Peter Alexander has lived and worked in China for 30 years, and he puts the country's local-government debt at $10 trillion to $15 trillion.
The Western argument about China is usually whether it collapses or takes over. He says the question is wrong on both ends, and that the answer to almost everything is that China refuses to choose.
"China is not on the precipice of collapse nor is China on the verge of assuming hegemonic global power."
Alexander runs Z-Ben Advisors out of Shanghai, selling market intelligence on China's asset-management industry to institutions, and Adam Taggart introduced him as the person Luke Gromen credits for everything he knows about China.
The full interview is covered here so you can skip it. 102 minutes of audio, 28 minutes of reading.
Here are the 18 arguments that matter.
👤 Guest: Peter Alexander, CEO and founder of Z-Ben Advisors, who has lived and worked in China for 30 years and sells market intelligence on the country's asset-management industry to institutions
🎙️ Host: Adam Taggart, founder of Thoughtful Money
📰 Published: 15 September 2026 on YouTube (Thoughtful Money)
🔴 YouTube | 🟢 Spotify | 🟣 Apple Podcasts | ⏱️ 1 hr 42 min | ✅ Time saved: 74 min
Key Takeaways
China's strategy is to refuse the choice other powers had to make
A blue-water navy and trans-Asian rail, coal and renewables, because it does not know which will pay
The objective is resilience, not growth, and Beijing has been preparing for a G7 crisis for four or five years
Rare earths were a distraction from the export that actually matters, which is intermediate goods
China does not build alliances, it builds one-on-one relationships, and that is why a grand Western coalition would fail
Airbus offers a price, someone calls Boeing, Boeing improves it
The thing that would prove the rebalancing is working has not happened yet
Household consumption is about 30% of the Chinese economy against about 70% in the US
Local-government debt of $10 trillion to $15 trillion is the drag, and only about $2 trillion has been restructured
Beijing would rather Iran's clerics stayed in power, because it has done this before in Iraq
China is buying gold as a reserve asset while conceding the dollar's role as reserve currency
He says the publicly announced purchases have accelerated over the past six months or so
Every reassurance that China is years behind has a short shelf life
Two or three years behind on AI, now neck and neck
1. The Cat Theory
Taggart opened on an essay Alexander had just published called the cat theory of geopolitics, and asked him to read the current moment through it.
The starting point is a quote from Deng Xiaoping about 40 years ago that a white cat or a black cat does not matter as long as it catches mice. The conventional reading is that it was about economic reform — capitalist or socialist, whichever produces growth — and Alexander said that reading is correct but superficial.
His own reading is that the color of the cat is the message, not the mice. "But what he was indicating was we're going to follow what appear to be contradictory approaches because we don't know which one's going to work. So if we follow different approaches, we improve the probability of catching the mice."
The clearest case is the oldest argument in geopolitics. Alfred Thayer Mahan said power comes from a navy and control of trade routes; Halford Mackinder said it comes from control of the Asian heartland. Britain and the United States had no access to the Asian landmass, so they had to pick sea power. China built a blue-water navy and pipelines and railways across the landmass at the same time.
Energy is the same pattern. China is the world's largest consumer of coal and the world's largest builder of renewable capacity, and Alexander said the usual industry line that "a molecule is a molecule" does not go far enough for Beijing. "Their argument is an electron is an electron. Whatever powers the system."
He said China is ideologically indifferent, and that its objective is resilience rather than growth. Taggart summarized it back as a means-independent approach: 50 cats of 50 different breeds if that is what the goal takes.
2. Different, Not Nuanced
Asked for the adjectives that would help a Western reader think about China correctly, Alexander started by rejecting the word most people reach for.
His first word is "different," and he is explicit that it is not the same as "nuanced." "In fact, I'm not the biggest fan of the word nuance because for me, that is the ultimate copout because you have individuals that don't want to take a side." "So, it's not nuance, it's just different. And you need to know those differences."
He rejected the cliché that China thinks in centuries. His version is a high time preference — Beijing is willing to be more patient than the other side, which is a different claim. "And again, you don't need to outrun the bear. You just need to outrun the other guy."
Adaptable is the second adjective. There are macro trends the leadership identifies and thinks through, but no strategic plan treated as gospel.
Methodical is the third, and it comes with a limit. They stick to the script on a handful of hard red lines in domestic and foreign policy, and improvise elsewhere.
The fourth is shared sacrifice. Alexander said Xi Jinping's line about eating bitterness was read in the West as a leadership indifferent to ordinary people, and that he reads it instead as a warning about a period of adjustment the population would be asked to absorb. He added that he remembers a version of that in the United States growing up and does not see it now. Taggart's parallel was the greatest generation, victory gardens and rationing.
3. Outlast, Not Overcome
Taggart put the American fear directly — that China wants to expand and that in two decades everyone works for Chinese overlords — and asked whether the real strategy is to outlast rather than overcome.
Alexander said that since the party's founding in 1949 there has been no ambition in Beijing to be a global hegemon the way Britain and the United States were. What exists is a desire to be hegemonic regionally in Asia-Pacific, driven mostly by wanting the United States to leave the region.
The live belief he reports from Beijing is that events in the G7 nations will produce an economic crisis on the scale of 2008-09. He was careful to mark it as a belief rather than a fact, and said he pushes back on it locally because he thinks the United States is a resilient and tenacious country.
That belief is where the resilience program comes from, and it has been running four or five years: energy resilience, distribution resilience through rail lines across the heartland, and above all bilateral relationships.
4. One Country at a Time
The section of the conversation Alexander flagged as the most important difference between China and the G7 is how each builds relationships abroad.
Europe, Japan, the United States and Canada work through blocs — NATO, the EU, AUKUS. China works one-on-one. Beijing will tell a counterpart in London that it understands the special relationship with Washington and wants a separate, ordinary one of its own, then repeat that country by country.
He traced the method to Sun Tzu and dividing an opponent. Once enough countries individually want access to China, Beijing can play the bilateral relationships off against each other.
His standing example is aircraft. Airbus comes in with a deal, someone in China picks up the phone to Boeing and asks whether it can do better — commercial on its face and a foreign-policy tool underneath.
He set that against the growing Washington consensus he called "allied scale": a grand coalition of like-minded democracies that together could out-compete China. His verdict is that it sounds good on paper and that Beijing would welcome it, because all China would then need to do is pick off a few members with special access. "And the edifice will crumble upon itself."
He does think an alliance would work on a smaller scale, and named the one nobody is building: the United States, Canada and Mexico as a common market. Adding Europeans, Japan and Australia is where it gets complicated.
He contrasted all of this with the American demand that countries choose. As he framed the US position, you are either with us or you are with the tariffs — put to countries for which China is the most important trading partner.
5. Just Another Tuesday
Asked how Beijing is reacting to the second Trump administration's trade pressure, Alexander said the honest answer is less dramatic than people want.
"the Chinese for them, it's just another Tuesday. There's a bit of an eye roll." He described a sense of awe at what Washington is doing, but not the admiring kind.
He dismissed the reading that the Iran conflict was a five-dimensional chess move against China, while allowing that taking Venezuelan and Iranian oil off the table was not a small thing.
Venezuela, he thinks, was outside what Beijing anticipated. Iran was not. The issue had been live for a year, with chatter about mowing the lawn back in 2025.
That is what the fourth-quarter 2025 oil buying was. China accelerated crude imports aggressively, headlines speculated about stockpiling ahead of a move on Taiwan, and Alexander's reading is that Beijing was buying while prices were depressed against a US move on Iran it considered likely.
His on-the-ground marker for the energy shift: far more than half the cars on the road in Shanghai are now electric, a change that has been under way for years and that he says accelerated over the last six months.
6. The Rare-Earth McGuffin
Taggart asked what else belongs on the list of China tail risks — events inside Beijing's own control that move global markets. Alexander started by demoting the one everybody watched.
Asked about those risks, he said that for him, "rare earths were the ultimate McGuffin." They sucked the air out of the room for over a year.
What rare earths actually represent, on his account, is an input to American manufacturing — defense or technology, it does not matter — and the bigger fact behind them is that China's largest export is now intermediate goods, components that go into other countries' manufacturing.
While attention was on rare earths, the oil market moved. By his account China cut imports from the Middle East sharply — "Because they reduced by nearly 10 million barrels of oil a day their imports from the Middle East" — and commentators asked whether China had just saved the oil market.
His explanation is the stockpile, not diplomacy. The Chinese bought a great deal of oil in advance at a low price, did not want to buy at a high one, and worked down reserves instead. He summarized it as buy low, don't buy high.
The consequence is a story now running that China matters more to the oil market than OPEC, which he treats as evidence that people have only just woken up to the tail risk.
7. The Two-Day DeepSeek Memory
The second tail risk is what happens when a Chinese model lands, and Alexander's complaint is about the West's attention span rather than the models.
When Kimi K3 appeared, he was inundated with emails asking whether it was as significant as it looked. His answer was a question: "Where were you last February when DeepSeek came out?"
His argument is that DeepSeek was the telegraph and everyone missed it. "The DeepSeek moment occurred. There was a two-day flare up where people got concerned about it and then it was forgotten."
Kimi K3 then produced the same cycle — excitement, concern, and, he said, it has already been forgotten.
8. China Shock 2.0 and 3.0
The third tail risk is the one Washington and Brussels have started naming, and Alexander thinks the naming is late rather than early.
"China 2.0 is Europe having woken up to the realization that their manufacturing base predominantly in Germany is now being replaced by China." Specialty chemicals and precision parts — the mainstay of the German economy — now made in China at similar quality and better prices.
His objection is that this is China shock 1.0 repeated one rung up the value chain, and that the first one — the hollowing out of the American heartland through the 1990s and 2000s — should have made it predictable. Taggart's view, given Europe's record, was hubris and willful blindness.
So he tells groups to plan for China shock 3.0 now: chips and the tech stack, currently made in South Korea, Japan, Taiwan and the United States, being made in China too. He was straight about the current state of it — the quality is not great and the yields are not there.
What he wants stopped is the reassurance that comes with it. His example is ASML, whose lithography equipment Taiwan depends on, and the line that China is 15 years behind. "People need to stop saying that because every time you hear the Chinese are so far behind, China was two or three years behind in AI, now they're neck and neck."
9. Banned, Not Beaten
The conversation turned to the long list of Chinese products Americans cannot buy, and what that absence is actually protecting.
Chinese electric cars are kept out of the United States, and the reason given in the conversation was that they would crater the market on price while matching or beating what is on American roads.
The example Alexander said concerned him most is recent. Huawei and Xiaomi announced their new phones two days before Apple's foldable launched — the first time Chinese manufacturers have gone first, where in past years they announced a week or two after Apple. He reads it as confidence that they have the product people want.
The list runs past phones: the best drones in the world, routers, and a range of goods he says are better and cheaper, all excluded under the heading of national security.
On robotics he was blunt: "I've told people whatever you think of the EV market China's going to do in humanoid robotics what it did in EVs just faster."
His test case for the national-security framing is TikTok, which he thinks was about advertising revenue rather than security. "It was Facebook and Google and Snapchat all of the American dominating social media platforms. They were getting decimated by TikTok in terms of ad revenue."
The drone version is the one he named outright: a California company, Skydio, losing globally to DJI, and a bill in Congress he said is jokingly called the Skydio Act that took DJI drones off the American market. His objection is the choice — regulatory capture in Washington rather than building a better product.
What he says he would rather see is Chinese manufacturers allowed to build in the United States and force American companies to compete, on the grounds that the American consumer currently gets a more expensive product and an inferior one.
10. What Apple Did Instead
Apple became the worked example, and this is the passage Alexander himself flagged as a soapbox.
"Apple, what have they innovated in the last six years?" Taggart's answer was the foldable phone, a format that has been on sale in Asia for more than a decade.
Alexander's charge is that Apple financialized the cash instead of reinvesting it — buybacks and dividends rather than capital spending — and that its capital expenditure has gone nowhere.
The question he says Apple should have asked itself in 2018, when the trade war began, was why not bring manufacturing home while the money was there. He knows of one facility being built in Texas.
He gave the reason he thinks it did not happen, and the number he thinks it turns on: a phone he already considers absurd at $2,000 would have to sell at about $4,000 if it were built in the United States.
On intellectual-property theft he thinks executives are grandstanding, while conceding the theft is real. "IP theft has been going on for as long as I've been here, 30 years. Adam, at some point, if IP theft's going on, why are you still manufacturing there?"
He does not think cheap labor is the answer to that question any more. What holds manufacturing in China is the hub: suppliers and assembly close enough together that when the final manufacturer changes something, the supply chain moves with it. Taggart restated it as an efficient ecosystem rather than a wage story, and Alexander agreed.
The human-capital point came from Taggart — that China has graduated a very large number of engineers and PhDs relative to the United States — and the answer was that this was a national priority pursued over a long enough period to work.
11. Where China Is Weak
Taggart asked, given how favorable the conversation had been, what is actually handicapping China. Alexander said there is a lot.
The economy is still soft, and the old drivers — property, infrastructure and exports — have collapsed into one. "1.2, 1.3, 1.4 trillion US dollars in a trade surplus is not sustainable." Whether the transition away from that works is, he said, still a very open question.
The debt overhang sits mostly at the local level rather than the center, a legacy of how China ran itself until around 2017. "And that local government debt, it's $10 to $15 trillion. It's significant."
The restructuring is real but partial: bonds issued to retire off-balance-sheet debt and bring it back on balance sheet at a lower cost. He put the total done at something like $2 trillion over the last three or four years, while warning the data is unclear.
Demographics is the broad heading, and he finds the two complaints hard to hold together — China is said to be growing old before it grew rich, and at the same time highly educated young people cannot find the jobs they trained for.
He sees Chinese AI aimed at efficiency rather than at a general superintelligence — "China's approach to AI is how do we make things more efficient, right?" — and particularly at efficiency in manufacturing. The groups he has spoken to say displaced staff were moved elsewhere in the company, which he said he cannot verify, and he accepted that a manufacturing economy deploying AI for efficiency will eventually need fewer people.
The counterargument raised in the conversation was that robots do not buy sneakers, which points at the consumption problem rather than the labor one.
The imbalance is the number to watch. Household consumption is about 30% of the Chinese economy against roughly 70% in the United States, and the test offered for whether the rebalancing is working was policy aimed squarely at household consumption: "for me the point in which I will have increased confidence that it's working is when you start to begin seeing real policy out of Beijing that is specifically directed towards households consumption."
Vouchers do not count. Money to buy a washing machine or a car is not sustainable, and Alexander was clear about the constraint: "China does not believe in stimulus checks. They do not believe in a welfare state." There is a social safety net, in his view, but not one a Western reader would recognize as robust.
He put the debt-driven model between roughly 1986 and 2017 and said it went too far. Taggart raised the ghost cities as the unproductive end of it. Alexander's answer was that over-supplied housing is still being worked through, that every large economy has entitlement and indebtedness problems, and that China should get credit for recognizing its own.
He refused to call the outcome. Nobody, including him, is in a position to say whether the transition works.
12. Pick China on the Board
Taggart's recurring game-of-risk question — pick the country you would start the next 40 years with — got an immediate answer.
Alexander picked China, and said his reasoning is physical rather than financial or paper.
His frame is Paul Kennedy's The Rise and Fall of the Great Powers, and the specific analogy is Britain and Germany before the First World War. Germany under Bismarck built a high-growth manufacturing base while Britain, holding the colonies, vacated its manufacturing ecosystem — and when Britain needed to fight, it had to go to the United States, then the world's manufacturing base.
The boxes he counts for China are the landmass and the sea together, ethnic homogeneity, and manufacturing. On the first, the United States can only play the sea card because it has no access to the Eurasian landmass. On the second, a largely Han population means less of the ethnic and religious infighting that creates internal strife.
He tied the South China Sea directly to the first point: China is hemmed in on the east, and access to blue water is why it has been aggressive there. Taiwan, in his reading, is about the first island chain rather than about democracy.
The one thing he would not bet on is the coalition around China. It is a loose collection of like-minded nations running on the enemy of my enemy, and he said Russia and China historically do not have the best relationship and could flare up again.
"China for me is the country that has the most boxes checked to be able to both be resilient and grow in my lifetime."
13. No Social Credit Score
The longest stretch of the interview away from markets is Alexander's account of what daily life in China looks like, and he used it to knock down two Western beliefs.
On mood, he said people are broadly content rather than euphoric. "For the most part, people are happy with their lot in life." The energy of the earlier boom is gone, and property is the reason: owners have not lost money, but the paper gains are smaller than they were.
That is his explanation for soft household spending over the past five years or so — a change in mindset caused by smaller paper gains rather than losses.
The geography of activity has changed since before the pandemic. Beijing, Shanghai and Hong Kong used to be the gauntlet; the energy has diffused into large second-tier cities — Hangzhou, where a lot of the AI companies are, Xi'an, Chongqing and Shenzhen. People who once left those cities for the big three have gone home to start businesses.
On nationalism, he named exactly one subject where it runs hot: Taiwan. He called it a red line not just for the party but for every Chinese person. Beyond that, he said, people want to get on with their day.
He rejected the social-credit-score story outright, and named where he keeps meeting it — a viral Jordan Peterson video about scores, cameras and fines for jaywalking that he said was sent to him more times than he can recall. His reply was that "number one, there's no social credit score," and that nobody is being fined for jaywalking.
He did not claim there is free speech. Amplify criticism of the government on social media and it gets censored, and the public security bureau may visit. "I've known people that have made comments on social media here where their social media accounts been closed but they didn't get thrown in jail and their social media account was opened after 30 days."
"So, there is a certain line that people know they shouldn't really cross." Private political conversation over dinner, in his experience, is animated and unremarkable.
His anecdote about Western corporate risk management is the passage that carries the point. On a call with a client's New York staff he was asked how safe Shanghai is, answered that you can get a bowl of noodles at three in the morning, and was met with silence — the question had been about being detained. "I promise you, you're not that important. You just are not that important."
14. Iran, Oil and Iraq
The lightning round opened on Iran, where Taggart's framing was that China built the world's biggest oil stockpiles and has been riding out high prices on them.
Alexander's first point is about temperament: China works hard to remove uncertainty in any form, and Iran and Ukraine are both uncertainty. He assumes back-channel activity between the parties, and distinguishes what Beijing says publicly, which is for face, from what it does privately.
His tell was the mediator. When Islamabad emerged as the channel months ago, he said, his office laughed — Pakistan is where China's thumb sits, because it is the most important trading partner.
Beijing wants the conflict resolved so Iranian oil flows to it again. But the second half is the part he thinks is underrated: "But I do believe that Beijing would rather see the mullahs stay in power than to see a change in leadership."
The precedent he pointed to is Iraq after the war 20 years ago. "China moved in aggressively and today China effectively controls or at least dominates the petroleum infrastructure throughout Iraq."
What the clerics would want in exchange is regime stability, and he says there is only one supplier. "And there's no group in the world that's got a turnkey for regime stability than Beijing." His read is that this is part of why the Trump administration has been more reluctant to push as far as it could.
Taggart's summary, which Alexander accepted, was that the prize is the reconstruction contracts and a position in Iran like the one China holds in Iraq — leaving China dominant in the region without a shot fired.
15. 30 Reactors Under Way
The energy segment is mostly the host's setup, and it is worth separating what each of them brought to it.
Taggart supplied the comparison and said he has shown the chart on his channel before: China's electrical production capacity against America's is close to a horizontal line against a vertical one, with China somewhere around three times the capacity. He added that the United States has belatedly got the memo and that bending the curve will take a long time.
Taggart also framed the split he wanted explained — the United States ahead on compute and data centers, China ahead on reactors — and the AI race as a winner-takes-all contest decided by who has the cheapest, most plentiful electrons.
Alexander's answer on energy was that nothing changes: coal, petroleum and alternatives, with the bias now toward what he called an electric state.
He said electrification of transport has already cut Chinese demand for imported oil, and that he has seen no evidence for the demand-destruction reading of the import decline. The open question is what the steady state is: "The question really becomes is it 12 million barrels a day that they need? Is it 4 million? Or is it somewhere in between? My guess is it's probably lower than what it was in the past."
On nuclear, Alexander said there are something like 30 stations under construction in China at the moment. Taggart's answer was that the American number is zero, and Alexander agreed.
He kept returning to method over headline: "It's always for me the direction of travel that matters rather than a specific" — the reason, he said, he wrote the cat-theory essay instead of another piece about BRICS or AI.
Taggart's own contribution to the section was an analogy: the Chinese economy as the Death Star in Return of the Jedi, revealed as already fully operational on the electric side just as the oil flow is cut. Alexander's response was that the progress is real but the need for fossil fuels does not go away, because a lot of production facilities cannot run on electricity.
16. Compute and Open Weights
Asked directly about China's position in the AI race, Alexander went through the compute problem first, then the distribution advantage he thinks is being ignored.
China is sourcing compute three ways: indigenous chips that are not great but work in volume, secondary supply of American chips, and offshore data centers. On the second: "They're smuggling, or as the Americans like to say, they have secondary sources of Nvidia chips and Micron and whatever else they need." On the third, he named Malaysia and Singapore.
None of that is close to enough, which is why local governments are throwing money at Huawei, CXMT and smaller firms to expand capacity. Compute, he said, is the limiting factor for China.
The results are arriving anyway — he named Kimi K3 and DeepSeek V4 — and the strategic difference is the licence. Once open weights are released, anyone in the world can take them and tweak them.
His comparison for the American labs is an old one. "I look at OpenAI and Anthropic and these are walled gardens." He said it reminds him of Steve Case's AOL, a walled garden for reaching the internet that fell over once people worked out they could have the whole internet instead.
On safety he is a cynic about motive. He reads the American push to slow down as companies that have noticed the competition and want regulatory capture, and said China's counter-offer is to do safety multilaterally.
The two competing bodies, in his telling: "The United States has this thing called Pax Silica and China has this thing called the World AI Cooperation Organization. Unfortunately, the acronym is Waco."
The distribution claim is the one with commercial teeth. He said Chinese models have already diffused through Brazil, Africa and other markets, and that China has the market share there. Taggart put it back to him as VHS against Betamax, and added the irony he sees in a communist state running the open-source play while the beacon of free markets runs the walled gardens.
Taggart also gave the demand-side version he says he hears inside America: frontier models for the genuinely heavy lifting, free Chinese models for the 80% to 90% that is routine.
Alexander relayed Jensen Huang's warning that refusing to engage with China produces a bifurcated technology stack, and said he was not wrong — but came down on the other side anyway. "I'm glad the United States did not allow for mass exporting of chips to China." His reasoning is that China set out in 2018 to become independent of the American stack, and shipping it the chips would only have got it there faster.
17. Lame Duck Until 2028
With a Xi-Trump summit coming, Taggart asked how the relationship actually looks from Beijing.
"So right now the Chinese are looking at the Trump administration from what I can tell from my interactions as a lame duck."
He said the idea he floated six months ago — a so-called fourth communiqué in which Washington and Beijing divide up the world — is clearly off the table now.
His read is that Beijing sees an administration in trouble on the global stage, and is watching sovereign yields across the G7 like everyone else. He made the rates point as a joke with an edge: "I find it interesting that I think it was Donald Trump himself who said that America should have the lowest interest rates because we are the greatest economy in the world. By that measure, China's the greatest economy in the world." China has the lowest rates, and companies and countries are raising renminbi there.
He gave Xi credit for the trip itself, calling Washington the viper's nest, and noted Xi has not been to the capital in more than 10 years — San Francisco and Mar-a-Lago in 2017, but not Washington.
His expectations for the summit are low. He would like to see something concrete, such as a battery plant, but said no topic in Washington carries more bipartisan agreement: "There is really no one topic in Washington that has the most bipartisan consensus than China bad, right?"
The date he would actually watch is the APEC summit in Shenzhen, which he put in November, with the possibility of a Xi-Putin meeting he compared to Potsdam or Yalta.
The bottom line on the relationship: "Beijing is looking and saying we just need to plan until 2028 and see where things go." Taggart's summary was outlast mode — polite, and letting the clock run out.
18. Gold as the Reserve Asset
Asked to close on investment themes, Alexander was careful to say he does not make recommendations, then gave one theme he does hold.
He thinks a small China allocation is appropriate, the way a small allocation to anything is, and noted it is the world's second-largest economy. He pointed at China ETFs as the accessible route while warning there are many of them and they differ.
He argued that market capitalization is not the motivating number for Chinese companies — market share and competitive ecosystems are: "If we have a market cap of hundred billion or 10 billion, we don't need a trillion dollar company. We're fine if we're where we are."
The theme he says people are missing is gold, and the distinction he draws is between the reserve currency and the reserve asset. On his account China is building an alternative to the dollar system as a reserve asset, predominantly based on gold, while conceding that the dollar remains the reserve currency — with renminbi surpluses cycled into gold.
The evidence he uses is the disclosure itself: "we can see China continues to publicly announce how much gold they're pulling in month after month and it's accelerated over the last six months or so."
Asked whether he would take the over or the under on the reported number, he declined to guess. "I would just say direction of travel is what matters." If the real figure is higher than the official one, as many speculate, that does not change his signal: "China has made it very clear in their public filings. We are buying gold and we're buying more gold every month and more gold the following month."
The commodity version of the same argument: "China uses its foreign currency reserves and buys real things." Iron ore, petroleum, copper, phosphate. Asked whether those are feeding the manufacturing cycle or building strategic stockpiles the way the oil reserve does, his answer was both.
Bonus Insights
Taggart credited Luke Gromen with putting Alexander on his radar, quoting him as saying that everything he has learned about China he learned from Alexander. Taggart also flagged a panel Alexander had recorded with Gromen and Darius Dale the previous day, which he said had passed 100,000 views on YouTube in its first 24 hours. Alexander's own note on it was that the two agreed far more than most people would expect.
Alexander's advice to Washington was to get on a plane. He said he is favorably disposed to China because of what he has seen, that his purpose in saying so is to press the American establishment to do better, and that decision-makers should come and use the high-speed rail and the phones and judge for themselves. He also offered to host Taggart, who has not been to mainland China since 1994, for an on-the-ground filmed interview.
The resource he pointed readers to is a long essay on Z-Ben's homepage called "How Did We Get Here?", written in January, which he described as about 50 pages covering how the US-China rivalry arrived where it is between 1996 and today, including what he called forced errors by American policymakers during the unipolar moment.
Taggart raised Michael Every of Rabobank's argument that the era of globalization was the historical aberration and that the world is returning to mercantilism, as the setup for the game-of-risk question.
The melting-pot exchange. Taggart's aside that America's melting pot is not melting well drew Alexander's memory of the metaphor being changed to a salad bowl while he was growing up — a tomato stays a tomato, an olive stays an olive — and his view that this was not how it was supposed to work.
Alexander also said gold and China is a subject he could talk about for hours, and Taggart asked for it as the topic of the next interview.
Alexander's bottom line is that China is neither collapsing nor winning, that it is buying optionality rather than committing to a strategy, and that the one position he holds with confidence is that Beijing is accumulating gold as an alternative reserve asset while leaving the dollar's role as reserve currency alone.
Products, Companies & Tools Mentioned
Z-Ben Advisors (Alexander's firm, selling market intelligence on China's asset-management industry from Shanghai)
Boeing and Airbus (His standing example of how Beijing plays bilateral relationships off each other on price)
ASML (The lithography supplier he quotes as saying "the Chinese are 15 years behind us" — a reassurance he says people should stop repeating)
Huawei and Xiaomi (Announced their new phones two days before Apple's foldable — the first time Chinese makers have gone first)
Apple (His case study in financialization: buybacks and dividends instead of capital spending, and a $2,000 phone he says would be about $4,000 if built in the US)
DJI and Skydio (The drone pair behind what he called the Skydio Act — regulatory capture rather than a better product)
TikTok, Facebook, Google and Snapchat (His test case for the national-security framing: he says the fight was over advertising revenue)
Nvidia and Micron (The chips China gets through what he calls secondary sources)
CXMT (One of the domestic chipmakers local governments are funding to expand capacity)
DeepSeek and Kimi (The two Chinese model releases he says the West noticed for two days each and then forgot)
OpenAI and Anthropic (The walled gardens he compares to AOL, against China's open weights)
AOL (Steve Case's walled garden for reaching the internet, his analogy for closed model providers)
China ETFs (The accessible route to a small China allocation, with the warning that there are many of them and they are all different)
Books & Resources Mentioned
The Rise and Fall of the Great Powers – Paul Kennedy (The seminal work behind his preference for physical over financial power)
The Art of War – Sun Tzu (Where he traces China's bilateral, divide-and-conquer approach to foreign relations)
How Did We Get Here? – Peter Alexander (A roughly 50-page essay on Z-Ben's homepage, written in January, on how the US-China rivalry reached this point from 1996)
Pax Silica (The American AI and supply-chain initiative he sets against China's World AI Cooperation Organization)
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