"Econ 102" with Noah Smith and Erik Torenberg

China, Tesla, and the Electric Tech Stack Revolution

79 snips

Jun 12, 2025

The hosts dive into China's complex economic landscape, discussing its resilience amidst demographic challenges and declining real estate. They compare U.S. and Chinese technological advancements, particularly in drone manufacturing and battery tech. The conversation highlights the essential need for American industrial policy and education reform to retain global competitiveness. They also explore how political ideologies are converging on industrial strategies, setting the stage for a new era of innovation and collaboration.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

China's Naval Strategic Advantage

China's navy can selectively protect its own trade while ignoring others, giving China a strategic advantage.
This challenges America's traditional role of policing global sea lanes as a public good.

INSIGHT

China's Financial Struggles Slow Growth

China's real estate crash and bad debts in local government financing will slow growth for years.
Government loans to manufacturers risk becoming zombie loans, causing lenders to become cautious.

INSIGHT

China's Tech Strength and Demographic Challenge

China still shows strength in high-tech sectors due to decades of smart, competitive workers.
However, demographic aging and declining fertility will reduce innovation over the next 25 years.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

This week, Noah Smith and Erik Torenberg discuss China’s economic strategies, technological advancements, and geopolitical challenges, contrasting them with U.S. policy. They discuss topics from the Hong Kong protests to battery manufacturing and emphasize the need for American industrial policy, education reform, and strategic investment to stay competitive.

–

SPONSORS:

NetSuite

More than 41,000 businesses have already upgraded to NetSuite by Oracle, the #1 cloud financial system bringing accounting, financial management, inventory, HR, into ONE proven platform. Download the CFO's Guide to AI and Machine learning: ⁠⁠⁠⁠⁠⁠https://netsuite.com/102⁠⁠⁠⁠⁠⁠

Shopify

Shopify is the world's leading e-commerce platform, offering a market-leading checkout system Shoppay and exclusive AI apps. Nobody does selling better than Shopify. Get a $1 per month trial at ⁠https://shopify.com/momentofzen⁠.

AdQuick

The easiest way to book out-of-home ads (like billboards, vehicle wraps, and airport displays) the same way you would order an Uber. Ready to get your brand the attention it deserves? Visit ⁠⁠⁠⁠⁠⁠https://adquick.com/⁠⁠⁠⁠⁠⁠ today to start reaching your customers in the real world.

–

SEND US YOUR Q's FOR NOAH TO ANSWER ON AIR: Econ102@Turpentine.co

–

FOLLOW ON X:

@noahpinion

@eriktorenberg

@turpentinemedia

–

RECOMMENDED IN THIS EPISODE:

Is the U.S. in a "high-level equilibrium trap"?: https://www.noahpinion.blog/p/is-the-us-in-a-high-level-equilibrium

Noahpinion: ⁠⁠⁠⁠⁠⁠⁠https://www.noahpinion.blog/⁠⁠⁠⁠⁠⁠⁠

–

TAKEAWAYS:

China's Strategic Position & Capabilities: China can easily police sea lanes to protect their own trade while potentially disrupting others, giving them a significant strategic advantage over America's traditional role as a global public goods provider.
Financial System Stress: China faces a persistent drag from their real estate crash and mounting bad debt in local government financing vehicles. Banks are struggling to transition from real estate lending to manufacturing loans, many of which will likely go bad.
Electric Tech Stack Revolution: The convergence of lithium-ion batteries, permanent magnet electric motors, and power electronics is creating a new technological paradigm that's replacing combustion engineering across multiple industries.
America's Manufacturing Challenge: America has "too many bottlenecks" - only Elon Musk seems capable of overwhelming all 20+ bottlenecks simultaneously, while other talented entrepreneurs can only handle 15 or fewer.
Republican Industrial Policy: America needs "Biden-style industrial policy without the everything bagel" - massive subsidies and support for electric tech manufacturing without progressive contractor requirements and community engagement processes.
China's Innovation Plateau: By the 2040s, China may face Japan's experience where aging leadership in corporations reduces innovation and creates fewer opportunities for young talent.