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In a《High-End Interview》 exclusive with Nobel laureate in economics and American economist Thomas Sargent, he has continued to visit China to explore the secrets behind China’s rapid development.

Sargent said that the key to making all this happen is that decisions by China’s leadership have sparked vitality, creativity, entrepreneurship, and research capabilities. He praised China’s closely connected five-year plans. Sargent said that China values education and promotes scientific development. He said that today, China is at the leading position in every field of technology.

**Wang Guan: **Today, our guest is Thomas Sargent, a Nobel Prize–winning economist and an American economist. For many years, he has visited China in succession, believing that China’s development is nothing short of a miracle. What kind of institutional logic and cultural genes lie behind this miracle? And how does his rational expectations theory resonate with China’s five-year plans? Let’s find the answers together in this conversation.

**Wang Guan: **Professor Sargent, we are honored to invite you to this exclusive interview with CCTV’s《High-End Interview》. You have come to China many times to participate in seminars and exchanges. In your observation, what new development directions and trends in China have you seen?

**Sargent: **I’m 82 years old this year. When I was 40, China was still a very poor country. And now, in the Chinese cities I visit, many have already moved to the forefront of the world. For such a large country to achieve development at this scale in such a short time is unprecedented in history and, in the view of economists, amounts to a miracle.

**Wang Guan: **In your view, what factors should be credited for this miracle? You have said that China has achieved the fastest growth in human history in both living standards and gross domestic product. What do you think China did right to reach its current level of development?

**Sargent: **As an American, I have firsthand experience. For decades, China has systematically insisted on opening up to the outside world, conducting trade in goods and services, cross-border free trade, opening ports, and connecting border regions—these are key to China’s success. So you can understand why I have firsthand experience, because my country, the United States, has launched a trade war, which is not good for the U.S. Some of the things China is doing correctly, the U.S. is not doing. For example, opening up markets, promoting scientific development, placing importance on learning, and valuing higher education: professors and students alike all embrace a spirit of science. These are all elements of success. The key to making all this possible is that decisions by China’s leadership have sparked vitality, creativity, entrepreneurship, and research capabilities. Today, China is at the leading position in all technological fields—precisely these decisions have made all this possible. In addition, the achievements of today’s China, and the cultivation of these excellent Chinese scientists and engineers, also come from themselves—the vitality and characteristics of the Chinese people. The United States needs to learn from China. China got these things right. History repeatedly proves that countries that insist on opening up, unleash entrepreneurial spirit, have stable order, rules, and a good business environment can always achieve sustained development.

**Wang Guan: **China places very strong emphasis on education in disciplines such as science, technology, engineering, and mathematics. Do you think this is the right choice?

**Sargent: **Yes. The quality of Chinese students left the deepest impression on me. Whether they are graduate students or undergraduates I have come into contact with, they all have talent and receive excellent education. For example, a student I recently met came to chat with me in my office. He has been educated in China all along; now he is studying for a PhD in Shenzhen. He is a world-class talent, fully trained in China. His math is especially good. When it comes to being especially good at math, it’s not that he is a mathematician—rather, math is like his mother tongue. When he discusses math, he is even more fluent than I am speaking English. Math is like second nature to him, which undoubtedly gives him a kind of power. It requires extremely high talent, but talent alone is not enough; it is the whole system that has cultivated him.

Thomas Sargent, one of the outstanding scholars in global macroeconomic research. In 2011, together with Christopher Sims, he jointly won the Nobel Prize in Economic Sciences for “empirical research on causal relationships in macroeconomics.” His rational expectations theory has laid a solid foundation for the development of modern macroeconomics and econometrics, and has had a profound impact on policy making and economic analysis.

Sargent not only enjoys great prestige in academia, but also cooperates with Chinese counterparts to train economics talent. In 2024, Sargent received the China Government Friendship Award.

**Wang Guan: **Professor, let’s talk about your research field. You are known for your work on rational expectations. You proposed that if we adopt aggressive fiscal policy and an easy monetary policy, it may give rise to unexpected consequences—stagflation. You also emphasized that policy credibility and long-term stability are crucial, and that the public’s expectations cannot be based solely on short-term policy manipulation. Could you please elaborate?

**Sargent: **You understand it very well. That’s exactly the kind of content I hope U.S. government officials will study and remember. The essence of expectations theory is forecasting the future, and its mathematical theory was created during World War II by scholars such as Wiener. With these tools, we learn that if you implement monetary and fiscal policy, government policy, or tax policy in a dynamic economic environment—what should you do? It’s about keeping commitments and following stable rules. That is the answer the math provides. There was a U.S. entrepreneur who complained to me about the uncertainty brought by Trump’s policies. He said, “You tell me the rules and I can adapt to those rules. But if you change every day without telling me in advance, I have no idea what I should do.” The United States currently faces fiscal problems. We have a social security system and a public healthcare system, and both have very high costs. When you look at all the plans and the figures on paper, you find that they contradict each other, even violating basic arithmetic logic—for example, the social security system will collapse in eight years. That’s the reality. Through mathematical calculations, you can infer that in the future the United States will either have to experience partial debt default or raise taxes, which would break promises. Politicians may create the appearance of problems that can’t be solved during their time in office, but the problems ultimately have to be solved. Do ordinary people understand this? In the United States, the answer is no. There isn’t high levels of popularization of knowledge in science, technology, engineering, or mathematics. There was previously a U.S. poll asking, “What does 1/2 divided by 1/4 equal?” The most common answer turned out to be, “It’s a trick question; you can’t divide a fraction by a fraction.” Of course you can divide. But what it reflects is that Americans’ mathematical ability is insufficient.

**Wang Guan: **Based on your rational expectations theory, what practical and feasible advice would you give to current central bank governors and finance ministers around the world?

**Sargent: **In fact, the way China’s central bank operates is even more to the point than what I would say. I believe there needs to be a stable and easy-to-understand set of rule systems. The policies formulated must ensure that government tax revenues are sufficient to cover expenditures, and at the same time improve various financial regulations. All of the measures they have already announced basically align with the framework we agree on, and their rules remain consistent over the long term.

**Wang Guan: **Speaking of long-term consistent rules, China’s economic planning uses the five-year plan as the core framework. We’ve just completed the targets and tasks of the “14th Five-Year Plan,” and now the “15th Five-Year Plan” has been introduced to guide the direction of China’s social and economic development. How do you view this approach?

**Sargent: **China’s five-year plans are interconnected. Five years isn’t short—why five years rather than ten? Because the distant future is full of unknowns, and that’s realistic. We need to leave room for adjustment, but China’s five-year planning can achieve close, step-by-step alignment.

**Wang Guan: **It’s planning at the strategic level.

**Sargent: **That’s right—macro-level strategy. My understanding is that it forms a kind of momentum, guiding social resources to tilt toward the target direction. If you ask me what I think, I believe these plans are surely formulated by very wise people after deep consideration. How much detail will they provide? Is it comprehensive or just sets the big direction? That requires achieving a balance, and that’s what leaves the deepest impression on me.

**Wang Guan: **When it comes to policy consistency and predictability, the Chinese government formulates green development plans and promotes a shift in the way development happens toward sustainability. Today, the number of electric vehicles produced in China has hit a record, and they have entered markets in many countries worldwide. China is currently the world’s largest producer of lithium batteries. Since you’ve visited many Chinese cities, you should be able to feel that the cities are quite quiet, because what runs on the streets are new energy vehicles.

**Sargent: **I’ve witnessed this process. Twelve years ago, I visited Beijing. The air quality and the condition of vehicles were completely different from today—it’s close to a miracle in terms of change. But unfortunately, in the United States, the solar panels and electric vehicles produced in China could have helped the U.S. solve environmental issues, yet the U.S. government imposed tariffs on these products. This exposes their hypocrisy: these are products the U.S. should have imported.

**Wang Guan: **On the streets of Washington, you don’t see China’s electric vehicles?

**Sargent: **I can’t even buy them. I especially want to buy my friend’s Huawei cars, but I just can’t. The Biden administration has imposed a 100% tariff on China’s electric vehicles, so it’s not only the Republican Party— the U.S. government has been obstructing all along.

Since the new U.S. government took power, its protectionist tendencies in trade have become increasingly serious. The U.S. has imposed tariffs on all countries, causing the supply chain to be artificially severed, and the global trade environment has undergone drastic changes.

**Wang Guan: **As an economist, when you see political and geopolitical factors interfering with the healthy development of the economy, and you see politicians feeding their voters viewpoints that are unverified, lacking in basis, and untested, what do you think?

**Sargent: **Most economists who deserve respect support free trade and open borders, and support mutual exchange. U.S. politicians say that we need to impose tariffs; we need to bring manufacturing jobs back to the United States. At the same time, we also need to use tariffs to significantly increase fiscal revenue. These statements contradict each other.

**Wang Guan: **Will manufacturing return to the United States? Back to the U.S.?

**Sargent: **No. That line of argument is misleading. First, politicians claim that they want to bring back high-quality manufacturing jobs that existed in the U.S. four years ago. But four years ago, whether it was U.S. factories or Chinese factories, they were very different from today. I’ve visited current U.S. factories and also toured many factories in China. It’s astonishing. In these Chinese factories, there are almost no people—the robots are doing the work. China is leading in this field. Even if manufacturing were to flow to the U.S., it wouldn’t create a large number of jobs, so that kind of claim is misleading. But so far, there is no evidence that manufacturing is actually flowing back to the U.S. Closing the U.S. market with extremely high tariffs cannot bring manufacturing jobs back to the U.S. This is not a free-market economy. When you ask me what China got right, I think China has established a rule-based system. Many countries are trying to do this: building a framework in which the government sets rules, indicates the general direction, and then lets people play to their strengths within those rules, competing fully to create a kind of fair competition environment. That is what economists advocate and what most people want. Not like in a certain family, where a father comes in and asks whether to give you an allowance depends entirely on how he feels today. People like an orderly environment.

**Wang Guan: **Where are we heading?

**Sargent: **I don’t know the exact answer, but I can share a bit of perspective. In some of the most important areas, there is still a lot of free trade. For instance, I myself am involved. I’m a developer working on open-source computing. Together with my friends, we build related projects. This situation isn’t rare. We write computer code and release it for free to the world—this means tariffs can’t be levied; zero tariffs. Cases like this can be found everywhere across the globe. China has many top talents in artificial intelligence, so now there is the so-called “artificial intelligence competition,” and everyone is watching who will win. And one part of the reasons the U.S. is restricting China’s chips is that it doesn’t want other countries to take the lead in artificial intelligence. But do you know that some of the mathematical theories that artificial intelligence relies on are publicly shared, and the relevant research papers can be found everywhere? I’m using China’s AI model DeepSeek, which is excellent. It inspires me, and I will also share my own thoughts to form two-way exchange. This is also a kind of “free trade”—scientists, mathematicians, and engineers all advocate this way. This isn’t some trade secret. Just like how knowledge about using algebra and geometry better can’t be prevented from spreading. The spread of scientific ideas is itself a good thing; it’s a driving force for collaboration, and this trend will continue. For example, five years ago, autonomous driving cars were still extremely challenging engineering and computer problems, but now my friend is already driving a Huawei autonomous driving car. It solves extremely complex technical problems through sensors. Looking back at achievements from the past five to ten years, it’s not hard to imagine what kinds of breakthroughs will come next. Moreover, whether China has the fastest chips isn’t important, because in my view China will ultimately produce chips that are fast enough. So I think fully “decoupling” is impossible. In many fields such as engineering, chemistry, and physics, China is already leading, including in pure science fields like physics. Near Guangzhou, China, a top-tier facility is being built by the Chinese government: the world’s top neutrino experimental laboratory. In my view, when China carries out research like this, it means researchers in other countries will be eager to learn about the relevant progress. That is the force that prevents “decoupling.” That’s my view.

**Wang Guan: **In your view, these rule-like factors, including scientific laws and economic laws, will naturally bring together various kinds of resources—such as talent, goods, and ideas……

**Sargent: **That’s a force.

**Wang Guan: **This force is unbreakable, right?

**Sargent: **Yes. In addition, history can also teach us a lot. History records the gains and losses of prosperity and decline, and those past experiences worth remembering can give us many lessons. One lesson the U.S. should learn is why U.S. technology has been able to lead the world over the past seven or eight decades: the core reason is that during World War II, we brought in large numbers of scientists from Europe, who were driven out by the Nazis at the time. Besides the field of technology, many other fields such as economics also had many top talents coming from Austria and Germany. After they were expelled from Europe and came to the U.S., the U.S. was able to rise quickly in areas such as physics and chemistry. We used this to build top universities. But recently, because U.S. universities have been affected, many scientists born in other countries want to leave the U.S. That clearly overlooks important lessons from history.

**Wang Guan: **Professor Sargent, China’s R&D spending in 2025 will account for 2.8% of its GDP. According to the “2025 Global Innovation Index Report” released by the World Intellectual Property Organization, China ranks 10th among 139 economies globally, including high-end manufacturing. Do you think China is becoming an innovation powerhouse?

**Sargent: **China already is. I’ve seen that. Innovation lies in creativity—not just chips, but also clever algorithms, and the ability to use mathematics and engineering. What truly drives these achievements to land in reality is human intelligence. Look at the data. One example is a paper I’m currently writing, and its co-authors are two Chinese scholars. They are both very smart, and their technical level is far beyond mine. One of them is only half my age, and the other is one-third my age. Their energy and wisdom impress me greatly. Looking back at my level at their age, I definitely couldn’t reach that. Maybe it’s just a coincidence that they happen to be Chinese, but I truly can feel the huge potential here.

**Wang Guan: **The “2025 Global Development Report” shows that in 2024, the developing countries in the Global South—countries at the stage of development—achieved astonishing growth of 4.28%, far exceeding developed economies’ 1.8%. Today, developing countries in the Global South account for more than 60% of the world’s trade growth. For you, what does the Global South mean? In the economic realm, what role do you think the Global South will play?

**Sargent: **This is a wonderful question. In my view, economic development isn’t just numbers. It has to show up in people’s everyday lives: what they can get, and whether they can escape poverty. Take China, which I have witnessed in my lifetime. Escaping poverty has brought unprecedented opportunities for development, enabling people to give full play to their talents. That is the miracle. Beyond numbers, some countries are borrowing China’s experience and striving to achieve their own development. If you transform the numbers into concrete scenarios, it’s change one family at a time: children get opportunities they didn’t have before. My experience in China has made a deep impression on me. I met a student—he is a friend’s student—who has now obtained a PhD in economics and also found a job. His mother is illiterate, and she may not fully understand all of this, but she is certainly proud of him. He comes from a small village; most of his family members haven’t gone to school, and only his sister can read. Just think about how his life has changed. I connect the data you mentioned and the scenes I’ve seen, and perhaps similar things are happening elsewhere too, such as in Thailand. Economic development creates more opportunities for ordinary people.

**Wang Guan: **This is a wonderful interpretation, with a very humanistic perspective. You have visited many places in China, and you also work with Chinese institutions in higher education cooperation in Guangdong Shenzhen. In the process of China’s modernization, what aspects have left a deep impression on you?

**Sargent: **I’ve been to different Chinese cities—like Shenzhen and Beijing. I’ve been to many places besides. I’ve also been to Hangzhou, and I’ve visited many Chinese airports. This morning, at the airport, I told my friend who was taking me around, “This place is so beautiful.” And then he told me, “This is still the old airport.” So the city infrastructure and the beauty of the buildings truly left a deep impression on me, but what moved me even more was the people here.

**Wang Guan: **In what ways?

**Sargent: **First, they have built these high-rise buildings and created the city’s appearance. Also, as I walk on the street, I feel that people here are so friendly. Once, I was walking alone at Shenzhen airport. Seeing that I was an elderly person, seven or eight people along the way主动ly came up to ask if I needed help. They were all kind and friendly.

**Wang Guan: **They don’t know who you are, and they don’t know you’re a Nobel Prize winner.

**Sargent: **They just saw an elderly person.

**Wang Guan: **That’s great. Professor Sargent, for those young economists, scientists, and mathematicians who admire you, what advice would you give them?

**Sargent: **My wife often says that nobody wants to become another me. I would say: be yourself, and do what you like. Love the work you do, and make sure it is meaningful to you, to your family, and to society. But most importantly, you have to genuinely enjoy it. So find the field you’re good at and that you love. The logic is very simple: just go ahead and do it. It’s not about blindly following others; it’s about figuring out what you truly want to do. If you find something that you both enjoy and are good at, it will make you feel a lot of fun. This is my advice.

**Wang Guan: **That’s great advice. As the first person to hear your valuable guidance, I feel very fortunate. Professor Sargent, thank you very much for taking your precious time to accept our interview.

**Sargent: **Thank you for your patient listening.

After receiving the exclusive interview, Nobel laureate in economics Sargent wrote an inscription for the program：

In the interview, Professor Sargent praised China’s insistence on opening up to the outside world, formulating stable policies, focusing on education, and promoting scientific and technological innovation. He also said that in an era full of uncertainty, stable rules, credible commitments, and open cooperation are the foundation for reducing risk and strengthening confidence.

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