transcript

Speaker 1:
[00:30] Kayak gets my flight, hotel, and rental car right, so I can tune out travel advice that's just plain wrong. Bro, Skycoin, way better than points.

Speaker 2:
[00:40] Never fly during a Scorpio full moon. Just tell the manager you'll sue. Instant room upgrade.

Speaker 1:
[00:47] Stop taking bad travel advice. Start comparing hundreds of sites with Kayak, and get your trip right. Bad advice?

Speaker 2:
[00:55] You talking to me?

Speaker 1:
[00:56] Kayak. Got that right.

Speaker 2:
[01:00] K-Pop Demon Hunter's Saja Boys Breakfast Meal and Huntrix Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi?

Speaker 1:
[01:08] It's not a battle. So glad the Saja Boys could take breakfast and give our meal the rest of the day.

Speaker 3:
[01:14] It is an honor to share.

Speaker 2:
[01:15] No, it's our honor. It is our larger honor.

Speaker 1:
[01:19] No, really. Stop.

Speaker 2:
[01:21] You can really feel the respect in this battle. Pick a meal to pick a side.

Speaker 1:
[01:28] I participate in McDonald's while supplies last.

Speaker 4:
[01:36] Welcome to Office Hours with Prof G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehourswithprofgmedia.com. Again, that's officehourswithprofgmedia.com. Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. Question number one. Our first question comes from Simple on Reddit. They say, you have an entire podcast about China, but we don't hear you speak about China too often. What are your thoughts on China closing the gap between global superpower, general thoughts about the progress in technology, manufacturing, green energy, military capabilities, economic positioning, and infrastructure growth? Where do you see the China and the US-China relationship ending up in a few years? I need a bigger boat. So China isn't rising anymore, it's risen. They're here, they've arrived. The framing of China as emerging is outdated. At Davos most recently, in February this year, the World Economic Forum noted that China is no longer, it was in January, and China is no longer asking the world to believe in its future potential. It's asking the world to adjust to what has already become. It's decided, look, potentially we're the superpower now. And now more people globally trust China. I believe China is a force of good in the world versus the US, which is more of an indictment on the US than it is a plus statement for China. China is the first middle income country to crack the top 10 most innovative economies globally, ranked 10th in the 2025 Global Innovation Index, ahead of Germany, Japan and France, according to the LSE Business Review, achieved this at GDP per capita of around $13,000, which is roughly one sixth of America's GDP per capita. No country's ever done that before. So in technology and manufacturing, it's not really a race anymore. DeepSeek demonstrated two things, that China can match frontier AI at a fraction of the US training costs, and chip export controls would not stall them. That was sort of a, I'm gonna call it, an Apollo moment or a Spondek moment. Made in China 2025, it's the policy the US laughed at, quietly delivered. China now dominates EVs, batteries, solar, wind, robotics. Look at what's going on in Iran. This is all about fucking energy. The flow of energy is the flow of power, and if you can strike the flow of energy, you have power, and China said we don't want to be dependent upon the Gulf or the US or other oil exporting nations, and we're going to make, they lead in EVs, they lead in solar panel production. They brought online more nuclear power power capacity in the last 10 years than we ever brought on. They produced more solar last year than we've ever produced. China now files more generative AI patents annually than all other economies combined. So think about that. And they count for 41% of the world's industrial robots, more than 70% of high-speed rail, and more than 75% of batteries sold globally. Jesus. The real mode isn't any single technology, it's their ability to move from design to scale to deployment. And it's remarkably faster than any of its peers. So they regulate for speed, we regulate for control. Some of their key advantages, China doesn't need to match US economic scale to win, it controls choke points. 94% of rare earth magnets, critical to US defenses and tech manufacturing, they control. This exposes sort of, you know, what is arguably a real flaw in Trump's strategy. The US is fighting with broad economic pressure while China has already secured the specific pressure points that actually matter. And then China is embracing something that we're expunging or getting rid of, and that is an investment in soft power. And it makes sense. A global Oxford study found that Trump's America first posture is actively repelling countries toward Beijing. His disavowal of the liberal international order may have given people license to build stronger ties with Beijing. They're seen as the more reliable partner right now, which is scary. According to Pew, 41% of people globally, and I mentioned this before, now see China as the world's leading economy versus 39% for the US. A dramatic shift from just two years ago. And it's getting worse. The Iran war is handing China more diplomatic capital. The US is pulled back into the Middle East, while Beijing positions itself as the stable, peaceful alternative. Some of the counterarguments, it's definitely not game over. China's economy is lopsided, its exports are booming, but consumer spending is pulling back. The property sector is depressed and over-leveraged. The IMF has warned that export-led model is having its limits. Demographics are kind of a... If you listen to Peter Zion would say it's a crisis. Aging population, cratering birth rate, same structural drag that stalled Japan, and then involution and the feeling among young Chinese that hard work won't be rewarded is driving real disillusionment. Youth unemployment is a growing problem. And Xi's recent purge of the top military commander raises concerns about loyalty, institutional competence, and how secure he actually is. Bloomberg noted a tale of two Chinas, empty streets and economic anxiety alongside cutting edge autonomous factories. So where is China? I personally believe we should kiss and make up with China. I think that if you were to, the largest tax cut in history would arguably be that China and the US are cooling in the thought of US-Sino relations. We have IP and innovation and capital formation. They have the world's greatest supply chain and manufacturing capabilities. So I think working together, you just bring down the costs of everything everyone buys around the world by 3 to 10 percent. At the same time, we need to recognize that we have had an asymmetric trade policy with China that has benefited them more than us. They effectively steal our IP and then sell our shit back to us at 40 to 60 cents on the dollar. So really thoughtful, strategic trade policy, stop all the finger pointing. Can you imagine how powerful we'd be if the Chinese and the US decided they had shared interests in militarily or kinetically and diplomatically try to coordinate? I mean, that would just be staggering. And I think some of that comes from a recognition that we are no longer the, you know, there's no longer a hegemony here. That while we'd like to stay the singular superpower, that's not going to be possible. And while we should probably, in my view, maintain our military leadership, 700 bases overseas, nobody can deliver violence like us. I don't think China has an operating aircraft carrier. If they do, it doesn't have the capability. I think they have two overseas air bases or military bases. Anyways, I think there's reason to try and do a better job of getting along. I would go along China from an investment standpoint, although I think you have to be engaged in stock picking because the controls or the SEC there, it definitely seems a little bit more, I don't know, sketchy, if you will. And they, they're SEC and their regulation is for control. All ours is for growth. But there's just like, there's just no getting around it. Every time I go to China, and I haven't been since pre-COVID, I'm sort of blown away and I'm like, it's impossible not to take these people very, very seriously. And if you look at what's happening, I think we're probably ceding power to China in the Iranian conflict because they are, I mean, they're dependent upon energy, but they built a lot of their own energy. They're seen as a more rational actor. You know, just, I think it's like, quite frankly, despite the demographic problems, despite the over-leverage real estate market, they have the ability, and this is the advantage of an autocracy, to think more long-term. They have 50-year plans. We have five-month plans. They're high-speed rail. You know, they're able to, a third of air traffic is now between certain cities, and that's a good thing because they have the largest network of high-speed rail now in the world, whereas our Citizens United lets airlines and automobile companies get in the way of any. It's just fucking unbelievable. We don't have a high-speed rail system in the United States. It's just unbelievable. But we have entrenched interests to get in the way. At the same time, you know, our tech sector is still dominant. We still take more risks. We still have much better brands, much more creativity. So this is all a word salad to say, yeah, who's the winner here, the US or China? And I think the answer is yes. Thanks for the question. Question number two comes from previousgolf95-41 on Reddit. They say, what company is the next Subaru? Before the 70s oil crisis, no American had ever heard of this Japanese car maker. Suddenly Americans need cheap, small, fuel-efficient cars and Subaru boomed along with Toyota, Honda, Datsun and others. What company is best positioned to boom during the current oil crisis? Will BYD and other Chinese EV companies dominate? So you saw my thunder. I was going to say absolutely BYD. Energy crises can change driving habits permanently. A crisis is a terrible thing to waste. It brings on innovation. In 1973, Americans needed small and cheap. And today, according to Reuters, the experience of extreme supply shortages and higher petrol prices is obviously pushing people towards or to reconsider EVs. The data is already showing it. Tesla competitors tripled in France in March, 9,500 units up 203 percent year on year, or Tesla competitor sales. UK monthly EV sales hit a record, 86,000 units up 24 percent year on year. In Australia, ComBank recorded a 162 percent spike in new EV loan volumes in March compared to the February weekly average, starting on exactly March 1st, the day the Iran crisis hit fuel markets. One of the silver linings here, Mike Crane, frankly, is that it was probably hard to get a lot of alternative energy startups funded with $60 a barrel oil. It's going to be a lot easier with $100 oil. EVs are also just more attractive now. Batteries now cost half what they did when the last oil, topped $100 after Russia invaded Ukraine in 2022. In the UK, HSBC estimates that owning an electric Renault 5 over four years costs about 7,000 pounds less than a Comprol diesel VW. So what could be the next Subaru? You answered it, BYD. Maybe Geely, who accounted for nearly a quarter of all EVs sold globally in Q4 2025. Geely shares are up almost 50% since the beginning of the Iran War. And BYD showrooms across Southeast Asia are packed. One Manila dealer told Reuters he saw a month's worth of orders in just two weeks. According to Prof G Media's own analyst, Alice Hahn, from China Decode, with the war continuing to rage in Iran, China's EV industry is likely to emerge as the winner, surging oil prices will give consumers even more incentive to buy the vehicles. I've driven in both Teslas and BYDs, said Alice. From my standpoint, BYD has the edge. In fact, it's probably a no-brainer, given the cost-style energy efficiency and intuitive operating system. Tesla could be the accidental winner in North America, and BYD is the intentional winner globally. Tesla has no tariff while in the US in the gas prices and free advertising, but it lost almost half its European market share in 2025 due to less political baggage, and US sales are still declining down 8 percent in March. European rebound is real but partial. Western automakers bet against EVs at the wrong time. Ford, GM, Stellantis, and Honda collectively wrote off 70 billion in EV investments when demand slowed a few years ago. Jesus, I just can't get it right. When they exit, then the war happens and EVs go crazy. They kept EVs in their portfolios, but they had to de-prioritize them. Now the market is moving again and they're behind. So what's the danger? If oil prices fall, some of the urgency fades, but history suggests the memory of scarcity at last, the crisis itself. That's interesting. The 1973 shock didn't just sell Subaru's reshaped energy policy for decades. This could do the same for EVs. I would argue that the better analogy is not Subaru but Honda. I've been in a BYD in Brazil. The way I saw it is it's like 70 or 80% of a Tesla for 40% of the price. I think it's the Old Navy or the Southwest of EVs. Those companies are the fastest zero to a billion dollar retailer in airline respectively in history. I think BYDs, you can hold them from your shores, but eventually that just means you lose all share internationally. At some point, you have to take them in and you're behind because you haven't had the forces of competition keeping you kind of innovative. Also, I think Elon Musk is basically, I don't want to say giving up on Tesla, but is focused on SpaceX and X, and I think the Tesla lineup quite frankly just feels a little bit stale. All right. We'll be right back after a quick break. Support for the show comes from Nutri-Full, the number one dermatologist recommended hair growth supplement brand. 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Speaker 4:
[17:07] Welcome back. Our last question comes from jobmiserable1017 on Reddit. Hi, Scott. I'm an urban planning student, and I'm wondering if the way cities are built in America, the streets, buildings, and public access affects the social and emotional lives of young men. Do you think suburbia, car commuter culture, or just overall design and feel of the urban fabric play a role in the crisis we often talk about? If so, I'd love to hear your thoughts. I'm sure it does, but the answer is I don't have a thoughtful answer here. So one piece of data the team got was that every 10 minutes of commuting reduces all forms of social capital by 10 percent. If you're spending all your time in a car, you don't have time to join sports leagues, or go to church, or go to bars. I think that there's a really weird dynamic, and that is cities offer so much opportunity. Two-thirds of all economic growth is going to take place in 20 cities globally. And the aesthetic draw, the kind of fabulous draw, I think, is a stronger pull for young women than young men. That's a sexist thing to say, but I'm sticking to it. And there's data that shows men have a tendency, or young men have a tendency to stay on the farm. A lot of them don't even live out of their house. One in three men under the age of 25 are still living at home. And women head to cities. The result is an imbalance, and there's usually more women than men in cities. And also, it is so expensive to be in a city that your currency as a man is even more dependent upon your ability to make a living such that you can date. I imagine dating, and this is a bit of a stereotype, in a mid-sized city or a rural area, it's like, okay, there's not a lot to do. Let's go to the high school football game or let's go see a movie. And it's not crazy fucking expensive and maybe you can afford a home and you're quote unquote a viable mate. To be a viable mate as a man in a city means you just gotta make a shit ton of money. And there'll be a bunch of Brooklyn sandaled wokeness that, oh, men don't need to make a lot of money. That's not only on criteria bullshit. In a big city, you're just not viable as a mate, as a man if you're not clocking it, unless you're smart enough to be born to rich parents. So more women in cities than men and the men that are there are tend to be making a very good living, which helps them engage in Porsche polygamy, which means that they don't have incentive to create long-term relationships. So a lot of the women can't find emotionally available or economically viable men. And cities are optimized, well, I'm talking about New York. Cities are optimized for two people, and this is going to upset people in the state anyways. Rich men and hot women, and for everyone else it's a soul-crushing experience. And I realize that's a broad generalization, but it is the ultimate in capitalism, it's the ultimate in consumption. So what happens if you're just a nice dude making a good living? You're really fucking lonely. If you're a nice woman who's attractive and making a good living, you're really fucking lonely. So I find that cities are the most crowded places in the world with the most lonely people. At the same time, if you want to get ahead and have influence, you gotta get to the city because the reason I spent so much time in New York and LA is this morning, I have four podcasts, I have a meeting with a guy about this great documentarian, about turning my last book into a documentary, and then I'm going on the Andrew Huberman podcast. And I go to New York, I'll do like five meetings, every goddamn, I mean, it's just so productive, you bump into something, and then every night, I'll go to something cool or a new members club. The density and collision of capital, creativity and cool is just extraordinary. You're gonna make more progress if you can figure out a way to survive in a city in three years than you might make in a rural area in 10 years. So, but yeah, I do think in a strange way, it creates a lot of loneliness. So what is the answer? I don't know, more affordable housing, better infrastructure and transportation such that people can live in peripheral areas that aren't as expensive and still get into the city. But effectively, I would argue New York right now is a leasium. I think it's in a golden age. You never realize when you're in a golden age. You realize it in retrospect. We are in a golden age in New York. New restaurants shed a skin from COVID. I find it clean. I don't find that many homeless in Manhattan. A members club opening every three weeks. Incredible events. It's just amazing. The problem is there's basically a giant velvet rope around Manhattan and that is it's just so goddamn expensive unless you have rich parents or you're extraordinary or in tech or finance making a living. When I first moved to New York, you could kind of dance between the rain jobs. I had friends who are artists, musicians, and it wasn't easy, but they could figure it out and they'd live downtown and sure it was more dangerous, but they could find a loft somewhere and share it with two other people. My first apartment on the Upper West Side I shared with two guys. It was $1,900, $633 a person. We took the subway everywhere. It was doable. Now, you're a young person. Unless you have rich parents, you're making a shit ton of money in tech or finance, there's just no fucking way. No way. Ubers are crazy expensive. Not that you can't take the subway, which I still think is the best transportation infrastructure in the world, but try going out and having a good time and meeting people. Well, you're talking about 300, 400 bucks. I mean, it's just, anyways, higher pay, more, you know, elevated minimum wage, more low-income housing, better infrastructure to help people commute in and out of work. No one has a birthright to live in a city, but I do think it's gotten to the point where we want to create more economic incentives for, I want to call it low-income, affordable housing in the US. And also, quite frankly, more men just need to realize the agency they have, have a plan, get their shit together and take that leap and move it out of their parents' house and move to a city and just try and do what a lot of young people do and let us figure out a way to make it. But yeah, there's something about cities being incredibly crowded and at the same time being incredibly lonely. See above, I don't know, I don't know, but I very much appreciate the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursatprofgmedia.com. That's officehoursatprofgmedia.com. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit and we just might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez and Laura Janer. Kamie Rieck is our social producer, Brad Williams is our editor, and Drew Burrows is our technical director. Thank you for listening to The Prof G Pod from Prof G Media.