Ep. 50: TechBuzz Live: The Transpacific Experiment: How China and California Collaborate and Compete for Our Future

Episode 50 of TechBuzz China is unique: it’s our first live recording! It features co-host Rui Ma in conversation with author and journalist Matt Sheehan, currently a fellow based at the Paulson Institute’s MacroPolo think tank. It was recorded at the August 13 launch of Matt’s new book, The Transpacific Experiment: How China and California Collaborate and Compete for Our Future. As our co-hosts have commented on previous episodes, we respect Matt as one of the smartest and most thoughtful voices on U.S.-China topics. Though his book covers content and industries that we at TechBuzz usually do not, these topics are crucial to understanding the greater context that defines US-China tech today — especially given today’s geopolitical situation.

Listen to find out: what does Matt think are some of the long-term repercussions of the Chinese education system, and how they may ultimately impact the decisions and preferences of Chinese tech talent? What does Matt mean when he writes that the Bay Area is to those born and raised in China what Shanghai is like for Americans — and what is the deeper insight here? How do Chinese tech companies often choose to compete in places like India, Brazil, and Indonesia, as compared with American ones, and why? What about Hollywood-US ties: will Hollywood continue to win over hearts and wallets in China, despite the trade war and other macro factors? What about flows of capital between the US and China — how have they been affected? Importantly, what does Matt predict for the future of the Transpacific Experiment, and why should TechBuzz listeners care about its outcomes?

You can purchase (and review!) Matt’s book on Amazon. As always, you can find these stories and more at pandaily.com. If you enjoy our content, please do let us know by leaving us an iTunes review, liking our Facebook page, and tweeting at us at @techbuzzchina! Thank you also to our listeners over at our partner, dealstreetasia.com.

We are grateful for our supportive and talented producers, Shaw Wan and Kaiser Kuo, and for our intern, Wang Menglu. Thank you!

Listeners who are interested in visiting China but never knew where to begin should check out Pandaily’s one-week immersion into China’s tech scene, taking place October 13-19, 2019: decode.pandaily.com. This trip is not to be confused with TechBuzz China’s inaugural invite-only China Investor Trip for public market investors, which will be held from October 7-13. Watch out for TechBuzz meetups held in your city!

Transcript

(Y: Ying-Ying Lu; R: Rui Ma; M: Matthew Sheehan)

[00:00] Y: Today’s episode is a unique one, because it’s in a bit of a different format from what we usually do: it was recorded live. August 13th, this past Tuesday, was the official release date of a book by our friend Matthew Sheehan. The book is titled The Transpacific Experiment: How China and California Collaborate and Compete for Our Future, and it’s chock full of thoughtful and well-articulated research, analysis, and stories. Matt is a former journalist in China and a current non-resident fellow at the Paulson Institute’s think tank, MacroPolo. For the launch event at the Asia Society in San Francisco, our very own TechBuzz co-host Rui Ma engaged in an interesting dialogue with Matt… and that forms the content for this week’s special episode. Rui, you did such a great job!

R: Thanks, Ying-Ying. It was a lot of fun. Matt is truly one of the smartest and most thoughtful voices on U.S.-China topics, and it was an honor to support his launch. His new book tells you things you never knew about how intertwined China and California are, and how that’s playing out in people’s lives here on the ground, in tech, real estate, and other key industries. While the U.S.-China tech relationship is only one of the six sectors covered, I’d argue that the deep dives into topics such as Hollywood-China ties or even the environment are essential for understanding China’s current context. These industries aren’t something we explicitly cover in TechBuzz, but they are crucial to understanding the bigger macro themes.

Y: Right. In addition to the term “Transpacific Experiment,” which Matt uses to describe the students, entrepreneurs, investors, immigrants, and ideas bouncing back and forth between China and California, or a “new breed of grassroots superpower diplomacy”; he also talks a lot about “Silicon Valley’s China Paradox.” You’ll have to grab the book to see what he means by that– and to decide if you agree!

R: By the way, I just checked and it’s trending as the #1 New Release in International Economics, and has also been named as an Amazon Best History Book of the Month. Congratulations Matt!

[2:35] Y: Hi everyone! We are TechBuzz China by Pandaily, powered by the Sinica Podcast Network!

R: We are a biweekly podcast focused on giving you a peek into what’s buzzing within the tech community in China.    

Y: We uncover and contextualize unique insights, perspectives and takeaways on headline tech news that don’t always make it into English language coverage. So you can be smarter about the world of China tech. TechBuzz China is a part of Pandaily.com, an English language site that tells you “everything about China’s innovation.” I’m one of your two co-hosts, Ying-Ying Lu.

R: And I’m your other co-host, Rui Ma. We’d like to acknowledge our partners DealStreetAsia and SupChina, creator of the Sinica Podcast Network! In addition to TechBuzz, you can also find Sinica which covers current affairs, NuVoices and Ta for Ta on women, the business-oriented ChinaEconTalk, and the Caixin-Sinica Business Brief from China’s leading business magazine.  

[3:31] Y: If you were ever interested in visiting China and simply didn’t know where to begin, Pandaily is organizing a one-week immersion into China’s tech scene from October 13-19th. More information and applications are available at decode.pandaily.com.

R: Here at TechBuzz, we are also going to be in Beijing and Shanghai this October. Our inaugural invite-only TechBuzz China Investor Trip for public market investors is happening the week of the 7th, right after Golden Week. So if you’re around then, do please tune in as we finalize where we will be holding meetups. Come and have a beer on us!

Y: Finally, as always, if you enjoy listening to our podcast, please leave us a review on iTunes or whichever other platform you use.  We are so close to hitting our 100 ratings target — help us get to three digits, we truly appreciate it!

<Audience Applause>

[4:37] R: My co-host, Ying-Ying, is in the audience as well. So, thank you for that kind introduction. I just want to say: Matt, I’m so honored to be here moderating your book lunch. I’ve known Matt for a few years, have had quite a few Xi’an noodles and meals with him. Have not played ultimate frisbee, but given the severity of the injuries you’ve sustained, maybe that is a blessing– or maybe not, because like you said, 焉知非福. Anyway, I am one of the few who was able to read the book already. I know it just came out today. Matt keeps on reminding me that when I do ask questions, I need to give full context, because I keep on forgetting that not everyone in this room has actually completed the book. So, I’m going to give as much  context before I ask my questions, which is why I have this piece of paper here. My first question is on education, which is the first chapter that you discuss in the book. Really interesting chapter.

One of the phenomena that Matt talks about is, how in the eighties — such as when my parents came to the US, this is back in ‘85 — most of the immigrants were pursuing technical PhDs. And that is very, very different from where Chinese international students are today. And that’s because back then China was very behind developmentally. But now, thirty years later, you see that most of the international students, such as the ones coming to USF, Stanford, et cetera are now choosing to go back to China. And you cite a percentage in the book that’s 70, 80 percent, I can’t remember exactly. It’s very high.

[6:10] M: Yeah, there’s no great numbers on it. But everyone throws out a different estimate. The point, largely speaking, is that many more students are returning now than used to be.

[6:19] R: Exactly. So, and that’s because they have better opportunities, higher social status, and many have actually a lot of money back home. As you say in your book, you don’t want to be the “Nth” engineer at Google — that’s a very Chinese way of putting it, by the way, I don’t know if you realize — you want to be part of this elite cohort of ex-Googlers in China, right. It just propels you to a different social status altogether. That’s what happened with the guy you talk about a lot in your presentation, Li Zhifei. Yet, as he [the Mobvoi founder] says, his Chinese employees are still far behind because of the rigidness of the Chinese education system, its “lecture” style instead of the discussion style we see more of here in the States.

So, what do you think are the long-term repercussions of this, and what is this trend in education of Chinese students coming to the U.S. and then some of the difficulties that they’ve encountered recently, and also the differences in the education systems. What is this really benefiting? In your book, you ask the question: “Which country loses more if you prevent the best and brightest Chinese students from studying in the U.S.?”

[7:26] M: Thank you for the question. I’m going to answer that, but first I’m going to say thank you to Rui, for agreeing to do this. In the technology chapters, she’s quoted in there; and the ideas that we’ve exchanged over the last couple of years are all throughout there. Rui’s one of the most knowledgeable people on this, been really on the ground in it. And so, most technology questions I just kind of want to throw back your way. That’s basically what I did for the book.

[7:49] R: Not at all. That’s being very, very humble.

[7:52] M: IN terms of the students, yeah, I think you set it up right there. A generation ago, if you were a Chinese student who came to the U.S., you were probably an educational elite in China who is looking for a technical PhD here in the U.S. And once you got that PhD, you clung to it, and you clung to this life in America, to hopefully get a green card and hopefully settle down here for a long time, because in the ‘80s and in the ‘90s, there was such a large gap in quality of life between the U.S. and China. And if you really got cutting edge skills here in America, and you went back to China, you couldn’t necessarily use them. It was a low-cost manufacturing country, largely  speaking, and so you couldn’t necessarily put your skills to work back there.

And that has just flipped. Not flipped in the way that China is more developed than the U.S., but flipped in terms of the incentives that all these students are facing. Nowadays, if they stay in the US, they might actually feel more limited. They might feel, you know, if I could just go enter Google as an engineer, I could do pretty well. I could carve out a good life for myself. But, if I really want to excel, if I want to found my own startup, if I want to kind of rise to the top of a company, they might actually feel that their opportunity for that is better back in China. That reversal in kind of the position of the two countries, in some ways, is something you see playing out in all the chapters of the book.

[9:08] And it makes me realize how much the national macro picture ends up impacting the very micro-level decisions of these people. If you’re facing going back to a polluted and impoverished country versus staying in the United States, that’s one set of decisions. If you’re facing going back to a booming, high-tech economy where you could sort of instantly get funded because you’ve got that pedigree of coming from Google, that’s a very different decision.

In terms of what we’re doing now to kind of cut off these flows, and who loses and who benefits, the broad picture here is we’ve started putting more and more restrictions on Chinese students pursuing specifically technical PhD here in the United States, making it so that they have to renew their visa much more often, and putting those visas under a lot more scrutiny.

[9:49] I think people tend to take a very kind of extreme position on this one, one way or the other. They say, you know, this is Senator Marco Rubio in his tweet, saying “Chinese students are all weapons that China’s using in the fight to dominate us” and you have other people saying as soon as you restrict any Chinese visas, that’s the end of America. That’s the end of our, you know, open ecosystem. I think both of those are too far to one side or the other. You have to actually be pretty specific and pretty tactical in terms of, at what point do we think this flow of talent, the majority of it stays in the U.S., or the majority of it benefits the U.S., or that it benefits China. That’s very much a question of how strong the two ecosystems are. I think, if 10 or 15 years ago we had cut off these flows, we would very much be harming the U.S. innovation ecosystem, but we also would have probably been able to stunt China’s innovation development by a lot. Many of these founders of top companies studied in the U.S.

Over the past 10 years, I think China’s gotten to a point where you could see a lot of this as potentially self-sustaining. You have places like Tsinghua, Beida/Peking University, that have gotten to a level where, they still come to the U.S. for advanced training. But if they were all stuck back in China, it might actually benefit China more to have them all there. So it’s very much an open question, and it’s something that I”m looking into in my current research. I don’t have a hardline answer — benefits U.S., benefits China — but I think it’s something where, yeah, we need to get past “the end of America innovation” or “China’s just trying to steal all of our goodies.” We need to get past that kind of dichotomy and look at it in a more specific and thoughtful way.

[11:19] R: Right, I know that as part of your recent articles, you had one on AI researchers and you used their undergraduate research as a proxy for I guess where they were born and raised. And then, there were some interesting findings from there, right.

[11:33] M: Yeah, so this is — my research these days has come to focus a lot on the artificial intelligence relationship between the two places. And recently, me and my colleague, Joy Dantong Ma [@JoyDantongMa] have done a study on this. On basically: where does AI talent come from, where does it go to undergrad, where does it go to grad school. And where does it work long-term.

And it was pretty interesting findings. If you look at where the top-tier AI scientists are today, it’s overwhelmingly in the United States. More, greater than 50 percent of all that top-tier talent is located here in the United States. But if you look at where it comes from, where it went to undergrad, where it grew up, over half of that U.S. talent comes from abroad. And if you look at who are these source countries for that, China is the largest source country for AI talent that is trained here and then ends up working here.

And so, as we start to pull these connections apart, it’s important to keep that in mind. Not just pull them apart with actual visa denials and stuff like that, it’s the environment we’re creating, in many ways. If you are a Chinese student who’s allowed to study here but every year, but every year you’re kind of put under suspicious gaze, it’s increasing the likelihood in many ways that you will end up going back to China. If we really fully flip the switch on that, that’d be pretty depressing.

[12:50] R: So, okay. I have a next-question. And this is really sort of out of my own personal interest. You had this great line in your book about the Bay Area being to those born and raised in China what Shanghai is like for Americans. And just to give you guys some context, I was born in China but I was raised in the U.S. and then I lived in Shanghai from 2007 to 2009, and, I don’t know how many of you in the audience have lived as an expat in Shanghai, but — yay, okay, I see a few hands — it’s quite comfortable, right. You have Starbucks everywhere, there’s lots of salad places, so you can really, yeah, there’s lots of like dive bars where you can play beer pong, et cetera.

[13:31] So there’s really, what’s Matt’s trying to say with this statement is that there’s just enough of a cocoon where you can not really have to meld into the mainstream and you can sort of stay within your subculture. And you cover folks like Tim Lin in your book, you didn’t go over him in your presentation, but Tim Lin for example is this guy who was educated in the U.S. and then went back to China to do a startup for actually overseas students. But, I would argue that he’s even, I think he’s thirty, maybe, so he’s even considered a millennial.

But now we have these Gen-Z’ers et cetera where you see a lot of the consumption tastes and values and these are just, Gen-Z on both I guess both the U.S. and China, from my observation, tend to be more globally minded. So, my question for you is: what do you envision the cross-cultural interaction to be like for them? Not people my age who you know, go to Shanghai to eat salad. Can we hope that there is going to be more cross-pollination and more communication with the people who are still prepubscent today, do you think? Or is the momentum too strong, based on what you said about the decoupling — is that going to extend?

[14:42] M: Right. Yeah. I think it’s a very live question. And it’s one that you see kind of being, not an isolated thing, but a trend over time. Like, you mentioned when your parents came here, everyone was kind of PhD students. The big change over the last 10 years is, suddenly we had a lot of undergrads. And over the last 5 years we had even a lot of Chinese high school students, or middle school students, coming and sort of embedding directly in U.S. schools and having that experience from their teenage years on. I know a lot of these people; I work with some of them. At every stage of this, you encounter a different kind of America, and you relate to it in a different kind of way.

Now I’m feeling old. Like, “I hold out hope for the youth, you know. The high schoolers, that’s where it’s at, you know.”

[15:24] R: In China, if you are 30, you are old, actually.

M: Yeah, so, I think that from Chinese students who came over here for undergrad, there’s a lot of times there’s this tendency to, they arrive on a big U.S. campus. They’re struggling with their academic classes, they’re struggling with English, and so they in a cocoon of other Chinese students. And, that can be very insular. And it can lead to not really having the experience over here, not really getting involved.

And you see the same thing with a lot of Americans in Beijing or Shanghai. You go over there, but you’re not kind of willing to push yourself out, to make other friends, to learn the language and stuff like that. It’s incredible what a mirror image these two places and these two expat communities have become of themselves. I do hope that with even younger students, if you come here in high school, maybe you can properly integrate. A lot of those kids that I’ve met, they’re the only Chinese kid in some high school in Montana, or something like that. And that’s a very different experience. And I do hope that there is more of an opportunity to really have that cultural exchange at that point, rather than just arriving in college or later on and potentially just encountering a lot of barriers.

R: And there are companies, by the way, who are sort of, maybe not doing so much cultural exchange, but at the educational level, companies like VIPKid that are trying to connect American teachers with Chinese kids, like 5-year-olds. Maybe it’s going to be less decoupling and more integration, who knows.

[16:58] R: So, my next question is really about sort of tech companies. Which is my expertise, so that’s why I’m more comfortable with this question. You note that American companies tend to go at it alone when they expand, right, so we see like the American internet giants, when they go to a new region, especially in China in the past, they’ve tended to just set up their own subsidiary. Whereas with Chinese companies, it’s more common — not always, but more common — that they go in and invest in a local player.

And the reason you give for this is that it’s like the story of David versus Goliah, right. That the Chinese companies are used to being the smaller, less advantaged player, and they’re more scrappy — they’ve had to fight against these international slash American brands coming into their territory, and they have succeeded. So they have more of this belief in David being able to defy the Goliath. And so they’re more willing to go and find a local player that looks very small, and emerging, and invest and partner with them. And how do you think this will play out, these two sort of divergent strategies in the rest of the world going forward?

Because as you noted, in China, there’s the Great Firewall. There’s sort of limited things you can do there. But there’s plenty of other territories still up for grabs.

[18:16] M: Yeah, I think you framed it up just right there. In many ways, as we’ve seen these markets become even more segmented and divided than before, a lot of the competition between U.S. internet giants, global internet giants, and their Chinese counterparts, it doesn’t happen in China. Doesn’t happen in the U.S. It happens in India, or in Indonesia, or in Brazil. And we’re seeing this among a bunch of different companies.

Maybe the biggest example these days, or recently, has been Uber and Didi. Uber tried to go into China, put up a very good fight over there for a while. It was great. For a while Uber and Didi were subsidizing their rides so much to win customers that you ride for free around the cities. It was heaven for a little bit. But, eventually Uber lost. Eventually Uber pulled out, it invested in Didi, and you now you see those companies going head to head in other markets. And this is the approach they take: Whereas Uber tends to bring its global brand directly into these countries, in the past, Didi has instead invested in the biggest local company. So in Brazil that was 99 taxi [99]. I’m forgetting the one for India right now [Ola].

But they do this kind of proxy competition in some ways. And it’s for the reason you described: The Chinese companies have seen how hard it is to come in and fight a scrappy, local upstart in those places, and so they kind of know that their best opportunity is to partner with those scrappy local upstarts. Maybe giving them funding. Maybe sharing technology or helping them build their backend or something like that, and letting them do the fighting against Uber or against Amazon, or against companies like that.

[19:53] How this plays out will very much depend on, probably, the industry and the type of service that’s being provided. I think a lot of the U.S. companies — Google, Facebook — they’ve learned the lessons in a different era of the internet. An era when Google, in the early 2000’s, it could basically just throw up a website and suddenly be a global player. It didn’t have to localize its services that much, because it was a search platform. Same with Facebook — you’re just putting pictures up, it’s not actually conveying services in the real world of people.

But a big change in the internet in the last few years has been, it’s a lot more granular, it’s a lot more nitty-gritty. It’s about actually handling a fleet of drivers, or actually putting scooters out around the cities. And that requires a lot, even more of that local grit and local know-how, and I think that is maybe something that will lean in favor of the local startups, whether they’re in Southeast Asia or somewhere else.

But, Silicon Valley has cast its net pretty wide, and it has a lot of brand recognition in a lot of places. So, this one’s very much up for grabs. I think one sort of shorthand version of this that people sometimes use is: Silicon Valley will dominate the developed world — the U.S., North America, Europe — and China might have an edge in partnering in places like Southeast Asia, and places like that.

We’ve yet to see if that’s really going to come to fruition, but I think as a kind of a mental model to check against in the future, that might be a good place to start.

[21:13] R: Every tech company I know of claims they localize to their region. But yes, I’ve definitely heard that Chinese companies tend to boast that they localize better, because they are more operational, they’re more willing to go and do the dirty work and be nitty-gritty, et cetera. And maybe they have more in common with the developing markets. We’ll see if that’s true.

[21:42] R: So speaking of localization, here’s an interesting question: Besides tech, as you guys know based on Matt’s PowerPoint just now, he covers a wide variety of other sectors, right. And one of them is Hollywood, or entertainment and content. And I loved reading this section because I actually worked for three years in China for a media investment bank and investment firm, so I saw firsthand how it went from, no one thought of China as a box office draw, to… everyone’s trying to — all the studios and all the talents are trying to go to China, and everyone wants to set up a JV.

So, as you explain though, the two sides actually want very different things. So you say that Chinese want respect, and China wants to put out its content for everyone to love the content, whereas Americans just want… cash. I’m just putting it crassly, okay.

[22:33] But despite the trade war, Hollywood actually still continues to do really in China, we saw some of the recent blockbusters, like [Avengers:] Endgame for example, do very well in China, and so continues to win over hearts and wallets.

Do you think this is going to continue? And just to give you a little context here, Matt does this really cute poll in the book where he asks the kids in China: “Do you think Mickey Mouse is Chinese or American?” And, the kids apparently answer in this way: “Oh, we think he’s both. He’s equally Chinese and equally American.”

So, it seems that for entertainment, at least, the content is being, at least from the Chinese audiences’ perspective, they’re treating it as like, Chinese. So, do you think this is going to continue, or do you think it’s going to be affected by some of the other, you know, headwinds we see in the relationship between the two countries?

[23:36] M: This was one of, for me, the most fun chapters to research and to write about and to just dive into. The Mickey Mouse question came up because I was visiting Shanghai Disneyland for research <laughter> , and I was in front of it, and I was just standing there looking up at the gates, and a little Chinese kid comes up to me from behind, and he goes “Laowai!” You know, “Foreigner!” Like, I’m used to that, that happens a lot in China, but you know, I thought, okay, I’m a laowai to him. But he’s about to go into Disneyland. He’s about to see Mickey Mouse. He’s about to see Donald Duck. Like, are those laowai? Are those also foreigners? Does he — when he hears Mickey Mouse speak, Mickey Mouse is speaking Mandarin. In the park, he’s going to see Mickey Mouse dressed up in, you know, a Tang Dynasty-era coat, and stuff like that.

So, I sent a WeChat message to my old coworker in Xi’an who ran an English school that I taught at and I said, “Can you just ask all the students, do they think Mickey Mouse is an American or Chinese?” And so she took polled all the kids and took videos of their responses. And yes, it was a little bit all over the map. Some of them were just like “… I never thought of that before.” Some of them gave the politically correct: “Yes, Mickey Mouse is both American and Chinese. Yes.”

[24:35] As this goes forward, I think in some ways, Hollywood has had amazing success in China. And for a long time, there was a feeling, for Hollywood companies, it was a hope, and for the Chinese government and to a certain extent Chinese filmmakers, it was a fear — that Hollywood was just going to totally wash over China and dominate the screens. And the government was very concerned about this. This has a lot to do with sort of national soft power, national pride.

And so, it’s a big question over there. And that’s kind of what I meant by, they want their stuff to be seen. They want Chinese content, Chinese stories to be seen, both around the world but even more importantly, by Chinese people at home. They want their people to be proud to be Chinese and to be connecting with Chinese content; not just thinking oh, the American movies, that’s where it’s at.

And, I see one kind of turning point in this relationship in Hollywood-China is 2012. That was a year that, for the first time in a while, Hollywood movies, despite having very few Hollywood movies allowed into China, they took over 50 percent of the box office. And, that same year the quota, how many Hollywood movies are allowed into China, was increased from 20 to 34 each year.

[25:43] And, I interviewed Janet Yang in the book; she’s the one who gave me that “cash versus respect” dichotomy. And she said she was talking to Chinese filmmakers in 2012 and they said, you know: the game’s up. Like the whole cultural market is going to be handed over to Hollywood. They’re already winning more than 50 percent with just so few films, and now it’s over.

But, uh, the interesting thing is, in the years since then China has actually — Chinese local films have won back that market to a certain extent. After that year they started winning more than 50 percent of the box office. They had some of their first real big-picture blockbusters. Wolf Warrior 2, this kind of like Rambo 1 [First Blood]-type movie movie of a Chinese badass soldier fighting in Africa. And, I think that while the American movies — The Avengers, Fast and the Furious — these mega-franchises have a huge market in China, have a huge pull in there, we’ve actually seen the beginning of Chinese films that have been able to adopt enough of those Hollywood techniques to look good for the first time — to really look like a sort of glossy, shiny Hollywood movie. But still starring Chinese characters, telling Chinese stories, and all that kind of stuff.

And I don’t think — this is not a market that’s going to go all one way or the other. But it’s been interesting to watch Chinese films kind of have a comeback. And at least carve out their own place over there. It’s something I reported on and wrote in the book, and just a lot of fun to get in the mix with that stuff with movies.

[27:06] R: Yeah, you actually went to Hengdian [横店], right.

M: The Hollywood of China, a very gritty Hollywood.

R: It’s not really Hollywood, it’s more like, where all the sets are.

M: Yeah, Hengdian is this, it’s a mid-sized city, I think it’s a xian [district] in Zhejiang Province, and they call themselves the “Hollywood of China,” but to me they embodied a very different model of creativity that applies both in the cultural sector, in the film sector, and in the technology space. Whereas in the U.S. we tend to think  these things, these industries, are very ethereal. The magic of Hollywood, it has nothing to do with the physical property — it has to do with storytelling magic. In technology, we think it’s just that freedom of expression, that freedom of mind that allows us to kind of dream up these big ideas in a dorm room.

And that has worked very well for Hollywood and for Silicon Valley, to a certain extent. The approach that China’s taken, it puts a lot of value on these industries, but it often takes a very different approach. It takes a very tangible physical approach, which is: “No, we’re not going to have full freedom of expression. No, we’re not going to have a free and open Internet, but we’re going to put enough qualified engineers, we’re going to put enough… flood it with venture capital money. We’re going to build a bunch of incubators and in Hengdian, we’re going to just build a bunch of film sets. And if we throw all these ingredients together, we think that we can cook up something approximating innovation, or something approximating sort of cultural currency.

I think the thing in the last five years has been, it’s been very much a surprise to a lot of people in the U.S. to see that that actually has kind of worked.

[28:44] R: Alright. I know we’re almost out of time. So I want to get to the last question before we open up to the audience for questions.

Matt, as we know, this Transpacific Experiment that you’ve chosen to cover is constantly evolving, right, even from when I first knew you were starting the book just a few years back, when you were starting the Chinafornia Newsletter, to now I think things have changed quite a bit, in all the sectors you cover: real estate, education, technology, politics, et cetera.

So, other than following your work on Macro Polo and following you on Twitter, which I suggest everyone in the audience does, how should we continue to keep abreast of everything that’s going on? So, can you give us some resources? What do you know, and what are you focused on these days, and how do we, as normal folk not doing this for a living, be just a little bit as smart as you?

[29:37] M: So the first thing you should do is you should listen to the TechBuzz China podcast, hosted by Rui and by Ying-Ying, somewhere back there. Honestly, that’s one of the ways that I try to keep up to pace with Chinese technology and Chinese tech companies. When I was over there, I was using all the apps, I was really in the trenches with it. But now it’s hard, you know, this thing emerges: Tik Tok, Douyin, Toutiao. All these brand new companies that are hugely important that are doing new and interesting things. And for me to understand them, I honestly turn to that podcast. They do great sort of explainers on each company and each trend that arises. So that’s in the tech space.

I could have sort of specific recommendations on Twitter accounts to follow and stuff like that. But, especially, I know a lot of people here have some connection to China, or have friends there or something like that. And if you’re someone who falls into that camp, I’d say the biggest thing I would advise is just stay in touch with those people. Keep talking to them, keep asking them what their take is on everything. What they say is often — I will sometimes just poll my WeChat friends.

When Google was going to introduce Dragonfly, its censored search engine, to China, I just sent out a WeChat to all my friends, saying “If Google created a censored search engine in China, would you use it?” And, I was expecting them to be like, “Uh no, we don’t want that stuff.” But they overwhelmingly were like “Yeah, that will be way better than Baidu.”

[30:59] <laughter> You know, no shade. But, if you’re someone who has those connections to China, I’d really advise just keeping them up. It takes a lot of work sometimes to just keep up those connections, but they’re so important. And if you are not someone who has that sort of personal investment… go out and watch some Chinese movies? More of them are showing up in the U.S.

And when reading all this high-level stuff about a trade war, a technology war, whatever we want to call it, just keep an eye out for the more personal articles. I think one of the big changes in China journalism coverage over the last five years or so has been there’s a lot more reporting done by people who are young, who kind of went over and learned about China first as living there, and then became reporters. And I think that gives a different perspective.

And there’s people like Amy Chin at the New York Times, Ben Yang at the Financial Times. There’s a lot of really talented young people. And so even while you’re keeping an eye on all these high level issues, I’d just say: keep an eye out for those vignettes, those little stories, because they cast a different light on things. And I think it’s a really important thing to keep in mind, even while everything else is going on.

[32:08] R: Yeah, and I think that’s something Matt does really well in his book. It’s that he really goes into the personal stories, right. So it’s not these headlines, but these very, very intensely intimate narratives, where you get to see the different shades of grey and how people are thinking about —

[32:32] Y: That concludes our recording of yesterday’s program. Please do let us know what you thought of this first-ever Live TechBuzz episode by writing to us, tweeting at us, or leaving a review. If it’s not clear by now, you should definitely also read– and review– Matt’s book on Amazon. You can follow him on Twitter at @mattsheehan88, and you can also subscribe to his newsletter, the Chinafornia newsletter– go ahead and check on google for that Subscribe link.

R: Personally, I think what makes Matt special as a writer– in addition to his ability to make up catchy new phrases like “Chinafornia”– is his ability to infuse human stories with analysis and academic stories with humanity. He is a born-and-raised Californian who spent five years learning Chinese and then went on a journalist’s adventure to far-flung places in China, oftentimes living with Chinese families.

[33:27] Y: The book ends with the open question of how the U.S. and China will relate to each other in the coming years. Indeed, one of its overarching themes is that while the levels of informal exchanges of people, ideas, and capital between the two regions are at an all-time high, the formal, high-stakes geopolitical relationship is at a low. And tech is going to be a sector in which key battles play out. Driving towards a better relationship and a better understanding is a core reason why we’re inspired to keep working on TechBuzz– and it’s also why we cherish, respect, and really hope to hear from more voices like Matt’s.

R: OK, that’s all for this week folks! Thanks for listening. We really enjoyed putting this together, and we are always open to any comments or suggestions. You can find us on twitter at thepandaily, at techbuzzchina, and my personal Twitter account is RUIMA.

Y: And my Twitter is spelled GINYGINY. TechBuzz China by Pandaily is powered by the Sinica Podcast Network. Pandaily.com is an English language site that tells you “everything about China’s innovation.” Our producers are Shaw Wan and Kaiser Kuo. Our intern is Wang Menglu. Thank you for listening!