The podcast examines China's fiscal decentralization history and how it has shifted under Xi Jinping's centralized leadership. Despite his strong control over the Politburo, Xi relies on advisors for economic matters while prioritizing tech competition with the U.S. In AI development, Ding Shixiang leads efforts cautiously, emphasizing brakes alongside investment. Local government debt, reaching up to 140% of GDP, stems from insufficient central funding and corruption, leading to overbuilding. Financial repression and capital controls channel funds domestically, impacting citizens' quality of life. Solving the debt issue requires reducing unnecessary spending and improving wealth distribution. Regarding Taiwan, Xi seeks unification but remains cautious due to international conflicts. Leadership succession poses risks; without a clear command structure, financial crises could arise. Future growth forecasts suggest China's economy may reach 70% of the U.S.'s real income by 2040, though challenges like trade pressure and high debt persist.