China Academy https://thechinaacademy.org an intellectual content network dedicated to illustrating how key dynamics shape China's view on the world Mon, 27 Jan 2025 07:44:28 +0000 en-US hourly 1 https://wordpress.org/?v=6.2 https://thechinaacademy.org/wp-content/uploads/2023/03/cropped-WechatIMG843-32x32.png China Academy https://thechinaacademy.org 32 32 213115683 Interview with Deepseek Founder: We’re Done Following. It’s Time to Lead https://thechinaacademy.org/interview-with-deepseek-founder-were-done-following-its-time-to-lead/ https://thechinaacademy.org/interview-with-deepseek-founder-were-done-following-its-time-to-lead/#comments Sun, 26 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/from-followers-to-frontiers-deepseeks-liang-wenfeng-on-chinas-ai-revolution/ Silicon Valley is reeling. However, founder Liang Wenfeng has remained low-key, with his most recent appearance being on China Central Television's Xinwen Lianbo (CCTV News).

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Editor’s Note:

Silicon Valley is reeling. A seismic shift in AI dominance is underway, and all eyes are on China. In January 2025, DeepSeek-R1—an open-source inference model from Chinese AI firm DeepSeek—sent shockwaves through the tech world by matching OpenAI’s top-tier performance at 1/30th the API cost, all while embracing full openness.

With just $6 million, China built one of the world’s finest AI models, dwarfing the billions spent by Meta, Google, and Microsoft. Already, global users—especially individuals and SMEs—are flocking to DeepSeek-R1, retraining it as their foundational model.

This Eastern-led revolution is forcing a global reckoning: What if AI’s future isn’t forged in Silicon Valley?

Translated from a July 2024 interview with DeepSeek founder Liang Wenfeng—conducted shortly after the company’s open-source V2 model catapulted it to fame—this rare dialogue unveils how a Chinese startup dared to leapfrog giants and redefine innovation’s rules.

This post-85s entrepreneur appeared on Xinwen Lianbo (CCTV News) as the founder of the AI startup DeepSeek, participating in a high-level national symposium and delivering a speech.

How Was the First Shot in the Price War Fired?

An Yong (Interviewer): After the release of the DeepSeek V2 model, it quickly triggered a fierce price war in the large model industry. Some say you are a disruptor in the market.

Liang Wenfeng (DeepSeek Founder): We never intended to be a disruptor; it just happened by accident.

An Yong: Were you surprised by this outcome?

Liang Wenfeng: Very surprised. We didn’t expect pricing to be such a sensitive issue. We were simply following our own pace, calculating costs, and setting prices accordingly. Our principle is neither to sell at a loss nor to seek excessive profits. The current pricing allows for a modest profit margin above our costs.

An Yong: Five days later, Zhipu AI followed suit, and soon after, ByteDance, Alibaba, Baidu, and Tencent joined the race.

Liang Wenfeng: Zhipu AI lowered prices for an entry-level product, while their flagship models remain expensive. ByteDance was the first to truly match our price for a flagship model, which then pressured others to follow. Since large companies have much higher model costs than us, we never imagined anyone would operate at a loss. It ended up mirroring the internet era’s subsidy-driven logic.

An Yong: From an outsider’s perspective, price cuts seem like a tactic to grab users—typical of internet-era competition.

Liang Wenfeng: Grabing users wasn’t our primary goal. We reduced prices because, first, while exploring next-generation model structures, our costs decreased; second, we believe that both AI and API services should be affordable and accessible to everyone.

An Yong: Before this, most Chinese companies simply copied the Llama model structure to develop applications. Why did you choose to focus on model structure instead?

Liang Wenfeng: If the goal is to develop applications, adopting Llama’s structure to quickly launch a product is a reasonable choice. However, our goal is AGI (Artificial General Intelligence), which requires us to explore new model structures to achieve superior capabilities within limited resources. This is foundational research for scaling up. Beyond architecture, we’ve studied data curation and human-like reasoning—all reflected in our models. Also, Llama’s training efficiency and inference costs lag behind cutting-edge global standards by about two generations.

An Yong: Where does this generational gap come from?

Liang Wenfeng: First, there’s a gap in training efficiency. We estimate that China’s best models likely require twice the compute power to match top global models due to structural and training dynamics gaps. Data efficiency is also half as effective, meaning we need twice the data and compute for equivalent results. Combined, that’s four times the resources. Our goal is to continuously narrow these gaps.

An Yong: Most Chinese firms pursue both models and applications. Why is DeepSeek focusing solely on research?

Liang Wenfeng: Because we believe the most important thing right now is to participate global innovation. For years, Chinese companies have been accustomed to leveraging technological innovations developed elsewhere and monetizing them through applications. But this isn’t sustainable. This time, our goal isn’t quick profits but advancing the technological frontier to drive ecosystem growth.

An Yong: The prevailing belief from the internet and mobile internet eras is that the U.S. leads in innovation, while China excels at applications.

Liang Wenfeng: We believe that with economic development, China must gradually transition from being a beneficiary to a contributor, rather than continuing to ride on the coattails of others. Over the past 30 years of the IT revolution, we barely participated in core tech innovation.

We’ve grown accustomed to Moore’s Law “falling from the sky”—waiting 18 months for better hardware and software. Scaling Law is treated similarly. However, these advancements are the result of generations of relentless effort by Western-led technology communities. Because we haven’t been actively involved in this process, we’ve come to overlook its significance.

The Real Gap Lies in Originality, Not Just Time

An Yong: Why did DeepSeek V2 surprise many in Silicon Valley?

Liang Wenfeng: Among the daily innovations in the U.S., this is quite ordinary. Their surprise stems from seeing a Chinese company join their game as an innovator, not just a follower—which is what most Chinese firms are accustomed to.

An Yong: But in China’s context, prioritizing pure innovation seems almost a luxury. Developing large models is capital-intensive. Not every company can afford to focus solely on research without commercializing first.

Liang Wenfeng: Innovation is undoubtedly costly, and our past tendency to adopt existing technologies was tied to China’s earlier developmental stage. But today, China’s economic scale and the profits of giants like ByteDance and Tencent are globally significant. What we lack isn’t capital but confidence and the ability to organize high-caliber talent for effective innovation.

An Yong: Why do Chinese companies, even well-funded giants, often prioritize rapid commercialization?

Liang Wenfeng: For three decades, we’ve emphasized profit over innovation. Innovation isn’t purely business-driven; it requires curiosity and creative ambition. We’re shackled by old habits, but this is a phase.

An Yong: But DeepSeek is a business, not a nonprofit research lab. If you innovate and open-source your breakthroughs—like the MLA architecture innovation releasing in May—won’t competitors quickly copy them? Where’s your moat?

Liang Wenfeng: In disruptive tech, closed-source moats are fleeting. Even OpenAI’s closed-source model can’t prevent others from catching up.

Therefore, our real moat lies in our team’s growth—accumulating know-how, fostering an innovative culture. Open-sourcing and publishing papers don’t result in significant losses. For technologists, being followed is rewarding. Open-source is cultural, not just commercial. Giving back is an honor, and it attracts talent.

An Yong: How do you respond to market-driven views like those of Zhu Xiaohu (who advocates prioritizing immediate commercialization over foundational AI research, dismisses AGI as impractical)?

Liang Wenfeng: Zhu’s logic suits short-term profit ventures, but the most enduringly profitable U.S. companies are tech giants built on long-term R&D.

An Yong: But in AI, pure technical lead isn’t enough. What larger goal is DeepSeek betting on?

Liang Wenfeng: We believe that China’s AI cannot remain a follower forever. Often, we say there’s a one- or two-year gap between Chinese and American AI, but the real gap is between originality and imitation. If this doesn’t change, China will always be a follower. Some explorations are unavoidable.

NVIDIA’s dominance isn’t just its effort—it’s the result of Western tech ecosystems collaborating on roadmaps for next-gen tech. China needs similar ecosystems. Many domestic chips fail because they lack supportive tech communities and rely on secondhand insights. Someone must step onto the frontier.

More Investment Doesn’t Always Fuel More Innovation

An Yong: DeepSeek currently exudes an idealistic vibe reminiscent of OpenAI’s early days, and you’re open-source. Do you plan to transition to a closed-source model in the future, as OpenAI and Mistral have done?

Liang Wenfeng: We won’t go closed-source. We believe that establishing a robust technology ecosystem matters more.

An Yong: Are there fundraising plans? Media reports suggest Huanfang【1】  aims to spin off DeepSeek for an IPO. Silicon Valley AI startups inevitably align with big players—will you follow?.

Liang Wenfeng: No short-term plans. Our challenge has never been money; it’s the embargo on high-end chips.

An Yong: Many argue AGI requires bold alliances and visibility, unlike quantitative investing, which thrives in secrecy. Do you agree?

Liang Wenfeng: More investment doesn’t necessarily result in more innovation. If that were the case, big tech companies would have monopolized all innovation.

An Yong: Are you avoiding applications because DeepSeek lacks operational expertise?

Liang Wenfeng: We believe that the current stage is a period of technological innovation, not application explosion. In the long term, we aim to establish an ecosystem where the industry directly uses our technologies and outputs. Others develop B2B/B2C services on our models while we focus on foundational research. If a complete industry chain forms, there’s no need for us to develop applications ourselves. That said, if necessary, we are fully capable of doing so. However, research and innovation will always remain our top priority.

An Yong: Why would clients choose DeepSeek’s API over big players’?

Liang Wenfeng: The future world will likely be one of specialized division of labor. Foundational AI models require continuous innovation, and big companies have their limits—they may not always be the best fit for this role.

An Yong: But can technology alone create a significant competitive gap? You’ve said there are no absolute “secrets.”

Liang Wenfeng: Secrets don’t exist, but replication takes time and cost. NVIDIA GPUs have no hidden magic—yet catching up requires rebuilding teams and chasing their next-gen tech. That’s the real moat.

An Yong: After your price cuts, ByteDance was the first to follow, suggesting they felt threatened. How do you view the new competitive landscape between startups and giants?

Liang Wenfeng: To be honest, we don’t really care about it. Lowering prices was just something we did along the way. Providing cloud services isn’t our main goal—achieving AGI is. So far, we haven’t seen any groundbreaking solutions. Giants have users, but their cash cows also shackle them, making them ripe for disruption.

An Yong: What do you think the endgame looks like for the six other major AI startups in China?

Liang Wenfeng: Maybe 2-3 survive. All are burning cash now. Those with clear focus and operational discipline will endure. Others will pivot. Value never vanishes; they will take on new forms.

An Yong: What’s your core philosophy when it comes to competition?

Liang Wenfeng: I focus on whether something elevates societal efficiency and whether we can find our strength in the industry value chain. As long as the ultimate goal boosts efficiency, it’s valid. Many aspects are just temporary phases—over-focusing on them will only lead to confusion.
V2 Model: Built Entirely by Homegrown Talent

An Yong: ack Clark, former policy lead at OpenAI and co-founder of Anthropic, remarked that DeepSeek has hired “some of those inscrutable wizards” who built DeepSeek V2. What defines these people?

Liang Wenfeng: No “inscrutable wizards” here—just fresh graduates from top universities, PhD candidates (even fourth- or fifth-year interns), and young talents with a few years of experience.

An Yong: Many major AI companies are keen on recruiting talent from overseas. Some believe that the top 50 AI talents globally are unlikely to be working for Chinese companies. Where does your team come from?

Liang Wenfeng: V2 was built entirely by domestic talent. The global top 50 might not be in China today, but we aim to cultivate our own.

An Yong: How did the MLA innovation emerge? We heard that the idea initially stemmed from a young researcher’s personal interest.

Liang Wenfeng: After summarizing the key evolutionary patterns of the mainstream Attention architecture, he had a sudden inspiration to design an alternative. However, turning an idea into reality is a long journey. We assembled a team and spent months validating it.

An Yong: This kind of organic creativity seems tied to your flat organizational structure. In Huanfang, you avoided top-down mandates. But for AGI—a high-uncertainty frontier—do you impose more management?

Liang Wenfeng: DeepSeek remains entirely bottom-up. We also do not preassign roles; natural division of labor emerges. Everyone brings unique experiences and ideas, and they don’t need to be pushed. When they encounter challenges, they naturally pull others in for discussions. However, once an idea shows potential, we do allocate resources from the top down.

An Yong: We’ve heard that DeepSeek operates with remarkable flexibility in allocating computing resources and personnel.

Liang Wenfeng: There are no limits on accessing compute resources or team members. If someone has an idea, they can tap into our training clusters anytime without approval. Additionally, since we don’t have rigid hierarchical structures or departmental barriers, people can collaborate freely as long as there’s mutual interest.

An Yong: Such loose management relies on hiring intensely driven individuals. It’s said that DeepSeek excels at identifying exceptional talent based on non-traditional criteria.

Liang Wenfeng: Our hiring standards have always been based on passion and curiosity. Many of our team members have unique and interesting backgrounds. Their hunger for research far outweighs monetary concerns.

An Yong: Transformer was born in Google’s AI Lab, and ChatGPT emerged from OpenAI. In your opinion, how do corporate AI labs differ from startups in fostering innovation?

Liang Wenfeng: Whether it’s Google’s labs, OpenAI, or even AI labs at Chinese tech giants, they all provide significant value. The fact that OpenAI eventually delivered breakthroughs was partly historical chance.

An Yong: So is innovation largely a matter of chance? Your office layout includes meeting rooms with doors that can be easily opened on both sides. Your colleagues mentioned that this design allows for “serendipity,” reminiscent of the Transformer story—where a passerby overheard a discussion and helped shape it into a universal framework.

Liang Wenfeng: I believe innovation is, first and foremost, a matter of belief. Why is Silicon Valley so innovative? Because they dare to try. When ChatGPT debuted, China lacked confidence in frontier research. From investors to major tech firms, many felt the gap was too wide and focused instead on applications. But innovation requires confidence, and young people tend to have more of it.

An Yong: Unlike other AI companies that actively seek funding and media attention, DeepSeek remains relatively quiet. How do you ensure that DeepSeek becomes the top choice for people looking to work in AI?

Liang Wenfeng: Because we are tackling the hardest problems. The most attractive thing for top-tier talent is the opportunity to solve the world’s toughest challenges. In fact, top talent in China is often underestimated because hardcore innovation is rare, which means they rarely get recognized. We offer what they crave.

An Yong: The recent OpenAI event did not feature GPT-5, leading many to believe that the industry’s technological curve is slowing down, and some have begun questioning Scaling Law. What’s your perspective?

Liang Wenfeng: We remain optimistic. The industry’s progress is still in line with expectations. OpenAI isn’t divine; they can’t lead forever.

An Yong: How long do you think it will take to achieve AGI? Before V2, you released code/math models and switched from dense to MoE【2】 . What’s your roadmap?

Liang Wenfeng: It could take two years, five years, or ten years—but it will happen within our lifetime. As for our roadmap, there’s no consensus even within our company. However, we are placing our bets on three directions:

1. Mathematics and code, which serve as a natural testbed for AGI—much like Go, they are enclosed, verifiable systems where self-learning could lead to high intelligence.

2. Multimodality, where the AI engages with the real world to learn.

3. Natural language itself, which is fundamental to human-like intelligence.

We are open to all possibilities.

An Yong: What do you envision as the endgame for large AI models?

Liang Wenfeng: There will be specialized companies providing foundational models and services, forming a long value chain of specialized divisions. More players will emerge to meet society’s diverse needs on top of these foundations.

All Strategies Are Products of the Past

An Yong: Over the past year, China’s large model startup landscape has seen many changes. For instance, Wang Huiwen【3】 , who was highly active early on, exited midway, while newer entrants are beginning to differentiate themselves.

Liang Wenfeng: Wang Huiwen took on all the losses himself, allowing others to exit unscathed. He made a decision that was most unfavorable to himself but beneficial to everyone else. I truly admire his integrity.

An Yong: Where do you currently focus most of your energy?

Liang Wenfeng: My main focus is on researching the next generation of large models. There are still many unresolved challenges.

An Yong: Many other AI startups insist on balancing both model development and applications, since technical leads aren’t permanent. Why is DeepSeek confident in focusing solely on research? Is it because your models still lag?

Liang Wenfeng: All strategies are products of the past generation and may not hold true in the future. Discussing AI’s future profitability using the commercial logic of the internet era is like comparing Tencent’s early days to General Electric or Coca-Cola—it’s essentially carving a boat to mark a sword’s position, an outdated approach.

An Yong: Huanfang had strong technological and innovative genes, and its growth seemed relatively smooth. Is this why you remain optimistic?

Liang Wenfeng: Huanfang, to some extent, strengthened our confidence in technology-driven innovation, but it wasn’t all smooth sailing. We went through a long accumulation process. People only saw what happened after 2015, but in reality, we had been working on it for 16 years.

An Yong: Returning to original innovation: With the economy slowing and capital cooling, will this stifle groundbreaking R&D?

Liang Wenfeng: Not necessarily. The restructuring of China’s industrial landscape will increasingly rely on deep-tech innovation. As quick-profit opportunities vanish, more will embrace real innovation.

An Yong: So you’re optimistic about this?

Liang Wenfeng: I grew up in the 1980s in a fifth-tier city in Guangdong. My father was a primary school teacher. In the 1990s, there were plenty of opportunities to make money in Guangdong. Many parents would come to our home and argue that studying was useless. But looking back now, perspectives have changed. Making money isn’t as easy as it used to be—not even driving a taxi is a viable option anymore. Within just one generation, things have shifted.

Hardcore innovation will only increase in the future. It’s not widely understood now because society as a whole needs to learn from reality. When this society starts celebrating the success of deep-tech innovators, collective perceptions will change. We just need more real-world examples and time to allow that process to unfold.

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DeepSeek Shot Through More Than Just Silicon Valley Oligarchs https://thechinaacademy.org/deepseek-shot-through-more-than-just-silicon-valley-oligarchs/ https://thechinaacademy.org/deepseek-shot-through-more-than-just-silicon-valley-oligarchs/#respond Sun, 26 Jan 2025 18:00:00 +0000 Keywords: Artificial Intelligence]]> https://thechinaacademy.org/the-week-where-decades-happened-the-geopolitical-impacts-of-the-deepseek-r1-llm/ Lenin has often been quoted “There are decades where nothing happens; and there are weeks when decades happen.” This week will clearly go down in the latter category.

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Lenin has often been quoted (possibly mis-quoted) as saying “There are decades where nothing happens; and there are weeks when decades happen.” Regardless of the accuracy of the attribution, this week will clearly go down in history in the latter category. Earlier this week, DeepSeek Artificial Intelligence Co., Ltd. – a subsidiary of the Chinese hedge fund “High-Flyer Quant” – released the latest version of its Large Language Model (LLM) – DeepSeek R1.

Ever since ChatGPT was popularized among consumers, prominent tech giants across the world have been working on their own version of LLMs – be it Meta’s Llama, X’s Grok, Anthropic’s Claude, or Beijing Zero One’s 01.AI. What makes DeepSeek’s models tower above aforementioned competitors is that it is able to achieve comparable or superior performance in all benchmarked categories while spending a fraction of the time & money required by the next best competitor. For reference, DeepSeek reportedly spent roughly $6M USD to train its model, using about 2.8M GPU hours on 2000+ Nvidia H800 GPUs (which operates at approximately 1/6th the speed of Nvidia’s most advanced H100 series). It achieved this feat in less than 2 months. This is less than 10% of the cost of the next cheapest model – Llama 3 (at least $70M spent), & less than 6% of the GPU-hours spent by the next fastest non-Chinese competitor – OpenAI’s GPT-4 (approximately 50-60M GPU-hours spent), despite the latter’s access to leading edge Nvidia GPUs that far outperform DeepSeek’s inferior H800s. Better yet, much of DeepSeek’s features & functionalities are open-source under an “MIT license” – meaning that anyone can copy, modify, & distribute the associated software & documentation free of charge & without restriction.

This is a revolutionary milestone in the still nascent LLM industry, & there are a few obvious strategic implications of this event:

1. US semiconductor sanctions against China have decisively failed. Ever since the Trump regime’s first export controls against ZTE in late 2017 (& later vs Huawei in mid-2018), the US has imposed ever more strict export bans on semiconductor exports to China. These sanctions not only prohibit sales of advanced semiconductor end-products to China, but also sales of semiconductor manufacturing equipment, so as to prevent China from being able to access & build the latest semiconductors, & therefore keep China behind the US in terms of accessing the latest advances in AI. These 8 years of ever stricter sanctions not only compelled Chinese enterprises to increase self-reliance across the entire semiconductor value-chain (which would be a first for any country in the semiconductor value chain), but use its limited computing power far more efficiently relative to its US counterparts, so as to get outsized results – as demonstrated by DeepSeek’s latest achievement. While the original DeepSeek model was trained using US-made Nvidia H800s, it is plausible that subsequent models can use domestically produced counterparts such as Huawei’s “Ascend 910C”. While the Ascend series do not have access to the latest cutting edge manufacturing processes (TSMC 2nm), it is a good-enough platform to run the DeepSeek R1 model at scale. In fact, DIY enthusiasts have already demonstrated that the basic open-source DeepSeek software can run on low-end computers such as the Raspberry Pi (albeit without the full 671 billion-parameter model), with power consumption as little as that of an ordinary smartphone.

2. Valuations of US tech giants must be revised exponentially downwards. As recently as last year, it was assumed that any company that wants to build an LLM needs hundreds of millions of dollars in sophisticated hardware (that only a few companies such as Nvidia can provide), & tens of millions of GPU-hours. This meant that only the richest tech companies in the world – Google, Meta, Microsoft, etc. – can afford to build, maintain, & offer the services of an LLM. Consequently, the profits associated with LLM services would be concentrated in the hands of a few companies that would command multi-trillion dollar valuations (e.g. Nvidia). The release of DeepSeek R1 shattered this assumption. It has demonstrated that a startup with less than 10 million USD can build & train a model, using older hardware that is well behind the leading edge. Therefore, small companies can profitably offer services at pennies on the dollar, given the low financial barrier to entry. Consequently, all the profits (& therefore the overall company valuations) forecasted by the US tech oligopoly must now be revised downwards significantly, with potentially perilous consequences on US financial markets.

3. The global south can now enjoy the fruits of generative AI. The most transformative impact of DeepSeek is not directly related to China or the US, but rather the rest of the world (particularly the global south). Now that everyone in the world has access to a top-performing, open-source LLM that has relatively minimal hardware requirements, the financial & hardware barrier to entry that kept the global south out of the AI game has all but been eliminated. Moreover, no country in the world can keep advanced AI technology out of the hands of any other country, big or small, due to geopolitical differences. The new bottlenecks to the application of AI are now education & imagination. That said, even education is becoming less & less of a barrier to AI, since DeepSeek users have already demonstrated the ability to develop software code (including AI code) without manually writing a single line of code. DeepSeek’s free, open-source LLM will unleash the imaginative & innovative abilities of over 6 billion people in the global south.

DeepSeek’s accomplishment is undoubtedly a great boost to China in the Sino-US technology race. Its benefits go well beyond simply mitigating the impact of US semiconductor export prohibitions, its bigger potential value add comes from 2 other sources:

1. Expanded semiconductor export opportunities. DeepSeek made it possible to run a scalable, high-performing LLM on relatively affordable but performance-constrained hardware platforms. Consequently, the available market for small scale enterprise & government AI infrastructure with targeted use cases is greatly expanded in global south markets. As the world’s leading manufacturer of legacy semiconductors, China is in the ideal position to sell relatively low-end AI chips & backend infrastructure – or the cloud based services thereof – to developing countries that previously could not afford to deploy or use high-performance computing infrastructure for AI use cases.

2. Expanded mind share in the AI developer ecosystem. As DeepSeek becomes the LLM of choice for app developers, researchers, & enthusiasts from developed & developing countries alike, its rapid adoption will lead to faster improvements, more available services, accelerated innovation, & broader community support to make DeepSeek an even more attractive alternative for a larger number of people in the future. The fact that it is mostly open-source makes it nearly impossible for any government to restrict or prohibit the use & proliferation of these aforementioned improvements, thus making it far more resistant to geopolitical upheaval.

Despite the numerous upsides for China, there are also significant uncontrollable risks that could be triggered as a result of this accomplishment. First & foremost on this author’s mind is the possibility that DeepSeek may prompt the US to loosen semiconductor export controls, upon witnessing the relative ineffectiveness of such measures. Such a measure may have the detrimental effect of luring Chinese enterprises back to a state of dependency on higher-performing US technology, thus shifting revenue & R&D dollars away from local Chinese upstarts in the ICT value chain. Contrary to popular belief, the sustainability of China’s technological progress is far more vulnerable to a more “friendly” US rather than a more “hostile” one. Another possible, perhaps inevitable, side effect is that DeepSeek’s accomplishment adds to a litany of other recent “Sputnik moments” – be it the “Great American RedNote Migration”, the test flight of 2 6th generation fighter platforms, or the recent breakthrough of EAST’s sustained nuclear fusion reaction to over 1000 seconds – that might galvanize the American public & elites alike to make a more coordinated, whole-of-society effort to maintain a technology lead over the PRC. Unfortunately for China, there are no practical means available to mitigate either of these risks.

In sum, the release of DeepSeek R1 marks a pivotal moment in the evolution of AI & its geopolitical ramifications. By achieving state-of-the-art performance at a fraction of the cost and time required by its competitors, DeepSeek has not only demonstrated China’s growing technological prowess but also reshaped the global AI landscape. The failure of US semiconductor sanctions to stifle Chinese innovation, the potential devaluation of US tech giants, and the democratization of AI for the global south are just the beginning of the transformative changes ushered in by this breakthrough. As DeepSeek’s open-source model proliferates, it will empower billions of people worldwide, accelerate global innovation, and challenge the existing technological and economic order. In this new era, the winners will be those who can harness the power of AI to mitigate humanity’s greatest challenges—regardless of their geographic or economic starting point.

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From a Chinese Perspective, Politicians in Germany, South Korea, and France Are All Unqualified https://thechinaacademy.org/from-a-chinese-perspective-politicians-in-germany-south-korea-and-france-are-all-unqualified/ https://thechinaacademy.org/from-a-chinese-perspective-politicians-in-germany-south-korea-and-france-are-all-unqualified/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/germany-in-chaos-france-in-chaos-south-korea-in-chaos-whats-happening-with-the-western-model/ Chinese Scholar’s Four Key Questions: Can you be independent? Can you select the capable? Can you plan long-term? Can you prioritize people’s well-being?

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【Editor’s Note: In 2024, countries such as Germany, France, and South Korea experienced social and political unrest. The intertwining of politics and business has become more blatant. Elon Musk’s sponsorship of Trump, Britain’s far-right political parties, and his appearance at a German far-right AfD campaign event last Saturday are stark examples. On January 21, the latest episode of China’s top political commentary program, “This is China,” featured Professor Zhang Weiwei, Dean of the China Institute at Fudan University, analyzing the current global political landscape. (This article was translated by AI.】

In addition to the Russia-Ukraine conflict and the chaos in the Middle East, 2024 also witnessed numerous disturbances: the collapse of the Scholz government in Germany, France changing four prime ministers within a year, a showdown between two political dynasties in the Philippines, the most serious unrest in the UK in a decade, and ongoing political turmoil in South Korea. This raises the question: What has happened to the Western model? Let’s focus on the political unrest in France, Germany, and South Korea and evaluate the deep-seated crises of the Western model using the Chinese model as a reference.
Last December 24, France’s Le Monde published an article stating that 2024 would go down in history as the worst year for the Fifth Republic of France, as the country changed four prime ministers in a single year, the first time since 1935. The article noted that French politics is becoming a “victim of triple decline”: a decline in the president’s functions, with increasing calls for Macron’s resignation; a decline in the National Assembly, where three factions are vying for power; and a decline in trust in the prime minister, who lives under the threat of a vote of no confidence.
The reasons behind this political decline stem from France’s economic downturn, with industrial competitiveness continually weakening, increasing pressure on government finances, and a growing debt burden and deficit level. For ordinary people, the job market is sluggish, and the cost of living is rising, with over 70% of respondents expressing concern about the current living conditions in France, believing that “living standards are constantly falling.”
On December 18 last year, the Frankfurter Allgemeine Zeitung bluntly declared: “France is in crisis, and this crisis is shaking the foundations of the Fifth Republic.” The article mentioned that when De Gaulle founded the Fifth Republic, its features included sound public finances, stable political situations, and control over vast former French colonies. However, these “heritages” have now been “squandered,” which must be regarded as a tragedy. The author pointed out that France today is mired in government debt and domestic political turmoil while withdrawing troops from former colonies such as Mali, Chad, and Niger.
Germany’s situation is equally bleak. At the end of 2024, the Scholz government announced its collapse. In early November last year, German Chancellor Scholz declared the dismissal of FDP chairman Lindner as finance minister, and the FDP subsequently announced its withdrawal from the so-called Ampelkoalition with the Social Democrats and Greens, which directly triggered this crisis and led to a no-confidence vote against Scholz in parliament.
In reality, the main reason for Scholz’s downfall lies in Germany’s severe economic crisis. After the outbreak of the Russia-Ukraine conflict, Germany, along with the United States, the United Kingdom, and other countries, sanctioned Russia, leading to worsening energy and inflation issues in Germany, significantly increased manufacturing costs, and widespread dissatisfaction in German society. Germany blindly followed the U.S., excluding advanced technologies such as Huawei’s 5G equipment and Alibaba Cloud, ultimately rendering Germany’s Industry 4.0 strategy a bubble.
South Korea’s political instability is even more perplexing. On the night of December 3, 2024, President Yoon Suk-yeol suddenly declared “martial law,” the first such instance in South Korea since 1980. Yoon claimed this move was to purge domestic “anti-state forces” and defend the country’s free democratic system. However, most analysts believe the fundamental reason is Yoon’s discontent with the opposition party controlling the majority in parliament and accusations against his wife’s family.
The martial law order was lifted after six hours, sparking massive street protests. Subsequently, Yoon was impeached by the Korean National Assembly, which also overwhelmingly passed an impeachment measure against Acting President Han Duck-soo. This marked the first time in South Korea’s history to impeach both a president and an acting president in two weeks, making South Korea’s extreme political infighting and legal system a subject of international ridicule.
The deep-rooted reasons behind South Korea’s political unrest also lie in economic stagnation, declining national competitiveness, and severe social division. South Korea is one of the countries with the most severe generational, gender, class, and regional conflicts globally. Furthermore, inflationary pressures, especially rising housing and food prices, further exacerbate social tensions.
In fact, the political turmoil in these three countries is just a microcosm of the crisis in the Western political model. I have always advocated assessing the world through the lens and standards of the Chinese perspective. The more we apply Chinese standards, the more we can project them globally and exert influence. I believe this is a significant aspect of the profound changes unseen in a century.
When measured by Chinese political standards, we can at least raise the following four questions about the Western model: 1. Is it capable of independence? 2. Can it select talents and appoint them effectively? 3. Can it plan for the long-term? 4. Can it prioritize people’s well-being? My conclusions tend to be negative unless the West undergoes substantial reforms, or the decline of the Western model will accelerate.
Regarding independence, China is one of the few countries with high autonomy, firmly opposing any country’s interference in its internal affairs. Yet today, we see that countries like Germany, France, and South Korea cannot control their destiny, which is a situation faced by many countries worldwide.
The soft and hard power of the United States pervades these countries, with a significant U.S. military presence in Germany and South Korea. Many Europeans understand that NATO’s eastward expansion could likely result in military conflict with Russia, but they continue to follow the U.S. and push for expansion, eventually causing the Russia-Ukraine conflict to break out and the collapse of the Franco-German vision of a “unified European home.” Meanwhile, France, Germany, and others have been severely hit in economic, technological, and social development sectors.
Regarding talent selection and appointment, the Chinese proverb states: “The key to governance lies in acquiring the right people; using unsuitable talent inevitably leads to misrule.” Nearly all Chinese people agree with the idea that “governing a country must rely on talent.” However, the current Western model has not provided an effective system for selecting qualified leaders. The multi-party electoral system has long devolved into “game-like democracy,” equating “democracy” with “elections,” and “elections” further reduced to political marketing. Political marketing often manifests as a contest of money, resources, public relations, strategies, image, performance, etc., with the elected officials not necessarily possessing the strategic judgment and execution needed for governance.
Regarding long-term planning, this is the biggest difference between the Chinese and Western models. China has always emphasized, “Without foresight, there will be impending worries,” and “Those who do not plan for the entire chessboard are not fit to plan for a single domain.” The comparative advantage of the Chinese model lies in successive medium- and long-term planning, including the execution and formulation of five-year plans. Western politicians often focus on personal interests and the short-term demands of some voters, overlooking the overall public interests and global interests. Moreover, the multi-party electoral system makes it difficult to ensure policy continuity. Last year, France changed four prime ministers; Scholz abandoned many of Merkel’s policies; Yoon Suk-yeol is entirely at odds with his predecessor—where is the strategic thinking or implementation mechanism for long-term planning in these countries?
Regarding prioritizing people’s livelihood, “Of all matters, people’s livelihood is paramount” is among China’s exemplary governance traditions. China’s rapid rise in just a few decades has continuously prioritized improving people’s livelihood. This philosophy has helped us eradicate extreme poverty in a short time, creating the world’s largest middle class and leading the way in the global new industrial revolution.
Recently, massive wildfires raged in Los Angeles, burning wealthy neighborhoods in the “developed regions of a developed region” of the U.S., with limited rescue efficiency, and chaotic scenes of officials blaming each other were astonishing. One may compare it to the 6.8-magnitude earthquake in Dingri County, Shigatse, Tibet, China, almost happening simultaneously in our underdeveloped border region in the highlands. Our disaster relief mobilization was incredibly fast and efficient, shocking the world: within ten minutes, military aircraft carrying soldiers and supplies flew to the disaster area, half a day later, the county town’s electricity was restored, 24 hours later, the national highway was entirely accessible, hot meals began to be served, and almost all relief supplies were in place within a day.
I refer to China’s democratic practice as the “people-oriented democratic model,” or “Chinese People-oriented Model,” contrasting it with the “Western democratic model.” I believe the “Chinese People-oriented Model” reveals a profound governance law, in that it doesn’t matter which political system is used—multiparty system, one-party system, or no party system—it ultimately must be realized in the fundamental aspect of improving people’s lives, including material and spiritual improvements. In today’s Chinese political discourse, this translates to the coordination of “economic, political, cultural, social, and ecological civilization construction” and ultimately transforms into people’s “sense of gain.” Therefore, I personally tend to believe that if there is competition between “Western democratic model” and “Chinese People-oriented Model” in the world today, the “Chinese People-oriented Model” has already prevailed. Of course, we can further improve in various aspects. Based on this, we can also more comprehensively understand General Secretary Xi Jinping’s previous powerful statement: “Since the new era, the clear contrast between ‘East rising and West declining,’ ‘China governance and Western chaos,’ has shown great developing countries new hope and options.” I also firmly believe that history will stand on the side of the “Chinese People-oriented democratic model”!

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I Don’t See Manufacturing Returning to the U.S. https://thechinaacademy.org/i-dont-see-manufacturing-returning-to-the-u-s/ https://thechinaacademy.org/i-dont-see-manufacturing-returning-to-the-u-s/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/i-dont-see-manufacturing-returning-to-the-u-s/ The U.S. has long attributed its manufacturing decline to competition from China, often overlooking deeper, systemic issues within its own economy.

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Every US president out of the last ten has campaigned on reviving manufacturing and none of them has achieved it. China has become the scapegoat. I don’t see much prospect, even the turn towards economic nationalism in the US and other countries: economist Richard Wolff.

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Where is China’s Juggernaut Economy Headed? https://thechinaacademy.org/where-is-chinas-juggernaut-economy-headed/ https://thechinaacademy.org/where-is-chinas-juggernaut-economy-headed/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/where-is-chinas-juggernaut-economy-headed/ China's long-term vision and political stability help avoid drastic shifts.

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This is the third episode of our interview with Professor Keyu Jin, She emphasized the challenges that China is currently facing, the characteristics of Chinese policy implementation, and the comparatively more conservative fiscal policies of China compared to the United States, which have garnered significant attention.

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Is China Likely to Accept a New Plaza Accord? Zero Probability https://thechinaacademy.org/is-china-likely-to-accept-a-new-plaza-accord-zero-probability/ https://thechinaacademy.org/is-china-likely-to-accept-a-new-plaza-accord-zero-probability/#comments Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/is-china-likely-to-accept-a-new-plaza-accord-zero-probability/ The U.S. is facing significant challenges in reducing its trade deficit and sustaining the dollar's exorbitant privilege by 2025.

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It is unlikely that both US objectives — shrinking trade deficit and maintaining the exorbitant privilege of dollar — will be satisfied at once in 2025, or in the next four years: Former Greek Finance Minister Yanis Varoufakis.

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China’s Strategy to Trump 2.0 https://thechinaacademy.org/chinas-strategy-to-trump-2-0-jeffrey-sachs-zhang-weiwei-charles-li/ https://thechinaacademy.org/chinas-strategy-to-trump-2-0-jeffrey-sachs-zhang-weiwei-charles-li/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/?p=100035002 Professor Jeffrey Sachs, world-renowned economist, talks with Professor Zhang Weiwei, China’s top political scientist, and Mr. Charles Li, China’s leading expert in finance.

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A conversation featuring Professor Jeffrey Sachs, a world-renowned economist; Professor Zhang Weiwei, an esteemed political scientist who advises China’s top leadership; and Mr. Charles Li, former Chief Executive of the Hong Kong Exchanges and Clearing Limited (HKEX)

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A Recession Is Not Always a Bad Thing https://thechinaacademy.org/a-recession-is-not-always-a-bad-thing/ https://thechinaacademy.org/a-recession-is-not-always-a-bad-thing/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/a-recession-is-not-always-a-bad-thing/ Keyu Jin discusses the absence of natural business cycles in China, suggesting that allowing for minor recessions could benefit the economy.

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This is the final episode of our interview with Professor Keyu Jin. She challenged the notion that China’s economy has peaked, arguing that both booms and busts are natural economic cycles. She also analyzed the role of China’s real estate sector as a quasi-financial system, explained the mystery behind China’s high savings rate, and expressed her belief that foreign investment will return if the Chinese economy rebounds.

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Why Did Trump Tiptoe Around Russia During Inauguration? https://thechinaacademy.org/why-did-trump-tiptoe-around-russia-during-inauguration/ https://thechinaacademy.org/why-did-trump-tiptoe-around-russia-during-inauguration/#respond Sat, 25 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/?p=100034986 Trump's vision of dividing Russia from China reflects a strategic geopolitical maneuver aimed at weakening the influence of both nations.

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Professor YU Bin explained why Trump’s inauguration speech did not mention Russia and pointed out that Trump’s ambition to ally with Russia against China has a long history, but it is difficult to achieve a split in Sino-Russian relations.

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Will Trump 2.0 Usher in a US-China Honeymoon? https://thechinaacademy.org/will-trump-2-0-usher-in-a-us-china-honeymoon/ https://thechinaacademy.org/will-trump-2-0-usher-in-a-us-china-honeymoon/#respond Thu, 23 Jan 2025 18:00:00 +0000 https://thechinaacademy.org/will-trump-2-0-usher-in-a-us-china-honeymoon/ Chinese political scholar YU Bin summarized Trump's foreign priorities as the "Three Ts": Tariff, Territorial acquisition, and Terminating the Ukraine War.

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China Academy interviewed Professor Yu Bin, a political science professor with experience in top-tier think tanks and policy research centers in China and the United States, regarding Trump 2.0’s foreign policy. Professor Yu sees Trump’s presidency as an opportunity to improve US-China relations and looks forward to a potential second honeymoon period between the two nations.

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