Taking a quick look at the YC S21 offering that is posted here - it seems all this capital is still mostly based on software that stimulates more consuming.
Startup seeks to raise funding or generate profits as quickly as possible -> VCs invest and hope for 50x return within 10 years -> Liquidity event may take startup public where they focus on quarterly profit
This is a system of private funding that generates maximum profits within a 5-10 year horizon while China and its public funding and actions is focusing on generating foundational returns and innovation that will last well beyond that 10 year horizon. The US approach of subsidies for loss leaders and laissez faire when it comes to regulation is kicking the can and optimized to pump out millionares/billionaires that can provide outsized returns to people in the market (employees/founders/congress/entrepreneurs) but less for people on the sideline.
Yup, consume now, profit some this quarter. Nevermind putting in the effort to invent new technologies that could profit and dominate for decades.
It is exactly the myopic financialist's approach. It works great for a while, juicing artificial growth. Meanwhile it starves the real growth engines, so when it stops working, there is no hope of recovery before failure (but the finance wizards have by then moved on).
Normally this applies at the scale of companies, but here it applies on the scale of nations or societies.
