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(1/10) Excited to share a new blog post on the wave of trade in programs in China and what they tell us about Beijing's efforts to boost consumption.
csis.org/blogs/trustee-…
Long thread for those interested!
csis.org/blogs/trustee-…
Long thread for those interested!
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An interesting article in the Beijing Daily from CASS economist Cai Fang who has been writing on the economic implications of AI. This one is about avoiding an "economic singularity" as proposed by Steven Hill, where AI leads to unemployment and worsening income distribution.
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Cai argues that even if a technological leap in AI cannot be avoided, the economic implications can be through a transformed idea of human capital cultivation alongside supportive social policies. Even with those, however, Cai notes that this would likely only suit some workers
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During the Biden administration, special tariff exemptions for solar wafer manufacturing equipment were put in place because of concerns around blunting the growth of a domestic industry. Different times...
One of my favorite examples of Chinese tech spillovers:
China doesn’t just make solar panels. It makes solar manufacturing equipment too, including equipment for slicing silicon wafers.
This wafer-slicing equipment typically uses diamond-coated wires. China also has the world’s nd industry.
These capabilities also benefit China's silicon carbide (SiC) industry. SiC is one of the hardest industrial materials and requires specialized cutting equipment, often using diamond abrasives. Chinese companies like Gaoce have expanded from solar wafer-cutting equipment into SiC semiconductor manufacturing equipment.
SiC semiconductors are increasingly important in power electronics, particularly EVs, high-power industrial motor drives, and emerging solid-state transformers.
Solid-state transformers are a promising technology for managing complex power grids, especially those with lots of clean energy. As well as AI data centers.
(And now China is considering placing export controls on some of this solar manufacturing equipment)
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(Relive those days with the federal register: federalregister.gov/documents/2024…)
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Things are moving so quickly I think those of us who track these things are going to need to be careful about how we think about existing strengths/endowments
One of the most interesting narrative violations in US China AI is that it is a US model with general capabilities that turns out to be the best at robotics, not a Chinese model, despite all the prognostications that China would dominate this due to its unique data.
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I'm always struck by how reasonable the diagnosis of China's economic problems is in Qiushi. Today's edition has one article on moving towards a new economic development model. The main issues:
1. Officials emphasize production and neglect distribution...
1. Officials emphasize production and neglect distribution...
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These are all problems and a fair characterization of the "strong supply weak demand" issue that the article focuses on. The stated core solution is also revealing though - in keeping with 15th FYP - doubling down on tech innovation and productivity more generally
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Interesting piece from Huang Yiping talking about how AI could cause an "Engels Pause" - a phenomenon in the industrial revolution where output increased rapidly but wages stagnated. More concerns that this phenomenon would not mesh well with China's existing problems.
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Good quote: 随着AI创新的不断普及与深入，未来一段时期，我国的收入分配不平等的问题可能会进一步加剧，就业压力特别是青年就业压力会进一步增强，“供强需弱”的矛盾也可能变得更加突出。这些都要求公共政策未雨绸缪，努力化解结构性矛盾。
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Key reason why BYD's export strategy has been so global - it is more profitable to sell a car just about anywhere else compared to China.
It's no news that auto business, or any business, is incredibly tough in China but still shocking how BYD makes only 2,000 yuan ($300) from each car they sell in China in Q3 (per MS estimate). For overseas cars, that level is at 16,000 yuan ($2,400).
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Ryan Featherston retweeted
I joined @GoogleDeepMind to develop a research program on the economics of AGI. Today, together with Andrew Koh (@andrewjkoh) and Shane Legg (@ShaneLegg), we are incredibly excited to release The Economics of Intelligence, the first in a series of projects from our group on how nomy.
How do capability improvements transform the economy, and when? In this project, we define thresholds of economic capabilities, e.g., minimal AGI, based on how they transform the economy. We then track how the economy–market structure, employment, and wages–changes during the transition across capability regimes.
We have seen exponential increases in what AI agents can do but the broader economy seems almost remarkably unchanged. Part of the reason is that the solo AI agent is the wrong economic object; economic transformation is an equilibrium outcome where organizations compete. Looking at how intelligence functions within organizations, transformation will depend on when two key capability thresholds are crossed: competence (gains on individual skills, e.g., coding, math) and coordination (gains on ability of agents to cooperate and work together).
We show that what economic transformation looks like depends on whether AI becomes supercompetent, supercooperative, or both—the regime of artificial superintelligence (ASI). Tracking this transition shows why the real visible transformation may come from improvements in coordination—a capability most benchmarks don’t yet track. Past a certain threshold, AI capabilities can break the Coasian ceiling on firm size and lead to an economy that looks drastically different than the one we see today.
Two main takeaways:
1. To understand the path of transformation, we should be tracking agentic coordination more closely.
2. The impact of AI will likely show up in wages before market structure or employment.
We are really excited about this paper. Excited to hear people’s thoughts.
Link: institute.deepmind.com/essays/the-eco…
How do capability improvements transform the economy, and when? In this project, we define thresholds of economic capabilities, e.g., minimal AGI, based on how they transform the economy. We then track how the economy–market structure, employment, and wages–changes during the transition across capability regimes.
We have seen exponential increases in what AI agents can do but the broader economy seems almost remarkably unchanged. Part of the reason is that the solo AI agent is the wrong economic object; economic transformation is an equilibrium outcome where organizations compete. Looking at how intelligence functions within organizations, transformation will depend on when two key capability thresholds are crossed: competence (gains on individual skills, e.g., coding, math) and coordination (gains on ability of agents to cooperate and work together).
We show that what economic transformation looks like depends on whether AI becomes supercompetent, supercooperative, or both—the regime of artificial superintelligence (ASI). Tracking this transition shows why the real visible transformation may come from improvements in coordination—a capability most benchmarks don’t yet track. Past a certain threshold, AI capabilities can break the Coasian ceiling on firm size and lead to an economy that looks drastically different than the one we see today.
Two main takeaways:
1. To understand the path of transformation, we should be tracking agentic coordination more closely.
2. The impact of AI will likely show up in wages before market structure or employment.
We are really excited about this paper. Excited to hear people’s thoughts.
Link: institute.deepmind.com/essays/the-eco…
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Part of me feels like despite government indications that it will look to protect workers Chinese corporate culture is so ruthlessly competitive... Even Lao Gan Ma is not immune.
Rumors that chili maker Lao Gan Ma laid off 500+ workers due to AI have gone viral in China.
Beneath Beijing’s positive messaging, many ordinary Chinese people are worried about AI and jobs.
Lao Gan Ma recently touted a new AI-powered chili inspection system that uses ameras that significantly outperform manual inspection.
A stat about the company using this AI system to reduce human inspectors from 600 to 48 went viral on Chinese social media. The iconic, family-run company pushed back.
But if you look at the data, the company has reduced headcount from 2,912 to 740 in the past few years while earning record revenues.
Original story: m.jiemian.com/article/152425…
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Alcibiades pursuing Socrates-coded timeline
Look. I don’t want to overstate it. But when you look at contemporary SF — the cults of rationality and dialogue, powerful men having sex with their male mentees, an obsession with “first principles” thinking — it’s hard not to notice some parallels with ancient Athens.
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Ryan Featherston retweeted
Xi Jinping is like a Leninist Logan Roy
He dominates the CCP, yet he complains subordinates who "constantly proclaim political loyalty" keep failing to act on his wishes
At the Fifth Plenum next week, he will demand yet more internal discipline
My latest for @AsiaPolicy
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He dominates the CCP, yet he complains subordinates who "constantly proclaim political loyalty" keep failing to act on his wishes
At the Fifth Plenum next week, he will demand yet more internal discipline
My latest for @AsiaPolicy
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Ryan Featherston retweeted
East Asia Today
A note reviewing developments in Korea ahead – just about – of the BOK meeting tomorrow. In addition, some charts showing the continuing gap between weak auto sales in China v strong car exports. That is affecting Japan, though overall exports there in USD terms .
eastasiaecon.com/east-asia-toda…
A note reviewing developments in Korea ahead – just about – of the BOK meeting tomorrow. In addition, some charts showing the continuing gap between weak auto sales in China v strong car exports. That is affecting Japan, though overall exports there in USD terms .
eastasiaecon.com/east-asia-toda…
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