is that we can’t know if the certainty, what is the mechanism behind these effects, right? But we can kind of test out a few different hypothesis. And so, if we’re going to try to explain divorce, we might think that relationships, spousal relationships between only children are, for whatever reason, more troubled or weaker, but that doesn’t seem to be the case. So, we also test the effect of being an only child on your satisfaction with your spouse and with your relationship, and there’s basically no effect. So, people are kind of equally satisfied. So, it becomes difficult then to explain, divorce through the lens of, well, only children have a different way of maintaining relationships, though they may, it then seems more likely that there might be sort of one of two things. So, one, it might be this financial case which we’ll go into, or two, it could be the case that only children are just more likely to leave relationships that are kind of unsatisfying to them. So, they’re not more likely to find their relationships unsatisfying, but they may be more likely to up and leave if that is the case. 

Kaiser: Fascinating. So, when you see higher instances of divorce among single children in a given county, are you also factoring in the marital status of their parents? Are factoring things like that? In that seem to be very, very big drivers in the Western societies that I’m familiar with of divorce. I know, for example, people who come from divorced families have a markedly higher increase in their chances of marriage that divorce.

Corbin: Yeah. Unfortunately, this is not really something that we’re in a very good position to study. And that’s because our sample size, once we start pairing it down to looking at individual counties and then looking at the gender and then cutting it up by the year that you’re born, we start to lose statistical power. And so, then if we want to control for something else, which is like very valid to want to do, it might tell us there is no effect, but it then becomes difficult to tell if that is a feature of having low statistical power or that there genuinely is no effect.

Kaiser: Talk about some of the economic effects that you witnessed, for example, in the savings rate and the propensity to spend.

Corbin: Yeah, so savings rate is something that is frequently discussed when it comes to thinking about China’s in modern-day economy. It’s really powered this investment-led growth model that, that we see today. But increasingly, economists think that the savings rate might become a drag on China’s economy. And there is a lot of preexisting literature on how being an only child means that your parents are more likely to save as a precaution because they can’t rely on you into their old age to take care of them. And so, some economists sort of try to explain part of China’s high savings rate through that channel, but what I find is that only children are huge consumers, right?

But maybe just not the type of consumption that we would maybe hope if we were economists hoping for a strong retail sector or something. Right? So, every year, year on year only children, on average, transfer significantly more money to their parents. They have lower discretionary expenditures, so they’re less likely to spend money shopping online, but like their expenditure on things like medicine and education unchanged or equivalent. So, to give you a specific figure, they spend 30.7 percentage points less as a share of their income online than their peers, but overall, they have higher consumption. So they’re 34.4 percentage points more likely to rely on loans to make ends meet. And that kind of paints a picture of financial distress, really, that only children are shouldering this burden. They’re consuming more in the sense that they are paying out more money to take care of their folks, but they have lower discretionary spending, and they’re more likely to rely on loans. And so that paints a bit of a troubling picture about how they’re going to pay for their own retirements, for example.

Kaiser: This is loans outside of things like mortgages.

Corbin: That’s right. Yeah.

Kaiser: The thing that I would’ve asked if I were one of the panelists when I was talking to you is, I mean, surely you would’ve been, immediately, you would’ve wanted to look at other East Asian countries and Western countries and looked at whether you see comparable results that seem to be tied to single child, to being an only child. Did you look at some of the other literature, and did you find similar effects?

Corbin: So, I don’t want to comment on anything that I’m not really an expert in, and so I really was just focused on trying to understand one effect. But I think that if you look around East Asia, you will find that these countries typically have low birth rates, which means lots of only children, and high savings rates. Now I’m not for a second claiming that it is like the only cause, but I can say that in the instance of China, there was a causal relationship between being an only child and, and sort of spending more money. And so, if we step back and take a look at the long term, we might see an increase of only children leads to higher savings rates amongst their parents. But then as those only children sort of move through into middle age, and they themselves get to the point to which they might retire, their consumption is heightened so that they can look after their parents.

Their spending is heightened so they can look after their parents into their old age. And so there may be some part of those high savings rates, which are sort of a glance that we might think that over time might even out somewhat. Because on the tail end, you have young people who enter middle age, they are consuming more, they’re spending more.

Kaiser: Are you yourself an only child?

Corbin: I’m not. I’m not. So, I have three siblings.

Kaiser: Me too. Me too. I have three. And where are you in birth order?

Corbin: I’m the youngest.

Kaiser: Ah, okay. Are you a big believer in birth order having an impact? 

Corbin: I think it’s difficult to say that it doesn’t. I think not for sort of like pseudoscientific reasons about how they’re treated by their siblings or whatnot. I think that the first and the last child probably tends to get either all of the attention or all of the resources because families, on average, sort of get wealthier over their lifetime.

Kaiser : If you went back in time and, and you could have the undivided attention of the technocrats who were responsible for the one-child policy, tell them what they were about to unleash and you have three minutes of undivided attention in which you can assume that they will take your warnings seriously and find them credible, what would you say to them?

Corbin: That’s a tough question. So, what I would say is that France and Britain sort of did what China did, taking their fertility rate from around five to below replacement over the course of 100 years. And China did that in about 10 to 15. And so, this huge shock is going to shape your society and your economy in ways that are really unforeseeable at that moment. And China’s birth rate was already falling. And some of that was to do with family planning policies, but I think that, as we mentioned, that first cohort of only children are sort of 44, right? Like if we take it back to 1976, and so we are still yet to see China’s economy fully reckon with the effects of this policy. I think that those effects are probably likely to become more painful in the coming years.

And so, thinking what sort of advice we would give the policymakers back then, it would be to maybe find a different way. The birth rate’s already falling. We should find ways to nudge that.

Kaiser: Trust the process.

Corbin: Yeah. That some of these things just have to be allowed to play out. And I mean, it’s a difficult argument to make. I think that we’ve left behind this 20th-century view of there being such a thing as like a population bomb, right? We are far less concerned about that today. And I think that if we could take that knowledge back, we might think, okay, China can grow with a large population and that we should maybe intervene less.

Kaiser: I imagine you probably agree that that’s really interesting stuff. All right, so Kelly and Manthan actually had three teammates who weren’t able to present, so I asked them to introduce those teammates, Emily, Sophia, and Jichen briefly.

Kelly: Emily is from New Zealand and she, like me, just graduated college before going to Schwartzman. She majored in environmental sciences at Harvard. And after Schwarzman, it’s going to consulting, working in the energy practice. And Sophia is also a college graduate. I think you can sense the trend in our team. We’re all, I think, on the younger side of the Schwartzman scholar spectrum. Sophia just graduated from college in mechatronics engineering, and she is originally from Australia. And we’ll also be going into consulting after.

Manthan: Jichen our fellow Schwarzman scholars and one of the most inspiring people I’ve met. He’s a young leader for the SDGs endorsed by the United Nations. He did his undergrad at Tsinghua University, and now he’ll be joining the provincial government in Yunnan, in the poor district and will be trying to focus on the areas of sustainability in his capacity as a civil servant in China.

Kaiser: I asked Manthan to tell the story of how this group came together.

Manthan: Yeah, absolutely. I think it happened in a very interesting time. All the people from all around the world were coming to China, navigating the quarantine situation, and we would have… We had a WhatsApp group about all the enthusiastic people about climate and finance who are focused on doing this project together. And it was massively oversubscribed. This is like more than two dozen people were interested in topics about this. So we had several Zoom meetings and conversations on the WhatsApp groups to see what our topics are. And I think everyone was doing like one-on-one conversations to try to understand what their specific interests were. So, that’s how I and Kelly met first during our time at Hilton. And clearly, like all of us who were interested in climate, we came from different backgrounds, so it was like a natural coming together of the band.

Like, I came from a more finance business background while Kelly is a chemical engineer, Jichen is a civil engineer. Sophia is a mechatronics engineer, and Emily studied environmental sciences at Harvard. So, it was like we all had like different skill sets as well as different nationalities. We are from literally all parts of the world, five different nationalities. So it was like a perfect mess mix of coming together. But the best part was, I think I remember it was like the first week in Schwarzman College, we were sitting in the forum, and there’s like five chairs around it. And we sat there and everyone was like coming to see, have the Avengers arrived, these like powerhouses of people coming together and discussing? What are they talking about? And so, it was truly a powerful, insightful, inspiring team coming together for this project. It was quite an experience.

Kaiser: Let’s get a little bit of an overview of the capstone that you guys did, and let’s talk first about the genesis of the idea, why you were attracted to this particular topic. It sounds like Emily was one who really maybe took the lead first, so really glommed onto it and organized the group around this topic. And then we’ll talk specifically about Shandong and why the particular industrial sectors, the material sector, steel cement chemicals were so important.

Kelly: I think Shandong, we found is that also through our research and conversations, but it can really be thought of as a mini-industrial China because it is the, I think one of the industrial powerhouse provinces in China. It’s the third largest in GDP and also the largest carbon dioxide emitter. And industry, especially like large industry, heavy industry is, I think, disproportionately represented in Shandong’s economy. So, I think it made sense for us to focus on Shandong because if Shandong’s industry can decarbonize, it can also provide the roadmap for like larger, greater China to decarbonize. And there’s a lot of lessons that maybe can be learned.

And the opposite is also true, if it fails to decarbonize, there’s a lot of challenges that lay ahead for the climate issue. Yeah, and then on the materials industries or why we chose the four industries — steel, cement, chemicals, and aluminum in particular — there’s actually a couple more industries that are difficult or included in this like hard to bait definition, including transportation. But we thought that transportation, there’s a lot more research that had been done. And we know that electric vehicles are taking off. It seemed like there is like a road ahead I think for that industry. But the ones that we were looking at, the materials industries, there is still a lot of uncertainty and maybe a lack of clear, I guess, path forward. So, we were really interested in digging more into this issue.

And I think a way in which these sport industries are similar is they are very difficult to, or it’s very difficult to remove carbon emissions from them because, for example, they use a lot of high-temperature processes, and that require a lot of energy. Carbon emissions are also made in the chemical processes themselves. So just by nature, there’s a lot of carbon dioxide that’s produced. The assets are a lot, very capital intensive to build. And the products are like commodity products, so you don’t earn a lot of profit margins on them. So, there’s a lot of ways in which their like very nature, it makes them hard to decarbonize.

Kaiser: Manthan, am I wrong to think that much of the conversation around decarbonization in China has traditionally focused on power generation and on transportation? These are sort of the big sexier ones. In fact, I think I would assume most people when they think of decarbonization, these are the sectors that come immediately to mind, right? I wonder why that is. And is this just a popular misperception? Is it one that’s shared, I wonder, by U.S. policymakers? Like, when us policymakers address issues in China, when John Kerry goes over and his staff briefs them, are they focused on power generation and transport and not on heavy industry?

Manthan: Yeah, absolutely. I think you are spot on. And Kelly, please add on to the point of U.S. politics because I don’t know too much about it coming from India, but definitely like, I think both transport and power generation are the sexier, newer places which attract a lot of capital investments. But de facto, I think the decarbonization of heavy industries is, as Kelly said, is very hard and has a lot of challenges. So, it just does not attract as much interest towards this field.

Kaiser: This research took you guys into areas that many of you probably knew very little about prior to this project. I doubt maybe you were aware, for instance, about the difference in carbon intensity of a blast furnace versus electric arc furnace is, right? If you even knew what an electric arc furnace was. I didn’t. Can you guys share between, the two of you, share some anecdotes about what kinds of surprises came to you during the course of research and surprising things to you and your team members, new areas that were opened up for you in the course of this that you found intellectually just fascinating.

Manthan: Earlier this part of the year in January, all four or five of us packed our bags and go to Shandong, we go to Jinan, and we are on the… As soon as we arrive in the railway station, we are waited by the government officials in the black suits and the drivers, the main building, the main official building in Jinan. And they have scheduled a complete three to four-hour session with us, with heads of every department. They were completely prepared that we were coming. They had sort of documents, research, press releases, and status updates from every industry, like steel, aluminum, chemicals, and cement prepared with them. So, the most surprising part, to me at least, was knowing of how, like seriously these industry leaders of department heads in China were thinking about these industries, how well prepared they were for our meeting, and how much they had done research, and like they were on top of their things and actually finding solution and seeking insights from us, university students, who were doing this research.

And it seemed to be, like that sort of level of preparedness and research and being on top of things very much surprised me coming from India in which there’s definitely a discrepancy between how much the department heads actually know and how much they’re willing to do. And similarly, I think that in the end, they were most curious about EU CBAM, European Union Carbon Border Adjustment Mechanism. And so, like I was studying steel personally, and steel industry, like it’s one of the biggest exports. And China produces 57% of the world’s steel as well as consumes about 60% of the world’s steel. And steel is one of the biggest things, but they could not export to the European Union because of the European Union’s Carbon Border Adjustment Mechanisms. And so, they were trying to find out the ways that they could align their carbon emissions and regulations to a level in which they could enter the export market.

Kaiser: Kelly, what about you? Did you have any interesting areas that this sort of had your mind blown or were completely eye-opening to you?

Kelly: Yeah, I think that one part was really figuring out how detailed we should go into each, the industry, which is how much we should stay high level and summarize. I think this is an interesting research question actually, is how much detail do we have to get into to really find useful recommendations on next steps and not really just say blanket statements of, oh yes, you should try and do energy efficiency as much as possible? Like, what does that actually mean? And I think that for us, with the way we divided the research, it was each of us had one industry that we became an expert in. And then Jichen covered one of China’s policies, being the Chinese scholar on the team. We were actually able to really get into a level of detail that was useful for finding similarities and differences across these industries.

But I think that was a really surprising point to me because in a lot of other reports I read, it was, oh, like carbon capture, we should just apply it across all of these hard debate industries. But actually, it’s not as applicable in cement where the emissions are like less concentrated. So, it’s like there’s actually a lot of subtlety that make these technologies not applicable for all the industries the same way. That I think was really surprising and important for me.

Kaiser: You mentioned the data that you had access to. One of the major things that you drew on was CREM, the China Regional Energy Model. Can you talk a little bit about what that is and how you made use of it, Kelly?

Kelly: Mm-Hmm (Affirmative). Yeah, so CREM is the China Regional Energy Model. In economics, there’s like a computable general equilibrium model, which basically says it means it’s able to consider a large part of the economy in the model itself through like equations and like data inputs. So, this model takes like GDP projections and historic GDP numbers, also like population projections, energy use projections and production estimates for like different sectors of the economy. And what it does is you can actually input policies that the government has made regarding carbon emissions maybe, and see how successful those policies are, or like how much emissions reduction might actually come from these policies being implemented. So, for example, Shandong’s government had put a lot of energy efficiency targets in place. So, maybe like total energy per GDP had to decrease by 2025.

And we could see from this model use that that may not be enough to reach longer term targets of 2030 carbon peaking. So, it was actually a very informative model to basically show where current policies would cause the, I guess, carbon emissions to fall. And I think it also kept our project kind of focused on a bigger picture because we were focusing on these four industries, but the model actually showed that yes, electricity itself also needs to be switched to renewables still, and it’s like still a big part of the entire carbon picture. Yeah.

Kaiser: Sure. So, one topic that gets talked about an awful lot, I think this is applicable not only in… I mean people look at China as an obvious example of it, but people are talking about it with respect to other developing countries as well, is this idea of authoritarian environmentalism, coercive environmentalism, using the capacity of the state in sometimes coercive means to actually affect carbon mitigation, and in ways, that can be painful or that can be invasive. That can be actually quite coercive. When you came out of this, how did you feel about the pros and cons of a very state-led approach after doing this project? Manthan, maybe we can start with you.

Manthan: Yeah. No, that’s a very good question. My personal opinion was that I think the level of authoritarianism, like top-down approach towards environmental issues has been quite promising for China. And I think that’s the way to go ahead. For example, like India and China were at the similar levels of economic development 20 years ago, but right now, because of this regulation, China is much further, but they’re at the same point. Like now China has committed to the 2060 net zero goals and 2030 carbon peaking goals. So, because of that top-down approach, we were able to see, like in our personal interviews also, the government’s incentives, that every individuals, every department’s incentives were tied with… the promotions were tied to their environmental outputs also. Therefore, to please their bosses, they would have to take actions that would align for China and the province to reach those goals.

That was very effective, in my opinion. Also, like professor like Zhang Juliang, our capstone academic advisor, he was responsible, like he headed a group to design China’s carbon trading markets. So, because of his… I spoke limited Chinese, but understanding his work and how further China was as compared to India in terms of evolving and developing carbon markets, I thought like that sort of top-down approach and taking multiple stakeholders from academy business industry and implementing was quite promising.

Kaiser: I’m sure that you couldn’t help yourself, that you must have thought about your own home country and what lessons might be drawn for India from China’s successes to date and from its approach to decarbonization. What were some of the positive and negative lessons that you took away from this?

Manthan : These were lessons like positive or negative, I’m not too sure, but they were very directly applicable lessons for India because After China, India, like after a huge margin, India is the second-biggest producer and consumer for say, example, steel. And a lot of the nature of these industries are very similar to the Chinese industry. So for our listeners, so steel is produced in two main ways. First is the primary, which is the BBF-BOF, which is Blast Furnace-Basic Oxygen Furnaces. So that kind of, at the high temperature, they use crude iron ore to make steel. So, at this point, like India and China, both use majority, like 90% of the steel, at least in China is still made by the BF-BOS method. The second method is electric arc furnaces, which is EAF.

So, they use the electric arc furnaces to, sometimes along with DRI or H2, hydrogen, to recycle the steel and produce steel out of it. That is still very limited in China and as well as in India. Therefore, there were a lot of similarities in the nature of the industries and the nature of businesses that is done within the industry that was applicable. Similarly, like at Shandong, we focused, there are like multiple regions in India that are like steel heavy, steel production heavy or industrial heavy industries. Therefore, like our short-term recommendations of increasing material efficiency, steel efficiency, the medium-term recommendations of increasing the supply of secondary steel, procurement of secondary steel, and the long-term recommendations such as increasing hydropower, like moving to new geographies or investing in, say, CCUS technologies were all directly applicable to Indian context.

And I’m very proud to say that part of our research was shared at the task like government of India’s task force for steel decarbonization. Therefore, we were able to submit part of our research for actually informing some sort of insights to the government.

Kaiser: Kelly, let me ask you the same question about authoritarian environmentalism and about this sort of top-down state-led approach toward environmentalism, which is, again, something that generates a lot of controversy. It’s come under a lot of criticism in the United States, but also finds its admirers.

Kelly: Yeah, I think that definitely, yeah, speaking from the perspective of having been in the U.S. and then also going to China, it’s really interesting comparing the types of policies the U.S. and China are taking for looking at industrially carbonization. And I think it provides really interesting like policy environment analysis. I think in the good part of this, more like authoritarianism, environmentalism is actually the aspect of industrial policy. They’re like picking and choosing industries to support and actually like design a little more of the industry’s progress. And I think that China has been doing this for a long time, for example, in the electric vehicle industry, and now also in these hard-to-like steel chemicals, cement, aluminum industries. Very, very clearly, I think, saying, “This is the step, road ahead. You must consolidate or you must do this.”

And I think the U.S. is actually also starting to do industrial policy because it has worked, I think like electric vehicles have taken off in China. And a lot of these cement just feel like the capacity has been reduced, though, emissions has been reduced in these heavy industries in China. I think in the U.S., it’s more like, alright, and I guess now we also have to pick some industries to really focus on and provide a little bit more guidelines for or a little more like structure forward for. And that’s seen in like the Infrastructure Bill and the Inflation Reduction Act, you can see a little bit more of like industry picking and road mapping. I think one way in which this authoritarian environmentalism may be less, that is maybe on like the innovation side. For example, to this point, as we found in our research, a lot of these industry decarbonization targets are based on, okay, let’s just keep closing the next plant, keep closing the next capacity.

Just really like limiting the amount of capacity that can actually be reduced in the province. But if less though thinking about, how can we support these companies and innovating and providing like new ways for them to build more efficient industry or think of the next step, like invest in these technologies like hydrogen and carbon capture. And I think that’s the way in which like the structure of incentives as Manthan mentioned as well where like government officials are rewarded for getting to those very concrete targets of like this reduction in capacity or this reduction in energy intensity by 2025, by 2030, that in a way maybe contrast with the innovation ecosystem that you need to really invest in like next generation technologies for climate.

Manthan: No, I just wanted to add an anecdote too. Kelly’s is so spot on in terms of the innovation part, and I think the European Union consciously or subconsciously did a very profitable way of implementing the EU-CBAM. So, in our conversations with the heads of departments and officials in Shandong, when the European Union’s EU-CBAM was kind of imposed on them, instead of pining ways domestically to sort of better account for their steel emissions or find technologies or build, invest in technologies that will enable them to align with the European union’s benchmarks, they were more curious of finding what are the technologies that already exist in the West that they could kind of bring in China and then try to scale it or like perfect it in the Chinese context? The Chinese ecosystem abroad, and even in the environmental contest works like this, sort of looking West and then kind of bringing it home and then scaling it.

Kaiser: Hmm. Yeah, contrasts, as Kelly said, but also maybe complementarities, especially President Biden’s Special Climate Envoy, John Kerry was in China very recently as you both doubtless know. How vital, staying with you Kelly, do you think cooperation between China and the U.S. on climate issues ultimately is? Because there are some who think that maybe, look, we can just lean into competition. Competition can produce a race to the top. Others though think that competition is inherently wasteful. You get a lot of redundancy when you’re trying to sort of replicate supply chains that could be more efficient if everyone did what they did best, right? They’re failing maybe to leverage China’s massive manufacturing capabilities when it comes to the voltaic arrays to solar panels and to wind turbines.

And of course, there is the specter of the incredibly carbon-intensive activity of arms racing. Where do you stand on this? I mean, the future of U.S.-China climate cooperation and how important that is, and what are some areas that you identify that even may have because you know, you talk about American innovation and that maybe are applicable to decarbonizing Shandong’s material sector?

Kelly: Oh, a lot of very, very important question. I think if we had an answer to this, maybe there’d be a lot less back and forth on the climate space and the collaborate or complete topic. I think that actually it seems like we’re in the sort of gridlock and the high level of collaboration or not. There’s always like this question of whether we can compartmentalize or not climate negotiations from the rest of the political negotiation landscape. But I think what’s actually happening, if you like, look under the hood is there’s still a lot of like business and individual collaborations like nonprofits or NGOs like working in this space. Then I think that’s where we really have to like focus on the efforts, especially as someone who’s like working actively in this space, it’s kind of like, okay, let’s still like keep working as while we can.

Because the biggest thing, I think, that’s limiting us all is the timeline of climate change. I think we really needed to start working on big, I guess, mitigation strategies in this decade. And that’s a fact, a truth. That’s not going to change based on the day-to-day dialogue of U.S.-China collaboration or not. So, really, I think it’s about like looking at the specific cases that are still going on. For example, I think some Chinese, like battery firms are still starting factories in the U.S. and also Chinese solar firms as well. There’s a lot of research that’s still going on in the U.S. looking at, oh, how can we help China’s like electricity market deregulate? There’s still a lot of things that are happening, and I think that’s like really what is the important part is looking at these detailed, like, let’s look at this industry, let’s look at this policy, let’s look at this topic and still try and make some change.

Yeah, and I think that another one more point on U.S.-China climate collaboration or competition is we really have to think about how developing countries and other countries in the world are also an important benefiter or loser of this dialogue. So, I think that for me, it’s important to see like, how can, maybe like the U.S. and China work with other countries as well to help their climate efforts. Whether it’s talking about migration options or technology development and transfer in like other countries, like things that are not necessarily U.S. and China working directly, but working with different countries. I think the more that we do in these other countries is also better. And as the largest emitters, but also some of the most innovative countries in the world and climate tech, I think U.S. and China can both help the global conversation by working with other countries as well. I was kind of rambling, but yeah.

Kaiser: No, no, no, but it’s very well said. No, no, you’re absolutely right. And one of those third countries would be India. So, maybe Manthan you can talk a little bit about what you think are the really big takeaways that from an Indian perspective, when you look to what the United States does and what China does, and what are your hopes for their abilities to cooperate and what are the sort of maybe as a later mover in this, what India can learn from watching this play out between the U.S. and China.

Manthan: Oh, that’s a very important question. I think Indian government right now has committed for 2070 net zero coals, and every state in India also have guidelines for industrial decarbonization and sort of consolidating industries to a few and sort of increasing the energy efficiencies and reaching the economies of scale in terms of production. So, I think India, like each of these are industries that we focus in our research or steel, aluminum chemicals and cement, there are direct sort of inferences that can be drawn for India to decarbonize. But at a broader scale, I think India, like we should sort of lead the global, these developing countries, by increasing the way we approach, just like trading with steel, like carbon accounting and being capable of trading with European unions and other people. And sort of coming to the benchmark of international standards of like carbon monitoring so we can actually trade and increase our output where China is currently lacking.

Kaiser: Fantastic. All right, you guys. There was one thing that I’ve neglected to ask you, which I really need to which is go through your recommendations. Let’s go through the actual substance. What did you conclude? What should Shandong Province do to most effectively decarbonize these stubborn industries?

Kelly: Okay, sure. Yeah, I think that for the cement industry, we found that it’s the toughest one by far to think about decarbonization currently because there’s really no technology that’s readily applicable even compared to other industries. So, in terms of Shandong, I think it requires a little bit more creative thinking. For example, working with the demand side of cement and thinking about ways that you can create demand for low carbon versions of the cement such as cement that uses less carbon intensive material, or even think about designing buildings that have less cement in them. And I think another thing for cement is looking at fuel substitution. So, thinking creatively about if we can’t use less fuel then can we use different fuel, for example, like biofuels or other waste fuels for the most high temperature process?

And then long-term also thinking about carbon capture as it becomes more advanced. On the chemical side, I think that chemicals is very diverse. So, there’s a lot of different types of chemicals that is produced, but one thing that’s really promising for Shandong and for chemicals itself is the use of green hydrogen. So, Shandong actually has a lot of renewable energy, and this energy could be used to produce green hydrogen which can then be used directly in chemical production. And that’s a replacement for really high emissions feedstock. So yeah, I think that’s one consideration Shandong could think about is how to integrate green hydrogen into their own local economy. And the other part is thinking about carbon capture as well. I think that the chemicals industry actually has really high concentration emissions, so it could be one of the first of its kind demonstrations for carbon capture. These are all, of course, along with other recommendations of continuing to increase efficiency, replacing old equipment and like digitalization of these factories. But yeah, I think those are sensitive.

Kaiser: Manthan, you’ve got steel in aluminum.

Manthan: So, for steel industry, our short-term recommendations were about increasing the material efficiency as well as energy efficiency within the Shandong Province. And this could be done by consolidating a lot of power in the top two biggest producers of the Shandong Province and sort of closing shops for the other smaller producers. And there is something that they were actually doing as we interviewed them. The other short-term recommendations were increasing sort of the technology for transparency and monitoring of energy efficiency at every stage of the supply chain in the province. In the medium term, it was about increasing the scrap procurement for steel, but through increasing the imports of high-quality scrap or improving domestic scrap collection or promoting recycling facilities within Shandong. And in the long term, it was, as Kelly also mentioned, utilizing the hydrogen power and sort of… it could also mean moving away to geography such as in the South and Yunnan to kind of take on the heavy hydropower energy sources that they have or investing also in disruptive ultra-load technology such as CCUS, so on, and so forth.

For aluminum, it was quite similar. In the short term, our resource showed that we could focus on transitioning to low carbon energy as much as possible, creating demand for low carbon aluminum, strategic movement to renewable areas and to continuing production caps, which would in turn increase the energy efficiency requirements. In the medium term for aluminum, it was deploying high technology to reduce process emissions, maximizing recycle aluminum processes and increasing material efficiency. And the long term, it was to completely move a hundred percent towards zero carbon, it was the establishment of [anode 1:21:12] technologies. Yeah, absolutely. So, in the long term for aluminum, I think the key strategy is to use anode technologies and the use of thermal energy for aluminum that will enable us to reach 100% net zero aluminum production in Shandong.

Kaiser: You guys, this is great. And once again, congratulations so much on your excellent, excellent capstone. It was so nicely done and so well presented. I think you guys got a lot out of it. I’m very envious that you guys got to spend a year surrounded by so many brilliant young people. Thank you so much both of you for taking the time and, once again, congratulations on such an excellent project.

So that’s a wrap. And wow, just going back through these after a few months and listening, not just to the design of the research, to the methods and the findings, really, I’m just blown away by the passion and the energy of these scholars. They are all obviously going on to great things. I am delighted that I will be in Beijing in a couple of months for the next iteration of the Schwarzman Capstone showcase, and I look forward to speaking with all the winners again, meeting a whole new crop, and putting together another show featuring these remarkable young scholars and their outstanding work.

Special thanks this week to Joan Kaufman, Senior Director For Academic Programs for the Schwarzman Scholars Program. She was instrumental in making this happen. Really, she made this happen. Next week, I’ve got a show taped live before an audience in Salzburg, Austria at the Salzburg Global Seminar. I sat down with Rana Mitter, who is one of my all-time favorite working historians, to talk about how China is trying to fuse Confucian ideas with its own brand of Marxism Leninism. I think you’re really going to enjoy that one.

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 sinica.substack.com, where there’s a growing offering of terrific original China related writing and audio, or email me at sinicapod@gmail.com if you have ideas on how you can help out or what I could be doing better. And don’t forget to leave a review on Apple Podcasts. Enormous gratitude to the University of Wisconsin, Madison’s Center for East Asian Studies who are supporting the show this year, and for educating my daughter. Thanks for listening, and we’ll see you next week. Take care.