"China is digging out of a crisis. And America’s luck is wearing thin." — Ken Rogoff

**Dwarkesh Patel** (0:00)
Today, I'm speaking with Ken Rogoff, who is a professor at Harvard, author recently of Our Dollar, Your Problem, former chief economist at the IMF. Ken, thanks so much for coming on the podcast.

**Ken Rogoff** (0:12)
Thanks so much for having me. Welcome to Harvard, which is where we're filming this.

**Dwarkesh Patel** (0:17)
In your book, you have a lot of anecdotes of meeting different Chinese leaders, especially when you were chief economist to the IMF. And it seems like you had positive experiences. You met the premier with your family and he would listen to your advice. So one, how does that inform your view about how competent their leadership is? And two, how do you think they got into this mess with their big stimulus or whatever else you think went wrong? To the extent that when you were talking to them in the early 2000s, it seemed like you were kind of seeing eye to eye or they would understand your perspective. Do you think something changed in the meantime?

**Ken Rogoff** (0:49)
Well, I first want to be careful to say they listened to everybody. I mean, the Chinese are way better than we are. Of sort of hearing a hundred different views. Mine would be one of many, many, many, you know, that they heard. So I was very impressed by the competence of the Chinese leaders. So I actually gave a lecture in their party training school, where if you're a mayor, you're a provincial governor, you're any bureaucrat on your way up, you go to this thing, which for them is like Harvard Business School. They really looked for competence. So of course, there were various loyalty things, but you meet the leaders. I met a lot of them. And when I was at the school, I met a whole bunch of people. They actually asked really raw questions too. They said things. I couldn't believe it that they were asking. And I was told, you know, within the school, you're allowed to say anything. So they had the system for a long time. And when you met Chinese technocrats or even, you know, so the mayor of Shanghai or they were impressive. I'm not saying ours aren't, but it's a mix. I mean, I think you know that. And then Xi Jinping has really changed that. So he's been the president since 2013 And he's over time pushed out the system and gone more to loyalists and people who are less technocratic. I actually probably the most important talk I ever did in China was to the what's called the China Development Forum in 2016
It's this, you know, giant hall that had most of the top leaders in the party, a lot of the elite of the tech world Mark Zuckerberg and, you know, many others like that were there. I said, I'm looking at your housing. I'm looking at your infrastructure.
It looks to me like you're going in a classical housing crisis problem. Your catch up is over. Your demographics don't look good. I gave a list of things. And by the way, it looks like power is becoming very centralized in the economy. I'm a Western economist. You're doing an amazing job. What do I know? But I don't think that would be good for growth. And I have to say, after I gave the talk, I just figured, you know, you only live once. You just have to say what you have to say. The couple top leaders came up to me and said, Professor Rogoff, we very much appreciated your remarks. And I was saying, you know, oh, no, you know, they're going to put me in jail or something at the end of this. But, you know, I'm less impressed by them now. And I'm worried that, let's say we get into a tangle with the, let me back up. They get in a crisis, which they're in now. I think they're in a deep crisis still. Or somehow hotter heads prevail between the United States and China. And we get in some kind of entanglement nobody wants. I worry that we're not as competent. I was thinking about right now, we have some very good people, but the average quality at the very top, I think, has gone down. And China's not as competent. That's a recipe for having bad things happen.

**Dwarkesh Patel** (4:14)
By the way, on that talk, so you mentioned in the book, that before that you had to clear your talk. And so you gave them a sort of like watered down version of what you would say. I have to say that would take gusto to go up to the top party leaders. Were you nervous while you were giving the talk and you're like, oh, it's too centralized?