China's Tech Tightrope: Power, Regulation, and the AI Race with Angela Zhang

**Erik Torenberg** (0:00)
Hello, and welcome back to The Cognitive Revolution. Today, we're continuing to build foundational context for understanding China as we enter the AI era. My guest is Angela Zhang, professor at the Gould School of Law at USC, and author of Highwire, How China Regulates Big Tech and Governs Its Economy. Having grown up in China, lived in Europe, and become a law school professor in the United States, Professor Zhang combines an insider's view of China with a global outlook to create a unique perspective on Chinese technology governance and international technology competition. After first discussing the difficulty of studying China, and how much better China collectively understands the United States as compared to how well we in the United States understand China, we unpack the dynamic pyramid model that she developed in her book to explain China's regulatory approach, as well as the prevailing characteristics of hierarchy, volatility, and fragility that it exhibits. We then examine the stark power imbalance between government and business in China, where the state clearly has the upper hand, and compare and contrast the Chinese approach with its European and American counterparts. We also discuss several notable moments in history, including the Chinese government's decision to exclude American tech companies, thus creating the market opportunity in which their own tech sector could develop, the famous 2020 crackdown on big tech that involved canceled IPOs, major destruction of the market cap of Chinese tech firms, and the sidelining of Jack Ma, who had been one of China's leading technologists and global ambassadors up until that time, as well as the more recent apparent thaw between the CCP and leading Chinese tech companies, which some see as evidence of recognition by the government that they need the most vibrant tech sector possible in order to effectively compete with the United States going forward. Along the way, as you'll hear, I ask a bunch of basic questions about the practicalities of Chinese society, including how concentrated power really is and how Internet censorship works at the operational level. On the topic of AI specifically, I was also very interested to get Professor Zhang's takes on the light touch that the Chinese government has taken on AI so far, how China understands the US export controls on chips and semiconductor manufacturing equipment, how to understand the deep-seek moment and whether we should expect another crackdown coming soon, and even whether or not Xi himself might be, as some in the AI safety community have speculated, a doomer.
Please note, as you listen, I am well aware that a number of the opinions Professor Zhang expresses in this conversation are highly controversial. To highlight just a couple, while I'm not sold on their strategic value, I am also not convinced that the deep-seek moment proves that export controls won't matter going forward. On the contrary, I think there's a very good chance that held in place as they are, they will. And more specifically to the Chinese tech market, I know that Jeff Ding's work on technology diffusion suggests that this is not in fact a great strength, but rather a weakness for China. That said, because my time with Professor Zhang was limited and because I am interested in hearing different perspectives on such important questions, I chose not to push back on each of these topics in real time along the way. I think it's worth taking her self-description as a neutral analyst seriously and genuinely trying to consider her analysis from a neutral point of view. But of course, this won't be the final word, and you can expect multiple strongly contrasting points of view on this feed coming up. For now, if you're finding value in the show, please send it to a friend who's interested in US-China relations or the global AI landscape. Reviews on Apple Podcasts or Spotify are always appreciated too, and we invite your feedback via our website, cognitiverevolution.ai, or by DMing me on your favorite social network. Now, for a look at how China regulates technology and what that means for the global AI race, I hope you enjoy this conversation with Professor Angela Zhang. Professor Angela Zhang from the Gould School of Law at USC, and author of Highwire, welcome to The Cognitive Revolution.

**Angela Zhang** (3:48)
My pleasure. Okay, I think it's okay to pronounce it as good because it's a good school. Yeah.

**Erik Torenberg** (3:54)
Okay. Good.

**Angela Zhang** (3:55)
I like it.

**Erik Torenberg** (3:56)
So quick preface for this conversation. I don't know a lot about China, and I'm trying to catch up quickly because I think that the assumptions that people are making about China and its technology development, and what's it going to do in AI, and what's its attitudes towards the United States, or the West, or whatever are these assumptions are really fundamental to a lot of the AI discourse that's happening in the United States right now. I have a sneaking suspicion that a lot of it is not super well-founded. So I'm trying to get a better understanding myself, and hopefully be able to have better conversations with myself, and contribute to a healthier discourse. So I've written this book, Highwire, about how China manages, and oversees, and regulates, and exactly to what degree those different words properly apply. It's technology sector, and I would love to go through it. But maybe for one question I have to just get started, because I don't think people have a good intuition for this. What are your methods for doing this kind of research? What sources do you go to? How do you understand them? What tools do you use? Is AI helpful? I'm interested in that because I think we probably need a lot more people looking closely at China, and I think a lot of people might be interested, I probably have no idea where to start.