O que é este blog?

Este blog trata basicamente de ideias, se possível inteligentes, para pessoas inteligentes. Ele também se ocupa de ideias aplicadas à política, em especial à política econômica. Ele constitui uma tentativa de manter um pensamento crítico e independente sobre livros, sobre questões culturais em geral, focando numa discussão bem informada sobre temas de relações internacionais e de política externa do Brasil. Para meus livros e ensaios ver o website: www.pralmeida.org. Para a maior parte de meus textos, ver minha página na plataforma Academia.edu, link: https://itamaraty.academia.edu/PauloRobertodeAlmeida.

Mostrando postagens com marcador China Talk. Mostrar todas as postagens
Mostrando postagens com marcador China Talk. Mostrar todas as postagens

domingo, 2 de março de 2025

Trump's Pivot to Putin - Jordan Schneider, Lilly Ottinger, Shashank Joshi, Mike Horowitz (China Talk)

Trump's Pivot to Putin

+ AGI and the Future of War

Why is Trump appeasing Russia? What lessons can we learn from the battlefield in Ukraine? How will AI change warfare, and what does America need to do to adapt?

To discuss, we interviewed Shashank Joshi, defense editor at the Economist on a generational run with his Ukraine coverage, and Mike Horowtz, professor at Penn who served as Biden’s US Deputy Assistant Secretary of Defense for force development and emerging capabilities in the Pentagon.

We discuss….

  • Trump’s pivot to Putin and Ukraine’s chances on the battlefield,

  • The drone revolution, including how Ukraine has achieved an 80%+ hit rate with low-cost precision systems,

  • How AI could transform warfare, and whether adversaries would preemptively strike if the US was on the verge of unlocking AGI,

  • Why Western military bureaucracies are struggling to adapt to innovations in warfare, and what can be done to make the Pentagon dynamic again.

This episode was recorded on Feb. 26, two days before the White House press conference with Zelenskyy, Trump, and JD Vance. Listen now on iTunes, Spotify, YouTube, or your favorite podcast app.

Jordan Schneider: Shashank, it seems you had a lot of fun on Twitter this week?

Shashank Joshi: I was in a swimming pool with my children on holiday in the middle of England and didn’t notice until 18 hours after the fact that the Vice President of the United States had been rage-tweeting at me over my intemperate tweets on the subject of Ukraine. I provoked him into this in much the same way that he believes Ukraine provoked the invasion by Russia.

Jordan Schneider: What does it mean?

Shashank Joshi: It means the Vice President has far too much time on his hands, Jordan.

This is a pretty significant debate. Fundamentally, this was about whether Ukraine is fated to lose. His contention is that Russian advantages in men and weapons or firepower meant that Ukraine’s going to lose no matter what assistance the United States provides.

My argument was that while Ukraine is not doing well — I’m not going to sugarcoat that, I’ve written about this and it’s made me pretty unpopular among many Ukrainians — it’s not true that advantages in manpower and firepower always and everywhere result in decisive wins. Indeed, Russia’s advantage in firepower is much narrower than it was. The artillery advantage has closed. Ukraine’s use of strike drones — which we’ll talk about later — has done fantastic things for their position at the tactical level.

On the manpower side, Russia is still losing somewhere in the region of 1,200-1,300 men killed and wounded every single day. While it can replenish those losses, it can’t do that indefinitely. I’m not saying Vance is completely wrong — I’m just saying he is exaggerating the case that Ukraine has already lost and that nothing can change this.


My great worry is this is driving the Trump administration into a dangerous, lopsided, inadequate deal that is going to be disastrous for Ukraine and disastrous for Europe. I’m worried profoundly about that at this stage.

Michael Horowitz: Quantity generally sets the odds when we think about what the winners and losers are likely to be in a war. Russia has more and will probably always have more. But there are lots of examples in history of smaller armies, especially smaller armies that are better trained or have different concepts of operation or different planning, emerging victorious. Most famously in the 20th century, perhaps Israel’s victory in 1967.

Jordan Schneider: We have three years of data. It’s not like you’re playing this exercise in 2021. You’re doing this exercise in February of 2025. By the way, Mr. Vice President, your government actually has a ton of the cards here to change those odds and change the correlation of forces on the ground, which just makes the argument that this is a tautology so absurd coming from one of the people who is in a position to influence and who has already voted for bills that did influence this conflict.

Shashank Joshi: Wars are also non-linear. You can imagine a war of attrition in which pressures are building up on both sides, but it isn’t simply some mathematical calculation that the side with the greatest attrition fails. It depends on their political cohesion, their underlying economic strength, their defense industrial base, and their social compact.

The argument has been that although Russia feels it has the upper hand — it has been advancing in late 2024 at a pace that is higher than at almost any time since 2022 — there’s no denying that to keep that up, it would have to continue mobilizing men by paying them ever higher salaries and eventually moving to general mobilization in ways that would be politically extremely unpalatable for Vladimir Putin. War is not just a linear process. It’s a really complicated thing that waxes and wanes, and you have to think about it in terms of net assessment.

Michael Horowitz: That’s especially true in protracted wars. I’m teaching about World War I right now to undergraduates at Penn. One of the really striking things about World War I is if you look at the French experience, the German experience, and the Russian experience in particular, given the way that World War I is one of the triggers for the Russian Revolution, how their experience plays out in World War I is in some ways a function of political economy — not just what’s going on on the battlefield, but their economies and the relationship to domestic politics and how it then impacts their ability to stay in and fight.

Jordan Schneider: America has levers on both sides of the political economy of this war. There was a point a few weeks ago when Trump said he was going to tighten the screws on Putin and his economy. The fact that we are throwing up our hands and voting with Putin in the United Nations, saying that they were the aggressor, just retconning this entire past few years is really mind boggling. There was a line in a recent Russia Contingencypodcast with Michael Kofman, where he says “The morale in Munich was actually lower than the morale I saw on the front in Ukraine,” which is a sort of absurd concept to grapple with.

Michael Horowitz: If you were to mount a defense here, what I suspect some Trump folks might say is that they believe this strategy will give them more leverage over Russia to cut a better deal. That involves saying things that are very distasteful to the Ukrainians, but they think as a negotiating strategy, that’s more likely to get to a better outcome.

Shashank Joshi: That’s right, Mike. Although they’ve amply shown they are willing to tighten the screws on Zelenskyy. If you were looking at this from the perspective of the Kremlin, would you believe General Keith Kellogg when he says, “If you don’t do a deal, we’re going to ram you with sanctions, batter you with economic weapons"? Or do you listen to Trump’s rhetoric on how we’re going to have a big, beautiful economic relationship with Russia and we’re going to rebuild economic ties, lift sanctions?

You’re going to be led into the belief that the Americans are really unwilling to walk away from the table because the Vice President and others are publicly saying we don’t have any cards, that the Ukrainians are losing, and if we don’t cut a deal now, then Russia has the upper hand. It puts them in a position of desperation.

My big concern is not just that we get a bad deal for Ukraine, it’s that the idea of spheres of influence appeals to Trump, dealing with great men one-on-one, people like Kim Jong Un, Vladimir Putin, Xi Jinping — and that what will be on the table is not just Ukraine, but Europe. Putin will say, “Look, Mr. President, you get your Nobel Peace Prize, we get a ceasefire, we do business together and lift sanctions. And you can make money in Moscow, by the way. Just one tiny little thing, that NATO thing. You don’t like it, I don’t like it. Just roll it back to where it was in 1997, west of Poland. That would be great. You’ll save a ton of money here. I’ve prepared a spreadsheet for you.” 

That is the scenario that worries us — a Yalta as much as a Munich.

Jordan Schneider: We have a show coming out with Sergey Radchenko where we dove pretty deep into Churchill’s back-of-a-cocktail-napkin split. At least Churchill was ashamed.

It’s so wild thinking about the historical echoes here. I was trying to come up with comparisons, but the only ones I could do were hypotheticals. Like McClellan winning in 1864, or — I mean, Wendell Willkie was actually an interventionist. There was some Labor candidate that the Nazis were trying to support in the Democratic Party in 1940, but he never made it past first base. Has there ever been a leadership change that shifted a great power conflict this dramatically?

Shashank Joshi: From the Russian perspective, that’s Gorbachev. Putin would look back at glasnost, perestroika, and Gorbachev at the Reykjavik summit as moments where a reformist Soviet leader sold the house to the Americans and threw in the towel.

Michael Horowitz: You also see lots of wars end with leader change, with leadership transitions, when wars are going poorly for countries and you have leaders that are all in and have gambled for resurrection. If you think about the research of someone like Hein Goemans back in the day, then you have to have a leadership transition in some ways to end wars in some cases if leaders are sort of all in on fighting.

Jordan Schneider: The Gorbachev-Trump comparison is a really apt one because it really is like a true conceptual shift in the understanding of your country’s domestic organization as well as role in the world. Gorbachev, for all his faults, at least had this universalist vision of peace, trying to integrate in Europe — he wanted to join NATO at one point. But going from that to whatever this 19th century mercantilism vision is, is really wild to contemplate.

Shashank Joshi: The other thing to remember is Gorbachev’s reforms eventually undid the Soviet empire. They undid its alliances and shattered them. In the American case, the American alliance system is not like the Soviet empire. France and the UK are not the Warsaw Pact. We bring something considerably more to the table. It’s a voluntary alliance. It’s a technological, cultural alliance. These are different things.

I worry sometimes that this administration or some people within it — certainly not everybody — views allies just as blood-sucking burdens. What they don’t fully grasp is how much America has to lose here. I want to say a word on this because Munich — and I heard this again — the FT reported recently that some Trump administration official is pushing to kick Canada out of the Five Eyes signals intelligence-sharing pact.

Now okay, the Americans provide the bulk of signals intelligence to allies. There’s no surprise about that. But if you lost the 25% provided by non-US allies, it will cost the US a hell of a lot more to get a lot less. It will lose coverage in places like Cyprus, in the South Pacific, all kinds of things in the high north, in the Arctic in the Canadian case. This administration just doesn’t understand that in the slightest.

Michael Horowitz: Traditionally what we’ve seen is regardless of what political hostility looks like, things like intelligence sharing in something like the Five Eyes context continues — in some ways the professionals continue doing their jobs. If you see a disruption in that context, that would obviously be a big deal.

Jordan Schneider: Just staying on the Warsaw Pact versus NATO in 2025 today, America plus its allies accounted for nearly 70% of global GDP during the Cold War. The economic outflows that were needed to sustain Soviet satellites eventually bankrupted the USSR. America isn’t facing anything resembling that situation by stationing 10,000 people in Poland and South Korea.

Michael Horowitz: We are in a competition of coalitions with China, and it is through the coalition that we believe we can sustain technological superiority, economic superiority, military power, et cetera. Look at something like semiconductors and the role that the Netherlands plays in those supply chains, that Japan plays in those supply chains. There are interconnections here. We have thought that we will win because we have the better coalition.


Shashank Joshi: That’s an interesting question to ask more conceptually — does this administration want a rebalancing of its alliances or does it want a decoupling? You could put it in terms of de-risking and decoupling if you want to echo the China debate here. Does it simply want more European burden-sharing? But fundamentally the US will still maintain a presence in Europe, underwrite European security, and provide strategic nuclear weapons as a backstop. That is what many governments are trying to tell themselves.

The more radical prospect is that whilst there are some people who envision that outcome — Marco Rubio, Mike Waltz (the National Security Advisor), and John Ratcliffe (the head of the CIA) — the President and many of the people around him view things in considerably more radical terms. It’s more of a Maoist cultural revolution than a kind of “I’m Eisenhower telling the Europeans to spend more.”

Jordan Schneider: There’s this quote from Marco Rubio that’s really stuck with me from a 2015 Evan Osnos profile where he talks about how he has not only read but is currently rereading The Last Lion, which is this truly epic three-part series. The middle book alone is most famous, which is what Rubio was referring to, where Churchill saw the Nazis coming when no one else did and did everything he could in the 30s to wake the world up and prepare the UK to fight.

Rubio is referring to this moment by comparing it to how he stood up to the Obama administration when they were trying to do the JCPOA nuclear deal with Iran. To go from that to having to sit on TV and blame Ukraine for starting the war, I think is just the level of cravenness. There are different orders and degrees of magnitude.

Shashank Joshi: You have to think about this not in terms of a normal administration in which people do the jobs assigned to them by their bureaucratic standing. You have to think about it like the Kremlin, where you have power verticals, or an Arab dictatorship where you have different people reporting up to the president. Think of this like in Russia, where you have Sergey Naryshkin, the head of the Foreign Intelligence Service, who may say one crazy batshit thing, but actually has no authority to say it. In which Nikolai Patrushev may say another thing, in which Sergey Lavrov may lay down red lines, but they have no real meaning because there’s a sense of detachment from the brain, the power center itself. Ultimately, it’ll still be Putin who makes the call. I think it’s a category error if we try to think about this administration as a normal system of American federal government.

Michael Horowitz: I will say, I can’t believe I’m now going to say this, but let me push back and say that there’s a lot of uncertainty about what the Trump administration wants to accomplish here, given the way they have embraced the notion that Trump is a master negotiator. To be professorial about it, in a Thomas Schelling “threat that leaves something to chance” way, or like madman theory kind of way, they think that there’s a lot of upside here from a bargaining perspective.

Most of Trump’s national security team is not yet in place. We just had a hearing for the Deputy Secretary of Defense yesterday. Elbridge Colby, who’s the nominee for undersecretary, has a hearing coming up, I think either next week or the following week. So a lot of the team is still getting in place.

Jordan Schneider: The thing about Trump 1.0 is there weren’t wars like this. You had two years of sort of normal people who were basically able to stop Trump from doing the craziest stuff. Then the COVID year was kind of a wash. But Trump 2.0 matters a lot more, it’s fair to say, over the coming four years than it did 2016-2020.

Shashank Joshi: It’s much more radical. In the first term, John Ratcliffe had his nomination pulled as DNI because he was viewed as inexperienced and not up to the job. Today, John Ratcliffe looks like Dean Acheson compared to the people being put into place. We have to pause and make sure that we recognize the radicalism of what is being put into place around us.

When you look at the sober-minded people who thought about foreign policy — and I include amongst this people I may disagree with, like Elbridge Colby, who will be probably the Pentagon’s next policy chief — what is the likely bureaucratic institutional political strength they will bring to bear when up against those with a far thinner history of thinking about foreign policy questions?

Jordan Schneider: I haven’t done a Trump-China policy show because I don’t think we have enough data points yet. But what, if anything, from the past few weeks of how he’s thinking and talking about Russia and Ukraine, is it reasonable to extrapolate when thinking about Asia?

Shashank Joshi: Two quick things. One is I see significant levels of concern among Asian allies. The dominant mood is not, “Oh, it’s fine, they’re going to just pull a bunch of stuff from Europe, stick it into Asia and it’ll be a great rebalancing.”

Number two, I think this is important: there is a strong current of opinion that views a potential rapprochement with Russia as being a wedge issue to drive between Russia and China, the so-called reverse Kissinger. Jordan, you know much more about China than I do. I’m not going to comment further on that, but I will say I believe it is an idea that is guiding and shaping and influencing current thinking on the scope of a US-Russia deal.

Michael Horowitz: You certainly have a cast of officials who are pretty hawkish on China, which will be a continuation in some ways of the last administration and the first Trump administration. I think the wild card will be the preferences of the president. There was a New York Times article a few days ago that talked about Trump’s desire for a grand bargain with China — his desire to do personal face-to-face diplomacy with Xi as a potential way to obtain a deal.

Now I think the reality is that every American president that has tried to do that kind of deal, whether in person or not over the last decade, has found that there are essentially irreconcilable differences. There’s a reason why there is US-China strategic competition and why that has been the dominant issue in some ways of the last several years and probably will be over the next generation. But Trump may wish to give it a shot — and it sounds like, at least from that article, that he might.

Jordan Schneider: We’ve also had every administration in the 21st century try to start their term by trying to reset relations with Russia. “Stable and predictable relationship” was Biden’s line. Maybe this stuff is just a blip, but I think Shashank’s right. We’re in really uncharted territory.

Jordan Schneider: Let’s talk about the future of war. There is this fascinating tension which is playing out in the Silicon Valley, newly national security-curious community where corporate leaders like Dario Amodei and Alex Wang, both esteemed former ChinaTalk guests, talk about AGI as this Manhattan Project-type moment where war will never be the same after one nation achieves it. What’s your take on that, Mike?...

(...)

Paid subscribers get access to the rest of the conversation, where we discuss…

  • AI as a general-purpose technology with both direct and indirect impacts on national power,

  • Whether AGI will cause instant or continuous breakthroughs in military innovation,

  • The military applications of AI already unfolding in Ukraine, including intelligence, object recognition, and decision support,

  • AI’s potential to enable material science breakthroughs for new weapons systems,

  • Evolution of drone capabilities in Ukraine and “precise mass” as a new era of warfare,

  • How China’s dependence on TSMC impacts the likelihood of a Taiwan invasion,

  • Whether AGI development increases the probability of a preemptive strike on the US,

  • How defense writers and analysts help shape policy and build bureaucratic coalitions,

  • Ukraine as a real-world laboratory for testing theories about warfare, and what that means for Taiwan’s defense.


A pdf version of this matter is available at: 

https://www.academia.edu/127962074/Trump_Pivot_To_Putin_China_Talk

segunda-feira, 17 de fevereiro de 2025

Asia's Great Power Wars Lessons from Imperial History for Today - JORDAN SCHNEIDER, ILARI MÄKELÄ, AND LILY OTTINGER (China Talk)

Asia's Great Power Wars

Lessons from Imperial History for Today

JORDAN SCHNEIDERILARI MÄKELÄ, AND LILY OTTINGER

CHINA TALK, FEB 13


How has Chinese hegemony shaped power relations in East Asia? Why did imperial China conquer Tibet and Xinjiang but not Vietnam or Korea? Can learning from history help maintain peace in the Taiwan Strait?

Today’s interview begins with a striking observation — while medieval Europe suffered under near-constant war, East Asia were defined more by great power peace.

To discuss, ChinaTalk interviewed Professor David C. Kang, director of the Korean Studies Institute at USC and co-author of Beyond Power Transitions:The Lessons of East Asian History and the Future of U.S.-China Relations.

We discuss…

·       How East Asian nations managed to peacefully coexist for centuries,

·       Why lessons from European history don’t always apply, 

·       How to interpret outbreaks of violence in Asia — including conflicts with the Mongols, China’s meddling in Vietnam, and Japan’s early attempts at empire,

·       Whether the Thucydides trap makes U.S.-China war inevitable,

·       Old school methods for managing cross-strait relations.

Co-hosting today is Ilari Mäkelä of the On Humans podcast.


Read the entire post here: 

https://www.academia.edu/127708854/Asias_Great_Power_Wars_Lessons_from_Imperial_History_for_Today_China_Talk_

terça-feira, 4 de fevereiro de 2025

DeepSeek's Secret to Success - JORDAN SCHNEIDER (China Talk)

 DeepSeek's Secret to Success

How it broke the China tech mold

Guest piece by JS Tan, a PhD Candidate at MIT’s international development program, researching the political economy of innovation in the US and China with a focus on cloud computing. He was previously a software engineer and writes on substack here. 

As of December 2024, DeepSeek was relatively unknown.

Then its base model, DeepSeek V3, outperformed leading open-source models, and R1 broke the internet. No easy feat when operating with less compute than western labs.¹

Their breakthroughs raise two key questions:

  1. How did DeepSeek outcompete Chinese AI incumbents, who have thrown far more money and people at building frontier models?

  2. What does DeepSeek’s success tell us about China’s broader tech innovation model?

DeepSeek’s success is not just a product of technical ingenuity, but also deeply rooted in its unique approach to labor relations. Chinese tech firms are known for their grueling work schedules, rigid hierarchies, and relentless internal competition. DeepSeek’s flat management structure, in contrast, focuses on empowering its workers with autonomy and creating a collaborative environment.

DeepSeek is hardly a product of China’s innovation system. The company is neither a state-led project nor a direct beneficiary of China’s AI-focused industrial policies. Rather, it was self-funded by a former hedge-fund manager and emerged from the periphery of China’s tech landscape. While DeepSeek makes it look as though China has secured a solid foothold in the future of AI, it is premature to claim that DeepSeek’s success validates China’s innovation system as a whole.

How DeepSeek Broke the Tired 996 Playbook

To appreciate why DeepSeek’s approach to labor relations is unique, we must first understand the Chinese tech-industry norm.

Perhaps the most notable aspect of China’s tech sector is its long-practiced “996 work regime” — 9 a.m. to 9 p.m., six days a week. This workplace culture emerged during the rise of China’s digital economy in the mid-2000s and solidified during the hyper-competitive years that followed. Employees are kept on a tight leash, subject to stringent reporting requirements (often submitting weekly or even daily reports), and expected to clock in and out of the office to prevent them from “stealing time” from their employers. Employers set demanding key performance indicators (KPIs) and practice “stack ranking,” a performance management system where employees are ranked against each other.²

Since the mid-2010s, these grueling hours and draconian management practices were a staple of China’s tech industry. The long hours were considered a basic requirement to catch up to the United States, while the industry’s punitive management practices were seen as a necessity to squeeze maximum value out of workers.

Indeed, speed and the ability to rapidly iterate were paramount during China’s digital growth years, when companies were focused on aggressive user growth and market expansion. The primary goal was to quickly and continuously roll out new features and products to outpace competitors and capture market share. This relentless pursuit of expansion demanded a workforce that functioned like a well-oiled machine. As a result, employees were treated less as innovators and more as cogs in a machine, each performing a narrowly defined role to contribute to the company’s overarching growth objectives.

Such labor relations can be seen at Pinduoduo, a rising challenger to Alibaba’s dominance in e-commerce. The company is infamous for requiring an extreme version of the 996 work culture, with reports suggesting that employees work even longer hours, sometimes up to 380 hours per month. Management uses digital-surveillance tools — including location-tracking systems — to measure employee productivity. Even bathroom breaks are scrutinized, with employees reporting that prolonged absences can trigger disciplinary action. Those who fail to meet performance benchmarks risk demotion, loss of bonuses, or even termination, leading to a culture of fear and relentless pressure to outperform each other.

Since the late 2010s, however, China’s internet-user growth has plateaued, and key digital services — such as food delivery, e-commerce, social media, and gaming — have reached saturation. Those developments have put the efficacy of this model under strain.

But instead of focusing on developing new value-added digital innovations, most firms in the tech sector, even after public backlash about the 996 working schedule, have doubled down on squeezing their workforce, cutting costs, and relying on business models driven by price competition. This approach comes at a cost: stifling creativity, discouraging independent problem-solving, and ultimately hindering China’s ability to engage in long-term innovation-based competition.

New Approach to Talent

DeepSeek’s approach to labor relations represents a radical departure from China’s tech-industry norms. Since its founding in 2023, the company has eschewed the hierarchical and control-heavy management practices standard across China’s tech sector. Instead, it has built a workplace culture centered on flat management, academic-style collaboration, and autonomy for young talent.

The team size is deliberately kept small, at about 150 employees, and management roles are de-emphasized. Research groups are formed based on specific goals, with no fixed hierarchies or rigid roles. Team members focus on tasks they excel at, collaborating freely and consulting experts across groups when challenges arise. This approach ensures that every idea with potential receives the resources it needs to flourish. Liang Wenfeng 梁文峰, the company’s founder, noted that “everyone has unique experiences and comes with their own ideas. They don’t need pushing. … When an idea shows potential, we allocate resources from the top down.” To that end, DeepSeek actively avoids the performative aspects of traditional tech workplaces. There are no weekly reports, no internal competitions that pit employees against each other, and famously, no KPIs.

On the human capital front: DeepSeek has focused its recruitment efforts on young but high-potential individuals over seasoned AI researchers or executives. Many of DeepSeek’s researchers, including those who contributed to the groundbreaking V3 model, joined the company fresh out of top universities, often with little to no prior work experience. Said one headhunter to a Chinese media outlet who worked with DeepSeek, “they look for 3-5 years of work experience at the most. Any more than 8 and you’re just a ‘pass’ for them.” Liang explains the bias towards youth: “We need people who are extremely passionate about technology, not people who are used to using experience to find answers. Real innovation often comes from people who don't have baggage.” While other Chinese tech firms also prefer younger candidates, that’s more because they don’t have families and can work longer hours than for their lateral thinking.

Heavy emphasis is placed on educational background and competition achievements. The company is known to reject candidates who’ve achieved anything but gold in programming or math competitions. And beyond a cultural commitment to open source, DeepSeek attracts talent with money and compute, beating salaries offered by Bytedance and promising to allocate compute for the best ideas rather than to the most experienced researchers.

This hiring practice contrasts with state-backed firms like Zhipu, whose recruiting strategy has been to poach high-profile seasoned industry recruits — such as former Microsoft and Alibaba veteran Hu Yunhua 胡云华 — to bolster its credibility and drive tech transfer from incumbents.

[Jordan: this strategy has worked wonders for Chinese industrial policy in the semiconductor industry. Poaching experienced talent from TSMC and Samsung has been integral to SMIC, Huawei and CXMT’s success. But AI engineering is in a unique moment where young lateral thinking often trumps talent trained in the pre-transformer era.]

DeepSeek’s success highlights that the labor relations underpinning technological development are critical for innovation. While many of China’s tech giants have focused on squeezing maximum output from overworked employees, DeepSeek has demonstrated the transformative potential of a supportive and empowering workplace culture. By breaking away from the hierarchical, control-driven norms of the past, the company has unlocked the creative potential of its workforce, allowing it to achieve results that outstrip its better-funded competitors.

An Outlier in China’s Innovation Landscape

Like its approach to labor, DeepSeek’s funding and corporate-governance structure is equally unconventional. Unlike many of its peers, the company didn’t rely on state-backed initiatives or investments from tech incumbents. Instead, its former hedge fund founder essentially bankrolled the company. The company’s origins are in the financial sector, emerging from High-Flyer, a Chinese hedge fund also co-founded by Liang Wenfeng. DeepSeek itself emerged from High-Flyer’s pivot into AI after the 2021 regulatory crackdown on speculative trading. As a result of this setup, DeepSeek’s research funding came entirely from its hedge fund parent’s R&D budget. This unique funding arrangement means that the company could operate independently of the constraints often associated with state or corporate funding. In this way, DeepSeek is a complete outlier.

Once again, let’s contrast this with the Chinese AI startup, Zhipu. Zhipu is not only state-backed (by Beijing Zhongguancun Science City Innovation Development, a state-backed investment vehicle) but has also secured substantial funding from VCs and China’s tech giants, including Tencent and Alibaba — both of which are designated by China’s State Council as key members of the “national AI teams.” In this way, Zhipu represents the mainstream of China’s innovation ecosystem: it is closely tied to both state institutions and industry heavyweights.

DeepSeek, by comparison, has remained on the periphery, carving out a path free from the institutional expectations and rigid frameworks that often accompany mainstream scrutiny. Its funding model — self-financed by its founder rather than reliant on state or corporate backing — has allowed the company to operate with a level of autonomy rarely seen in China’s tech sector.

Tech Transfer vs. Indigenous Innovation

This brings us to a larger question: how does DeepSeek’s success fit into ongoing debates about Chinese innovation? And how must we update our perspectives on Chinese innovation to account for DeepSeek?

The debate around Chinese innovation often flip-flops between two starkly opposing views: China is doomed versus China is the next technology superpower. As I see it, this divide is about a fundamental disagreement on the source of China’s growth — whether it relies on technology transfer from advanced economies or thrives on its indigenous ability to innovate.

  • Those who believe China’s success depends on access to foreign technology would argue that, in today’s fragmented, nationalist economic climate (especially under a Trump administration willing to disrupt global value chains), China faces an existential risk of being cut off from critical modern technologies. From this perspective, isolation from the West would deal a devastating blow to the country’s ability to innovate.

  • On the other hand, those who believe Chinese growth stems from the country’s ability to cultivate indigenous capabilities would see American technology bans, sanctions, tariffs, and other barriers as accelerants, rather than obstacles, to Chinese growth. In this view, such restrictions compel Chinese firms to innovate, upgrade, and develop homegrown technological solutions, ultimately strengthening China’s self-reliance and long-term competitiveness.

[See also Nancy Yu’s piece on China’s industrial policy.]

So far, this debate has primarily unfolded in the context of advanced manufacturing sectors, from solar PV to batteries, and, more recently, electric vehicles. In the early stages — starting in the US-China trade wars of Trump’s first presidency — the technology transfer perspective was dominant: the prevailing theory was that Chinese firms needed to first acquire fundamental technologies from the West, leveraging this know-how to scale up production and outcompete global rivals. So the initial restrictions placed on Chinese firms, unsurprisingly, were seen as a major blow to China’s trajectory. China’s dominance in solar PV, batteries and EV production, however, has shifted the narrative to the indigenous innovation perspective, with local R&D and homegrown technological advancements now seen as the primary drivers of Chinese competitiveness.

When it comes to China’s tech industry, its success is portrayed as a result of technology transfer rather than indigenous innovation. Part of the reason is that AI is highly technical and requires a vastly different type of input: human capital, which China has historically been weaker and thus reliant on foreign networks to make up for the shortfall. Scholars like MIT professor Huang Yasheng attribute the rise of China’s tech sector to the many collaborations it has had with other countries. Even Chinese AI experts think talent is the primary bottleneck in catching up.

Indeed, China’s post-2000s ICT sector built its success on the back of overseas technical know-how. Many of China’s early tech founders either received education or spent considerable time in the United States. Chinese tech firms privilege employees with overseas experience, particularly those who have worked in US-based tech firms. In the generative AI age, this trend has only accelerated: Alibaba, ByteDance, and Tencent each set up R&D offices in Silicon Valley to increase their access to US talent. This reliance on international networks has been especially pronounced in the generative AI era, where Chinese tech giants have lagged behind their Western counterparts and depended on foreign talent to catch up.

Is DeepSeek the exception or the new rule?

This is where DeepSeek diverges from the traditional technology transfer model that has long defined China’s tech sector. Instead of relying on foreign-trained experts or international R&D networks, DeepSeek’s exclusively uses local talent. Liang himself also never studied or worked outside of mainland China. The DeepSeek story shows that China always had the indigenous capacity to push the frontier in LLMs, but just needed the right organizational structure to flourish. Much like China’s advancements in solar manufacturing, batteries, and electric vehicles, DeepSeek symbolizes a critical turning point in tech/AI: China is no longer merely playing catch-up, but is now competing on equal footing with the leading innovators in the West.

While I hope the “tech transfer vs. indigenous innovation” perspective is helpful in thinking about China’s innovation system, I must admit that it is somewhat of a false dichotomy. As development economists would remind us, all technology must first be transferred to and absorbed by latecomers; only then can they innovate and create breakthroughs of their own. Thus, tech transfer and indigenous innovation are not mutually exclusive — they’re part of the same sequential progression. First, technology must be transferred to and absorbed by latecomers; only then can they innovate and create breakthroughs of their own.

If we are to claim that China has the indigenous capabilities to develop frontier AI models, then China’s innovation model must be able to replicate the conditions underlying DeepSeek’s success. But this is unlikely: DeepSeek is an outlier of China’s innovation model.

Unlike solar PV manufacturers, EV makers, or AI companies like Zhipu, DeepSeek has thus far received no direct state support. In fact, its success was facilitated, in large part, by operating on the periphery — free from the draconian labor practices, hierarchical management structures, and state-driven priorities that define China’s mainstream innovation ecosystem.

Can China’s tech industry overhaul its approach to labor relations, corporate governance, and management practices to enable more firms to innovate in AI? The real test lies in whether the mainstream, state-supported ecosystem can evolve to nurture more companies like DeepSeek — or whether such firms will remain rare exceptions. The answer to this will define the long-term competitiveness of China’s AI firms.

For now, though, all eyes are on DeepSeek.

In December 2022, JD.com AI-research executive He Xiaodong 何晓冬 told local media,

In order to say goodbye to Silicon Valley–worship, China’s internet ecosystem needs to build its own ChatGPT with uniquely Chinese innovative characteristics, and even a Chinese AI firm that exceeds OpenAI in capability. This is an essential question for the development of China’s AI industry.

DeepSeek made it — not by taking the well-trodden path of seeking Chinese government support, but by bucking the mold completely.

The parallels between OpenAI and DeepSeek are striking: both came to prominence with small research teams (in 2019, OpenAI had just 150 employees), both operate under unconventional corporate-governance structures, and both CEOs gave short shrift to viable commercial plans, instead radically prioritizing research (Liang Wenfeng: “We do not have financing plans in the short term. Money has never been the problem for us”; Sam Altman: “We have no idea how we may one day generate revenue. We have made a soft promise to investors that, ‘Once we’ve built a generally intelligent system, basically we will ask it to figure out a way to generate an investment return for you’”).

But now that DeepSeek has moved from an outlier and fully into the public consciousness — just as OpenAI found itself a few short years ago — its real test has begun. How will it fare? Can High-Flyer cash and Nvidia H800s/A100 stockpiles keep DeepSeek running at the frontier forever, or will its growth aspirations pressure the company to seek outside investors or partnerships with conventional cloud players? Does Liang’s recent meeting with Premier Li Qiang bode well for DeepSeek’s future regulatory environment, or does Liang need to think about getting his own crew of Beijing lobbyists? Will Liang receive the treatment of a national hero, or will his fame — and wealth — put a months-long Jack Ma–style disappearance in his future? If an organizational vision crisis arises (à la the Altman vs. Musk feud), will Liang be able to steer DeepSeek through it?

In short, how long can DeepSeek buck the mold?

ChinaTalk is a reader-supported publication. 


segunda-feira, 3 de fevereiro de 2025

Trade: How Free is Too Free? History of US Trade Policy with Douglas Irwin - China Talk

Trade: How Free is Too Free? 

250 years of US trade policy

JORDAN SCHNEIDERTEDDY KIM, AND LILY OTTINGER


CHINA TALK, FEB 3


As Trump throws 10% tariffs on China and 25% tariffs on Canada and Mexico, it’s worth reflecting back on the long scope of America and trade.

Back in 2019, back when this humble substack was still called ChinaEconTalk, we interviewed the dean of US trade history Doug Irwinabout his magisterial Clashing over Commerce: A History of US Trade Policy


In this interview, we discuss:

·       A historical tour through 250 years of American trade policy;

·       Parallels throughout US trade history to recent policy;

·       The evolution of GATT and the WTO;

·       Whether tariffs now are likely to have the intended effect;

·       The three R’s of tariffs: revenue, restriction, and reciprocity.

Read here: 

https://www.academia.edu/127442137/Trade_How_Free_is_Too_Free_250_years_of_US_trade_policy_Doug_Irwin_ChinaTalk_