Post by Jesse Friedlander

HOMO ECONOMICUS OCCIDENTUS Alibaba's AI lab allegedly created over 20,000 fraudulent accounts to extract IP from Anthropic's frontier models. Chinese firms have allegedly cloned Japan's premium Benihoppe strawberry across 44,000 hectares — eight times Japan's entire strawberry area. These aren't isolated incidents; they are symptoms of a systematic and decades-long struggle. In Part II of my series on Chinese state capitalism, I argue that the Western commerce framework — the operating system most of us internalized in business school — contains five structural blind spots that make it incapable of accurately pricing China risk. Those blind spots are: assuming a predictable regulatory and operating environment; treating assets as fixed rather than fluid; competing against Chinese firms rather than the Chinese state; believing global brand equity creates durable moats; and allowing market size potential to override honest risk assessment. The consequences are visible in the data: Volkswagen's China profits collapsed from $5 billion annually to under $500 million today, after €50 billion in cumulative investment transferred its engineering knowledge to the domestic automotive ecosystem that now threatens it globally. The deepest asymmetry isn't technological or financial — it's temporal: Western CEOs operate on a 3-to-5-year return horizon while Chinese industrial policy executes on a 30-to-50-year strategic arc, meaning a Western company can win every quarterly battle and still lose the strategic war. If you advise companies with China exposure, manage capital with emerging market risk, or simply want to understand why the world's most sophisticated corporations keep arriving at the same outcome in China, this piece is for you — link in comments. 👇 https://lnkd.in/eurvbhk7