Discussion about this post

User's avatar
Godfree Roberts's avatar

Interesting angle! Thanks.

A niggle: "a large fraction of top Chinese graduates are absorbed into the civil service or state-owned companies, which are the least productive parts of the economy". ??

The civil service embodies Confucian virtues like compassionate service and, in so doing, sets an example to the entire society. It takes many geniuses to actually govern a country as well as China has been governed for the past 3 generations. It doesn't just happen!

As to SOEs they, too are pillars of the national economy, contributing 30% of GDP. They drive strategic sectors, stabilize key industries, implement national policies, and provide massive employment, serving as crucial forces for sustainable development and socialist modernization. Don't mess with it. There are plenty of leftover geniuses to choose from.

ChinArb's avatar

Zixuan, the data on the '400:1' tail ratio relative to India is a harsh reality check for the 'India is the next China' narrative.

But I would reframe your conclusion on 'squandered talent.'

From an industrial physics perspective, what you describe is 'Cognitive Overcapacity.'

When 22 million geniuses are blocked from emigrating (by US policy) and blocked from high-end research (by domestic structural issues), their intelligence doesn't just evaporate. It turns into kinetic energy within the supply chain.

This is the hidden engine of 'Neijuan'. We have PhD-level intellects optimizing logistics, manufacturing processes, and e-commerce algorithms because that’s the only outlet left.

The US, by closing the immigration valve, is effectively forcing China to keep its highest-octane fuel at home. This pressurizes the 'Universe B' industrial machine to frightening levels of efficiency.

It’s a tragic waste of human potential individually, but systemically, it creates an industrial juggernaut.

I explore the macro consequences of this trapped energy in my analysis:

[ 'The Great Bifurcation' ] https://chinarbitrageur.substack.com/p/the-great-bifurcation-when-the-world?r=71ctq6

[Neijuan] https://chinarbitrageur.substack.com/p/neijuan-why-your-chinese-competitor?r=71ctq6

4 more comments...

No posts

Ready for more?