Pearl Lam (林明珠): Welcome to the Pearl Lam Podcast. I’m now, uh, in New York at the Peninsula, New York, and having the great pleasure of speaking to my old friend, David Barboza, who is a very established journalist. And I’ll let David give a brief introduction about himself.
David Barboza: Sure, Pearl. Um, I am a longtime New York Times foreign correspondent. I spent 12 years in China. That’s when I got to know Pearl. Um, and in the last four years, I have been working on a startup called The Wire Digital. We are a news and data platform,
Pearl Lam: which I have subscribed to.
David Barboza: Yes. Thank you. Thank you. So, I’ve, I’ve gone from the big world of journalism to starting my own little news and data company.
Pearl Lam: I mean, I always wanted to ask you, why are you so interested in China?
David Barboza: You know, China, I think the first time, other than my interest in Bruce Lee when I was young, I should say, like, that was,
Pearl Lam: Oh my, do you learn kung fu or not?
David Barboza: You know, the, um, I don’t think, I don’t think I’ve told you this story, Pearl, but, um, when I was young, when I was eight, my mother died, and my father had to tell me about this death. And he said, I want you to go to the movies. And there was a Bruce Lee film.
Pearl Lam: Enter the Dragon.
David Barboza: Enter the Dragon. And so I went to see Enter the Dragon, and instantly I was interested in Kung Fu. Not in China, but in Kung Fu. And later in college, I took a course in the journalism school called, um, Reporting the Revolutions, China and Vietnam. The course was all about how journalists covered the Chinese Revolution in the thirties and forties, and the Vietnam War with the United States. That got me very interested in China, the history. I went back into the library and I got all of the old microfilms of the New York Times articles that appeared in the thirties, forties, and during the Vietnam War, the sixties and seventies, printed them out and said, I would like someday to be a correspondent in Asia, to go to China or Vietnam, and to cover the countries as a New York Times reporter. Never thinking it would really happen.
Pearl Lam: No, because all I knew that you were saying to me is you were telling me years ago that your dream was to work for the New York Times.
David Barboza: That’s right. That’s right.
Pearl Lam: And then when you started working with the New York Times, it was like a dream come true.
David Barboza: Yes. So first the dream was, could I get to the New York Times, and then could I ever get to China as a foreign correspondent? And, but despite taking that course in college and joining the New York Times, I had one trip to China and it was canceled at the last moment. So I never went until the Times said, would you like to go to the Shanghai Bureau?
Pearl Lam: And that was how many years after?
David Barboza: That was… I was covering Enron. Do you remember the Enron case?
Pearl Lam: Yes.
David Barboza: This was 2002, 2003. And I spent a year writing about Enron in Houston — a whole year covering one company. And as a reward for that year, living in a hotel in Houston, the Times said, where would you like to go if you become a foreign correspondent? And we will pay for you to travel anywhere in the world to look at another country to see if that’s where you’d like to go. So I said, I’d like to take my vacation in China. I’d like to go to Shanghai, never been there. I want to see it. And I want to see, could I become a correspondent in China? So I took the vacation. I think I went on December 23rd or 24th of 2002. I had just met Lynn. Lynn, my soon-to-be girlfriend. Um, I took that trip to Shanghai, and within three days I was saying, I, I called back to the New York Times and said, I am moving to China, whether you send me or not.
Pearl Lam: Wow. I love it. So from the time in December until when did they actually place you in China?
David Barboza: So that trip, I went to China, I went to Cambodia, I went to Myanmar, Burma. And then I went back maybe two weeks later, and it was actually more than a year before I actually moved to China. And that, it’s a long story, but the Times had sent someone else to China. And so then my, I was delayed in going, but it was very good because I got to know Lynn better. And so in February, 2004, I finally, after this, I first visited in December, 2002. Yeah. Um, so I had to finish my job in Chicago. I was the Chicago business correspondent for the Times. And I had to finish that job in 2004. In early 2004, I moved to China, uh, February, early February.
Pearl Lam: Wow. Yeah. What a story. Yes. Um, so you don’t have any regret, right? Even, even, you know, how you escaped from China.
David Barboza: No regret. Like, I am so grateful, like all the people I met in China, including you, all the friends I made, all the stories I wrote to see the, one of the most interesting countries in the world at a time when like, this was the golden age.
Pearl Lam: Yeah. It was the golden age.
David Barboza: People didn’t know in 2004.
Pearl Lam: Yeah.
David Barboza: Maybe many people didn’t know. But 2004 to the Olympics, to, I got to cover not just business. I was sent,
Pearl Lam: I know you were as a business reporter, I know you were covering Olympics as well as covering culture,
David Barboza: Culture, art, sports, science. Any topic I wanted, I could really pitch that story to the New York Times because they didn’t have correspondents in all these areas. So this was like a dream come true. In fact, as you know, I didn’t want to leave China.
Pearl Lam: No, of course. I know. Um, so I mean, I think the audience does not know that, uh, do not know that, uh, David has actually won two Pulitzer Awards. So can you briefly, you know, I know both stories are about China. Mm-Hmm. So can you just quickly, you know, share?
David Barboza: Sure, sure. So the first, so this is, we’ll go back to 2011. That’s when I worked on the stories. They were published in 2012. The first was a series we were working on, on Apple. I love my Apple products. I love my Apple. I know you love your Apple products. Um, but we were told, um, the series was out of New York. And we’re gonna look at Apple’s manufacturing in China. You know, why is it manufacturing in China? What is it like in China? What are their factories like? So part of my job was to look at the manufacturing, the labor situation in China. So I was sent out to meet some of the workers at the Apple factories. And as much as I love my Apple products then and now, it was a pretty shocking story to see some of the labor conditions at Apple’s partners. Because Apple actually doesn’t manufacture, but they outsource to companies like Foxconn. So I was visiting Foxconn facilities, I was, uh, actually one of our stories was keyed on some of the workers who were injured, one worker who died. And so that first Pulitzer was a look at why does Apple manufacture in China? Could it move those jobs to the US? Why doesn’t it, what is it about China in a big compounding?
Pearl Lam: They’re off to India now.
David Barboza: Yes, yes. Now they’re thinking of, you know, yeah. Is China the right place for them to be? But at that time, Apple was mostly producing in Shenzhen, was about to move to Nanjing with the biggest factory in the world.
Pearl Lam: Yeah.
David Barboza: 350,000 workers. So this was an amazing story to see how are your products made? What is it like at Apple? What are the labor conditions? I dealt with Apple, I dealt with Foxconn, and I think it was maybe an eight or 10-part series looking at Apple and working conditions and manufacturing. Um, that was the first Pulitzer for 2013. We published in early 2012. The second one was much more dangerous.
Pearl Lam: I know.
David Barboza: I was tipped off many years before that the children of some of the elite political families were making millions or tens of millions or billions of dollars holding so-called secret shares. I was told, like off the books, no one knew it. And, um, this was told to me by many different people at dinner parties. And I wanted to figure out, is that true? Is there any way to know if it’s true? How does that happen? How did they get the money? Who passes it off to them? So I spent a year looking at corporate records working, actually Lynn and others worked with me to figure out, could we trace the money in China? I mean, it’s hard to trace the money anywhere. So in China, in Chinese, in Chinese corporate records. And to my big surprise, I thought, maybe I’ll find a million, 2 million, 3 million. We found billions. Right? We published $2.7 billion of family wealth for the family of the Prime Minister of China. The sitting prime minister at that time, we actually found closer to 5 billion, but to be very conservative, to be very cautious. We wanted to make sure if we went to court, could we prove it? Did we have the documents? So we tightened it up. We made sure, like legally accounting-wise, and we published in October, 2012, a story that said the family of the sitting Prime Minister has $2.7 billion in the official records. And many of those investments are tied to things that the Prime Minister oversaw, like the financial services industry. Um, so that was the more dangerous of the two articles. Both of them led to trouble. Apple was not happy with the New York Times.
Pearl Lam: Of course.
David Barboza: For a while, I think it canceled some of its advertisements. Um, but certainly the Chinese government was very upset that we would publish a story like this, um, in 2012. So that gave me and Lynn and, and the New York Times, we were blocked, as you probably know.
Pearl Lam: Yes.
David Barboza: The New York Times was blocked. And then visa problems, we were followed. Yeah. They, they didn’t allow reporters from the New York Times in. So it was several years of, uh, challenges for us on the ground.
Pearl Lam: And oh, I was recently told that even the bureau, uh, uh, the staff working in the bureau has been greatly reduced.
David Barboza: Yes. Yes.
Pearl Lam: Because now is a complete different era. Right. So I, I consider that you would say that during your era it was really fortunate.
David Barboza: Yeah, yeah.
Pearl Lam: That, that you can actually, uh, report different stories.
David Barboza: So I would say, despite the fact that we were followed by the government all the time, I mean, from the beginning, uh, we were relatively free. I could report on art, I could travel the country. I could go anywhere but Tibet and felt pretty free, you know, followed once in a while, but not really impacting stories. And even after my series on the Prime Minister’s family, I still spent three more years traveling in China, reporting from China, followed more, um, threatened sometimes, but still, through the time I left, up to the time I left in the end of 2015, I had relative freedom. As you know, after I left, the government got more strict on journalists. During Covid, they kicked out the New York Times. Most of the New York Times reporters, the Wall Street Journal now is very different. The era that I was in was the best, I would think, would consider it the best time to cover China, the most free time. I could meet all sorts of people. They didn’t have surveillance everywhere. So, um, you came up with tricks of how to, if you were followed, tinted windows, or you traveled to a different city and then you take a car, lots of things that we did to try to get around the surveillance. That would be very difficult today for any journalist.
Pearl Lam: One thing I was very interested, and let’s talk about it, because during Covid time, we realized that China actually has been a global supply for many, many items.
David Barboza: Mm-Hmm.
Pearl Lam: So you’ve been traveling all around China, seeing factories. I mean, I mean, there are companies, I mean, there’s many countries outsourced to China, and you were saying that you’ve been visiting, um, uh, places where they make one product like a city for t-shirts, cities and, and all that. Just, just, you know, it is really surprising because it’s only a few decades.
David Barboza: Mm-Hmm.
Pearl Lam: That China could, could, could be able to create such a global supply, um, center, which is, I mean, totally surprising. And you were then, you were witnessing all this happening.
David Barboza: Yeah. This is actually maybe my favorite thing about being a correspondent in China. So you think about in the nineties and early two thousands, China starting low with textiles and t-shirts, you know, toys and things. But in the time I’m there, they’re going to go from the very low all the way up now to EV batteries, et cetera. And so if you traveled around China while I was there in the two thousands, you could go to provinces and you could see the lowest level factories. You could see, you know, food factories, plastic factories, all sorts of like, you know, dangerous factories. I’ve been in, um, aquaculture, seafood factories, et cetera, all the way up to the highest quality goods, right. Luxury brands or electronics or cars.
Pearl Lam: But, you know, but China only really started manufacturing is like in the 1980s. Yeah. And you know, when Mao passed away, right? So, so with the machineries by 2000, they must have really high technology machineries there.
David Barboza: You know, even when I got there, there was still, and maybe there is still today, talk about China is really low quality, low cost. But during the time I was there and you were there, it changed dramatically, right? So think about the eighties and the early nineties, they are kind of a brilliant strategy, which is we will invite all global manufacturers, starting with the low ones. Here is free land or subsidized land. We will let you bring in equipment, right? We will bring workers to you. And when I got to China, even in 2004, I remember visiting a factory and I said, what do you get paid in this factory to a worker? And they said, 500 RMB a month. And I thought, wow. Not even like, that’s like $80 RMB, $70 US dollars. Yeah, 70 or $80 a month. And I didn’t realize at the time they were including their overtime. So this isn’t a 40 hours a week normal. Then they were working lots of overtime, so they could have been making something like 210 to 15 cents, 20 cents an hour to do this. So you think of moving that job from Europe, from the US all of a sudden, every global company said we could get cheap land workers that are not unionized, that will pay. Not pay 15 cents an hour. They were willing to work seven days a week. And I think you may know also Pearl, that when they set up these factories, they were factory cities, so you would have your factory, right? And then the dorm was built on the factory grounds. So the workers would move from Sichuan or another province, live in the dorms for three or four years, eight to a room. They could only go from their room to the canteen to the factory floor. They could be called at 2:00 AM more production. Um, so it was almost like the perfect system to lower the cost for those producers. So just think of like nineties, two thousands. Every, every year, they’re getting a little better. The quality is getting a little higher, more higher value. Companies come in and say, well, if they can do it, we can do it. You get Nike, I’ve been to the Nike factory. Amazing. You get Apple, you get Dell, you get Microsoft. So pretty soon it’s really about who doesn’t come to China, you’re gonna lose out.
Pearl Lam: Yeah.
David Barboza: The economies of scale. So I was telling you that I went to Sock City.
Pearl Lam: Yeah.
David Barboza: Bra City, t-shirt City. Um, you know, they had all these specialty cities, Pen City. There was a city that made most of the world’s pens.
Pearl Lam: Wow.
David Barboza: And actually, I remember going in and there was a person who was screwing together. Like every, they didn’t have a machine. Someone would get the two parts and screw together every one all day long. Um, so many people that did that, obviously.
Pearl Lam: I was told at the time there were a lot of buying offices in Hong Kong.
David Barboza: Yes.
Pearl Lam: And they all go through Hong Kong, and then they all started to go, especially with garments. Right. But then during the Covid time, we realized that China is actually the medicine cabinet.
David Barboza: That’s right. I mean, that’s right.
Pearl Lam: Who would believe this?
David Barboza: Yeah.
Pearl Lam: And at the time that you visit that,
David Barboza: Yeah, actually, even before Covid, I knew that lots of pharmaceuticals were being made. There was in 2000, maybe seven or eight, a scandal in the US with something called Heparin, which is this drug. And it was, they had
some like contamination. It was injuring people in the US. And we actually went and visited some of the Heparin factories in China. I remember going to one, I think in Jiangsu, which was a home factory. They were making this very expensive drug in the homes of workers. And you could walk in, and by the way, heparin was made partly by pig intestines. Something like as one of the raw materials. So you could see there’s a slaughterhouse nearby, or they’re getting all of the pig intestines from that area and bringing them to the homes. Think of people working in their homes for global pharmaceutical companies. Not that there’s no dis amazing, not that they didn’t have other big factories, but there were even home factories in some cases for common drugs, or very important drugs.
Pearl Lam: Yeah.
David Barboza: So China and India, I think, are still making most of the world’s drugs,
Pearl Lam: at home.
David Barboza: Yeah. And, well, not at home, but some at home. And they’re, again, they’re the levels of the factories. And what was a challenge when I was there is sometimes the factory would show you the factory and say, it’s made here, but they would outsource some of it to a cheaper factory, and they would outsource some of it to people at home to keep lowering the cost. So you might not know, you think your stuff is made in the Nike factory. Is it actually made in the outsourced factory?
Pearl Lam: So having said that, we are talking about medicine and drugs. How do people know, or how does anybody know that the quality is there?
David Barboza: I mean, yeah, it’s, uh, well, the FDA is supposed to regulate and visit those FDA-approved factories. But the challenge in China, not just for drugs, but for any product, is there can always be the factory behind the factory. And your inspectors, whether you’re a Mattel, I visited Mattel’s factory, I visited Nike’s factory, I visited Apple’s factory and others, there can always be the hidden factories. And there can be bribes paid to the inspectors, or they don’t actually, they go to the fake factory, the show factory when it’s not really coming from there. So to have a full system, um, I think it got better, by the way, I don’t want to mislead that. Over time, the factories I visited, the quality, the standards, the things that I saw seemed to be improving pretty dramatically. But you always had the issue of whether you could really fully inspect the factory.
Pearl Lam: Wow.
David Barboza: Yeah. So actually, I think I should have taken you to some of these factories because I,
Pearl Lam: I would love to see it.
David Barboza: The great thing for people outside of China to see is where are the things you’re using made? How are they made? What are the raw materials?
Pearl Lam: Because some of these medicines go throughout the, it’s global.
David Barboza: Yes. This is like your major thing that you’re using in healthcare. In food, by the way, I visited eel factories making seafood, shrimp. Much of the shrimp in the United States served at restaurants is from China.
Pearl Lam: So what are those shrimp factories like?
David Barboza: So that became one of my favorite things is to see where are things produced? How are they produced? Who funds it? What are the raw materials that go into it?
Pearl Lam: How interesting. So I remember when I was reading some notes, you, there was one topic that you were talking about is about food and drugs.
David Barboza: Mm-Hmm.
Pearl Lam: Related to, to what we are discussing about the food and drugs. And do, does China actually have a food and drug regulation?
David Barboza: They do. And they’ve had many problems over the years. So when I was there, um, they executed the head of the Food and Drug Administration, I wrote about that. So they like, it was so bad with tainted drugs, with children dying from tainted drugs. That was the big, that was the big milk powder.
Pearl Lam: Right.
David Barboza: There was like milk powder. There were other drugs. Um, so they executed the head of the FDA and they had lots of different food and drug scandals. Um, maybe we didn’t even hear about half of them. Uh, so they had serious problems. We haven’t heard as many. Uh, I’m not so sure that means they went away or it’s not widely reported. Uh, but they have over time had lots of food and drug and toy safety and other things. But I think that’s also kind of like when you are scaling up a country and you’re building everything overnight and you’re doing lots of new things.
Pearl Lam: Yeah. Yeah.
David Barboza: Because you have to catch up.
Pearl Lam: Yes.
David Barboza: Everything is fast, fast, fast.
Pearl Lam: I think the same thing happens in America as well.
David Barboza: Right. Right. And if you don’t have free press and you don’t have good regulation and good inspection of those factories, it’s going to be hard to control that.
Pearl Lam: Let’s, let’s talk about the environment.
David Barboza: Mm-Hmm.
Pearl Lam: You did a series about the environment and yes. Can you just give us an overview?
David Barboza: Yes. So we did a series, I think it was 2007 or ’08, looking at the environment. And you can imagine China’s impact if every manufacturer is moving their production, which means they’re moving their raw materials, which means they’re pumping all that, all that gas and oil and all that stuff is, rather than happening in the US, in Germany, in Japan, you are moving it all to China. And they’re using coal to fire those plants and other things. And there are electricity, you’re going to have some serious problems, serious environmental problems. Also, China at the beginning was, we welcome foreign investment. Don’t worry about the environmental restrictions. We don’t have those. So literally, some of the owners said to me, or businessmen said to me, we were told, just dump it in the rivers. Like in the early days, like, wow, we’re not going to inspect that. Now they, of course, over time they got more and more concerned, but China became heavily, heavily polluted because they’re using dirty fuel. They are producing not just China’s goods, but the world’s goods. And, uh, they don’t have environmental standards.
Pearl Lam: Right.
David Barboza: For a long time. So you can imagine the waterways, you can imagine even the farmlands that were polluted.
Pearl Lam: Hold on first because I remember, I used to see Beijing was very dark and gray and everything.
David Barboza: Mm-Hmm.
Pearl Lam: But recently,
David Barboza: Mm-Hmm.
Pearl Lam: Beijing is crispy blue sky.
David Barboza: Yeah.
Pearl Lam: I mean, it’s beautiful. This is, this is before Covid time.
David Barboza: Yeah.
Pearl Lam: And I remember I arrived in Beijing and I said, wow, what a beautiful sky. And the driver was telling me, do you know how many people could not afford the electricity? They all froze to death in order to have the blue sky?
David Barboza: Right. Right.
Pearl Lam: Was that true?
David Barboza: I don’t know. I haven’t been there for that change. But I do know that post-Olympics, they slowly started to force the factories around Beijing even far away because it’s all blowing in. So I think Beijing made a major effort to move steel factories or coal-fired, like all of that stuff out of Beijing, out of, especially around the political and cultural center of China.
Pearl Lam: But one of the, one of the arguments that China uses, and I do believe it’s quite fair, because if you remember, they’re talking about the Industrial Revolution, like in the UK during that time the sky was all black.
David Barboza: Right.
Pearl Lam: Because you go through that in order to build up a country, I mean, to build up and evolve into a developed country.
David Barboza: Right.
Pearl Lam: And of course, China or any developing countries, they want that chance to do that. And they don’t want to be limited by the environment. Right. But at the same time, China wants to lead the Paris Climate Committee. So the contradiction is, yeah.
David Barboza: I think it’s more of a, um, if you put it on the timeline, so first they make the bet and say, right now we want food. Right? We want jobs. So we’re willing to be dirty for a while, and we want to move up the value chain and we’ll get better. And that was from the nineties all the way through the time I was there. And it was probably really after the Olympics, maybe even around the time of the Olympics, they got really serious because I was there for the Olympics. The opening ceremonies like clean the skies, like this is an embarrassment. So I think after 2008, they got more and more serious. They got serious about solar and wind and just renewables. And, and they also know they, they don’t have the resources. Um
, and their country is, the country’s going to be polluted. So I think it’s not a contradiction, it’s more them sensing over time, we are gradually shifting to green. But if you said to them today, do you want to go green and cause the loss of lots of jobs, they might still say, okay, we don’t want to be that green.
Pearl Lam: Right. Yes, exactly.
David Barboza: Uh, but we want to also, green is an opportunity for China. Right. It’s like we could lead with electric vehicles and, and other things China’s doing as manufacturers. So many EVs. You should, yeah. We should think of them as China as almost like 10 countries. Yeah. They are both green and dirty and old, old, uh, sort of factories and new factories and middle factories. When I would travel around China, I would often say to myself, okay, this city, I’m going back to the 1970s, this city, I’m back in the 1940s.
Pearl Lam: Wow.
David Barboza: This city looks like 1920 or this city looks like 2030. So you can see everything in China.
Pearl Lam: So if you have a developed economy who also produces so much pollution, what makes the world go against China? Something that I don’t understand. Well, it seems to be so much double standard.
David Barboza: Yeah. I think more of it is, um, if you think about our time there in, even in Shanghai, you know, we were there together. And from 2004 to the time I left almost 2016, even though Shanghai is a beautiful city, if you said, how many days did you see sun and blue skies in Shanghai every month? I might say two days.
Pearl Lam: Right.
David Barboza: I mean, it’s, it’s not like Beijing. But everywhere I went in China, I saw, except like Nanning. And in out west, I saw polluted city after polluted city, after polluted city. I don’t think the US is even close to that. Part of the reason though, when you think about the contradiction is the US moved a lot of its production of dirtier things to China.
Pearl Lam: Yeah. They’re interconnected, right? So what we buy in the US is affecting pollution in China. It’s also affecting job growth.
Pearl Lam: Yeah. Because we were talking about the supply chain. Yeah. Obviously all these direct relationships.
David Barboza: Yes.
Pearl Lam: Another very interesting topic that we were talking about, since we’re talking about covering everything, is technology.
David Barboza: Mm-Hmm.
Pearl Lam: So of course, China technology giants like Alibaba. Mm-Hmm. Tencent, JD.com, you met them all and they became really successful. And, um, they, all of them went public on NASDAQ. And actually, they are, they’re American companies rather than Chinese companies. Then you have all these American companies trying to, like Google’s Facebook. Facebook is not even in China. They all go into China, but they fail.
David Barboza: Mm-Hmm.
Pearl Lam: Why?
David Barboza: I think it was a combination of reasons. First, it is very difficult for not just technology companies, but any company from outside to adapt to China. So you have to, you would think in any country, the locals will know the taste better, will know the culture, will know how to serve.
Pearl Lam: Right.
David Barboza: And I think the companies from the west or from the globe that went into China, they went in and they did things that China could not quickly catch up with. Right. They, China cannot in a couple of years figure out luxury goods and all of a sudden serve up better things than the best brands or even high technology. But every year they’re going to get better and better. And as they get better, the people, the entrepreneurs on the ground like a Jack Ma or Pony Ma, um, they are going to figure out, well, what do we learn from Google or Yahoo or the others? And how do I adapt that to China’s taste and to what people want? It won’t be exactly. You can’t just take your idea from the US and say, well, Chinese are exactly the same. They’ll like it, they’ll like it to look the same, they’ll like the same colors. So I think the brands, whether technology or not, that did well in China, either they had a huge advantage that China just desperately needed, or they adapted and made themselves more like China. And I think for the western tech companies, they were there. So they had several problems. One, one is how do you adapt and compete with the locals? Secondly, is the Chinese government doesn’t really want to have some of these tech companies to have that influence in China. So they,
Pearl Lam: But a post stricter, right? Apple.
David Barboza: So Apple, they were okay,
Pearl Lam: Apple is retail, right?
David Barboza: Yeah. It’s also, it’s a hard product. It’s not, and they can control Apple still. Right. So they, they’re really, they were really interested in influence at that time. Does Apple have news? They’re selling at the beginning, Mac and iPhones. And it wasn’t about news, it was,
Pearl Lam: How about Microsoft? Every operating, most of the operating systems in the Chinese government is a Microsoft operating system.
David Barboza: Yes. But remember, Microsoft for a long time, including maybe up to today, did not do well in China, despite everyone adopting their software. So they were getting it for free. They were buying pirated versions. And I think for a long time Microsoft was okay with that saying, we want you almost like free, free at the beginning and get used to it, get addicted to it, use it with the government, and eventually you’ll pay. And I think Microsoft has had some success, but in many ways they never really, you know, Apple is the most successful, I would say.
Pearl Lam: Right.
David Barboza: They could, they had a product that at the beginning you couldn’t just easily copy.
Pearl Lam: Yeah.
David Barboza: And so I think when I went to China, an American brand, if it had a billion dollars in revenue in China to consumers, that was big. Apple, by the time I left, might have had 70 billion in revenue in mainland China. Something like 57 billion.
Pearl Lam: Which is, which is unheard of for foreign companies.
David Barboza: Yes. Yes. So they were, I’m pretty sure that is the most successful brand ever in the China market. And it’s one the government didn’t stop from producing and it didn’t force it into a joint venture.
Pearl Lam: But that, but that was hardware. But they also produce in China, it helps in employment.
David Barboza: Yes. They’re maybe the largest employer. I think of all the global brands in China.
Pearl Lam: And I think Tesla is, is doing very well as well.
David Barboza: Yes, that’s right. That’s right.
Pearl Lam: Is it because of the government relationship?
David Barboza: I think that helps because those are partnerships. I would say the government. It’s not that the government helps make a better brand or a better company. It’s more that the government allows you to thrive or not to thrive.
Pearl Lam: So you are saying that Facebook, Google, all those technology companies which are sharing information and messages and they don’t want this transparency.
David Barboza: That’s right. That’s right. But I would say the two things, right? Is one, can Facebook compete with WeChat and Tencent in the Chinese brands? That’s challenging. And then the other part is the government won’t allow them to compete. So with those two factors, very difficult for any company that’s related to influence or media or social things to thrive as a foreign brand in China.
Pearl Lam: But this also includes luxury brands. Some of the luxury brands, uh, I, I, I think many, many luxury brands, they want to go into China because of the consumer power.
David Barboza: Mm-Hmm.
Pearl Lam: They all want to have, uh, I mean, a bit of China.
David Barboza: Yeah.
Pearl Lam: They want the market, they want the consumption, but not many are successful.
David Barboza: Um, I wonder, Pearl, I think they, I don’t know the numbers now, but when I think about my time there with you in Shanghai, um, the luxury brands, first of all, they were all setting up shops in Shanghai and in Beijing and other places. Not crowded, because the tax on them, the cost was so high. People went to Hong Kong to buy them. And then they’d bring them back. Or they went to Tokyo or Japan. So they would bring the luxury or the US to bring it back. They would pay for their trip, the savings in the taxes and the VAT and everything. But I think the brands overall, and the, I think the brands would tell you, we look at China as a global number and not what it sells just in China. We know this is a Chinese customer buying in, in Fifth Avenue in New York or in Tokyo or in Hong Kong. And the luxury brands very hard for Chinese brands to compete with them at the top level.
**Pearl Lam
:** So is it because of the marketing budget they have?
David Barboza: Marketing. They have amazing marketing.
Pearl Lam: Because I look at like a big brand like Erdos. Erdos is a big enough brand.
David Barboza: Yep.
Pearl Lam: And then they have French, you know, they got a French designer, what is his name? Who used to be Karl Lagerfeld and works in Chanel. They were doing the whole things. They spend money on advertising.
David Barboza: Mm-Hmm.
Pearl Lam: But it only remains local.
David Barboza: Yeah.
Pearl Lam: They don’t go overseas.
David Barboza: Mm-Hmm.
Pearl Lam: It is, it is just that they don’t have the confidence to go overseas, to take, to take the market out.
David Barboza: You know, I’m gonna, I hope this doesn’t sound strange, but I think in my time in China, it is the first period or at the beginning of the period where Chinese are able to afford luxury brands and Starbucks. And so it is a status symbol too, to show I have made it. So when I went, I was like, wow, the Starbucks is so much more crowded and better run than the one in the US because it is like a luxury brand. Everyone wants to be seen there. And the luxury brands, if you can get to that level, it like changes your status in society. So this is, you know, people would say the luxury brands actually would change and they would say, make the logos bigger because the Chinese love the bigger logos. They want to show where it’s from. So I think that is the period. Maybe we’re still in China is huge. So I think the luxury brands have been among the most successful because China can’t ease. I mean, they can have knockoffs, which they do. But still, people want the real thing. They want the quality. And so if I were to look through the books and say, what are the areas of business where foreign brands succeeded really well in China? I would say auto for a while. I would say Apple and some technology, I would say luxury brands. Like really the highest quality, the stuff that you cannot easily duplicate.
Pearl Lam: Yes. And now, I mean, even in New York, I would come back from China to visit New York and there were Chinese everywhere in New York buying the luxury brands here. So that is probably one of the biggest success stories. And someone might even say pumped up the value of those luxury brands because China was the new market.
David Barboza: Absolutely. His minting, as you know, from your time in Shanghai, you’re still there in Shanghai. All everyone wanted to go to Shanghai. Everyone wanted to meet the new rich who were the new rich Chinese. What were they buying? The art world which you’re in. Right. They started buying art.
Pearl Lam: Yes. Absolutely. Another question I think is very interesting is with this US-China conflict, what you read in the western media is before everything about China is great. Today everything about China is bad. It’s like bashing China.
David Barboza: Mm-Hmm.
Pearl Lam: Is there any more objectivity in the media? Yeah. I mean it’s something that I constantly question. Yeah. Where is the objectivity in any journalism? Yeah. I mean, it’s just like newspaper media is falling in line with government policy. So I want to know your thoughts about that.
David Barboza: Yeah. This is a really tough topic, uh, for me, because I think all the time about how is China portrayed? How is the US-China relationship portrayed? Um, we’re in a polarizing period, right?
Pearl Lam: Absolutely. Not just China, but the world.
David Barboza: So I actually think in the last maybe five to 10 years, it has become so polarized and so fueled by also what’s on social media, that there’s been a tendency to go to the extremes, to attract more attention. Not just the news media, but just everyone wants to go and blare theirs. And so that sort of very complex mix of political currents around the world. Also, what’s happened between the leaders of the US and China, very different from when, when I met you in China. Right. It was, it was engagement, the era of engagement.
Pearl Lam: Yeah.
David Barboza: The era of everyone wanted to see China, the new China, the integration with the world. Chinese students come to the US, US students go to China.
Pearl Lam: Absolutely.
David Barboza: Now, all of a sudden, because of I would say many complex factors,
Pearl Lam: Every single newspaper or every single story about China is negative.
David Barboza: Mm-Hmm.
Pearl Lam: I mean, you cannot be to one extreme. To another extreme.
David Barboza: Yeah. Yeah.
Pearl Lam: I mean, it’s very sad.
David Barboza: Yeah.
Pearl Lam: Because, you know, when I see it as, oh my God, you know, this is not journalism. Journalism should be objective.
David Barboza: Mm-Hmm.
Pearl Lam: I cannot find any objectivity in all the major press.
David Barboza: Yes. And so it’s, I hate to say this, but tonight I had dinner and, and the woman sitting, sitting next to me, who’s, uh, a lawyer, she was telling me about how she feels that not about the US and China, but about the US coverage in the US, everything is negative. And then you say, and the US-China coverage. So the amount of negative coverage, and I don’t know if anyone has done a study, but it’d be interesting to see in the last five to seven years.
Pearl Lam: So how can you enhance that understanding between the west and east?
David Barboza: Yeah. I wish I had an answer, but I do, you know, I have the magazine that we run, the Wire China, and I think about every issue about can we be more fair, more open-minded, get as many there, there are no like, taboo ideas. We would interview Republicans who are hardliners or, or Chinese. If Chinese government said, we would love to interview them and say what you will say, but say it with the freedom, the forum, the discussion, the debate. We’ll ask tough questions. But we don’t want to be an opinion magazine. We want to be a fair balance.
Pearl Lam: Absolutely. That’s what journalism should be. Yeah. Should be. So, okay. So now, after all the years in China, after doing, and now now you are ongoing doing the Wire, you know, publishing the Wire China. Do you believe that there is a huge misunderstanding between the west and the east, west and China, especially the US and China?
David Barboza: Yeah. Yeah.
Pearl Lam: And, and what can be done? I mean, we always say the culture is soft power. We should use the culture to be the way of communicating.
David Barboza: Right.
Pearl Lam: Um, and I was hoping that you, as you know, two big economies, these two big economies is very essential that they can work together because the world needs to work, to work together.
David Barboza: Yeah.
Pearl Lam: And with now, you know, China’s forming another, uh, alliance with the other cities. Mm-Hmm. It’s just like, it’s getting more and more complicated.
David Barboza: Yeah.
Pearl Lam: How about if I put it in this way, I hope the two governments do their part to figure out a way to be less hostile.
David Barboza: Right. They, they have to do part, but then there’s the part that we can do citizens, journalists, or others to say, how do you not fall into the trap of one extreme or the other? Or thinking the other side is the devil or evil. Right. We know China’s not evil. Um, so you write about the people, you get different viewpoints. You don’t, you don’t pick up the same language of hate or stereotyping or most of the media is insinuating China is evil.
Pearl Lam: Look at Hollywood movies. I mean, who are the, who, you know, it’s always the baddies now, it’s either Russians or Chinese.
David Barboza: Mm-Hmm.
Pearl Lam: I don’t see many Chinese as the bad. I see Russians, sometimes Russians definitely.
David Barboza: I wonder if they’re starting to do, because, you know, for a while they actually used to say that China invested a lot in Hollywood, and they wouldn’t have them as the baddies because they need to get into the China film market.
Pearl Lam: Oh, um, yeah. True. It may have changed a little, but because, because there were a lot of investments from Alibaba, Tencent and all that. Right. But today, would the Chinese government allow that, that investment? Or would America allow these movies to be accepted by the Chinese money as well?
David Barboza: Yes. I mean, this is, that’s right.
Pearl Lam: America already now has stopped the US funds investing in China. And then next thing we have the FT, big topic saying that, oh, you know, China now has the lowest foreign investment.
David Barboza:
Mm-Hmm.
Pearl Lam: I mean, all this is negative news.
David Barboza: Yeah.
Pearl Lam: I don’t think it’s going to change anytime soon.
David Barboza: No. But if the two governments have, have to take the lead, I don’t think it’s going to come outside of the government that strong. If the two governments both decide, like turn up the dial and the people around the governments, because there’s Congress, there’s others.
Pearl Lam: But your Congress, what happened before, but your Congress, um, is very united against China from what I’ve read.
David Barboza: I wonder, I, I don’t know for sure, but I notice, I don’t notice the Democrats as hawkish as the Republicans. And by the way, our magazine is soon going to interview Nancy Pelosi.
Pearl Lam: Oh, very interesting.
David Barboza: And I want them to ask her, what, how do the Democrats see China? But you don’t hear a lot of rhetoric about China from, at least as far as I know so far, is why is it that the Republicans are much more upfront in, out front on the China issue and the Democrats are not? I don’t know the answer. Um, it’s not that Biden is soft. He’s a Democrat, is soft on China because he’s been tough. But the rhetoric,
Pearl Lam: he’s very tough actually.
David Barboza: But the rhetoric that they use is very different, uh, for the Republicans and the Democrats. And maybe they’re united in a way, but they’re not as vocal for some reason. Maybe it’s because Biden is in office, or I, I, I don’t know. But I, I think now if you go to Washington, you hear most of the rhetoric is led by the group of Republicans, and they are very hawkish. And the Democrats are kind of quiet. Like, I don’t hear Schumer say much on China. I think Schumer visited China this year. Um, he used to complain that China like manipulated its currency. I don’t hear him complain as much. So I don’t, I’m, I think they’re fairly united. But maybe it’s not as equal as you think.
Pearl Lam: I agree with you. I don’t think in any near future that these, these two relationships will be resolved. But all we can hope is it’s less harsh with each other.
David Barboza: You know, it’s interesting Pearl, because when I was there in China in 2013 or ’14, Vice President Biden visited, was in Beijing. I was in Beijing, and he met with a group of US journalists.
Pearl Lam: Oh, I remember that time. Yeah. Because they were supposed to revoke all your visas.
David Barboza: Yes, yes. And then he, he saved all your, all your working visas.
David Barboza: Yeah. Had he met Xi Jinping before? I think he had just come from meeting Xi Jinping. And we had an off-the-record session, but we talked about the visa situation, but also Vice President Biden said like he has had this relationship with Vice President Xi, they went to traveled in China, I think they went to Chengdu together. They went and had, you know, different things to eat. And they, they had the closest relationship of, of a Chinese and American sitting official in history. And that this would actually, once they, once Xi became president, which we knew, we didn’t know Biden would become president, but we’re, they knew Xi would become president, that this would be better. Right. Uh, that they would have this great. And so when Biden became president, they said, well, he’s met Xi, I don’t know, 50 times. And they have this long relationship. So this is one chance that maybe those bonds they developed long ago would pay off. And in fact, the relationship is the worst. It’s been probably since, worst since Mao.
Pearl Lam: Yeah.
David Barboza: Right. So that’s hard to explain. I think that, I think it was, it was set in motion long before. And it’s hard to unwind it.
Pearl Lam: Yeah. I thought, I mean, I don’t know America. I mean, I’m guessing through that, that must be the direction your Congress is looking at because, you know, in China, um, or even in Hong Kong. Many would say that America is doing, is, is building all obstacles to stop China to rise.
David Barboza: Mm-Hmm.
Pearl Lam: Since this podcast is about China’s rise and influence, we might as well discuss this. So China, China’s saying that America would not allow China to rise. So they set up all the blocks. Because America’s ambition is always to remain to be the world leader. What, what are your thoughts about that?
David Barboza: I don’t think I can answer that. I’m not enough of a political science or international relations person to know. But it makes sense that China would say that when they blocked Huawei, you don’t want Huawei. But I think there’s a lot of complicating factors. And that we won’t know. But in general, everywhere is talking about, you know, China supposedly would take over America like every 100 years there’s another country taking over. I think though, when I think about what, you know, we’re doing this series in The Wire China on US-China relations, and we would love to have more Chinese, but we can’t get them. And so there are a lot of former US officials talking about the relationship. So there were also on the US side, the perceptions of the cyber attacks. I don’t know if you saw it just this week.
Pearl Lam: Yes. I just read, I read the cyber attacks.
David Barboza: They said China is embedding itself into the infrastructure to be able to turn it off. They’re aligning with Russia.
Pearl Lam: They, they’re using a lot of Covid.
David Barboza: They’re the surveillance state. And they’re even putting that surveillance overseas. I think it’s not, I think it would be too simplistic to see it as the number two, one is afraid of the number two, although I don’t discount that. There is some of that. You just think of also, American companies have challengers. But if you think of our time in China, I think, you know, they, there was, because the Chinese government and the US government had a much better relationship when Xi came into office, the relationship changed dramatically. I don’t blame it all on him, but many people do. And then Trump came into office and really changed the relationship.
Pearl Lam: I think Trump started it.
David Barboza: I, and then, yeah. I think both of those leaders contributed a lot of different things that made the other side, gave the other side reason to believe that, oh, okay, they are using their technology to challenge us. We’re gonna use our technology to challenge them. Their military is doing this, our military is doing this. So actually, maybe this is just me being an old-fashioned journalist, but I would say there’s a lot of blame to go around on both sides. And I think figuring out that it’s one or the other, to me, is probably not right. It’s probably a combination of history. I don’t say the US didn’t make a lot of mistakes. Because they did. And China did too. And I think no one will ever get to the bottom of it. It’s not about assigning blame, but more about how do we get along? How do we move forward? We’re integrated already. For example, when I take my Covid tests, I look at the packages — all of them are made in China. There are no American-made Covid tests. So I need China’s Covid tests. I use equipment, things that are made in China. My wife is born in China. There is this integration, and I don’t think in 30 or 40 years they will separate. So it’s really about how well do they integrate? Do the two governments stop seeing each other in such a hostile way and blaming the other side? But, but find a path that they work together. Or at least decide how do we coexist? Because you’re not going away. I’m not going away. We’re the two largest economies.
Pearl Lam: Two egos. We should do things together. Egos. Fighting with each other. And then with Mr. Trump being the president. I think the situation would turn even worse. Because egos and egos and egos.
David Barboza: Everyone knows about the Pearl Lam dinners, right?
Pearl Lam: Yes.
David Barboza: There were these dinners, and there was this long table, and there were guests from around the world that were coming together. And I guess we thought during that period, wow, this is a place where you’ll meet interesting people. I remember sitting next to Bill Gates’ stepmother at one of the dinners. And just so many interesting people from the art world, but also from the business world, from politics, etc. And that was sort of for us, the bridge-building period, right? Where you’re just learning and there’s a sense of the international world arriving in China and there is this bridge. You were that bridge. Since then, I don’t know if you still have those dinners, but I get a sense that there are fewer foreign travelers, fewer visitors. I see fewer Chinese visiting the US. I see some universities, students, or faculty feel less safe in the US because there’s anti-China sentiment. What do you think can be done to build bridges or to repair the bridges that you help build for US-China relations?
Pearl Lam: I always like to create something like a salon. So I always have a dinner table because I’m a foodie, as you all know. So I always believe that, you know, sharing food, sharing dreams, but put people from all different areas together, whether it is culture, business, finance, or sometimes I even have writers, drag queens together, because it is, you know, what we are looking at is a contemporary culture, an international contemporary culture. And I always believe that culture is soft power and is a language that is not intimidating. It is not about power. It is not about competing or fighting for power. So that was really nice, bringing people together to understand each other because you’re creating. And truly enough, now China has much fewer foreigners, international people visiting. And I think one of the things is, initially it was very hard to get a visa, the tourist visa, but now the tourist visa is really relaxed. I mean, I have friends applying for one trip. He was given a two-year multiple-entry visa. So I think China is welcoming people back.
David Barboza: I think one of those things that you did, and that we can still do, is humanize the China story. In other words, China is not just the government or the Communist Party, right? No. There are Chinese artists, writers, documentary filmmakers, all of the people that you know, have met, have interviewed, visit their studios to see those people and hear their stories. Like when I think about my experience in China, one of the most beautiful things was not interviewing the business elites, but actually visiting the countryside, visiting the factories, or meeting the migrant workers who came to the cities and hearing their stories. What they went through, how they survived or made it somewhere. And I think also, and a lot of them, China, I hope, will listen to stories that humanize the foreigners, the westerners, and not stereotype them. When we were talking, I was thinking there’s this fear and it’s very easy to stereotype and act as if it’s China that’s doing everything wrong. It’s government policies that you may not like. It’s a part of the government that you may not like, but it should not become something about China or Asians that is very bad and dangerous, and we should call it out. Right. And we should want the stories of ordinary Chinese or talented Chinese or Chinese fashion, the people in the fashion world that you know, or like I said, the writers, the filmmakers, and also bringing those intellectuals and others.
Pearl Lam: I’m hoping that China will be open to them having the freedom they had when I was there. As you know, when we were together in Shanghai, we could say anything.
David Barboza: I think now it’s a little bit more difficult because even exhibitions, if you have a foreign artist coming to China having an exhibition, you need an exhibition license. If you have a catalog, a Chinese artist’s catalog printed abroad, you need a license. I think China itself is also in fear that all these cultural events may create unrest. The same thing I think the West is seeing China as intimidating. So I think both sides are having such fear. So it’s not, you cannot advance one and be closed off to the other, because there must be a sense of trust.
Pearl Lam: Right. Right. Yeah. I almost want to say it will be easier for me to humanize the China experience here than for you to humanize or to build bridges in China if the state says no. But I’m hoping it could be a cycle.
David Barboza: You know, I’m hoping that there are now a lot of government officials and a lot of younger generations who’ve been educated abroad. Hopefully, when they have been abroad, they actually appreciate or understand the western way of thinking and the culture. Then they would understand the West much better. Then it will bring the upper power, you know, at least to tell them, not to have this misunderstanding. That’s the only way to go through.
Pearl Lam: Right. I also think the people like yourself or others coming from China or Hong Kong or even Taiwan and other places, meeting the, not just Americans, but meeting the different stakeholders and saying not, uh, just, uh, saying you’re wrong, but talking to them about why do you believe that? And let me show you this side and let you consider this. That’s part of the education process. You want policymakers, you want academics. I know, you know, I’ve been to many conferences recently of a lot of leading China experts, scholars, policymakers. I can tell you at the conferences I’ve been to, it’s been high level and very impressive discussions. It is not like China hate or anti-China conferences. There are a lot of smart people out there thinking about how do we resolve these things? How do we bridge build bridges? How do we think about the challenges? It is a very complex problem with two very strong governments locked in. And I think a lot of people are trying to figure out how to make it so that it’s not dangerous. You don’t want more.
Pearl Lam: It’s about the willingness, the willingness to be united, the willingness to understand each other. It’s like a marriage. You have to be open. But I think this fear is too much. And I really believe that they really don’t understand each other.
David Barboza: Yeah. And it’s hard to accept because if you call it a marriage, this marriage has been going on for a long time and it got pretty solid. And then it hit a surprising bump on both sides, like unpredictable.
Pearl Lam: Yeah. So, it’s a prevention. No one would believe that Mr. Trump would become president, and no one would believe that Mr. Trump would become completely so. Right. Supported by the Tea Party. So yeah. So we never know what the next one will be, the next minute, the next second.
David Barboza: Who knows, maybe in two years we’re sitting back at these mics and actually things have changed. I hope things have changed dramatically because we could have never predicted this.
Pearl Lam: So let me ask you a final question. How do you see The Wire China in the next stage?
David Barboza: I would like The Wire China to be the publication on China’s interaction with the world. We’re not in China, we’re not writers inside China, but outside. And I would like it to be considered hard-hitting journalism, but also balanced journalism, thoughtful educational journalism. And not with an agenda or not with a sense that we tell you what to think,
but we give you ideas. And by the way, I don’t know if you know, but we have the China Books Review with Asia Society. I know. I just started it. It’s also about culture, like building bridges and saying it’s not just China business that we’re gonna tell you about or China politics, but also China culture, writers, artists, photography, lots of different things. I think if those two things work together, that’s one side of our business. The other side of our business is WireScreen, which is the data. And we want to be a great global data analytics firm. And so if we could be a great company that transforms the space of understanding how companies go global, and we could produce, starting with China, but maybe even broadening to other parts of Asia and say, we’re going to teach you and educate you and give you that bridge to the rest of the world. Asia’s just a gigantic part of the world. How can you not understand it? So you should think about their books, their culture, their history, their businesses. They’re your competitors and they’re your suppliers. So you need to understand that.
Pearl Lam: Thank you, David, for joining me. We had such a great time, and I learned so much from you, again and again.
David Barboza: Pearl, it’s been a delight. It’s like old times in Shanghai. Thanks for inviting me.
