The Xi Jinping Episode | Lemonade Stand 🍋

15:01Aiden:I think very naturally, too, the people who have been most critical of the system have been the people in their late 30s, early 40s who have kids. They both said this is one of the number one problems in China, presumably because it affects their children very directly. And the way that the tutoring companies, there was this arms race among tutoring companies to get extra, to help your kid out and all of the money that went into that. We asked them about the tutor company crackdowns that had supposedly happened in the last couple years and every single person that I've asked this without fail says, yeah, I mean, nothing actually changed.

15:40Aiden:The tutoring companies on the surface went away, but the tutoring economy still exists. It's like you said, right? The incentive is so strong because of the good part of it, which is that it can change your life. You could do that on this test. You can be from a poor background. It could change your life. You can do a good school. Your whole life's different. Yeah, but it's getting harder for poor people in this system to use it to succeed. Because of those incentives, wealthy parents will spend any amount of money on private tutors, private anything to get their kid in advantage. And the state tried to crack down on that by banning that.

16:09But all it did was move it underground. Not a single person we talked to, like you said, thinks that it's gone. And so, you know, this is becoming a huge problem where people are just constantly competing to stay in almost the same spot. Like there's nobody really getting ahead. And apparently they used to be different. Like I would talk to you was 29. He was like, yeah, it used to be you could, you know, I studied hard, but not that hard. Which, by the way, I think he's like, basically what he was saying. I mean, he seemed like a humble guy.

16:34Aiden:I was wondering when you when you shared about playing basketball, I was like, damn, kids are playing basketball from 10 p.m. until midnight. But then I thought about it. It was like, maybe this is the only time they have to do it. They said literally this is our only time. This is our break. I was like, you guys stressed? They said, yes. They're like, it's in two months, they're grinding. I'm curious from either of you, like from these hangouts with these two younger people, the basketball last night, any more big takeaways of what they're dealing with at the moment?

17:07Atrioc:I got some pay for you. So they were willing to share their pay and said we could share it on the thing. So I think this is an interesting example. We've talked to folks across the spectrum, including a delivery driver who made, I believe 10 ,000 RMB a month, right?

17:21Aiden:Yeah.

17:21Atrioc:Was what we landed on. We talked to -

17:23Aiden:That was in Shanghai.

17:24Atrioc:That was in Shanghai. In Shanghai, and he was grinding. Which is higher, and he was grinding. In Chongqing, we talked to our tour guide who's lived there her whole life. She was saying that on the lower end for Chongqing, it's like 4 ,000 to 5 ,000 RMB a month. Ji, could you - What is that in US dollars? Okay, thanks. I'll Google it as well. Thank you. Just to check - You're fact-checking Ji Jinping. That reminds me of Aiden last night. What did you say? You said, I think... What? You said, I think Xi Jinping probably has a translator for English. It was the dumbest thing I've ever had to say.

17:56I was making a joke. No, you turned it into a joke. Dude, I was making a fucking joke.

18:03Atrioc:We were talking about how Xi Jinping does speak English.

18:06Aiden:We were talking about if Xi speaks English, because when I looked this up, I've never been able to find public video of him doing so. And I was just like, he's probably got a guy. He's probably got a guy.

18:16Atrioc:which she do you have that yeah my man you don't this interview would be a lot easier if you just uh okay so on the low end in chong ching it was like 5 000 uh r &b a month four to five thousand which is about 720 us dollars and then for the you know somebody who's doing well you know by the by standards with delivery driver that's 1400 us dollars a month um 10 000 r &b so by contrast these two folks are in a more white collar job it's about 21 000 rmb a month and that's three thousand dollars so this is getting to like you know sort of america salaries in that general range right um and so asking that i was just like how do you feel about your pay and they're like it is great it is really good like huawei pays well this hong kong company pays well what happens a lot for hong kong for people are not aware it's right below shenzhen so a lot of people live here in this city because it's so massive and there's so much development and it's way way cheaper and they just commute into hong kong every day it's like an hour and a half by train but everybody's like look it's going to be you know x x amount cheaper here that's it's like uh those people

19:26Aiden:that work in they work in like rural parts of france and then they commute into switzerland it's like you're going from just a low cost living area to one of the most expensive places in the world and then you just go home across a border and it gets magically cheaper again yeah but one

19:40Atrioc:of the things i asked was like did you guys pick these jobs because you liked it or is it like the one job you could get and they're like it's the one job like there it is rough uh it sounds like again just like us young people are like it's really hard to find a job you don't have a lot of choice it's super competitive so you take what you can get and both of them are in situations where it sounds like they don't necessarily love their job i don't know if you think that's fair she was there by the way um uh but they're still like okay it's great for the current so even the guy who works at Huawei is considering doing a master's in Hong Kong, but the fear is if he does that, he's leaving his current job.

20:14Atrioc:Who knows if he'll be able to get one. Who knows if, again, just like in America, if a higher education is even going to be that valuable. And you do have to pay for school here in China, apparently. And here's one of the crazy things I didn't know. In America, if you come and study at American University, not only do you pay tuition, you pay way more as a foreign student, even out of state. Oh, yeah. Right? To go to the UCS. That's why the universities love it, because they make paying costs. They make tons of money off of foreign students. Even someone, a mainland China resident who goes to studies in Hong Kong gets charged a foreigner tax.

20:50Atrioc:The rate goes up because of that, which I was like, that is crazy. So it's one party, two systems. They are right next to each other. They're commuting from Shenzhen, and it's like, well, you're a foreigner. or you live in mainland China instead of Hong Kong. Hey, that text.

21:03Aiden:Gee, I'm starting to feel like it's not a part of China in the same way that the rest of the...

21:10Atrioc:And then another kind of fun tidbit I saw was that his girlfriend runs a small fashion brand. There's like, I think three of them running the company. And they like pick items that they like. I think they do some designing, some is like they find items and then they're kind of selling them as part of their brand. So they're pitching himself as this, you know, sort of niche fashion brand. So small business, and their marketing is all from live streaming. So every night, I don't know how many days a week, but I think most nights a week from 9 p.m. to 1 a.m., they are streaming those streams you've seen where they're just showing different clothes.

21:46Atrioc:It's somebody walking up to the camera and saying, this article of clothing looks really great. They put it on. They take it off. They go to the next one. And then Stavik showed me on the Chinese TikTok, basically. Taobao. Is it more of a marketplace or a TikTok? Yeah. It's Amazon. Okay, so their equivalent of Amazon, the second tab on the app is shopping live streams. And they had 100 ,000 people watching all the top ones. They're huge. All the top ones, which is just people putting on items of clothing or showing things on and off. And this is how his girlfriend, their streams, because it was live.

22:18Atrioc:We saw it live. It's only like 80 viewers per stream, but that's enough to get a couple repeat customers and a couple orders. And apparently you do this at night because then everybody's home from work and they're more likely to spend money. And this is just like the way you market right now. And it's fucking wild. Yeah, the biggest ones are making millions. They're moving millions of dollars of product. This has been for a while now and they keep trying to make it happen in America or in the West, at least. I think you heard of Whatnot. It's like starting to pop off. They're trying to do it. It's like all trying to learn from the Chinese live stream shopping, but it hasn't quite hit over in the...

22:51Atrioc:I don't get it. I don't want to fucking watch someone advertising me clothes, but it is like brain rot. It's like, it's really... QVC was big. The flow of it is incredible. For rumors. I assume this could be Zoom or QVC eventually. QVC was big because nobody... There's nothing else to watch. Right? That's like at 3 a.m. you're awake and there's nothing on the channel to be like... Maybe this is that. Maybe you just want this background of like...

23:13Aiden:Haven't you ever had that thought of, as a kid, seeing infomercials on TV and being like, who the fuck watches this? And then realizing that we're all the same. it's Stevix

23:25Atrioc:Stevix said her mom exclusively buys live stream shopping clothes now that's where she that's where she buys all her clothes it's massive it's crazy

23:33Aiden:did they talk to you at all about their I mean I guess for the kids in school this would be a little different but for these jobs did they talk about their hours at all we've heard a few things about that

23:42Atrioc:yeah oh oh so that's interesting so in our book club that you can listen to with our tier 2 patreon we read two books about China last year one is called Breakneck which I really recommend it's basically comparing America to China I think that was the better of the two. But there's also the book House of Huawei, which we also read, which is about the history of Huawei, the company. Very short primer for people. This is one of the companies that started up when Shenzhen became like the special economic capitalism zone. And then they built up and it's all telecoms. And they sort of spread throughout China, then started spreading throughout the world.

24:11Atrioc:And then there's this infamous battle with the United States where Trump locked onto Huawei and said, this is a security threat and got the entire world, the sort of most of the world to stop using them and attack them. So it's like a death knell for the company. So in that book, they talk about how in the early days of Huawei, people literally worked themselves to death, like literally would die in the office from overwork and exhaustion, or they would be going out into like small villages and whatnot. And the expectation is if you don't return with all of the business that we asked, if you don't personally take out all of the potential clients every night, hardcore heavy drinking, you're a failure.

24:51Atrioc:So it's really, really insane of a company for like 20 or 30 years. It sounds like it's a lot more chill now. So for him, his hours are like, you know, nine to six. It's five days a week, except the fourth Saturday of every month you have to go in. so instead of being forced to go six to seven days a week it's five and then this but then he followed up and said like i have a more chill department some of the departments are are still going insanely hard and then one of the wild things is the crazy stories about huawei in the early days they would have senior employees who were hitting the like kind of like you're going to get a promotion and get tenure and get all these things by law if you're hitting the nine or 10 year mark, those people would voluntarily quit the company, immediately get rehired.

25:35Atrioc:And that way, Huawei doesn't have to spend more money on you. And you're like sacrificing for the company that still exists. He was like, oh yeah, people still do that. That's crazy. Once you get to the point where you're ready to get promoted after like nine or 10 years with the company, you quit so they can rehire you at your same position. So you don't have to be promoted. That's the kind of intensity that they have for this company. The 29 year old we talked to did mention something about he's like, he talked about age and how Now, I don't know if he said 35 or 45, but he's like, after that, they don't want you for these tech companies.

26:06He's like, I have to make the money now because after that, it's much harder for them to keep me because I'm not going to want as many hours or they're going to not pay me as well.

26:16Atrioc:Okay, wait. One final tidbit or story that was fascinating. Part of the interviews, before you go into in-person interviews with Huawei, they do a personality test, like a Myers-Briggs personality test. you answer all these questions and they only are going to move you to the next round both of them had actually applied and and she had applied and gotten denied and he specifically looked up how to answer the personality test so that it would make him look really submissive and that got him the next round so they literally use a personality test as a barrier to find people who are submissive and will do whatever they're told to do like endless amounts and those are the people they

26:55Aiden:hire that's fucking crazy i think this is a theme across pretty much any we do that but we have the balls to do it in person you know right they just at least we say to your face we say to your face you're not weak people work extraordinarily hard here i think we have heard from people that workers rights have improved over time like over the last few decades but the hours that people work as like the standard at whatever job people are at are pretty extreme like we were talking to the factory owner and it sounds like most people at the uh the factory that makes clothes everybody there comes in uh six days a week uh 9 a.m to 6 p.m and also often work over time and then with people in the offices they drop a day they work like five days a week uh he said five and a half

27:45Atrioc:yeah he said five and so it's like you're still going in on a saturday you just get to have the

27:49Aiden:evening to yourself yeah and and then i think that's carried through like even the the one kid who was talking about making 10 000 yuan a month from doing delivery he is working seven he literally said he works seven days a week uh and i do not think there's a single person i've talked to here where they're not verging on like the 966 thing that you hear about chinese work hours seems to be very true from talking to everybody. 9-9-6. 9-9-6. 9-9-6 days a week. Yeah, it's brutal hours. And I... Wait, sorry, keep going. I mean, not literally 9-9 every day, but most people working at least 9 hours every day, six days a week.

28:34Aiden:Oh, the factory.

28:35Atrioc:I remember. So we toured the factory. What's the context? What is this factory? People don't know. We didn't just like roll up randomly. Oh, yeah.

28:41Aiden:So the factory, interestingly enough, had the opportunity to go to the factory that makes most of the cut and sew clothes for mogul moves in the yard. And we've worked with them for like five years, I think. So the owner of the factory gave us a full tour of the facility. It's a relatively small factory compared to other ones. And then we sat down and got to interview him for two hours. And then we went to another like two and a half hour dinner. and yeah so that's the context of how we found this. He was a fascinating guy. I mean the guy looked 40 but was actually 60 something. I couldn't believe that.

29:19I was and had been through

29:20Atrioc:dropping bro and holy he was dapping us as we left. That was how he left. He was a joke guy. You guys want to check out my new car? Here's one of the guys as we mentioned who's a little more positive actually a lot more positive.

29:35Aiden:He was way more positive because this guy you know he's 64 which means he had been around for Mao through now and seen just absolute radical changes in China and like, you know, overall up into the right, massive changes in the city. And, you know, he had a really nice car. Like, he's balling. He did say he wanted to retire, but his boss, which is his wife, wouldn't let him. But anyway, so we're at the factory. On the hours discussion, we're touring the factory. And it was like, like you said, they're working diligently. I don't see a lot of breaks. and it's like no kids he mentioned that i want to make it so clear no kids they're the oldest

30:13Atrioc:kids i've ever seen if they're kids they look there's some gray hair i was so sure that mogul moves would use shaw labor i just thought that's ludwig's brand that's what he's gonna use but there was no children there and in fact the guy made a specific mention of like how experienced and not children these workers were um but were you upset to see that they didn't have the same nimble fingers that you had hoped for when you were shaking his head and was just like this is

30:41Aiden:not the cruel standards that i had hoped for i told you i didn't want to talk about this on the episode uh i don't want to dig into this yeah uh but there's a there's a leaderboard you know there were people like sewing clothes and they had like a digital leaderboard tracking everyone's name and the number of i mean this is probably standard in a factory but it just was it was wild uh you know the level of output and consistency. And I think the treatment and everything there was good, but it's a lot of hours, a lot of work. Yeah, I don't think I really understood the, one, all of the ins and outs of the process to make the clothes itself.

31:16Aiden:It was really interesting to just see that. But then also what, like they work these crazy hours, but they also get lunch and dinner provided by the factory, which sounds like is normal. and then they also a lot of them lived in the apartment complex literally next door and it seems like something similar is is very standard at a lot of the larger factories too yeah support for this show comes from tasty trade guys i'm getting real tired of you not knowing serious financial terms on this show okay steve eisman comes on and we can't even explain ourselves in the complicated financial ways we seem like chumps is bitcoin a money This is a problem.

31:59Aiden, so I came up with a quiz to test you on your financial knowledge. You're going to tell me if these are real or fake. Okay? These are financial terms. Yes. The Lady Macbeth strategy.

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32:11Aiden:That's not real. That's real for sure. It's real. Really? It's real. Yes. Everyone knows that. What about momentum canceling? Momentum canceling? That's from Melee.

32:24Atrioc:Fake. Fake. Yeah, it's from Melee. All right, what about a broken wing butterfly? That's got to be, it's too weird to be made up. That feels like it's real. Feels like it's real. That's a fair point. That's a fair point. Okay, it is real. So you guys are getting some of these right. What does it mean? Let's not focus too much on the details. You know who could explain it really well? Tasty Trade, because they have an actual jargon library that breaks down these terms, help you understand so you can trade with understanding. Wow. Are you saying I could go to tastytrade.com slash lemonade today and that Tasty Trade Inc.

33:00Atrioc:is a registered broker dealer? That's exactly what I'm saying. You finally got it. Okay, I'm picking up on it.

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33:55Atrioc:Get your outdoor space ready and save$50 on a select Cobalt 24-volt blower kit. Now$79. Plus, save$80 on a Char-Broil Performance 4-Burner Grill. Now$199. It's springtime, and our best lineup is here at Lowe's. Valid to 413. While supplies last, selection varies by location. Well, you go into this guy's... I mean, that guy's discussion was one of the most fascinating. He gave us hours of discussion. He had a lot to say. And in fact, you're going to like to hear this. He was the most positive on Xi Jinping of anybody we interviewed. He said Xi Jinping is a genius. Yeah. We just asked. We're like, who do you think is that?

34:35Atrioc:You did it tactfully. We've been asking a number of people like, what do you think about Xi Jinping? And then people literally tell us. And a bunch have said, no, he's not that good. It's the Chinese people are what makes this successful. And then you framed it more tactfully. I just listed all the leaders he's been alive for. Yeah. And you said, which do you think is your favorite? And he was like, no, no question. He's the best. Yeah. Yeah. He was no question. It was awesome. So congrats. Congrats. He has a big win for you. Yeah. He did. He then followed up and I was like, are you concerned at all about the lack of term limits?

35:09Atrioc:Like that Jesus is going to be there forever. And he's like, nope, we still have term limits. He it's there's a limit. He can't be chairman forever. And I was like, I thought they abolished that. I thought he abolished the term limits. And he's like, nope, that's propaganda. See, this is why you can't trust everything and people tell you false things about China. And we all looked at each other. And we're like, that is not true. He did do that. You abolished term limits. Be honest, bro. Be honest, bro. You abolished them.

35:39Aiden:But I was looking this up because I was like, maybe there's just something I missed here. Because what he was saying is he raised the cap of term limits. from two to four and it's not like they're gone entirely and i was like oh maybe i just misunderstood when this decision was made i can't find anything that says that's the case uh so i'm you know i was like i don't need to be right about this i've just never seen what you're telling me anywhere i i couldn't find any verification for his claim that there was but it's like it's the

36:11Atrioc:same thing it's you know and i just to reiterate the theme that we felt and expressed in the previous episode that almost everyone i think except younger people like mid-20s or younger everybody older than that has expressed china has developed so much has become so much better it's an amazing place to live now it's incredibly convenient and he expressed the exact same thing and you know again like he grew up in hong kong fucking across the water would have been this with nothing here and he you know he's in his lifetime this is developed into this mega city and talked about how much the supply chains have improved, how much the quality of fabric and materials across China has improved, how he as a factory, he went and founded his own factory, how much better the standards are across the entire country, how quick everything is.

36:59Atrioc:Just from a logistics perspective has just said, it is unbelievable the amount of change. And so you hear that from everyone. He confirms something we've talked about before, which is that in the initial days of China industrializing or getting foreign capital, they were cheap labor. That's what they started out as doing. It was factories that would do cheap labor. And now they've sort of moved up the value chain. And the new cheap labor he was mentioning is like...

37:24Aiden:Vietnam. Vietnam. Cambodia. Bangladesh, Cambodia. And so factories are actually moving the real basic stuff there. That's where that's going. Like Chinese factories are moving some stuff there and then just sending the fabrics. But the higher end stuff is staying in China because they have process knowledge and infrastructure. He also said something I thought, because that was one of my big questions, is how does the competition around these things work? Like where do the Chinese factories and companies locally still find their business? And he said that they're more cost competitive than people think because of the supply chain infrastructure that's been built up in China.

38:03Aiden:He basically said like there's so much infrastructure and so much supply chain knowledge here, which was something that was super highlighted in breakneck that book we read right that because that doesn't exist in those foreign countries we can remain relatively cost competitive with the factories that start up there that aren't owned by chinese companies right

38:22Atrioc:yeah some examples he gave were let's say you need a specific type of fabric he calls somebody and in two days a massive amount is delivered to his factory right you you can't get that in other places they would have to do a whole giant supply chain thing special parts custom washes like for your guys's clothes like if you need a specialized thing to make clothes look a certain way or you know special metal pieces that are custom designed like all of that can be done instantly in this broader area of china like everybody making the fundamentals are here so everybody can just pass it to each other super fast the big thing was the tariffs he talked about the tariffs and how they impacted his business you know there's a sense i think on uh if you were like against trump in America, which I am, but you would say something like the tariffs are only hurting people in America, only increased prices.

39:12The truth is it did hurt. It hurt factory owners in China as well, but the jobs just didn't move to America. That like his takeaway was that their business slowed down 20 to 30 % and that they had to find ways to cut costs or whatever to try and make it competitive. However, he also mentioned that to get around that either factories were at that time moving to, you know, different in-between countries, or we went into more details on, like, and this is, like, stuff we heard from other people, but, like, of the ways people avoid tariffs altogether by shipping through...

39:44Aiden:Yeah, he was saying, like, big companies that produce a lot of, like, standardized blanks would send, like, a shirt that doesn't have one of the sleeves on it, and then they would send, you know, like, thousands of that shirt to a factory in Indonesia where they would sew the last... the last sleeve on it and then change the label and now it's an indonesian shirt and you don't

40:08Atrioc:have to pay the tariff i have my issues with trump but he has been a job creator for indonesia for indonesia we i just want to underscore this according to this man to andy who we spoke with for a long period of time known like none of these companies were like there's tariffs now we should set up shop in america they just moved to cheaper they just found cheaper places south

40:32Aiden:asian countries what is the fucking point he was talking about some of the consequences of ai in this industry too or the consequences of ai that he expects he seems like a pretty pro ai guy but he said one of the things that these larger factories are looking to do uh are their process is already fairly automated compared to a factory like his to briefly explain the difference his factory makes smaller amounts of highly custom sweatshirts or jackets or whatever, which is the reason that we work with a company like his is because it's very difficult to get the customization we want at the volume we want with a lot of other places.

41:13Aiden:Like if I were to try to do that in the US, it'd be especially difficult. But he said that larger, larger factories are outputting like thousands of the same item. And because of that, they've automated a lot more than his factory has. And we did see that like so much of what is done at his place is like hand sewn or hand cut because of how frequently the products change. And he doesn't really have a choice. And he said the goal of a lot of these larger factories especially is using AI and robots to basically get rid of everybody in the long run. Have a completely automated factory that is running 24 seven that doesn't have to employ any people.

41:52Aiden:and it was interesting to see him talk candidly about the consequences of that. I don't think he was so positive. He was like, it's happening. He was shrugging his shoulders like, what can you do? You don't have a choice. You don't have a choice. He's like, I want to take a course to learn about AI because this is the way it's going. I have to figure it out and this is what the bigger factors are doing. I don't think he was like, I'm so stoked to... Yeah, that's fair. He was also talking about robots being the caretakers for the elderly as the population ages. because of the demographic problem.

42:24Aiden:He's like, no old woman wants to help her husband shower every day. But the robot will. But the robot will do it fine. Who bathes you?

42:36Atrioc:I bet he has somebody who can help bathe. Yeah, I bet. Probably does. He probably has a bathing guy. I bet he has a bathing guy. Almost certainly. Yeah, and another theme, we heard and expressed this in our previous episode, and it continues to be expressed over and over and over by people here, which is that Chinese people are used to change and they are used to the idea that their culture has changed or not even like culture, but you know, the world is changing technologies, upgrading things. And again, they, the average Chinese person has seen a massive, massive change in the world around them that has made their lives measurably better over the last 30, 40 years.

43:12Atrioc:And so when something like AI comes along, they aren't scared or terrified or trying to stop it. They're just saying, this is the next set of changes that we are going to adapt to.

43:20Aiden:Yeah. I think he put it the most eloquently out of everyone we've talked to. We did record that interview too. We might even be able to cut. I feel like his answer to that specific question was amazing. So maybe we actually cut it into the episode.

43:33Atrioc:Slot it here. And then Xi gets a counter argument.

43:36Aiden:But Chinese people, they get used to the way we keep changing. No big deal. Am I right? No big deal here. Everybody get used to. So, okay. wow AI is a good future for us then we have to learn. I'm an old guy but I still want to take a course of AI. You know what I think is nothing about money just like life have to carry on and then just like the cell phone long long time ago the analysts for out of here the best right but out of the business not just us people don't want to learn from the smartphone but eventually they You need to learn it, otherwise you can't survive. Because you need the form to communicate with the world, with people.

44:20Okay, like the computer, a long, long time ago, quite a lot of the top management, they didn't want to touch. Oh, and like, I got a secretary, how we out.

44:30Aiden:But they were out of the day, just a matter of time. They forced them to learn from the computer. They've learned from the computer, all that, you know. The same case like right now. But Chinese people, they get used to that. It'll keep changing. Every single day, every single year, there's something new. Wow. Amazing. We feel, wow, so amazing. We love to see that. So everybody, especially those young guys, teenagers, even the old guy like me, oh, okay. We need to learn something. Otherwise we're out of date. I can't communicate with those people, with people, with my friends, all that. So we need to learn something.

45:09Aiden:I think in the spirit of maybe the anti-glaze episode are there any other things there's a massive one dim sum fucking sucked if you can't knock anything it's the food

45:23Atrioc:they don't have sticky rice and they don't have oh my god what is it they don't have rice noodle they have these things not at the places we're going to we've eaten three goose in a row do you know how many fucking geese we've eaten in the last 28 hours It's honestly easy to glaze the incredible food, and people have been great, and the cities are obviously incredible. But what are things you think are bad? I want to give the biggest anti-glaze because it's the thing I was most interested in learning about. And every single person from the most diehard I love Xi Jinping China glazer to the hey, I'm trying to get out of here.

45:54From everyone we talked to had the same agreement on this. It's the one thing universally agreed on. The real estate crisis is real. It is real. Every single person has said there's been a massive downturn. Now, whether it's – it's not China ends in 30 days. Not by any – and in fact, we're seeing so much controversy. out here. But the truth is, if you don't know, there was a massive, a gigantic bubble in Chinese real estate. Everybody put their savings into apartments and houses and buildings. There are buildings everywhere. There are multiple apartments. People have multiple apartments. And the prices of these have been cratering.

46:25And so it's the reason behind a lot of the job slowdown and a lot of the, because there's just a general lack of willingness to spend because so much of the savings is tied up in apartments that are growing more and more worthless. This is like everyone's agreed on it even that guy who was uh 100 all in was like yeah it's a problem but you know they're doing the right thing we'll get through it but that that nobody disagreed that that was a downturn and so it's um i guess it's just good to verify because you read a lot of sources about this but you're like what is it on the ground and people are feeling it they know

46:55Atrioc:that yeah yeah the the guy we talked to who worked in real estate yeah he was the most dire yeah uh you know, interned at Evergrande, right? Mentioned how he's been looking into this. And he said there are probably, you know, from his estimates, and this is somebody who's really like researched this stuff, while acknowledging that it's hard to know the exact scale of it, that there are probably millions of Chinese citizens for whom they bought a home that was supposed to be constructed because you buy it before the building goes up. And again, I mean, just these condos are going up everywhere all the time for the entire train ride across the entire country, right?

47:31Atrioc:and people would buy these homes and they just don't get built. And then you're just fucked. There's no recourse. You can't go to the local government. You can't do it. Oh, the fucking shell companies. You can't do anything. And there's millions of people who basically bought a home. That was going to be their big nest egg and it is just not there and they just have to accept it.

47:46Aiden:Yeah, the specifics are a little vague, but it seems like there's like early programs that are meant to help people in this position and some people are being helped, but the majority of people in this situation are, quote, they're just fucked. The scale is just massive. It's just a massive. It is very, you know, we talked with a guy. It was funny. You guys seen the big short. It's like the scene at the dinner when they're understanding the size of the bubble. Aiden's face was like, as this guy was walking through the details of like how local governments will use shale companies to borrow money to try to develop land.

48:19And then if they can't make any money on that, so they have to shuffle the debt off to a different. It's just, it was wild. Yeah. Can you walk through the steps of like.

48:28Atrioc:Yeah. Okay. So I'll say this is, you know, somebody who's. talked to local governments about the process of this somebody who's been on the ground talking with them and he walked us through this weird process that is funding all of this building

48:41Aiden:despite it being a disaster i think to quickly contextualize he wasn't just an intern at evergrand he continued to work in the real estate industry after for years and then he recently left the industry to go work at a different company because of the downturn yeah 100 uh i want to say there is a difference between, you know, the tier one cities like we're in, you can still see, obviously, a ton of construction things. These are still popping. Like the bigger cities are way more insulated from this. But what the real problem was, was all the other areas where there was just a ton of building. But the main thing is, so collecting taxes for local governments is not something they've built a great infrastructure for.

49:22They're not pulling in a lot of income tax money. And so a lot of the way that local governments in China are funded is through selling land or renting land out to be developed. And so they had an enormous incentive to do as much development as possible. And so what they would often do is they would set up a shell corporation from the local government, which would then borrow money to either purchase the land if they needed to purchase it to be developed, or to loan to developers to start developing. And the problem with that is that the thing you are creating, if it doesn't continue to go up in value, you can no longer pay back that development money.

50:06And so as everything was sort of working while prices continued to go up, but as prices are now declining, these local governments can no longer profitably rent out any of this land. And so they can't fund a lot. Like you were saying bus services were getting shut down in some places. And like it's just becoming more difficult for them to fund their thing. So the central government has to step in and like buy a lot of this bad debt off of their books. But it's becoming this sort of chaotic problem.

50:31Aiden:And he also explained that the local – it sounds like from what I'm gathering across more conversations is corruption at like a local government level is still relatively rampant. And the central government is doing their best. And one of the things we've heard she be like praised for, criticized for in some other ways is the cracking down on this corruption within local governments. And the local government appointees have a large incentive to continue building and continue taking out this debt because it was one of the major metrics that they were judged to get promoted. and if you're in a local government position where you can take out a bunch of debt build a bunch of stuff get promoted you can pass the buck of the debt to whoever the next guy is so it created this big pipeline of people trying to move as many infrastructure projects forward as possible so that they can go up the chain themselves and then we'll deal with the debt problem later 100 yeah that even the guy who was you know the most pro Xi Jinping he was like he's great the local governments are still corrupt that's what he said and yeah that was uh that the incentive structures but again i think we have the same a very similar incentive structure where people in our government overspend because they know the problem is passed to the next person but in here it's very concentrated in the local governments where they are just dumping borrowed money on things that uh you know that may not make sense you know i think the first wave of infrastructure always makes a lot of sense you build the first train or the first bridge or the first whatever but they're just continually doing it because that's how you get promoted that gets your growth target help me help me say this if i'm if you think my understanding is incorrect he was basically saying that local government officials currently in charge that own these buildings or uh you know that could be leased for commercial purposes or leased for housing purposes don't want to put them on the market because then the loss will be realized from an accounting perspective.

52:31Aiden:Yeah, okay. So they can basically hide the values of these things crashing and maintain the facade of these things being worth the amount of money they want them to be if they just don't actually sell them. Yeah, so if you're a local government and you have this plot of land that is currently like unfilled apartments or whatever, it's not doing so well. But you make a shell company, you take out debt, you buy that land, and then you're gonna build a mall. Now you haven't done any research or studies whether this mall will be supported, whether enough people will actually use this to make it worth the money you spent.

53:04And so what they do is they build the mall. They find out that they can't even fill the space properly. They just can't. They're not making money on this, not even to justify the cost of building it. And they can't pay the interest on the debt. But if they were to sell the land and like declare it a loss, then on the books, they would have to mark down. The mall is worth what they paid for it until they sell it. And so they're just kind of like going forward with everything, knowing that the next guy will have to deal with the problem and sell it.

53:33Aiden:To give a visual, if you've seen the big short, it's that scene where Michael Burry is talking to the banks. And he is saying that if the underlying assets are crumbling, how can you tell me that there's no drop in price of the CDOs? That doesn't make any sense. And it's the same thing.

53:50Atrioc:If you don't sell them ever, you can't prove that people don't want it.

53:54Aiden:Because there's no incentive for them to mark it down before that. There's something going on in private credit right now in America. It's just very similar. But I guess the thing that this guy was so insistent upon was that this is massive. This is one of the most leveraged bubbles of all time. And I will say, I kind of pushed him on this. It feels like the way they're handling it. Getting into the situation in the first place was a disaster. Like it's clearly a problem, but the way they're handling it is like a slow deflation over many years that is avoiding societal, you know, not collapse, but like disruption.

54:34Like they are implying that there's maybe four, the guy estimated four or five years to go.

54:39Atrioc:Oh yeah.

54:40Aiden:And well, it's kind of tough because right into the mic, man.

54:48Atrioc:Sorry.

54:51Aiden:Kind of tough. isn't there is the argument that i mean in the case of like the american housing crisis at the time too is you need to let the corrective period play out in order to start fixing the root of the problem no i asked him that i was like well you know you're talking about the prices keep going down and the price of everything is going down because there's deflation um and there's you know the consequence of that in the short term is that there's no jobs and the economy is really slow but for a young person eventually it's like i can get an affordable place and things are more affordable and so um i asked him that and he's like yeah well it has to happen so you know i i on some level i have to give credit there but i do want to say um you know for people that are like well housing shouldn't be an investment you should do it more like china it's like they did it as an investment for now 30 years like they've created one of the largest like people put money in it You're dying.

55:49She's your biggest killing me for my truth.

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56:44Aiden:Respect in this battle. Pick a meal to pick a side. And participate in McDonald's while supplies last. In a classroom of sodas, most stay quiet. Then there's Mr. Pibb. Sweet cherry, bold outbursts. The kind of flavor that gets attention. Bold kick of cherry.

57:04Atrioc:Hey, yo, Mr. Pibb. You guys think, though, that it's worth it? What? It's hard, like... Thank you. Going around, at least to, again, these are like the tier one cities where apparently the struggle is really being felt a lot more on the smaller ones. But there's part of me, it's like, I don't know, maybe leveraging themselves into a massive bubble, but at least you get massive infrastructure, massive buildings, housing everywhere. Everything is cheap and affordable. It's like, I would rather that than what we got, which is no infrastructure, no housing. I think it's definitely a pro. It's like, okay, well, you know.

57:39Atrioc:If you're going to make a giant bubble, it's like, this is one of the more valuable ones. Like, one of the bubbles we keep doing is bombing the Middle East, and I would argue that's less interesting and valuable. Yeah, the ROI is lower. Talk about it later.

57:52Aiden:Don't nip it in the bud so early. You know what? Let's let it play out. Why don't we wait and see? I think there, yeah, I've been thinking about that. I think a common criticism I hear is how much different the rural parts of the country are and how much lower the quality of life is. And while I think that's true to a degree, asking people here, they've been pretty insistent, and from the little parts of what we've seen, that quality of life in rural areas has drastically improved compared to what it was in the past. like the level of infrastructure access that even gets built out to more rural areas has been

58:33Atrioc:incredible anecdotally as we went across a six and a half hour high-speed rail from chong ching to here i was looking outside most of the time and it was like little villages and you could see everywhere condo buildings going up bridges going up infrastructure going up like it is touching like everywhere yeah even if maybe the leverage and fundamentals behind the finances are bad no i think like we just clearly under invest infrastructure in america and so it's obvious that this is we take this trade um i do think you know he had a really good point which is about there's maintenance costs on all of this stuff you know it's all freshly built and so it's extra nice but the maintenance costs add up and if you if it wasn't able to be supported before it's like harder now but yeah overall i agree i think uh this was a better use of debt and money than other things, right?

59:25This is just... It's clearly had some positive effect.

59:28Aiden:You guys really scrutinized this whole Iran thing. I don't get what's up with you. Keep bringing it up.

59:34Atrioc:Dude, this is$50 a gallon here. It's unbelievable.

59:38Aiden:I think that whole section on real estate is really good. Any other things I don't like about China? After, you know, after three guys, white guys, spend two weeks here. Dim sum fucking sucks. Dim sum is incredible. No, that's the only...

59:52Atrioc:I wanted rice paper. It's the least. This is so extraordinarily wrong. I don't even know what to say. I'm sorry. Let me rephrase that. The people who order dim sum here fucking suck. They don't order 15 plates of bao like I do. I thought it was going to be this feast of bao, and instead they keep ordering me goose and duck. They keep ordering delicious food. We've eaten so much. It's incredible. I should be clear. The food quality is incredible, but it's not exactly what I get in America, and that is a tragedy. We had McDonald's last night. I did.

1:00:22Aiden:You had a little Mickey D's. I did. I didn't want to go anywhere, and I couldn't figure out food delivery on my phone, so I went downstairs to the McDonald's next to the hotel. Chong's phone.

1:00:31Atrioc:Okay, Aedish, can you put up the photo of what Aiden looked like when we went to get hot pot in Chongqing? It's very spicy food there. Aiden refused water. Oh, yeah. We've got to give credit, because you're going to be pissed off. You're going to be fighting the war in the commons. I'm too tired. You had the most spice. You were the best among us.

1:00:50Aiden:but also water doesn't i would say water like famously doesn't help let's be clear though they gave us a bowl of water to dip the meat into and i didn't use that to reduce the spice and you didn't use it but yet you were like i don't need the water i'm tough but then you started crying yeah you were sweating and crying and getting flushed red but you're like oh this is not even bothering me i kept as you shovel more spicy meat in your mouth chong ching is famously spicy food I kept accidentally pulling bowl peppercorns out of the pot pot. So it's funny because for the first 30 minutes, I'm like, this isn't even that bad.

1:01:25Aiden:But by the time I got to the end, so many peppercorns had accumulated in the little bowl that I was like eating multiple at a time. And I was like, oh, keep getting spices as we go. And my forehead is like a waterfall at the end.

1:01:43Atrioc:The workers were staring at us. I don't know if you guys noticed that. We showed a picture to the factory owner, and he was crying, laughing. He thought it was hilarious.

1:01:51Aiden:Yeah, but you guys make great food, Xi. I don't know what your favorites are if you dig the spice. Yeah, a couple small things. Smoking.

1:01:59Atrioc:A lot of smoking everywhere. The weird thing is Xi has exclusively been eating these rice crackers. Can you hand them over? Me and Wang Xi rice crackers really, I think, are going to be a huge hit in America. Is it legal to imply that Xi Jinping endorses these rice crackers within China? Thank you, Xi. and i just and i just you know i mean he does he's right here but oh my god oh my god that's so good now as a reminder um this is the rice cracker brand that i'm gonna try to buy a bunch of rice crackers from and people in discord were going and trying to find it online so they could buy some and it doesn't exist like you can't we didn't make it up it's no no i just mean that like this is not a company that's like selling to americans right like i have to buy it wholesale like 40

1:02:41Aiden:crates or whatever i had a thought i'm gonna if we're gonna pile a bunch of these on our set for a couple episodes after that we should just sell them at no margin we should just oh we're just a pass-through yeah drop shipper for because we're never gonna eat them i don't understand um it doesn't make any sense i did it's a passer but doug gets a little tax on each one yeah yeah okay i do have my complaint what's your complaint because even by my own memory having been to mainland China a long time ago and I came in like 2011. A bunch of people have talked about how much traffic standards have improved, how much smoking has improved and as far as the traffic stuff goes it's one of the results of the Skynet camera system.

1:03:25Aiden:There's more video to hold people accountable for breaking the rules basically. I looked into this. Can I add something to this? I looked into this. I wanted to see more concrete comparisons in like justice application across China. I looked at some Europe countries and looked at America. And there are concrete studies that show, and I think Singapore has learned this as well, that it's not the length or the strength of the punishment that matters nearly as much as applying it 100 % of the time. So in fact, prison sentences are longer in America. But if you are hit every single time with a fine or a short prison sentence, I mean, I don't even know if I like this, but they have like a 20-day prison sentence they can give you before you've even been tried, which is kind of crazy.

1:04:10That's insane. But I'll just understand that like, if you are getting hit every time, they have like a 95 % conviction rate or something absurd, then mathematically you don't try it anymore. You just don't do it. The gap of crime exists in the area of thinking you won't, of the risk reward of whether or not you will get punished. Yeah, I mean.

1:04:31Atrioc:You're saying there's a small number of criminals. and we need to do what needs to be done. Not what I'm saying. I think that's what we're doing in the right now. I'm reading in between the lines here. No, I'm saying actually you could be less punitive, but if you were 100 % applying it, if people know that some people are getting wet with it and some people aren't, then the law loses all meaning. I'm not advocating for the system in general. I'm just saying that is why I think you're seeing a proven reduction in crime. I mean, the opposite end of this. Proven reduction in crime.

1:04:57Aiden:The opposite end of this is, my car has gotten broken into twice in LA, semi-recently, and I don't have any hope that that's no recourse. Nobody's going to do anything about that.

1:05:08Atrioc:It's been a number of people we've talked to that bring up the homelessness in America. That seems to be like a thing that is broadcast to people on social media or whatever else where they're shown like, well, it's way worse in America. Lisa's not that bad. And that's so interesting that that has become a sort of like, I don't know if propaganda is the right word, but this like, you know, point of comparison that people keep saying, well, like, we've heard from two or three people now like well in america there's all this homelessness on the street and then that includes from the factory owner who has gone to los angeles a whole bunch and just said it's gotten really worse and like that type of thing can't happen here because of the government system yeah you told him the murder rate was down he's like well numbers are numbers but yeah the feeling you know when his family like his son lives in america until very recently and he's visited all the time to like talk to the prospective american clients and just said it just feels a lot less safe over the past 10 years and that's that's like in kind of our area of la like this is los angeles yeah and so

1:06:08Aiden:it's relatively and this is coming from a relatively pro-american guy yeah he's done a lot of business in america and overall has like a fairly positive view of america i was not expecting

1:06:17Atrioc:that aspect of you know one of the big challenges that we are dealing with in america to be something that is basically constantly brought up and broadcasted in other countries to be like well well, it's not as bad as America. It's so strange. No, very big here.

1:06:32Aiden:But I mean, there's been, keep in mind, we've only been to four major cities, basically. There's asterisks on that of stopping in smaller places as we go. But we have seen, I would say one, obviously homeless person the whole time. Yeah. Yes. There's no homeless, not no homelessness, but essentially none in the major cities. With the camera system from earlier and people talking about that improving traffic and things, My nitpicky complaint is that the smoking and the traffic here are surprisingly brutal. Like driving in the city is very chaotic. The rules around driving seem much looser, much more dangerous.

1:07:13Aiden:You always have to be on the lookout from getting hit by something. Crosswalks feel like they mean a lot less. And that's saying something from coming from Los Angeles where they barely mean anything. and then smoking is just allowed in so many public spaces. Yeah, I've had some smoke blow to my face a couple times here and it's just, you kind of forget. Yeah, it's just, and even compared, it is less. I remember being in Beijing in 2011 and being like, there's so much smoking and there's less than there was back then but it's still a ridiculous amount and not as segmented.

1:07:50Atrioc:I don't feel the same. Really? I feel like the traffic is bad, but it's a little more chaotic than Los Angeles. The main difference being there's scooters everywhere. That's notable. As a pedestrian, you're constantly having scooters zip around you. And they're like, yeah, they're smoking, but compared to other countries you go to, I don't know. It's just a European country. You've spent more time in Europe. I feel like you see a person or two smoking every block. It's not everywhere.

1:08:15Aiden:I think it's not that smoking doesn't exist. It's where it can happen. It's like, for example, when we were at lunch yesterday, our guy who drove us, he was the guy who drove us from Shenzhen. And he was outside the room in the restaurant, like right outside of it, just smoking a cigarette in the building.

1:08:33Atrioc:There's people in the elevator, like hallways in Chengdu that were just like smoking. Or in the spa. In the stairwells. There's a good amount of smoking.

1:08:43Aiden:We went to like a bathhouse and two guys were smoking in the bathhouse. It'd be like going to the Korean Spos in LA. It was kind of badass. It's like fully naked, leg up. And I did see that, and I was like, maybe it's better here, bro. They got it figured out. Yeah, the smoking the scooters are definitely the most day-to-day you might notice the difference. I think if you're, for me, I think if you're thinking about cities that have beautiful urban planning and ultra-safe layouts for their streets, like in a place like uh the netherlands it's not like that at all there's like gigantic roads gigantic highways people like uh like when we've been in cars our driver will just like pull out in front of like a mother with two people on the bike and she'll have to slam on the brakes you better know i just i i don't know i think that's my i i don't love that part yeah i mean i for me I think the scooters are just like, there's so many areas that are fucking awesome.

1:09:44Everyone's walking around and enjoying themselves and the vibes are good. And there's no sound except for the sound of honking scooters trying to get through. And they're always having to dodge them. And it like, you know, I understand they're a part of this economic movement, but it's, if they didn't exist in that area, it would be like, there's, there's, it's flawless outside of that. In terms of, we're all walking at night, having a good time. The vibes are good. And it's honk, honk, honk.

1:10:08Aiden:So any last, vast big criticisms of China having been here for the two weeks?

1:10:16Atrioc:This is a fucking incredible country, and I think everybody should come visit and see it for yourself. And I think there's a degree of, you know, we talked about this in the Patreon episode, and I believe you guys were chatting about it in a separate one about the comments that we've gotten on our episodes about the general sentiment of, oh, people are biased, right? They can't talk about how they actually feel, or they have this skewed worldview and whatever else. and I think coming to this place even if you don't spend the amount of time that we've done at least like 50 percent of our trip has been like interviewing or talking to people asking them about their experience of China I would say um even if you don't do that it's it's hard not to come here and be like this is way different than what I expected you know what we are told in the way it feels like everybody's learning that now it's rapidly it's like you know and we're contributing to that literally right now with the show of I think we're all realizing it of like oh the stereotypes we had about what China is and how it works and what's going on.

1:11:10Atrioc:And even if they like what's going on, there are these hyper nationalists that are, that are biased because no offense of a certain, you know, certain interviewee. And it's just, I think just, just come here. And obviously the caveat of we've been to four cities in a, we have plenty more to see, plenty more to do. I actually think it's good to watch Ludwig's tip to tip too.

1:11:29Aiden:He's seeing a different side of China. Yeah. Whatever your preconceptions are, whether they be positive or negative, I think if you come here and it's not as hard to come here as you'd think, they will be challenged in some way. You will learn so much in such a short period of time. And we were kind of making this joke about how like, well, if you were visiting America and you only visited like New York, Boston and Baltimore, like how much would you really understand about the country? And it's like, you, it's true. You would have so much more to understand about what America is like and how people live there,

1:12:00Atrioc:but you would have a way better understanding than not having been at all. Only having gotten TikToks and mainstream news in your country.

1:12:09Aiden:If you're Canadian, you can go without a visa now. Even if you're American, it was like a two-week visa process. I just really, really encourage people to go because your mind will be blown in so many ways.

1:12:23Atrioc:That wasn't exactly as negative as you prompted me to. Yeah, this was not the... I truly just... I don't have a lot of... Literally, the one thing is it's fucking miserable to use the apps here, and they use apps for everything because the translation is all inconsistent. Like at least on my phone, it's been very challenging. And that's going to get fixed. That's like a current minor thing. Yeah, the apps and the firewall suck. What I would say is I didn't, I think the purpose of us coming here, like I didn't come here to, I don't know, like reinforce bad ideas, whatever you're talking about. I came here to find things that are surprising me and things that possibly we could learn from.

1:13:00There's no world where I'm going to try to become a Chinese citizen. You know what I'm saying? Yeah. I'm coming here as almost like a learning fact-finding mission to see like, hey, this country changed radically in 30 years. Is there things we can take away from that that I could bring back to my country and advocate for? That is the thing that's most interesting to me. That's why I think going to these big four cities is the best places to go to learn the things possibly all of us are interested in. What is the outlier here? Because, yeah, obviously we can go to the rural parts and see there's parts where there's poverty.

1:13:30But that almost feeds into the stereotype that I already knew. Like that, I could confirm that. But what is crazy is like a modern city developing in 30 years.

1:13:39Atrioc:Like how did that happen? You can make a city. You can make infrastructure. You can make housing. It is possible. You see it all around us. It's not impossible. We can do it in other countries. I just, I hope we do. And I hope the success of China instigates the rest of the world, and particularly America, to actually fucking do something to make things for our citizens. It's interesting that China causes this. I was thinking about this, though, because what's funny is, like, you can go to a, you know, things I'm impressed with this city is, like, clean, great infrastructure. I've seen that in European cities.

1:14:15You know, I've been to European cities where they have that. I've seen that in Tokyo. But something about China, I think because they're also becoming competitive in high-tech areas that America used to dominate is like causing a sense of, oh, whoa, you can do both? I think there was almost a sense that like America had worse cities, but it was part of the trade-off. We got the innovation. It's like the competitiveness led to it. So I think China's causing that reckoning in a way that like a little, nice little place in Europe didn't. Yeah, why it's different.

1:14:50Atrioc:I think it's good. I think this will continue to put pressure on other, you know, hopefully our politicians to be competent, to invest in infrastructure, to like not just fucking fight in Congress and never change anything. That's what I'm hoping for. When will the check drop? I will function. And is that in RMB or is that in USD? Was it USD? We'll clarify that. I would prefer USD right for the now. Apparently we were told they're handing out money to influencers and we didn't get fucking any of it. We didn't get shit. We are not being, I mean, I guess for our lovely, incredible patrons and viewers for supporting the show.

1:15:28Atrioc:Thank you so much.

1:15:28Aiden:I guess I can't let the fucking state pay me for going. I guess I can't fucking do that, dude. Yeah.

1:15:34Atrioc:Yeah, whatever. Whatever, dude. You guys want to cap off the episode a few tapas that are about tech events? You have a small tapas called the Iran War. Can I please talk about it for one second? Yeah. Is it about the 2 ,000 paratroopers that are getting moved into the region? Christ. Yeah, fun stuff. All right, let's go. So there's different things you can do in the world. One is you build a megacity with 40 million people with incredible infrastructure. Or you can go beast mode. You can go beast mode. You know what's weird? Or you can do what needs to be done.

1:16:06Aiden:Me talking to Andy at lunch yesterday, it's like, you may have all of this, and you may have a successful company, and I recognize that. But you've never gone beast mode. You've never gone beast mode. Yeah. You're an M1 Abrams tank. No, dude. I was, I'm continually struck by how often the Iran war is covered here, everywhere. Not only on social media, I was in a diner last night at 11 p.m., massive TV, people are all watching, covering the Iran war. In a way that I think like, you know, I just think people aren't even, they're aware of it. I think people call it Iraq, you know, people are just not as aware of it in America.

1:16:43It's like everywhere here. You think people aren't aware of it in America? They're aware of it, but I don't think they could give you specifics. I don't, you know what I'm saying? I just, I don't know how to put words on it, except that I'm struck by how often it's covered. I'm seeing it all over the place. And it's like treated as a really big deal, who we're talking about. And I don't think I would see the same thing.

1:17:04Aiden:I mean, it's such a, I feel like it's such a dunk to villainize America. Yeah. You barely, even your state media and you have an antagonistic relationship with the U.S. It's like, you don't even need to change anything about this one. You can just talk about it kind of as it is. This one's kind of a freebie.

1:17:20Atrioc:Yeah. In the dinner I had with the friends yesterday, again, they're 25-year-old Chinese citizens, and at some point we were talking about Trump and just how we're not a fan, and then they were like, how much longer is Trump in office? It's like three more years. And they're like, it's only been a year? So to people in China, they're like, really? He's done this much in a year?

1:17:45Atrioc:Not a lot of positivity about Trump. The waitress at the diner I'm at. She's like smiling. We're chatting it up. And she asked me where I'm from. And I say Los Angeles. And she doesn't know. And I show her. And she goes, oh, America. And then her face gets sad. She completely changed her attitude. And she goes, I don't like Trump.

1:18:05I was like, damn, bro.

1:18:08Aiden:I don't know. I think I stressed this point a while ago. but and maybe it doesn't you know it obviously doesn't matter to some people or it doesn't matter to a lot of americans but it's hard to stress how as someone who's traveled quite a bit how people's perception of the u.s has changed within that time i think there's always been a little energy of like anti-american-ness from uh places around the world smoothiness in europe but but it's like a friendly way when i yeah it's like ah you guys are doing crazy shit over there Yeah, you yanked. Yeah, yeah, yeah. And now, I need to stress, in the last two years, it has become pretty embarrassing.

1:18:47Aiden:Yeah, that's where it works.

1:18:48Atrioc:It's become pretty embarrassing to tell people you're American because their reactions paint the picture for you. Well, I think this is a good time to introduce our second guest to kind of counter. President Donald Trump is over here on the right. Again, forgot the camera. Anything you have to say, really, about our reputation?

1:19:04Aiden:Our nation is back.

1:19:06Atrioc:Oh, it's great?

1:19:08Aiden:what do you think

1:19:10Atrioc:what we like to do in our interviews is get someone from both sides of the perspective never say we didn't do anything for you but you guys know what's happening with the Strait of Hormuz right now can I give you a minor update

1:19:25Aiden:I do know this one thing which is quick France recently made an announcement that 30 to 40 percent of oil refinement capacity in the Strait has been damaged or is completely wiped out. And this is expected to reduce oil output by I think 11 million barrels per day. And I thought that was pretty wild, like 30 to 40 % of... But at least we... Reflected? And that 30 to 40 % of the area that makes a fifth of the world's oil. Okay, but we didn't... No, we didn't get anything yet until these paratroopers land and then we'll see what happens. Well, Trump is planting seeds for trees he'll never sit under the shade of.

1:20:08And I appreciate that about Big T. Yeah, I'm selfish. So the Strait of Hormuz was previously freedom of navigation. Anyone can sail through it. And now because of the war, Iran started by mining it and threatening to shoot you if you went through it. But now they've switched to a new phase where they have created a small section that you can pass through if you pay the Iranian government, whatever remains of it, in yuan. So they've created a Petro Yuan toll booth that countries are now paying to go through. And they're making a lot of money. I just think, again, countries building infrastructure.

1:20:46So this creates a real panic. So again, we know the Trump strategy usually is to come in, leave a dump there, and then declare victory and walk away. Leave a dump? Yeah. Die.

1:21:02you okay man oh i'm dying bro i'm actually dying she she what did you slip a little what was that ozymanthium tea you gave me or whatever we're crossing the

1:21:12Atrioc:finish line of this trip just fucking covered in dirt and mud like a car with all the tires are popped the engines on fire and we're just barely crossing over we're crawling we're struggling all of us last night aiden couldn't go to dinner because he had a fever like we're just dying man Okay, sorry. As I was saying, this toll booth, basically, Trump cannot back away. He can't declare victory and walk away because now the new reality in the trade of Hormuz is that you must negotiate with the Iranian government and pay them money. And they are saying no U.S. ships, no U.S. allies. So everyone is now incentivized, if this stayed the way it was, to get rid of their security agreements with America and get a bunch of yuan so you can pay that.

1:21:58I mean, it is a catastrophic new reality on the ground from where it was before this war happened. And so he can't walk away, which leaves the only option being escalation, which means the reports we're seeing of paratroopers, and that's 2 ,000 paratroopers, but also 14 ,000 more troops being mobilized, they line up with what's going on. Now, there's no confirmed boots on the ground yet. There are confirmed paratroopers being moved to the area.

1:22:24Atrioc:This is also, we're recording this a few days before it goes live. So there's a wide window for the lemonade stand curse. Yes, the lemonade stand curse. Hopefully we flip it. We should not talk about these things with this much time in advance. But, you know, it is just, I got to say, I really honestly believe this Iran war is this biggest fuck up of his 10 year career. I think it's such a disaster. And, you know, I think it's worth asking what you guys have heard and seen politically back in America. But it feels, you know, Twitter used to be a really pro-Trump place. and I have been scrolling and even all the right-wing accounts are like, they're just turning on.

1:23:04I do not see the support. It's like the digital flags are gone. I truly think it's collapsing in real time. This is all day by day, but I legitimately think the force of the movement is gone. He just, the county that Mar-a-Lago is in just flipped Democrat. The Mar-a-Lago county. Like, I don't know. It just feels like I'm seeing a total evaporation, which hopefully leads to some change eventually. Because I really think, I think as, you know, if this doesn't get solved in two weeks, let's say 10, 14 days, the knock-on effects are going to start to be really, really big. Because companies will have to default on their contracts, declare force majeure, which then goes down the chain.

1:23:49Refineries declare it. First the oil tankers declare it, then the refineries declare it, then the power companies declare it. then everyone only changed and you just end up this massive clusterfuck and a lot of countries in fact america least of all maybe are going to be feeling dramatically higher prices and i think you know they might be some of the golf things might be out of iran but i think generally the vibe is going to be like they know what caused this they know what it was before and what it is now and i think it's going to be a bad sentiment so yeah i'm i don't know i'm i'm pretty I'm doom around this the wrong war bro maybe it's base this is something maybe it's all gonna work out but I think it's it's turning out pretty poor but you know it's a live update we can definitely follow up with more as it happens this day by day and maybe things I'm saying could be out of date maybe it's all open and things are clear and straighter Hormuz is falling by the time you see this which would be an incredible outcome and I hope for it but I'm just doubtful there's just not a lot of good here

1:24:44Atrioc:I don't know it's weirdly one of those topics that feels like there's like less to talk about because it's just so one-sided. I think we all try on this show to think about the other viewpoints and express them or understand them, and it's like, they're nothing, man.

1:24:59Aiden:I feel like even the best-case version of this that you could even discuss is that this will be the leverage point that potentially allows the Iranian people to free themselves from the oppression of the regime that they're under. That's like the most glowing outcome you could possibly say. It doesn't seem like that. That's not happening at all.

1:25:19Atrioc:It's also the nuclear program, right? It's them agreeing to shut down the nuclear program. That would be the other one where Trump could say, see, we did it. We saved the Middle East and Israel and every other country from nuclear-armed Iran, who explicitly states they want to kill America, right? But what I feel like is happening instead is that they're going to get a lot more money from this toll booth and then they know they need a nuclear weapon as fast as possible. And they're also going to be like, why the fuck didn't we put up the toll booth before? Thank you, Donald Trump. Dude, I literally think this toll booth is wild.

1:25:49And yeah, I don't know.

1:25:50Atrioc:Yeah, Trump is like, he comes over there and bomb shit. It's like, yeah, bet you won't turn on your infinite money machine that has total control over the world. You have 90 million people next to this tiny strait. The fact that they didn't have a toll booth before

1:26:02Aiden:is like a huge benefit to the world. It may be a stupid question, but why is the reason they get to, not in this specific situation, but the straits in more general terms, why do they get to set up the toll booth when there's so many other countries on the straight. It's just because they're the biggest? They're famously anti-LGBT. It's only straight. They don't get to. They're just doing it because of a war, and no one can... Other countries will be mad about this, and perhaps after the war is over, we'll figure something out because it's a huge tax on trade. But right now, they're just doing it, and no one can stop.

1:26:35What are you going to do? Bomb them? You're bomb them. They're being bombed.

1:26:38Atrioc:You can fit a lot of tollbooths in that straight. There's space for a lot of tollbooths. A second tollbooth on the outside if we want to. That's how we counteract it. Yeah. We're putting another one in. But yeah. So we don't have to talk about this anymore. You have other stories, and I do want to hear them, these tech stories. Let's see one fun little topic to end it out. So on Tuesday, this is a couple days ago as of recording, the New Mexico Department of Justice in America won a massive lawsuit against Meta, Facebook's company, and basically found that they're liable for misleading customers about the safety of the platforms and endangering children.

1:27:11Atrioc:So the quote is like, this is a historic victory for every child and family who's paid the price for meta's choice to put profits over kids safety meta executives knew their products harmed children disregarded warnings from their own employees and lied to the public about what they knew and so this is interesting i think because meta might be kind of fucked because this case happens the background of this they're they're ordered to pay 375 million dollars in civil penalties not a ton for a company that company for a company that has 1.4 trillion market cap um but this is just new mexico and basically the way this set up is new mexico did like an undercover sting where they sent uh they had two of their their you know investigators go undercover and pose as underage girls and they were able to find pedophiles online who are reaching out to them right so it started as this operation of like hey we're going to try to do that thing where you you know you uh entrap is that the right word honeypot whatever you you find pedophiles right but what they found while doing this undercover operation is like, that was very easy for creepy adult men to reach out to accounts that are clearly underage girls.

1:28:19Atrioc:And so they started to build a case based off of this and then started to basically, you know, sue Metta in this pretty high profile case and say, hey, you are endangering young people through the access that it's giving to kids. And these employees from Metta, former employees have been coming out and the most damning evidence is them testifying that while working at meta they express concerns about the damage this was doing to kids or that executives were explicitly aware of it and then ignored it so the one quote from uh arturo behar said his own 14 year old daughter received unwanted sexual advances on instagram um and his quote is like if you're interested in little your if your interest is in little sorry the product is very good at connecting people with interests and if your interest is little girls it's very good at connecting you with little girls brian boland a former vp of marketing for 12 years there left in 2020 and he said he absolutely did not believe that safety was a priority to mark zuckerberg and cheryl sandberg and they're uncovering these various times where internally meta does research or has findings that show this stuff is really addictive to kids it's really easy for adults to get in contact with kids and they then didn't do anything to stop it so the employees from meta are basically surfacing this information about how they are aware of the addictiveness of their platforms.

1:29:40Atrioc:The next day, in a Los Angeles trial, Meta and Google were both accused and convicted of harming a young woman's mental health and are ordered to pay $4.2 million. Zuckerberg is ruined! How will he survive?

1:29:57Aiden:Wait, to that one person.

1:29:59Atrioc:So this is, I bolded that because it's funny. Google has to pay$1.8 million. But what's, if you think about how this goes. So this is a 20-year-old woman sued Google, Meta, TikTok, and Snapshot saying that they contributed to her anxiety, depression, body dysmorphia, and other conditions during her youth. And Meta in the courtroom argued that, hey, it was actually your disruptive home life and your parents got a divorce. They don't love you. And they said, that's the reason you have mental health problems. Isn't the lawyer for Meta arguing that your parents don't love you? I mean, that was not the actual argument.

1:30:29Atrioc:It was like, hey, she had a fucked up home life. That's the problem. They always like discredit, right?

1:30:32Aiden:If your parents loved you,

1:30:33Atrioc:you would be feeling bad at all you wouldn't need to scroll instagram and so again they had internal emails that surface one of the internal emails presented in the case said quote our overall company goal is total teen time spent mark has decided that the top priority for the company in the first half of 2017 is teens they found research that showed the parental controls weren't effective in curbing teens use of social media uh tick tock and snapchat settled out of trial because they didn't want to deal with this, which is damning. So I think both of these are very interesting because there are two cases where Meta, in a high-profile lawsuit, lost badly and was convicted of saying, you have intentionally designed a platform that harmed young people.

1:31:18Atrioc:And if you think about the fact that that was just New Mexico and just Los Angeles, how quickly and at what a massive scale this will turn into is mind-boggling, right? Like, yeah, the 4 million, this is 4.2 million dollars they had to pay to a single 20 year old woman right in the new mexico case they it was uh five thousand dollars per violation which is basically applying to anyone in new mexico that this could have potentially affected there is a world where i mean there's already apparently thousands of similar lawsuits starting up where every social media company it has to be on this extraordinary defensive to say they didn't fuck over the mental health of our

1:31:57Aiden:entire youth is it it's youth specifically so like in the case of the 24 the 24 year old woman she's talking about the time period where she was using these apps under age so she's 20 now yeah the

1:32:07Atrioc:lawsuit's been going on for i believe two years and this is about saying in my youth when i was a when i was before i was an adult i was a teenager this was harming my mental health and again it's like the other companies seem to have a better argument but meta just has this evidence that they're like oh we're trying to make teens use our apps more oh it turns out this is really addictive great and they're just not yeah i yeah this could be this could be a major catalyst to these companies having to i don't know fucking shut down in the worst case this makes me think of two things number one whatever this investigative team that helped find the pedophiles on meta is yeah put them on roblox right now i just i i got a feeling get get on roblox i feel like it's going to be the next fucking pedophile story roblox is so massive and has so many kids on it and i just I feel like nobody's investigating it.

1:32:57Aiden:It's also a good, I mean, if you're an adult who loves being friends with kids, it's got to be just friends.

1:33:04Atrioc:It's a real reckoning, you're saying. Yeah, a real reckoning. You ever text a 14-year-old about life? Roblox games. And the second thing. Gee, you ever text a 14-year-old? Gee, what up with that? What up with that? How much Roblox are you playing, Gee? The second thing is, you know, you talk about parental controls not working. or at least meta not making them effective. It reminded me of all the children we've been speaking to in China. That's a strong way of putting it. Every time we've had the opportunity to talk to a parent or to somebody who is younger, we have asked, there's a rule in China that you're only allowed three hours of gaming per week if you're underage, and all of them are like, no, no, you get around that.

1:33:46Atrioc:Yeah, everyone gets around that. No, you just get around that. It's one of many things where you hear about these dystopian things in China, about like, hey, if you say anything about the government, they're going to pull you over, the police are going to get you and you get here and you're like no it's not it's not that extreme everybody there's rules and then everybody like kind of skirts the rules exactly like it was funny the guy saying that the tiktok or the doyen sensors are asleep at midnight so you just go and scroll it at night no yeah yeah you post the more charged political content at midnight because then the sensors aren't watching that was an interesting revelation a lot of people talking about how the

1:34:18Aiden:online sensors are the most you know the things that crack down the most but because you can everybody is trying to push the envelope online all the time because your posts will just get struck down most of the time if you if you cross that and they uh they they find like new words or new pictures or new phrases to describe like different aspects of the government and like that's the new trend of how that person or thing is labeled and then as soon as it's struck like people just move on to the next thing and there's a mixture of like automated censoring and manual censoring done by staff that are doing it.

1:34:54Aiden:So at midnight, when the least people are working, that's when you can post with the most freedom, which was super funny. It is wild. Do you think this will get censored? I was with Xi Jinping on this. I mean, Xi, you've had a great time. You've got a great time. We're done. I do apologize. We kind of talked over him a lot this time. He did not get too many words in edgewise, which I think we might have wasted our opportunity. Yeah, I think what we do,

1:35:18Atrioc:a really sincere thank you to our audience for supporting the show and allowing us to do this. Really, truthfully, this is one of the most meaningful trips I've been on. So informative and interesting. And dare I say, it was pretty fun too, hanging out with our crew. Thank you, Stevik, our lovely, incredible interpreter. She happens to be in the same general vibe as she, completely different people. Perry for producing all this. Thank you guys for supporting us. It's just been phenomenally interesting. I don't think it would have happened. Dude, there was a time, either last night or the night before, we were all in a DD, which is like an Uber.

1:35:52And the Chinese woman who was driving put on a fun Chinese song.

1:35:56Atrioc:No, hold on. All right, we gotta... No, no, no. It's not that she randomly decided to do this. All of us are in an Uber. We're in one of these hectic streets where people are crossing the lanes all the time. I will admit the lane crossing is very chaotic. And then Aiden in the front seat puts into his translator app, you can pick a song, and shows it to her. So then in the middle of like a fucking freeway, she's like pulling, she's like veering to the side as she's searching for songs, only looking up at the road every two to three seconds and then eventually puts on this song and starts driving normally again.

1:36:24And it's a banger. And it's just a heater. It's a banger. And so after it's over, we're asking about the song. And she doesn't quite understand the question. So she just thinks we're playing to play the song again. Right. I say I like the singer's voice. So she plays it again. And then we kind of get into the bit. And so after it's over, Aiden's like, all right, we're done. And then I pull out a translator and play, please play the song again. And so for the entire rest of the side, we just do this song on loop. and then we're kind of singing along. It's all in Chinese, so I can't, but she's singing along and I just, the vibe was, we're all having a good time and I just thought that was a beautiful moment on the trip.

1:36:58Everyone was smiling. There's a language barrier, but everyone is having a good time and I thought that was a, it was a beautiful moment. I really enjoyed.

1:37:04Aiden:We listened to the song six times. That's a long song, too.

1:37:09Atrioc:Dude, it's one of those things, when you go to another country, it doesn't matter what you hear on the news. You sit and you talk with people in person and people are kind and caring and we're all good people underneath. The people who we met here who have been to America said the same thing about the regular people. Everybody's the same everywhere. Their problems are very similar. The average person's just trying to get by, make enough money to live, have a family, have some free time. Everyone's trying to do basically the same stuff all over. And everyone has more in common than they have different.

1:37:41It sounds trite, but it's so true. And you get it on every one of these trips we go on.

1:37:45Aiden:Yeah, and if you get a chance, I would come here for yourself. I think it will be revelatory no matter where you stand on anything or any way you feel about China.

1:37:56Atrioc:Pick up a basketball, bring it, dribble it for yourself. You gotta slander me so hard. You can't listen to some podcaster and just trust his dribbling. You gotta dribble in that country. I'm just glad my five new friends from high school, which by the way, with Matt and the Petalbobbs.

1:38:12Aiden:Sounds like fucking somebody needs to sue you. Check out Roblox and Chinese basketball courts. thank you for joining us on this trip we've made a bunch of extra like walk and talk episodes on the Patreon if you want to check those out they're on patreon.com slash lemonade stand and where we address some of the other like questions people have left on the episode but yeah thank you for supporting us and we will see you back home next week

1:38:35Atrioc:we'll let Xi Jinping sign off the show comes from Tasty Trade

1:38:44Aiden:and if you're an experienced trader like many people are, you could trade using TastyTrade unless you live in China where we are right now. I don't think you use TastyTrade if you live in China. So this is really an ad for all of the people that listen to us. I hear a great wailing of sadness outside the window. It's like 50 % of our audience. A lot of people in Shenzhen. Like that building back there,

1:39:06Atrioc:full of fans watching us. And they're so sad.

1:39:09Aiden:And they've been saying they wish they could trade stocks, options, and futures and more all in one platform and with low commissions. And you likely can watching it all. Which is crazy

1:39:15Atrioc:because Aiden doesn't really speak Mandarin, but he knows that phrase exactly. It's crazy.

1:39:19Aiden:And I'll do it in a different ad sometime. Become the trader you always wanted to be. Go tastytrade.com slash lemonade today to get started. Tasty Trade Inc. is a registered broker, dealer, and member of FINRA, NFA, and SIPC.