Infrastructure Projects and Gigantism in China

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Learn more at Microsoft.com slash N365 Copilot. Megan Rapino here. This week on a touchmore, we've got two insiders to help us unpack the WMBA's new CBA, three time champion, and WMBPA Vice President Alicia Clark. Aka C, and ESPN basketball analyst Andrea Carter. We're also gonna take a look at our NCAA brackets and check out what's next in March Madness. Check out the latest episode of A Touch More wherever you get your podcasts and on YouTube. of the matter is China is still very vulnerable exposed. If this war becomes more prolonged and it seems as every day that passes It's more likely that it is a more prolonged. Conflict, right? So what is your assessment as to why China hasn't really been As aggressive over surfers in its criticism. It's abstained from the UN um resolution on the Tehran conflict, and it hasn't really, to my knowledge at least, given direct military aid. To the Iranians. Well, Alice, I mean, you know, obviously, first of all, this is a tragedy that is enveloping much of the Middle East now, but at the same time, as you've just pointed out, it provides us with a very valuable chance to get an object lesson in how China conducts its diplomacy. And how China's overriding priorities as the world's second most influential geopolitical actor actually play out. I mean to put it in short This is China's game theory. Welcome to China Decode. I'm Alice Hen. And I'm James King. In today's episode of China Decode, we're discussing How Beijing is maintaining a neutral position as the Iran conflict deepens. How Chinese automaker BYD is poised to become a global force. And an ambitious and unique infrastructure project is ready to open in Chongqing. We'll talk about how it reflects China's values. That's all coming up. But first let's do a quick check in with how the Chinese markets are starting the week. On Monday, the Shanghai A Share Index gained 0.2%. The Hangsang H share index fell zero point eight percent. Now down twelve percent from its January high. On news of Iran striking aluminium plants in the Middle East, Aluminium Produces Aluminium Corporation of China and China Hong Chiao Group. closed up seven and four percent respectively. and Eevee Makeup BYD fell nearly 5%. But more on that later. Before we get to the episode, a quick announcement. China Decode now has a weekly newsletter. We go beyond the topics we cover here on the podcast and give you even more data and analysis on the most important stories coming out of China this week. Subscribe at China Dcode.profg Media dot com It's free for now, so be sure you get subscribed soon. That's ChinaDcode.profg Media dot com. All right, let's get into it. It has been just more than thirty days since Israel and the US launched their military operations in Iran. Thrusting much of the world into deep uncertainty. China gets about half of its oil through the Strait of Hormuz. But it has not offered public support for Tehran, nor offered security guarantees or military backing. In part because of the current tenuous moment in China's trade relationship with the US. Beijing is being highly cautious. Call it a fraught neutrality or call it playing the long game. China is clearly trying to project an image of calm, economic stability. to a global audience looking on to judge its next moves. James, China I think has been quite withdrawn from the criticism of the conflict relative to, say, Venezuela. We've discussed that previously. But the fact of the matter is China is still very vulnerable, exposed. If this war becomes more prolonged and it seems as every day that passes. It's more likely that it is a more prolonged. Conflict, right? So what is your assessment as to why China hasn't really been as aggressive or visurus in its criticism, it's abstained from the UN um resolution on the Tehran conflict. And it hasn't really, uh, to my knowledge at least given direct military aid. To the Iranians. Well, Alice, I mean, you know, obviously, first of all, this is a tragedy that is enveloping much of the Middle East now, but at the same time, as you've just pointed out, it provides us with a very valuable chance to get an object lesson in how China conducts its diplomacy. And how China's overriding priorities as the world's second most influential geopolitical actor actually play out. This is China's game theory. Uh what we're watching now is a real time example of how China uses game theory to leverage advantage. I I've sort of boiled it down to what I consider to be three main areas. And the first one I'm rather fancifully calling, you know, the principle of the tiger's front paw. Because a tiger uses its front paw as its prime weapon because it's so powerful. Um and in China's case It uses not military or diplomatic muscle as its prime weapon. Economic power. And so this crisis uh in the Middle East. is one in which China has to back off in terms of military and diplomatic initiatives and concentrate on its economic power. And so in this regard you've already mentioned China's main priority is to keep the oil flowing through the Strait of Hormuz. Um and so that it can keep its cities and factories running back home. And it needs to avoid antagonizing the US. You know, too much in order to avoid economic reprisals from Washington such as tariffs or other forms of of economic sanction. Second I think China always tries to keep its powder dry, and in this regard, I'm talking about it strictly prioritizes Crucial theater of focus, crucial theater of interest. Iran And the Strait of Hormuz are of course important to China. But China's crucial focus is on the areas around its borders. Taiwan, the South China Sea, and of course Japan and Korea. So China doesn't want to spread itself too thin. It can't focus on everywhere all the time. The official word for this is periphery diplomacy. It's focus on countries in the regions around China. And this has been the case for actually thousands of years. So I think that's the second crucial uh kind of guiding philosophy that China's diplomacy has. The last and probably the most important is that China is still a highly transactional power. doesn't have allies with the exception of one, and that is North Korea. It has a formal treat with North Korea signed in nineteen sixty one. But aside from that, China has no treaty obligation to go in and protect and defend any other country. Were that country to be attacked. It has many so called strategic partnerships with countries around the world, and in fact it had one or it has one. But these mean really next to nothing when push comes to shove. A lot of these strategic partnerships are really just to flatter countries that China wants something from. And in the case of Iran, China wanted cheap oil and it got it. Um, and it also probably wanted to use Iran somewhat. to undermine the US on the world stage, certainly in the past. Um I'm not so sure about the present. So these considerations or If we prefer China's game theory means that I think China's response In this war has been a mix of the following things, some of which you've already mentioned. It's moderated its criticism of the US. It's been using measured, relatively low key language to criticize the US. It said that the US attack was unacceptable. It said that the Washington is adopting a law of the jungle It's creating a vicious cycle. But these are fairly mild criticisms, really, uh, in diplomatic terms. Crucially, at no point. Has China ever offered military support to Iran? either in terms of money or technology or combat reinforcement. So China's remained aloof in in that really important sense. And lastly, China's going ahead. with the delayed summit with President Trump, that is now on again for May. Um and that's hardly the action of a country that would be really annoyed with the US or wanting to score points against the US or harshly criticize the US. So I think what we can see through all of these is China focusing on its own interests, mainly economic interests. Focusing on keeping its focus and discipline on the countries that surround it where China's destiny really can be made or lost. And lastly, maintaining a transactional view um of its relationship with the rest of the world. In other words Getting what it needs, um, and not pledging too much and not getting bogged down in any kind of military adventures anywhere in the world. Would you agree with that, Alice, or or do you have a different take on this? Well I like the way that you framed this, James, is game theory, you know, to to borrow the vernacular of game theory. I think China's dominant strategy and maybe you and I agree in this respect. is to have the Strait of Hormuz open, but on its own terms, and ideally through diplomatic means, right? I think the fact that you have a back channel between Washington and Tehran via Pakistan. is a key indication, uh, that China is s is probably strongly involved. Right? Remember because Pakistan is effectively a client state of China, heavily funded uh and and military aided by Beijing. So I could see China playing a big role in if there is some kind of a a peace agreement. Uh, now Iran is rejecting Trump's fifteen point plan and there may be escalation in the coming days where Trump is gonna put troops uh on the ground, starting in Cog Island, to open the strait on American terms. But I think China's strategy to your point, James, is to disassociate the US China trade talks and relationship. From the Iran issue, and then be seen by both the Gulf states but even the G seven countries as being a key diplomatic Honest broker. Because remember, it's not just the relationship with Tehran that's at play, it's also the relationship with the Gulf states that have been key suppliers of oil and natural gas to China, and China wants to be on good terms. uh with the Saudi Arabia's uh of the world. So I think that that, you know, moving forward we'll have to see How involved Beijing is in the talks. Take your point, uh, James, that you know, Iran is not Russia. And I would no the question back to you is is why is it that China has invested so much in the Russia relationship? Uh uh she personally has invested a lot in the relationship with Putin. I think that same sentiment is shed uh with the Iranians, for instance. I agree with you, James, that I Iran is seen as a key strategic partner and foothold for China within the region. Iran also creates more uh conflict. and difficulties for America in the Middle East. So in this respect it is somewhat like a client, uh state. For China? But moving forward, we'll have to see, you know, what happens with the new Ayatollah, what kind of a relationship we're gonna have between Tehran and Beijing. To date, we haven't seen any Chinese direct or indirect. uh financial or military aid to the Iranian regime. I think before the conflict started, uh we had a change we saw a change in the navigation systems used by the Iranians. They now use the Chinese Biddle um satellite navigation system. Uh, there was word on the street that the Americans, you know, before they started striking were trying to take down some of the system and infiltrate it. uh in order to pick up on where uh different assets were in the region. And then before that there was talk about China selling precision missile technology. To the Iranians. We'll have to see moving forward if China is willing to do that. But thus far I think they've been reluctant to. And then one last point that I will make is that even although I think China benefits from this Geopolitical game theory, uh multiplayer game theory. I think we still shouldn't understate the difficulties this puts China in in terms of the energy fertilizers. Uh besides of things, right? Because You know, you effectively have about a hundred days of uh strategic reserves. China's now Cutting down pretty much on all exports of oil and fertilizers. Uh, and I think potentially even petrochemicals. And right now they're putting in oil caps to protect everyday consumers and corporates. you know, if this conflict drags on for longer and the strait in particular is not securitized for, you know, more than two months moving forward, I think that that puts China in a difficult position, has ramifications For the economy where again growth is quite um fragile. But I wanna end on one last question for you, James. I think this sort of sums up my thinking. Why is it that this relationship with Iran is so different from the relationship with Russia? On the surface These are both huge oil producing. Countries are all part of the axis of ill will, they all cause troubles for the West. Why is it that I think China's more hitched to Russia? and has supported Russia throughout the conflict. Much more than Iran. Absolutely, Alex. Uh and before I answer that, let me just say that I think you're dead right to point out that could be things happening behind the scenes that we don't know about. You mentioned missile technology. Uh we don't have any evidence that China is helping Iran in any regard like that at the moment. But if that was to happen then I think we would be in different territory here. For the moment we assume it's not happening. But anyway, Russia versus Iran. I think this um very much falls into the kind of category that I mentioned in terms of periphery diplomacy, which is obviously China's uh uh core criteria. Uh Russia and China have a border of several thousand miles. Um So that makes Russia much more important to China. Than Iran. China also gets a huge amount of uh liquefied natural gas from Russia through pipelines, which are actual fixed infrastructure. Uh so that's another reason why uh Russia's so important. But also Russia uh provides China's access to crucial other supply lines such as the Arctic. Um, you know, uh shipping through the Arctic goes uh goes ahead in the summer months. And it's possible that in the future it could also do so in some of the winter months if global warming continues. I do also think and this slightly goes against the argument that I was trying to make that Xi Jinping and President Putin have a bit of a personal relationship. I said that I thought China was mainly transactional and it was and it focuses on its periphery diplomacy. Uh and and you can see that Russia falls into those categories. Russia's vital for China's supply lines, vital for China's LNG supplies. But there is a little bit of an emotional content, I think, between Putin and C. Um, so you know, perhaps that goes against my sort of framing argument of what I think motivates uh Chinese diplomacy. Chinese game theory in this regard. Actually is rather similar. to something that goes right back into China's ancient history. There are principles of diplomacy set out in Chinese canons from about two thousand five hundred years ago. They're called the thirty six stratagems. And they're all about how one state can use psychological warfare, ruses, deception to gain the advantage over your rivals. And I was looking through uh this list of these thirty six stratagems. I would definitely recommend this to any listeners that don't know about these. You can find them anywhere on the internet. And they are really uh colorful and really interesting. One of the key aspects of this of these stratagems is that fighting is always considered a last resort. And I think that underlines what I was saying about Economic development being so crucial to China's sense of state craft. Um, and uh if we apply some of the stratagems to what's happening now between China, Iran and the US, I think there's a couple of stratagems that actually Do some work to help us understand. What's happening. One of them is called Kill with a Borrowed Knife. Dao Sharan in Chinese. Um I'm not saying that China's using Iran to kill the US. But I certainly think that It is disadvantaging the US by its tight relationship with Iran. Um and the other stratagem that jumped out at me was Li Dai Tao Jiang, which means sacrifice the plum tree to preserve the peach tree. And this is basically a sense of sacrificing short term objectives in order to gain the long term goal. In other words, Keep your eye on the pri on the prize. Um, and in this regard I would I would say that China is sacrificing the short term objective of being highly critical of the US, which is what China really believes in its heart. in order to gain the longer term objective of getting Trump to Beijing and hopefully in China's eyes. To win some concessions from Trump. Maybe some de escalation in the trade war between China and the US. Yeah, yeah, I think I agree with that. It's funny that you quote um Chinese history. I would have said that uh one of the analogies that we're looking into is the Suez crisis. In fifty seven, in which the Brits and the French were involved. And trying to uh stop NASA from nationalizing uh the canal and controlling it and the US under Eisenhower came in after diplomacy failed and basically economically coerced the Brits and the French to back down. paving the way for America overtaking uh the British Empire. And so the big question as we look forward is Is is Iran the Suez um crisis of today? And does that mean that China is ascendant and the US is in decline? So I'll I'll leave that big epic thought for for a future episode, but I think that's something worth bearing in mind. Okay, we'll be back with more after a quick break. Stay with us. Support for the show comes from Hims. You've got places to be, sitting in a waiting room for hair loss treatment isn't one of them. Hims makes extra care accessible on your schedule so you can skip the line and focus on feeling like yourself again. Hims offers convenient access to a range of prescription hair loss treatments with ingredients that work, including chews, oral medication serums, and sprays. These are products that use doctor-trusted ingredients like Finestried and Minoxidil, which may be able to stop further hair loss and regrow hair in as little as three to six months. 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Advertise on LinkedIn, the network that works for you. Spend $250 in your first campaign on LinkedIn Ads and get a $250 credit for the next one. Just go to LinkedIn.com slash Scott. That's LinkedIn.com slash Scott. Terms and Conditions apply. Welcome back. BYD, the largest of Beijing's auto giants, is making serious moves. It recently signaled to analysts that it is on pace to beat its twenty twenty six exports target by fifteen percent. Earlier this year, the company reported a seven point seven percent increase in global sales. even as domestic sales declined by almost eight percent in twenty twenty five. Competition from other Chinese manufacturers, along with weakened demand at home. has made them less of a bear myth domestically. BYD's net earnings declined by 19% to 4.7 billion US dollars last year. The first profit decline since twenty twenty one. But abroad BYD is ascendant, and this comes at a time when Tesla's market dominance continues to decline in the US. Tesla is investing heavily in artificial intelligence and robot taxis, while BYD is pushing ultra fast charging technology in batteries and overseas expansion. James, I think this story is timely and it somewhat links to the Iran prices issue, right? Because if we see oil prices continue to rise r in the US, for instance, I'm hearing they're up a dollar a gallon. uh at the pump for consumers. This may incentivise a lot of consumers across the world to go, Maybe I'll buy an E V instead. And actually these Chinese E Vs are very, very competitive. uh and energy efficient, right? So I think maybe one of the winners, um, beyond China geopolitally is is Chinese E Vs. What's your take on that? Hundred percent agree, Alice. I think that, you know, the BY D phenomenon is a true phenomenon. I mean the growth of BY D sales outside China. Has just been so rapid. But I really do think that its impact is only going to grow and it's gathering a following wind by you know from the crisis as you described. in Iran and obviously the rising cost of uh petrol, gasoline around the world. But I think the bigger point here is that BYD is just the first of many, or or one of the first of many. A wave of Chinese companies are finding it easier to make money abroad than back in the hyper competitive Chinese domestic market. And this is why Chinese exports this year are likely to rise, in my view, above four trillion US dollars. That's up from about point eight trillion last year. And that will be the biggest proportion of total world exports ever. in history, according to my research. So I think, you know, this BY D phenomenon is connected to a much bigger phenomenon. Which is truly epoch making in terms of global history. Um, when it comes to BYD itself, I think the salient characteristics are the ones that you've described. It's technology, it's world class, but it comes in at a price point. That really blows Western car companies out of the water. I drove a BYD E. V. in Germany a couple of years ago. It seemed to me like an excellent car. The biggest problem I had was understanding the instructions 'cause of of course the car speaks to you. But I don't speak in any German and this was all in in German, so that was a bit of an issue. But the one I rode was the BYD Atto two. That costs about twenty two thousand uh nine hundred and ninety euro, which is a lot less than, you know, the Teslas and some of the other uh E Vs on sale in Europe. And as you've already mentioned, Alice Key aspect now. And the new news here is the charging technology. Because BYD this month has just unveiled something called the Blade Battery two point zero. This is a game changer, complete game changer. This means that you can charge From ten percent of the charge to seventy percent of the battery charge in just five minutes. It just takes five minutes. That's equivalent, I think, to about the same amount of time that somebody uh spends the pump putting gas into their car. So that is a complete game changer. I remember B. Y D car that we drove in Germany, we had to spend about thirty five minutes trying to charge it. All the time we were fretting about whether or not we were gonna miss our plane. So I I I I really do think that what we're seeing now in terms of BYD's penetration into global markets is just the beginning. Just a couple of numbers. to put a little bit of flesh on the bones. BYD's registrations in Germany have jumped ten times. in January twenty twenty six compared to a year ago. BYD now ranked sixth globally in terms of total auto sales. So that's EVs and non-EVs. puts it in i ahead of Ford for the first time ever, and we don't have to remind any of our listeners that Ford's been around for more than a hundred years. So This is a true phenomenon that we're trying to describe here. Do you like BYD or or uh Teslas or you know, um have you driven any of these cars? I've actually driven both a Tesla and a BY D. I uh you know, they're both great cars, but I think uh at least From a standpoint of of you know being a passenger, I think BYD was a better experience. They just have thought of Uh a lot of the you know internals, uh, the look of the car f and it feels very good. Uh, even the uh operating systems within the car dashboard are pretty intuitive. I I've actually been very, very impressed and and for that price point, I just think that it's a no brainer for a lot of people if they're just purely thinking about uh, you know, cost per use, uh, as well as energy efficiency. BYD is a no-brainer. But when you were talking, James, I was thinking that it actually is is really significant that a company like BYD In February of this year, uh finally saw It's overseas sales, its exports exceed its domestic sales. That is, I think, a very critical turning point. For a Chinese automaker, we're at a point now where it can export more to the rest of the world than it can, you know, be consumed domestically. So just for the numbers. A hundred and thousand, around a hundred thousand units were sold abroad in February, versus about ninety thousand sold in China, and overseas sales in January to February jumped fifty percent year on year. That suggests to me that there is gonna be legs in terms of an external overseas market for BYD. And remember they're, you know, building plants all over the place, you know, in Hungary and Latin America and South East Asia to obviously avoid some of these tariff But also some of these things. um you know industrial policies in in countries that they're selling into. If they can build local manufacturing that helps, I think, reduce some of the trade backlash against uh a Chinese Eve maker like BYD. But your point, James, about the batteries, that's gonna be crucial. You know, a company like BYD where everything's done in house, it has a fully closed supply chain. will continue to carry the cost advantage in a time where we could see gas prices being at sustained highs, right? I know WTI might be north of a hundred, um, for at least the foreseeable next couple of months. And then the last thing that I will say that I think is super interesting is The domestic environment, right? So the stocks have I think seen some dampening, uh BYD stocks and E V Maker stocks. Um early this year because of the cost pressures, the price wars that are still happening domestically. And you know, my takeaway from the government work report in the five year plan Is that g the government still cares about this anti involution drive, you know, the so called drive to stop these aggressive price wars and deflationary prices in the economy and in sectors. So potentially maybe that will c reduce some of the um pressures and profit pressures for BYD this year. But by far the most important point is the point that you're making, James, is that they are, you know, really enjoying positive tailwinds in terms of overseas market demand for the cars. Yeah. I'm I'm in Hong Kong at the moment, Alice, and uh I just had a a BY D experience today, actually. Well, not really a BY D, but certainly a Chinese E V experience. I was talking to somebody um at an event that I was at here and uh they said to me, So I'm assuming that you drive an E V and actually I don't. I uh back in the UK I drive uh internal combustion Engine car, like an a an an old style car. Uh and they looked almost offended, you know. Um that I would have the temerity to be a using a gas guzzler at a time like this when oil prices are rising. So So much and the and the the environment is such a big topic. So um I I also think that peer pressure is gonna have an increasing uh uh influence on this topic as well. BYD has comprehensively overtaken Tesla now in terms of vehicles sold around the world. In twenty twenty five it sold two point two uh six million um vehicles. against Tesla's one point six four million. So Yeah, BY D is really streaking out ahead now when it comes to E Vs globally. Yeah, and then one last point, just the battery side of things, China continues to dominate, right? So the China's power batteries uh currently have about seventy percent. of the global market and the anode materials m overpass ninety percent. So if we just think about the other aspects. of the E V supply chain China has really continued to dominate. Uh and then beyond that, I think what will be interesting to see is further industrial consolidation in the market. Uh when I was in China a couple of years ago there were four hundred odd odd different E Vs and it seemed like every province in China, you know, from Hangzhou to Shenzhen had its own, you know, n set of national champions and now I think there's gonna be even more um regulatory and and cost pressure that is gonna force further consolidation. So apparently, uh, according to to one outfit Alex Partners, uh, we could see the number of E V brands drop from about one hundred and thirty currently to fifteen. in the next five years, which uh will be super interesting and definitely BYD I think will be at the front of the pack. That would be amazing. If that transpires that really will be a g another game changer. I guess it means that more of these Chinese E V companit because there'll be less players in the market. Yeah. And that's a really important point because a lot of these brands are effectively not making any money. They're making negative profit because they're trying to subsidize and compete with with other makers. So really interesting. Alright, let's take one last quick break. Stay with us. And we're here to invite you to the Curiosity Shop. A podcast that's a place for listening, wondering, thinking, feeling, and questioning. It's gonna be fun. We rarely agree. But we almost never disagree, and we're always learning. That's true. You can subscribe to the Curiosity Shop on YouTube or follow in your favorite podcast app to automatically receive new episodes every Thursday. This week on Networth and Chill, it's my birthday and I'm turning 32, so I'm sharing 32 life lessons I've learned that have actually changed my perspective. These aren't the picture perfect Instagram infographic versions. These are the real hard uncomfortable truths about money. career, relationships, and everything in between. 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Plus the 50th anniversary of Apple and why after trying every other phone I could find, I wound up just buying another iPhone. On the VergeCast wherever you get podcasts. Welcome back. In the rapidly growing area of Chongqing. A unique project has just been finished and turned on. In what is being called the world's longest outdoor escalator system, the War San Goddess is a system of twenty one escalators. eight elevators, four moving walkways, and two pedestrian bridges spanning over nine hundred and five meters in length and traversing an elevation gain of over two hundred and forty meters. That's the equivalent of an approximately eighty store building. The project took over four years and significant engineering prowess to complete. Some nine thousand people now use the Wusan. Elevate it every day. paying a small fee the equivalent of forty three cents. that's in dollar terms, to ride in each direction, which can take twenty minutes. An official said four hundred and fifty thousand people used it. during last month's spring festival. James, I've recently watched this on the F T. I think the F T had a good piece on this. And it's really d dystopic, but in a good way. It it feels like you're on some kind of joy ride. It's kind of crazy. It reminds me a little bit of a modern version of, you know, those Hong Kong escalators that you see in the mid levels, central mid levels. Um we know when people just Can stand on them for ten, fifteen minutes as they get to the top. This seems like a similar thing. Although I think the difference is that you have to pay to use this as opposed to what they do in Hong Kong, right? Yeah, absolutely. I was just gonna mention the same thing actually. Only today was I going up the escalator in central Hong Kong. Uh Island. Um This is well, what can I say? This is one long escalator or series of escalators really, isn't it? I I think it it also plays to a much bigger topic in China and that is big trend for gigantism, for huge things, for statement projects. And uh been I've been doing a little bit of looking around at some of the you know, the biggest, fastest, tallest, longest, quickest, um, you know, the superlatives Um and there really are a lot in China. A lot of them revolve around the built infrastructure. So there is the longest sea bridge in China, and again that comes to Hong Kong. Here and then it goes to Juhai and then from there it goes to Macau. That's fifty five kilometers or thirty four miles long. That is a long bridge. There's also the highest bridge in China, the Hua Jiang Canyon Bridge. Uh that is six hundred and twenty five meters above the ground. And That's not the only big bridge in China. In fact, eight of the ten highest bridges in the world are all in China. Of course, China has the longest high speed rail network in the world with Forty five thousand kilometers of track. So, you know, China's got lots of huge things. And I think it's quite interesting to think about why. One thing we can say for certain is that this goes right back into Chinese history. Uh of course there's the Great Wall of China that was built. More than two thousand years ago or more. And uh Gentleman Square. Uh in the heart of Beijing, that's a hundred acres in size. That makes it five times larger than Red Square in Moscow. The free gorgeous dam. That's the biggest dam in the world. Um, I would say that really I don't know about in the past, but certainly now, I'd say that some of this gigantism owes its heritage to China's self-image, a it an image of itself as a civilization at the center of the world, a really consequential player. And I think this filters through into I don't know, central government wanting to build big things, make big statements, and local governments too. Uh what's your sense of that, Alice? So I'm glad you raised that 'cause I'd I would have taken a completely economic perspective of it as opposed to h historical and cultural, which is to say you know, embedded in the modern Chinese system is the incentive structure for local governments to have these vanity infrastructure projects that they can point to, right? Especially the big party congress in October twenty twenty seven. You know, you i there's an incentive for these party secretaries in each province, th in this case Chongqing to these big infrastructure projects that they successfully led. you know, raise China's profile. uh globally, but also employ people. It j they generate GDP. Uh now we can debate whether or not it's efficient or inefficient use of of uh funding to make these infrastructure projects. Some of them end up not being used and end up being turning into ghost cities, for instance. But certainly I I think it makes sense at the locality level to be doing these infrastructure projects, um, in order to get promoted in the next party congress, right? That is was my first instinct when I saw this, which is that, you know, this is This is a party secretary and you know s uh uh a network of officials that are doing this big project so that they can get promoted uh next year. But uh you know, your point about gigantism in Chinese culture. You know, certainly I think that there is this uh desire to break records, right? You saw that in Olympic Games in terms of the biggest number of performers during one of the Olympic ceremonies. And China obviously w uh uh until very recently was the most populous country in the world. So there's also th this this feeling that things need to be bigger. to to encapsulate the awesomeness and the grandeur and and the size of of China. In any case, I think it looks now as if the government is wanting to curb some of the excesses of this sort of wave of gigantism. Um it turns out that a there is a proposed uh power in Wuhan City, which is supposed to be one kilometers tall. That would make it the tallest building in the world, overtaking the Birch Khalifa, which is uh that huge building in Dubai. The Birch Khalifa, just for your reference, is eight hundred and twenty eight meters uh tall or two thousand seven hundred and seventeen feet. Um This one, if it was built, the one in Wuhan, would be a full kilometre tall. Uh but it looks like uh that has been kiboshed by the government. And uh there have been a couple of recent directives that have come out. Um in twenty twenty one. The Ministry of Housing and Urban Rural Development said there's a ban on new skyscrapers taller than five hundred meters, and there's a smaller uh threshold for smaller cities. And they've started to name and shame local authorities that kind of get too caught up in this kind of uh urge to build big things. So uh as you said, as you said, Alice, these vanity projects. Uh I guess some of them are vanity projects and some of them are not. I mean, some of them, you know, maybe this um this escalator in Chongqing seems to be, as you said, a fairly ergonomic and efficient way of moving people up a up a very steep hill. Um, so but some of these are probably vanity projects and it seems that the government wants to crack down on that. Uh So maybe we'll never see that kilometer high building. Um, I don't know. Especially they're charging people forty cents per trip, you know, if you have like over they said over the spring festival four hundred thousand people, that's like two hundred thousand US dollars a pop. Right, for the spring festival. So maybe the ROI on that escalator's better than a skyscraper. Maybe that's the that's the yardstick. But I remember and and y you must have been in China at this time. Uh young uh decade ago in the twenty tens, China was in a competition across different cities to build the biggest skyscrapers in the world. For a time, I think the last time we had the biggest skyscraper in the world. was in twenty fifteen Shanghai and the Peace Tower. You know, you see that from from the Bund. And since they have really had a hiatus because to your point, James, there's been a crackdown on excessive local government vanity projects in infrastructure development. Yeah, the the the craze I remember so well, this goes back to probably around two thousand and five, two thousand and six, seven, eight, sometimes around then, when local government all over China, well a lot of local governments in China, wanted to build replicas of the White House as their uh local government headquarters. And there were some replicas that looked identical to the White House. And all of us journalists used to run around the country trying to find these places and take pictures of them and write stories about them. Um but that was also curbed by the government. I don't really know why, but uh I think they they did they weren't comfortable with the idea of too much mimicry or imitation of America. Yeah, they didn't want the Washington consensus in architecture. Right. That's it. All right, James, you know what time it is. It is prediction time. As you look into your crystal wall for the future this week, what do you see? Thanks, Alice. Yes. I just want to return for my prediction to the question of Chinese exports. Uh last year, Chinese exports to the whole world was about three point seven seven trillion US dollars And this year I think it will go up above four trillion For the first time. probably come in at significantly more than four trillion, maybe four point two, four point three trillion US dollars. Part of the prediction I'd like to make is that for the first time ever Chinese exports as a proportion of total global exports. will rise to about seventeen or eighteen percent, which is a historic record, overtaking the previous record, which was sixteen percent. by the United States way back, I think it was in nineteen sixty eight. So uh we're we're headed into new territory again in terms of Chinese trade and the dominance of Chinese That's just a great point. I was running the historical figures earlier this week, and we've never seen a country in our h modern history that has run as big a trade surplus as a share of GDP, its own GDP, as China.