China has demonstrated a willingness to forego money in the name of the common good, in the name of protecting workers and protecting labor. And so even if China is more structurally exposed to AI, even if that is the case, my assumption is that the Chinese government will bend the economy to its will in order to protect Chinese workers. What I know about America is that the total opposite is true.
Welcome to China Decode. I'm Alice Han. James is off today on holiday, but we have the amazing Edson from Prof Markets. Ed, it is so good to have you here.
Great to be here. Thank you so much for having me. Standing in for the other Brit, although I have a lot less knowledge than him, but that's okay because I'll be prompting you as well. So, thank you for having me. In today's episode of China Decode, we're discussing how Chinese companies and investors are getting shut out of American markets, where the first trillionaire from China could come from, and the growing push for workers' rights in an age of AI. 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, markets closed up on the news of a deal being reached between the US and Iran to potentially reopen the Strait of Hormuz. The CSI 300 index closed up 2.4% while the Shenzhen Composite was up 3.4%. The Shanghai Composite itself was up 1.6%.
All right, let's get right into it. In addition to the US-Iran deal, some of the biggest global economic news in the last few days came in the form of SpaceX's mega IPO. And it was an IPO that investors from China and Hong Kong were shut out of over apparent concerns around US restrictions on exports of critical technology. At the same time, the Pentagon has designated a broad range of Chinese firms as Chinese military companies, which means they will be subject to restrictions. The list includes corporate giants from China, including Alibaba, BYD, and BU. So Ed, it feels like a very historic week. The Knicks won against the Spurs the first time since the 70s. I don't know if you were cheering on for the New York team. We had the biggest IPO in history. Elon Musk is the first trillionaire in history. It feels just like a very historic week. So, break it down for us. What is the big takeaway from this huge IPO? And what do you think that that means for the season of IPOs to come? Because obviously we've got Anthropic, OpenAI coming down the pipeline.
Yeah, huge week for Musk. One thing you missed out there is that the World Cup began. So that's the other thing that everyone's talking about. But I noticed China isn't in this year's World Cup and I was kind of wondering what's going to happen with the Chinese football team. Surely that needs to show up and become a real player because they're so successful in the Olympics, but then they just, I guess, they haven't gotten their act together on football. So that's maybe another conversation for another time. SpaceX IPO. Yeah, I think you said it right. This is the most important week for markets in an extremely long time. This is the largest IPO in history. They ended up raising about $86 billion. They were going to raise 75, but then there was so much demand for this thing that they ended up pushing it to $86 billion. So this is the largest IPO by far. And by most counts, it was a pretty successful one. The company was priced at around $135 per share as the issuance price and then when it went out to the public markets it initially rose around 10 to 11% which I thought was a little bit low. My prediction was that it would go out at around 25% higher than the initial price but then what did we see over the rest of the day? It started to rise. It went up over 25% above $135 and then starting the week on Monday, June 15th, it has continued to rise up around 30%. So this has been an extremely successful IPO. It was really a test of the markets. How much demand is there really for these companies? Because I mean, one of the points that I had brought up before is there's so much new equity supply that is being injected into the market starting with the SpaceX offering, but then you've also got Google with their $86 billion equity offering. You've got Nvidia now talking about doing an offering of their own. You've got Amazon also considering the same thing. Meta considering the same thing. And then of course you've got OpenAI and Anthropic which means tens of billions of dollars of more equity hitting the markets. In fact, it'll probably go out to around half a trillion dollars in new equity supply. And that will be the test. Is there enough money out there that will actually be willing to go and buy these companies, buy these stocks, or is it so expensive that they're eventually going to have to sell some of their existing positions, some of their existing tech and maybe AI company positions in order to go buy these companies? So, that will be the question. I think the first week and the first day, we all expected this would be relatively successful, but over the next 6 months, will SpaceX continue to perform? That's the real question for me. My bet is no, it won't. I think that these lock-up expirations are going to be really tough for the stock. I think you're going to see a lot of downward pressure on the stock over the next 6 months. But to relate it back to China, and this is I found really interesting, it's why I'm glad I'm doing this podcast with you. The fact that China has been, or Chinese investors have been banned from buying the SpaceX IPO for some interesting reasons. I'm kind of skeptical of them. So, I guess I will just throw this back to you. What do you make of the fact that Chinese investors cannot buy the SpaceX IPO? Does that mean that we're going to see the same thing with OpenAI, with Anthropic? Are we seeing this sort of separation between the Chinese markets and the US markets? What is your take?
Great question. And I don't think it's purely about the US side of things being worried about Chinese capital going into cutting-edge models and companies listing in the US. There was a report earlier this year from CSRC, so the securities regulator in China, that they were going to tighten basically these offshore brokerages that were doing cross-border securities operations. So they cracked on a couple of them, Tiger Brokers, Futu Holdings, and the idea behind that, which I think will pick up inertia in the coming months, is that the Beijing government officials don't want to see more Chinese mainland capital going into US tech companies. I don't think that this means that they will completely throw away ADRs or that the US will delist ADRs, but I do think that it means that moving forward the inevitable truth is that we will see far less Chinese capital being parked in US-listed companies, both Chinese US-listed companies and American US-listed companies in particular because this tech war is heating up and it's a tech war that's not just about semiconductors, about models. It's also about capital as you know. What does that mean for long-term developments of Chinese capital in tech and AI? It means that in tandem with what the government wants, more of that mainland money will go to Hong Kong, will go to the mainland. We've got some big IPOs on the mainland coming down the pipeline as well in the semiconductor and AI spaces. We've got Unitry, China's biggest humanoid robotics company that has just given the go-ahead in terms of starting the listing process. We've also got two big semiconductor companies, CXMT and YMTC. These are just a handful of what is coming down the pipeline. I've heard that there's at least about 50 robotics companies that are in the, you know, process to apply for IPO. So, just as in the US we're seeing a bumper crop, we're also seeing a bumper crop of tech companies trying to list both in the mainland and in Hong Kong.
It's really interesting because, you know, I saw this headline that Chinese investors aren't allowed to invest in the SpaceX IPO. And immediately my assumption is that this is something that is maybe of Trump's doing. Like, oh, maybe America has set some regulation where we're going to try to separate away from China. You're not allowed to get into this thing. And it honestly wasn't totally clear to me why this happened. But on the other hand, you make a really important point which is that China is also making it harder for their own investors to invest in US markets. Like they have all of these capital controls and they're limiting these like foreign currency conversion rules and they're making it such that if you're an investor in China, they're trying to incentivize you to continue investing in companies at home. And so it's this interesting dynamic where it's like both parties are trying to break up with the other. But the question is who's going to break up with whom first? And what does that say to the markets about who's really on top? Is it that China said no, we're not interested in SpaceX. We have our own companies at home. Or is it the US says, 'No, no, no. This is our own company. You're not allowed in. You guys are the enemy, though you're not invited to the party.' Do you know where it stands? Like whose decision was what on this and how might it change going forward?
I guess my sense is that we haven't seen legislation or even executive action from Washington to really block Chinese investors in the capital markets and the flows going into stocks. CFIUS a couple years ago was really weaponized to basically block and highly obstruct Chinese FDI going into M&A activity going into companies in the US. But whether it's Wall Street lobbying or it's some of these companies that are listed that are lobbying, the fact of the matter is that we haven't seen restrictions from the US side for the capital market flows. Now, we don't know for sure if there are these offshore subsidiaries and capital that are finding its way ultimately into the SpaceX IPO. I wouldn't be surprised if there are high net worth individuals from the mainland that are able to do this through other loopholes. But right now what I am sure of is that the modus operandi and the trend for Beijing is to crack down on cross-border flows going into US-listed stocks because ultimately they see the capital conflict as being really, really important for the broader tech conflict. Because if too much of Chinese money is ultimately going into boosting valuations and boosting profitability and R&D for US companies, that is at a disservice to the government's aim in China which is to, you know, make sure that capital is allocated to the tech sector at home.
Yeah, it's really fascinating. Part of the other thing that I found really interesting is that in terms of US versus China kind of separating the two out, making sure that there's none of this cross-border financing. The Pentagon just updated their Chinese military companies list and it now includes Alibaba, it now includes BYD and it now includes BU as well. Alibaba is of course like China's version of Amazon. BU's Chinese version of Google. BYD is like the Tesla of China. The list has grown significantly this year. And I was trying to understand like, okay, if you're put on this Chinese military company list, what actually happens to your business? And the answer is, from what I understand, not that much actually. Basically, all it means is that it prohibits you from doing business with the Pentagon and then maybe there is some reputational risk as well, but it doesn't prevent you from operating in the US, for example, you can still do business here. And that's quite interesting because it's almost as if what they're trying to do is create a bad guys list. And if you're on the bad guys list, then that's a problem. And we're going to make sure that everyone knows that you're a risk to the market. And in a way you could almost put any Chinese company on that list. I mean, if the implication is they are at risk of working with the CCP in some capacity or providing some value to China and China's military, I mean, I'm not sure why we're even making lists. Why don't we just make it all Chinese companies? They're all highly linked to the CCP. The CCP has massive oversight over all of them. You can make an argument if your view is China equals bad guy, then surely they should all be on the list. I mean, I'm not totally sure if this is actually a substantive policy move or if it's more performance art. To say China's bad.
I think you're spot on, Ed. It's more tactical move as opposed to strategic. And it is designed to show Beijing, at least from Washington's vantage point, hey, we have a lot of levers at play, to make it very difficult for you if you don't play nice with us on ongoing, as you know, trade and technology talks. You're completely right that if you read the fine print, it only means that they can't be involved in selling to the government, so being part of government contracts. But I do think that the broader impact is to keep corporate America spooked about China. And the reason I say that is because I was just in LA giving a talk to, you know, Hollywood executives, people in the industry and, you know, just off the record a few people told me that they are so in awe of what ByteDance is doing in the video AI space. So Seedance in particular, that it is above and beyond what any other company in the world is doing, but their legal team won't allow them to touch it because they're very worried about the political backlash, what Washington, what Trump may say. So I would say that in a way the shadow of this entities listing of these sanctions is greater than the actual list itself in the sense that corporate America, American companies across the board will be worried about, you know, doing business with Chinese counterparts because they're not sure if in the future they may be at risk of some kind of Washington sanctions regime.
Right. Yeah. It's almost, and this actually relates in a lot of ways to what we're seeing with Anthropic at the moment, because it seemed as though we don't have necessarily in America at least, clear legislation on who you can work with and who you can sell to. I mean, this was the problem with Nvidia. We spent all this time trying to figure out is Nvidia allowed to sell chips to China? Which types of chips? It went on and off and on and off and on over and over again. It wasn't totally clear. But what does seem apparent in the business world is you don't want to become quote-unquote friends with the enemy, whoever the enemy might be. And Trump has made it pretty clear who his enemies are. China seems to be one of them. If you're on that list, you probably don't want to be working with them. Otherwise, you probably won't get some form of favorable regulation or you might get punished out of the blue. And then we see what happened with Anthropic last week where Anthropic releases this extremely powerful AI model, Fable 5, a variant of Mythos, and the White House is then told by Amazon of all people that there are some potential security issues and Anthropic then says, 'No, it's not a real problem. We've looked at it and actually it's fine.' And the White House says, 'No, that's not good enough. We are slapping on an export control. You're not allowed to release this model to anyone outside of the US,' which was a real problem for Anthropic's business. Anthropic then decided, okay, we're just going to cut off this model entirely. But it seems as though this all was probably stemming from their previous dispute where Anthropic said, 'We're going to set the terms and the rules on how we interact with the Pentagon and interact with the Defense Department,' which pissed a lot of people off over at the White House. And then Pete Hegseth goes on Twitter or X and he says, you know, this was a long time coming essentially. And it makes me think again this isn't because there was a certain rule that was actually broken. It's because we've decided, or at least the White House has decided, these are our friends. These are our enemies. We're going to treat our friends nicely and we're going to treat our enemies harshly. And it seems that Anthropic has been branded as the enemy in this situation. I wonder if you agree.
Yeah, I would agree with that and I think it cuts deeper in the sense that, you know, now that David Sacks has left, somebody who would have been a strong voice lobbying for Silicon Valley, OpenAI and Anthropic included. We've got Scott Bessent who's probably taken over I think a large amount of that portfolio and he is somebody, you know, coming out of the financial worlds who is deeply worried about the financial risks of an unbound Anthropic, and beyond that the national security risks. You know, there was some speculation that having the model open would invite the Chinese to distill or to jailbreak into it. I thought it was interesting over the last few days that Anthropic has announced that no Chinese nationals hired by Anthropic will touch both Mythos and Fable 5. Clearly that I think is in response to pressure from Washington. But in a way it reminds me of SpaceX. I remember visiting the SpaceX factory about a decade ago. I'm Australian so I was able to visit it but they made it illegal to, or unpermissible to, Iranian nationals, Chinese nationals because increasingly that technology was seen as a national security technology and national security risk and AI is in that weird space where it is, as you know Ed, very consumer-facing but it also has massive national security cyber implications and I just think that with Scott Bessent now at the helm those concerns are taking priority over concerns about innovation and technological preeminence.
And it does seem to all go back to China. Like when you ask anyone about why is this a problem? Why do we need to be accelerationists when it comes to AI? Why do we need to build out our data centers? Why do we need to up our game on frontier AI technology? The answer is usually because we have to beat China. And then the same is true of AI safety. Why do we need to make sure that we put on all these protections? Why do we need to make sure that we have these export controls? Because we're worried that China will get ahead of us. I tend to be quite sympathetic to that view. Like I'm someone who does believe that we need, that the US should do what it can to maintain some level of hegemony, maintain its power on the global stage. I do believe that the next competitor is China and we should probably be doing whatever we can to prevent China from getting ahead of the US when it comes to these kinds of technology. But I wonder if that's, I don't know, some sort of jingoist element in my mind that is trying to force me to think we need to be really protectionist about all of this. And I wonder how real that threat actually is from your seat. Do you see this as a real threat in the US that if we don't put enough protections on our AI then China will indeed go and steal it and potentially use it in ways that could harm the US from a security perspective?
Well, I think what we've seen with trade and semiconductor export restrictions is that actually decoupling or putting barriers to getting access to technology or goods is very hard to do in practice. In theory, it makes sense. In practice, very hard to do because there are loopholes. China has been smuggling cutting-edge Rubin chips from third-party countries in the Middle East, in Malaysia for instance, and same with trade. There's a way in which China has rerouted very massively trade through Southeast Asia, through Latin America to go back to the US. So I take a view that having these restrictions are not enough because you cannot rest on your laurels that if you, you know, tomorrow decide to put in all restrictions in terms of blocking China from access to cutting-edge models, but either by making it very hard to distill or by firing all Chinese national employees. I find it hard to believe that that seriously kneecaps the Chinese because, you know, history, recent history shows that countries find ways to work around, to tinker, to make up for lost capabilities. And one last point I have on this is that if they were very serious about the China threat then they would have to put pressure on, and this is not by any means my policy advice but I think it's an acute observation nonetheless, they'd have to put pressure on the number of Chinese nationals, you know, PhD students, postgrads that they hire because by far the plurality, and that's about 38% of the top talent AI people come from China. They're not Chinese Americans, they're actually Chinese nationals. And anecdotally when I speak to people who work in tech, and I'm sure you have the same view Ed, they will tell me, look, we can't build the kind of AI models we want to without high-level AI talent coming from China that wants to stay in America. So I think the administration needs to think long and hard about balancing those priorities. You know, in a way you cannot avoid it as long as you have some level of China dependence on the talent side. This is why I actually like making the comparison between AI and the nuclear bomb, which is a comparison that a lot of people have made. Some people complain about it. They say it's kind of a false equivalency but, you know, Dario Amodei as an example is someone who said AI is like a nuke. And the reason that I like it as a comparison is because it's, I mean, we have a precedent to look at and to examine which is that, and you and I have talked about this, but the US builds the nuclear bomb and then the question is what do we do about it if other people get their hands on this technology? And then everyone does get their hands on the technology because other countries figure out ways to put resources together, invest in their scientists, invest in their research institutions and they build that technology. One of those nations was China. China figured it out. And so this is a great example. Despite the fact that China does have a nuclear bomb, they haven't dropped it on America for reasons that are quite obvious to all of us which is, and we've again, we've discussed this, mutually assured destruction. They're not going to do that unless they have a really, really good reason to do it. And so I think when it comes to AI policy, when I hear the argument we have to make sure that China doesn't build the equivalent of the nuclear bomb when it comes to AI, it seems to me that it's quite obvious that they're going to build it either way. They're going to figure it out. They have immense capabilities when it comes to power, actually far greater than our own. They have immense capabilities when it comes to AI research and their models and their model capabilities and their model efficiency. Like, it's going to happen. So then the question becomes from a policy perspective, what do we do if China has AI that is as capable or more capable than our own? Then what? But I feel like that question isn't really being asked in the administration. It's sort of all about how do we prevent them from ever getting to that point?
Yeah, I completely agree with that and history proves your point, Ed, is that when it comes to these technologies, we're in a multi-polar trap. The dominant strategy for each player is to assemble as much capability as possible in whatever technology it is that they're pursuing, whether it's nuclear or AI or in the next field, quantum. And it's going to be very hard, I think, for the administration to really suppress China's AI rise. And I think that history will look at the AI arms race as being very comparable to the nuclear arms race. Okay. We'll be back with more after a quick break. Stay with us.
Welcome back. As Chinese investors are being shut out of major IPOs, including one that's made Elon Musk a trillionaire, we wanted to dive into what big Chinese IPOs are on the horizon and whether or not China could in and of itself create the next trillionaire. Ed, we've just covered this. We've got a massive wave of tech IPOs in the US. What are you most excited about? And do you think that there could be somebody bust on the heels of Elon taking the trillionaire crown?
Short answer, no. This guy is not only the richest guy in the world, but potentially the richest guy in history on a relative basis. I mean, we've just run the numbers. He's now worth more than a trillion dollars, a little bit more now that SpaceX stock has climbed further during the week. But that is equivalent to 3.22% of US GDP. And I say this a lot because it's important. The richest American in history is widely regarded to be John D. Rockefeller, who at the height of his wealth was worth 1.5% of US GDP. So on a relative basis, Elon is more than twice as rich as the richest American ever. And so we're now getting to a point where we have to consider, I mean, who else do we compare Elon to in terms of his pure wealth? A lot of people say that Mansa Musa was the richest person to ever exist because there are stories of how much gold he had and his control over the trade routes throughout Africa. We're getting to a point where now we need to compare Elon to that. And then compared to everyone else, I mean, no, it doesn't come close. I mean, Sam Altman is not going to become a trillionaire. Dario Amodei is not going to become a trillionaire. At least not anytime soon. The level of wealth that Elon has accumulated is just spectacular. Now when you compare this to China, will we see a similar level of wealth out of China? I don't think so. Because the richest man in China is Zhang Yiming, who is the co-founder of ByteDance, which of course owns TikTok. He's worth a reported $93 billion. Though I guess it's hard to tell because it's a little bit difficult to value ByteDance at this point. It's not a publicly traded company, but certainly far off from Elon. But I do think it's a fun theoretical question is would China ever have a trillionaire? Or more importantly, would China ever let itself have a trillionaire? Because China is a communist nation.
It would seem to go against all of China's principles. Though at the same time they have allowed themselves to have plenty of billionaires. The rich list in China continues to grow. So I would throw that question back to you, like would the CCP ever allow for a Chinese trillionaire?
Number one, I think that you're spot on. It's hard to see and draw out the curves into the future that will ever get a trillionaire in the next decade, let alone the next two decades. I don't think ByteDance will IPO within the decade. I think that they don't need to. They're a highly profitable company. They're worried that if they IPO that they'll be subject to more regulatory scrutiny both within China and globally. So that takes that off the table in terms of his future growth curve of wealth. And he's the richest man in China. To your point, when I look at other companies, again, in China in general, the IPO sizes are a lot less than what you see in America. But as a result, valuations of companies that are comparable in comparable fields compared to their American counterparts are just orders of magnitude lower than what you get in the US. And so by that nature, I would say we won't get the same blockbuster IPOs. You know, just for reference, at its height, this was at least six years ago. So, in 2020 when Alibaba was trying to IPO its Ant Group, which is the big financial platform, it was seeking to raise $35 billion at the time, which was a blockbuster IPO for mainland China. As we know, the way that history played out, Jack Ma made a speech that did not play well to the regulators a few months before that IPO was supposed to happen. And then it was shut down almost the night before in a very, very dramatic fashion. And that answers my second point which is I do suspect, and you know this is just a gut instinct not necessarily based in data, that when you get into trillionaire territory, when you get too rich, that becomes politically problematic and we've seen a crackdown on high net worth individuals displaying their wealth. We've seen a crackdown on the platform companies partly because of the wealth factor and its political implications but I think mainly because the government was concerned that without regulation people's data, consumer welfare would be further compromised. You know, in a way it was the wild west of internet platform companies from the 2010s through to the early 2020s. So all in all, I think put simply, we will not get a trillionaire in our lifetime, Ed, coming out of China. The stock markets in the mainland are just not at the same market cap levels as we see and valuation levels as we see in America. And I think that there you're right, there is a political angle to this which is that it gets problematic when you have a rich person who in the case of Elon Musk his combined wealth is larger than a country like South Africa that he's from. That becomes problematic.
That's crazy. Yeah. I mean, Jack Ma seems to be like the perfect example where you had this larger-than-life charismatic personality who sort of, you know, the rags-to-riches story and then he becomes this incredible billionaire and then he gets I guess too cocky. He flies too close to the sun. And I forget exactly what his comments were and maybe you could remind me but it was something kind of self-involved or self-aggrandizing and then there was some slight criticism of the government I believe which is like just a fraction of the kinds of rhetoric that we hear from Elon which is basically constantly posting the government, constantly saying how the government was getting in his way and he was able to take advantage of the system despite the fact that everyone was against him and Joe Biden didn't invite him to the White House and that was such a problem, etc. And so when that happens in China, it does seem like there is a policy of we're going to shut you down. We're not going to let you, I mean we're not going to let you IPO. That was one thing that they were able to do and then it seemed like they basically just disappeared Jack Ma for several years and we didn't hear from him for a long time. I think we're starting to hear from him a little bit more. So I guess they didn't just fully take him out but they shut him up for sure. To me, it's a very interesting model because over in the US, when you compare it to the US, yes, we have a glorification of billionaires in a lot of ways, but the tide does seem to be turning and we're starting to see a lot of resentment among Americans for the billionaire class. One in five Americans say that it's morally wrong to be a billionaire. They think that that's a problem. If you look at young people, especially if you look at Gen Z Americans, half of us say that there should be no billionaires whatsoever. Billionaires just shouldn't exist. Which is why we're seeing a lot more interest in the wealth tax. For example, over in California, they're talking about a wealth tax where they literally...
Create a cutoff at if you have a billion dollars, then we're going to issue this wealth tax. I'm going to take 5% of your assets. And then that's becoming a lot more popular at the federal level as well, which was introduced by Ro Khanna and Bernie Sanders, and it's been co-signed by Elizabeth Warren. This is sort of the momentum is growing in America where we say these guys have too much money, they have too much power, and this is a problem for the country, which is such an interesting parallel when you look at it compared to China. I'm not totally sure, or maybe you can tell me how the population feels about billionaires, how they feel about people like Jack Ma. But my understanding is the government doesn't like them so much, or at least they don't like them if they ever get in their way. So I guess my question would be, what is the sentiment towards billionaires, and how does it differ between the population in China and the government in China?
Yeah, it's interesting to ponder a hypothetical in which you have in a parallel universe Elon being Chinese, and would he have become a trillionaire and been as successful as he has? And I would probably argue no, in a way that Elon relies as much on America as America relies on Elon to drive the kind of growth and innovation and crazy numbers that we see. I would say that I detected in the late 2010s going into 2020, funnily enough, in tandem with the crackdown on the tech platforms, on Chinese microblogs and amongst the Chinese netizen community, that people were starting to get very upset about the billionaire class and the tech billionaires. So, you know, if you think about the recent history, you know, you see the growth from the 2010s onwards of these huge social media platform companies, you know, Tencent, Alibaba, and the search engine Baidu. In these early years, people were so keen about the Pony Ma's and Jack Ma's of the world, they saw them as people to look up to, that they represented Chinese heroism and innovation. And then really you start to see this nihilist, more skeptical view coming just before 2020 online, was starting to criticize the fact that they have so much money, that they can continue to monetize consumer data, that they, through M&A activity, are very anti-trust, you know, they have these monopolistic or dualistic effects on the internet and digital economies. And then fast forward 2020 onwards, you see this huge crackdown across tech companies in China, and it's the second part of my answer to your question, Ed, which is that there is a weird, I would say, tightrope walk that the government has to do. On the one hand, yes, it's politically problematic when you have such wealthy people when your mandate is to achieve common prosperity and to make sure that the everyday people's livelihood standards are good. But at the same time, you need these people, which is why I think why Jack Ma was brought back into the fold after a brief stint in Japan. You need these people to be driving innovation, to be doing the necessary R&D investments into frontier emerging technologies like AI and semiconductors. So I ultimately come down to the view that, you know, they are kind of tolerated with varying degrees of tolerance, but generally tolerated because they are seen as really important cavalry for the Chinese competition with the Americans over technology.
