China Decode: China’s Long Game in the Middle East

25:57Alice Han:You're still OK for now, Alice. I see in the QS World University Rankings 2026, Stanford is number three and Harvard is number five. So don't worry about it. You're OK. I was at Edinburgh University. I think we're something like 34th. So you're doing all right. But the point you make is a very valid one, which is that Chinese universities really are leaping up these tables. And a lot of the time, it depends on which table you look at. The QS World University Rankings, the one I just cited, is generally seen as the most rounded measure. But there are some really eye-catching rankings that have just come out.

26:43Alice Han:the CWTS Leiden ranking that comes from Leiden University in the Netherlands shows that 19 of the top 25 universities ranked as being Chinese. Harvard is the only foreign unit, well, the only US university that gets a look in, in the top 10, and it's ranked number three. There's no Yale, no MIT, no Stanford. The only other university in the top 10 is the University of Toronto, and that comes in at number 10. These rankings are rather different. The one that I've just mentioned, the CWTS Leiden ranking, that looks very much at what's called bibliometrics. That's looking at how many papers are published, how many times those papers are cited.

27:35Alice Han:Whereas the QS rankings, the one that we mentioned at the top there, is a much more comprehensive, reputation-heavy ranking. And it looks at things like teaching, employability, research, and also internationalization. And internationalization is one area in which Chinese universities really stumble because there aren't that many international students there. I also went to a Chinese university. We were really like a rare breed, foreigners in the Chinese university campus that I was in. So you do have to take these rankings one by one, I would say. But my final point is that this is very much a strategy of the Chinese Communist Party.

28:19Alice Han:Although these universities are independent institutions, the Communist Party, of course, lies behind them and orders them and informs their policies and strategies. and so this is a big national push to push Chinese universities to the top rank and then to gain the kudos, I suppose, that that brings with them. But what's your sense, Alice? Did you go to a Chinese university as well?

28:49James Kynge:I didn't, James. So I'm going to have to ask you a lot of questions about that. I only went to universities in the States. So I don't have a clear sense, but, you know, what you've just said to me, James, gels with my own understanding of some of the metrics used to assess China's AI publications. There's an argument that China is vastly overproducing or rather producing way more in terms of AI-related research than any other country. But then this begs the question, what is the quality of this research? And there's a figure, for instance, in 2024, China produced over 870 ,000 journal articles and reviews in journals, while the US produced roughly 500 ,000.

29:29James Kynge:China's AI research publication output is the combined output of the US, UK, and EU, and now is about 40 % of the global citation attention. And just in terms of also the STEM graduate students, Chinese STEM graduates make up about 50 % of the world's total. You've got 12 ,000 PhDs coming out of China every year. That's three times coming out of the US. So numbers aside, the big question is, what is the real productivity or innovation that's coming out of this research and out of these graduate students and PhD students? And it's hard to really find a metric that captures that. And I think this story that you've cited, James, about the conflicting rankings is at the heart of how we in the West struggle to really understand the degree of innovation coming out of China.

30:22James Kynge:Because we don't trust the volume of research alone. And it's still very much a black box in terms of really figuring out what is actually happening on the ground in terms of innovation. But James, you're the only one of us here who's actually been to a Chinese university. So please tell me what that was like and whether or not it can, you know, reveal things about China's education system at the tertiary level.

30:45Alice Han:My sense is that there is absolutely no doubt that Chinese universities have really sharpened up their act. And, you know, the level of teaching, the level of determination among the students is really very close to, you know, the global standard right now. The difficulty comes because there are stories that are true and appear to go against what I've just said. The Financial Times wrote an article about Chinese universities and they quote Ivan Oransky, who's co-founder of an institution called Retraction Watch. And what this researcher has found is that there are huge numbers of papers issued by university academics that are then retracted later on.

31:35Alice Han:According to his statistics, in 2024, about 3 ,000 retractions of Chinese-authored papers from journals took place. And that compared with just 177 retractions from US authors. So there's no question that faking of papers in China is a big deal. And actually, there's a whole business model, you'll be surprised to hear, so-called paper mills, companies that are paid to create fake academic studies. So some people focus on that and they go, oh, well, you know, everything in China is fake. You can't trust this. They appear to be leaping up the rankings, but it's not real. But my sense of it is absolutely very, very clearly, it is real.

32:23Alice Han:China is leaping up the rankings. The academic output of Chinese academics is going through the roof. And the other sidelight that I think we can shine on this is to look at how many Chinese academics from abroad, particularly the US, are going back to China. There has been a study done by Princeton, Princeton University's Paul Marshall Wise Center on Contemporary China, and they found out that 80 to 90 professors are returning annually from the US to China in recent years. And these include some really big names. We've mentioned before on the podcast Song Chun Zhu, a consumer scientist at UCLA who went back to Peking University.

33:10Alice Han:He is top of the tree in his area. There's another one called Nian Yan, who is a biologist who left Princeton. and then there are also some famous name foreign intellectuals who are going as well. There's a field medal winning mathematician who joined Tsinghua University, etc, etc. So I would like to say that this is a very real theme. My own time at a Chinese university was a long time ago. It's not really relevant to the current day, aside as a point of comparison, And I would say when Chinese universities were really nowhere on the global rankings. And yeah, as I said, foreigners were seen as a kind of rare species around campus.

33:56James Kynge:That's fascinating. I have a friend of mine is actually a professor at NYU Shanghai, and I'm actually going to be there doing an event in a couple of weeks time. And what he said to me, I think, chimes with the concern that you raised, James, about the lack of international students in Chinese universities. Now, this is supposed to be more of an international program that invites people from around the world, but they heavily rely on Chinese students who want an NYU brand name going to university in Shanghai. Another key market for them is actually Central Asia, where they're seeing a lot of growth and some, you know, a mix of students from Europe, Africa, Latin America.

34:34James Kynge:But really, what I've noticed is a decline in American students going to China. There's an example of the Schwartzman program that I think has been suffering in the last couple of years, and it's relying more on non-American students. But there's a bigger, broader question at play, which is to what extent can China be truly international? You know, putting aside how cutting edge and innovative the research can be, can it ever become, you know, the US or European level of international university or even the British level of international university with international standing? For cultural reasons, I'm deeply suspicious of that.

35:15James Kynge:But I think, James, you raise an interesting point about ethnically Chinese people, Chinese passport holders coming back from potentially being educated or working in the States to the mainland. And I often hear anecdotally that it's not just because of the financial or patriotic rewards. It's oftentimes a decision to come home and take care of their parents who are getting older as well. I see that a lot amongst my peer group, for instance, who have lived and worked in the States coming back to China. James, do you feel that there is a change in the way that Chinese universities are being regarded in the West?

35:53James Kynge:Is that something that you're plugged into? Kind of.

35:56Alice Han:But as it happens, I met the son of an old friend the other day here in London. I knew him when he was a kid in China. He grew up entirely in China and speaks Chinese like a native. he went to university in china but he was put into the foreigner's stream and this to me shows the real problem with the internationalization of chinese universities his chinese is definitely good enough to sit alongside the chinese students in the chinese stream but he wasn't allowed to do that because in general foreigners are not given that kind of access they're shunted off into foreigner-only streams. And that isn't real internationalization.

36:39Alice Han:That is fake internationalization. And quite honestly, very few foreigners speak native-level Chinese. So it is a problem for them to sit alongside Chinese students. But even those who do are not allowed that opportunity, or very rarely allowed that opportunity in Chinese universities. So I think Chinese universities really do have a long way to go to genuinely internationalize and give foreign students the same kind of treatment that a Chinese student would have at a university in the US or in the UK, where they sit alongside, you know, students from everywhere in the mainstream course, not in some adjunct course for foreigners.

37:22James Kynge:It's interesting that you raise that the language aspect, James, because it's coming at a time where in the last week or so, we've seen announcements that the government really wants to reinforce the use of Mandarin Chinese in the schools. And this is especially targeted to minority groups and minority schools around the country. And the idea is that all courses need to be taught in mandatory fashion with Mandarin Chinese. I don't know if you've been following this, but certainly I think in the West, there is a bit of consternation anytime anyone raises this issue, especially as it pertains to minority rights.

37:57James Kynge:But as you were saying this, this definitely came to mind. Okay, let's take one last quick break and stay with us.

38:07Scott Galloway:Support for the show comes from Quince. Building a wardrobe you actually like comes down to pieces that mix well and last. That's where Quince shines. Lightweight cashmere sweaters, short sleeve 100 % Mongolian cashmere polos, linen bottoms, and shorts. These are just a few of the versatile pieces Quince offers that make your wardrobe actually work season to season. Our colleague Claire Miller has tried Quince, and she's a fan. Claire, talk to us. Say something new about Quince.

38:34James Kynge:I love Quince, and I did get a cashmere sweater from them for the winter. Now it's spring. I got to stock up on their linens, but whatever I need for each season, they've got me covered. So I love Quince.

38:47Scott Galloway:I'd buy some more linen, but I'm not 80. Anyways, go to quince.com slash prop G. I wonder if that'll make the edit. Go to quince.com slash prop G for free shipping and 365 day returns. That's a full year to build your wardrobe and love it. And you will. Now available in Canada too. Don't keep settling for clothes that don't last. Go to quince.com slash prop G for free shipping and 365 day returns. Quince.com slash prop G.

39:20Scott Galloway:Support for the show comes from HIMSS. Thinning hair is part of life, but not everyone can pull off the Mr. Clean look. If you're not ready to throw in the towel and start buzzing it all off, here's something you could try instead. HIMSS. HIMSS offers convenient access to a range of prescription hair loss treatments with ingredients that work, including chews, oral medications, serums, and sprays. These are products that use doctor-trusted ingredients like finasteride and minoxidil, which may be able to stop further hair loss and regrow hair in as little as three to six months. Think of HIMSS as your digital front door that leads to better hair health.

39:50Scott Galloway:They bring expert care straight to you with 100 % online access to personalized treatment plans that put your goals first. For simple online access to personalized and affordable care for hair loss, ED, weight loss, and more, visit HIMSS.com slash PropG. That's HIMSS.com slash PropG for your free online visit. HIMSS.com slash PropG. Featured products include compounded drug products which the FDA does not approve or verify for safety, effectiveness, or quality. Prescription required. See website for full details, restrictions, and important safety information. Individual results may vary based on studies on topical and oral minoxidil and finistreed.

40:30Scott Galloway:When you think about wealth inequality in America, there's probably one man whose name comes to mind. And yes, he did compare America's billionaire era to the Gilded Age. We're living in a moment where the top 1 % owns more wealth than the bottom 93%. Where one man, Elon Musk, owns more wealth than the bottom 53 % of American households. Where, while 60 % of our people are living paycheck to paycheck, the billionaire class has seen its wealth increase by a trillion and a half dollars since Trump was elected. How's that? They're doing pretty well? I talked to Senator Bernie Sanders about his latest bill for a wealth tax and his call for a moratorium on AI data centers.

41:20Scott Galloway:Plus, how much he uses AI himself. Today Explained, every weekday and now on Saturdays too.

41:29James Kynge:Welcome back. Chinese EV giant BYD is reportedly considering a big new way to boost its global brand, entering motorsports. The company is exploring options ranging from the Formula One Championship to the FIA World Endurance Championship, which includes the famous 24 Hours of Le Mans. It would be a major move for a Chinese automaker in a sport long dominated by European and American teams. It also comes as BYD is expanding globally after recently surpassing Tesla in global EV sales and pushing into higher-end vehicles. But getting into F1 isn't cheap. Building and running a competitive team can cost up to$500 million a season and can take years to pull off.

42:15James Kynge:James, are you a car enthusiast? I have to confess that I love Drive to Survive. It really got me into F1 driving.

42:21Alice Han:Oh, really? Okay, well, I'm going to come straight back to you on this. Just a couple of things. I'm not a massive fan, but I do follow it a little bit. And I must say, Alice, when we were thinking about this segment, I just thought a few episodes ago, we did a piece on how C-Dance, a video generation technology which has been created by ByteDance, is disrupting Hollywood. And I can't help but think that what we're really talking about today in this segment is the next potential Chinese tech disruption story, and that is Formula One. I had a quick look at some of the speeds involved. Now, I guess as a bit of essential background formula one cars are almost all uh conventional combustion engines they do have batteries but that's not what they're mainly about um and byd which as you said wants to break into formula one is a pure battery car and yet if you look at their fastest car the yangwang u9 extreme it's purely battery and it set a world production car speed record of 308 miles per hour.

43:34Alice Han:That's 496 kilometers per hour in September last year. That's quicker by quite a long way than any of the modern Formula One cars around. So, you know, if we're just talking about pure speed, I don't know about cornering, going around the car, I don't know about driving technique, but if we're just talking about pure speed on the straight, this BYD car could lick any of the Formula One cars that are currently out there. Tell me your sense of this. Do you welcome this, the battery cars coming in? Are you a traditionalist? Do you like hearing the roar of the engines and listening to those combustion cars?

44:17James Kynge:I have to say the combustion cars probably went out. There's something very special about a motor, the sound of a motor and a combustible vehicle. So I'm not sure if an EV would be able to deliver the same kind of satisfaction from a driver's or even a viewer's perspective. But certainly, when I saw the story, I had a couple of thoughts. Number one, what I've seen trending in social media is the virality of F1 driving, especially amongst young females, educated females in China that seem to be really keen on F1 driving. And over the weekend, And we just saw the Shanghai F1 Grand Prix of about, I think, 230 ,000 spectators.

44:57James Kynge:This is a world record. According to Chinese press, this is the biggest record in two decades. And a lot of these drivers, in particular, one Chinese one that I have to shout out for Zhou Guan Yu, who's the driver for Cadillac. Now, this is an American company, is very, very popular in China. He's originally from Shanghai. You know, we also have Lewis Hamilton, who's been going around China. He was actually just in Tibet with his mother and posting about the beauty of the Chinese landscape. The reason I raise this story and these anecdotes is that it's clear that the government seems to be in favor.

45:33James Kynge:This goes back to previous episodes when we talked about concert tourism. of these sorts of experience economy-related tourism. There was, I think, a statistic from Trip.com, which is a big Chinese tourism platform, online tourism platform, that during the F1 weekend, there was a 20 % year-on-year increase in inbound tourism bookings and hotel reservations in Shanghai rose 96 % year-on-year. So that's just to give you a sense of how much enthusiasm there has been from everyday Chinese towards the F1 Grand Prix. And I get the sense that this could be like what, you know, snow smorts were for China a couple of years ago.

46:13James Kynge:If you remember before Gu Ailing, Ailing Gu came on the scene, there was a big, I think, government-led push, but also supported by everyday people to get more people into skiing, into ski sports, snowboarding and skiing. I could see something similar where the government is super supportive because it sees this as being actually really beneficial for consumption, for tourism. What's your feeling, James, about whether or not this could be popular in China moving forward? Do you sense that the market is ready for an F1 story in China? There's a separate question about whether or not F1 is ready for a Chinese brand, but do you think that the market in China is primed for F1 mania?

46:58Alice Han:I remember when some of the first F1 cars arrived in China, it was mania at that time. And I think this is exactly what a lot of Chinese people will love to support and do and follow. You know, I mean, we've often spoken about it on here, Alice. Chinese people in general, I would say, are very interested in technology. You know, when you go to China, you find to an extent that I never find over here in the UK or even in the US, you know, people love to talk about technology. They will kind of interrogate your mobile phone or ask you about whatever technology you're interested in. It will be the font of many conversations.

47:39Alice Han:So I think the level of interest in this type of thing is sky high. And then, of course, there's the glitz and the glamour that goes with F1. There's the sort of howl of these cars going around those tracks. And then there's the winners and the losers. It couldn't be better designed for a Chinese consumer audience.

47:59James Kynge:Yeah, I think that's honestly what is prompting the head of FIA, the Formula One's governing body, to actually be open to having China potentially join. Now there's a separate discussion of whether or not they would be allowed to with EVs, you know, as we mentioned. But certainly I think as F1 grows more popular in China, I think it economically would make sense for FIA to really start to take BYD seriously. And it seems that BYD is really at the forefront and would be the front-runner candidate if China is allowed. And currently, I think, insofar as I understand, it's dominated by the Europeans and the Americans.

48:36James Kynge:China doesn't really have any representation apart from that driver, Joel, that I mentioned. But aside from BYD, some of the other car brands potentially that we've mentioned, And Geely has participated in international touring car racing through Xi 'an Racing. NIO won the Formula E electric championship back in 2015. So there's a lot of other car brands out there that could want to get into this Formula One ecosystem. But it, I think, tells a bigger story, which is my sense that the EV industry and the auto industry in China is starting to evolve and really want to capture the high end or luxury end of the market.

49:17James Kynge:We had more recently in the last few months BYD's Danza model that just came out. This is the premium model that's being marketed differently from the other BYD offerings. And you already mentioned, James, the Yangwang high-end model that was tested recently in Germany that had huge, very, very high speeds. But certainly I get the sense that as this auto industry is maturing, they really are trying to rebrand and create alternatives that are more high-end luxury as opposed to mass market and cheaper. And I think this F1 story is a good indication of the ambitions of a lot of these Chinese automakers, not just BYD.

49:57James Kynge:All right, James, you know what time it is. It is prediction time. What is your prediction for this week?

50:03Alice Han:This one might sound a little bit left field, but actually when you look at the numbers and you think about it, it's pretty mainstream, really. I would say this year is going to be a bumper year for AI emotional companions in China. These are, you know, avatars online. They don't forget your birthday. They don't forget your anniversary. They'll never ghost you. That's a given because, you know, the software of these AI companions these days is so good that you can have a proper interaction with them. They're good company. They lend a sympathetic ear. They're witty. They can be humorous, etc. So I have a prediction.

50:43Alice Han:This year, the market for Chinese AI emotional companions will grow to about one billion U.S. dollars. That's up from five hundred and thirty million U.S. dollars in 2025. And by the way, there are predictions out there that see an even more aggressive market growth by, let's say, 2028 or beyond that. So this is a huge market. It's really catching on. I have not yet tried an AI emotional companion, but I might give it a go.

51:18James Kynge:How are they monetizing it, James? Is it through online platforms, online chats?

51:22Alice Han:I think you have to pay a subscription. So you pay probably a monthly subscription for your AI companion. And I was searching. There are lots of different competing names there. You know, some of them are quite famous. I think Xiao Ice is the most famous. That originally was a Microsoft product. I'm not quite sure what happened to it, whether it still belongs to Microsoft, but it's huge in China. And I saw a number online. I don't know how real this is, that there are 660 million people worldwide who look at Xiao Ice or interact with Xiao Ice.

51:59James Kynge:That's crazy. I mean, it's all feeding into the Silicon Valley fears that people aren't going to have kids because they're all going to be with their AI girlfriends and boyfriends. But I think in East Asia, that's going to be a pretty developed market given where things are heading. Fascinating, James. So mine is a bit less left field. I would say it's very much in the vein of what is happening right now. I get a spidey sense, I don't know why, don't ask me why, that we might have a delay of the Trump visit to China. I was reading some of the coverage of the Halifeng and Scott Bessent meeting in Paris over the last few days.

52:39James Kynge:And even though there were no real bad news or signals coming out of that meeting, I just got the sense that there hasn't been anything really substantive, that the Americans are still very much distracted by, you know, as Dr. John mentioned, what is happening in a fractured Middle East in Iran, specifically. So I just see an alignment of a lot of stars that point towards Trump potentially delaying. And now he's even said in the last 24 hours that he could delay that trip. So I think we'll see in the next few weeks if that indeed happens. But that certainly changes, I think, the nature of detente, you know, which was very much the base case for a lot of people and investors when thinking about the U.S.-China relationship.

53:21James Kynge:Because certainly if we don't have that Trump meeting, which I think was a key sign of the continuation of detente, that opens the doors for a lot of challenges and risks in the relationship, to my mind.

53:32Alice Han:That's such an interesting call. Yep, I'm going to be attuned to that as well, Alice. Thank you.

53:37James Kynge:Before we go, some very big news. China Decode is now available on Substack. Subscribers will get ad-free episodes, our exclusive newsletter, and a place to engage with James and me and other listeners. Find us at chinadecode.profgmedia.com. That's all for this episode. Thank you for listening to China Decode. Make sure to follow us wherever you get your podcasts so you don't miss an episode. Talk to you again next week.