John Arnold Profile picture
Jan 19 20 tweets 4 min read Read on X
Just returned from my first trip to China, mostly looking at the energy and robotics industries. Fascinating. Random observations, both business and general, below...
1/x
The speed to add manufacturing capacity is stunning. Permitting takes weeks. A factory making sophisticated equipment is built in 12 months. An auto plant took 16 months from groundbreaking to first production. Slack in labor market makes it easy to staff and flex employment.
2/x
The US and China have significantly decoupled since early 2020. The # of flights between the two countries is down roughly 70%. Two long-term residents I spoke with said the # of American expats is down 50-75% from the peak. The # of Americans studying in China is down ≈90%.
3/x
Universities and government research labs are at least as tightly woven into the startup ecosystem as in the US, and in many cases more so. Their mission and incentive structures explicitly include commercialization, not just research.
4/x
China awards 1.3 million engineering undergraduate degrees each year vs 130,000 in the US.
5/x
Intense competition leads to widespread overcapacity and low profitability across many industries. Once an industry is deemed strategic, provincial governments deploy subsidies and other supports as they compete to turn local firms into hubs and capture the associated jobs.
6/x
I don't know if Chinese manufacturers will ever make money but I came away not wanting to invest in any manufacturing business in the rest of the world.
7/x
Here's (one reason) why high-speed rail works in China and not the US. These population density maps are roughly the same scale. 1.3 billion people live east of the line in China. 220 million live east of the line in the US.
8/x Image
You see American fast food everywhere. There are 12k KFCs (vs 4k in the US), 6k McDonalds, 7k Starbucks, 4k Pizza Huts.
9/x
Tier 2-4 cities are very quiet. Few cars on the road. Don't see many people. Factory workers live in dorms on campus. Other workers are in gated compounds that are self-contained neighborhoods. Food delivery and e-commerce have replaced dining out and shopping.
10/x
China is one of only handful of countries with highly educated workforce, robust access to capital, and strong entrepreneurial culture. Only the US and China meet those conditions and have scale.
11/x
As industries become more complex, scale matters more than ever. Large countries can fund frontier R&D, support dense talent markets, amortize infrastructure, and create robust supply chains. Few countries can be cost competitive in high value-add manufacturing.
12/x
While the supply chain on transmission and grid infrastructure is backed up in the US, there is spare capacity in China. Anecdotally, data center developers are increasingly buying Chinese equipment. Half of the electrical transformers at one factory were heading to the US. There does seem to be confusion and contradictory messages from the US government and local regulators about what Chinese equipment is allowed on our grid. Best I can tell, it's ok if at the edge of the grid but not part of the main transmission and generation backbone.
13/x
A security check including bag x-ray is required to enter subway stations, at least in major cities. It's interesting that most Western countries that are more dangerous do not do this, presumably for speed and cost.
14/x
After all these years, Tiananmen Square is still a police state. ID checks are required to exit nearby subway stations. A reservation is needed just to walk the square. Bag X-rays & metal detectors are mandatory even hundreds of yards away. Police everywhere on a random day.
15/x
There were fewer cranes than I expected, presumably reflecting the collapse of China's real estate market.
16/x
Lower density cities still had most housing in high-rise residential buildings, usually built in complexes of 10-50 identical buildings. I guess it's the most practical way to house people in a city growing quickly but the aesthetic damage is real.
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Can we please bring platform screen doors to subways in the US?
18/x Image
Interesting that robotic coffee shops are taking off in China first even though wages are much higher in the US.
19/x Image
I learned a ton about how China works, which coincidentally is the name of the book I'm reading now that details the history and significant role the government has played in promoting growth. It feels the US is moving more towards that model than vice versa these days.
20/20

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More from @johnarnold

Dec 13, 2025
Have a child going through the selective college admissions process for the first time and the system seems designed specifically to maximize stress for student and parents alike. The process has gotten worse in recent years and will will keep getting worse until it breaks.
1/n
Step 1: Ask a 17-year-old to take a long list of colleges they would be happy to attend and become emotionally committed to just one school for Early Decision because the acceptance rate is higher in the first round, even though odds are they will be rejected.
2/n
If rejected, Step 2: Ask the same teenager to choose a new school from the long list of colleges they’d be happy to attend and become emotionally committed to it through ED2, even though the odds of rejection are even higher than in Step 1.
3/n
Read 8 tweets
Sep 23, 2025
Energy costs have tracked inflation historically. That stability is now at risk after scores of projects across every source were cancelled over past decade due to permitting. Without reform, we will not have affordable & reliable energy. A partial list of projects affected:
🧵
Energy projects delayed/cancelled since 2015
Part 1: Nat gas pipelines
1) Atlantic Coast: 1.5 bcf/d, WV-->NC, cancelled
2) Mountain Valley: 2 bcf/d, WV-->VA, delayed
3) PennEast: 1 bcf/d, PA-->NJ, cancelled
4) Constitution: .65 bcf/d, PA-->NY, suspended
Energy projects delayed/cancelled since 2015
Part 2: Transmission Lines
1) New England Clean Connect: 1.2 GW, Quebec<->ME, cancelled
2) Plains & Eastern: 3.5 GW, OK<->TN, cancelled
3) Grain Belt: 5 GW, KS<->IN, suspended
4) TransWest Express: 3 GW, WY<->NV, delayed
Read 11 tweets
Jul 26, 2025
Gambling addiction is a slow and quiet killer. You know if someone close to you drinks too much. You don't know if they have a gambling problem. People are embarrassed by their losses. Suicide from gambling debts is rarely directly associated with online sports betting.
12/n
Robinhood now offers sports betting as if it is another form of investing. You can buy a contract on the app that pays out based on a sports outcome as easily as buying stock. It is another step to conflating the concepts of short-term gambling and long-term investing.
13/n
A bill proposed in MA is designed to limit the harms of online gaming. The Better Health Act would:
= enact higher tax rate on betting revenue to generate more public health funds
- prohibit in-game gambling advertising
- prohibit live betting and most prop bets
- limit deceptive ads
- ban staff incentives that compensate VIP hosts based on volume of bets
- require affordability checks and daily limit
- mandate anonymized data-sharing with researchers
- commission research into links between problem gambling and mental health outcomes
14/n
Read 4 tweets
Jul 26, 2025
We and @aibm_org hosted an event yesterday about the evidence base and policy options of online sports betting and issued a call for new research. As states continue to legalize, it's important they understand the full ramifications. A thread of some of what I learned.
1/n🧵
Since SCOTUS struck down the federal ban in 2018, 30 states rushed to legalize online sports betting. Many viewed the new revenue source as too tempting to ignore, especially after pandemic hit. Now, some are starting to question if they need more guardrails on the industry.
2/n
State policy was largely designed around an industry of straight wagers like point spread and total points with a gap of 2-3+ hours between bet and outcome. But the online version shifted players to much more frequent bets (in-game) and worse odds (parlays and props).
3/n
Read 15 tweets
Mar 11, 2025
Each year, Michael Cembalest at JPM publishes a fantastic, unbiased summary of the state of energy and climate. I find his data invaluable for staying grounded in the facts. Here are 20 slides that stood out to me. His data, my commentary. Link to the report at the end.
1/x
The speed at which solar has won market share for power generation is likely unprecedented for any fuel in history.
2/x Image
Despite making up 62% of added generation capacity in 2023, solar had <6% market share of global electricity generation. This is the stock vs flow problem that makes decarbonization so hard.
3/x Image
Read 23 tweets
Jan 9, 2025
Many social programs are presented as investments that will pay for themselves via better outcomes in the future. But is it true? What if govt funding was tied to outcomes rather than inputs? We @Arnold_Ventures and others tested that model in a first of its kind project. 1/12
Cognitive behavioral therapy (CBT) is a frequently used tool to promote better behavior in many areas. There is promising evidence that it works to reduce recividism. Roca, a leading service provider, worked with Mass General to develop a program for Massachusetts to test. 2/12
Rather than the state paying for an experimental program, or it being fully funded by philanthropy, Third Sector created a novel structure:
1) Govt contracts with a service provider and defines the outcome of interest
2) Socially minded investors fund the program delivery

3/12
Read 12 tweets

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