Scholar at Work: Yuan Li on AI, Language, and How Rhetoric Shaped Reality in the Capitalist Transformation of China

“At Work” is a series that highlights Saint Mary’s faculty and staff at work in the world. Scholars, scientists, writers, and artists—we sit down together and dive deep into their latest projects.

Yuan Li has taught in the School of Economics and Business Administration for nearly a dozen years and is a member of the faculty in the Leadership, Ethics, and Law Department. She grew up in Beijing, obtained her PhD in Business Administration from the Marshall School of Business at the University of Southern California, and served as an assistant professor of Strategy and Organization at the Desautels Faculty of Management at McGill University in Montreal, Quebec, before returning to California.

Her internationally acclaimed research concerns the cultural coding and symbolic undercurrents of organizational, institutional, and technological change—which is very much at the heart of her 2024 book, China’s Capitalist Transformation: The Rhetoric that Mattered. She studies how the space and distance between words and their meaning shape reality and truth, and how the complexity of human linguistic acts holds the key to understanding humanity. Some of her current projects focus on artificial intelligence as a field, the moral and existential implications of AI, as well as AI’s impact on organizations and professional work.

We recently sat down to discuss her research and teaching—including work with leaders in SMC’s Executive Doctorate of Business Administration Program.

In the Epicenter of AI

Given this moment and where we are, let’s start off by talking about the work you’re doing connected with AI. 

We're in the Bay Area—literally in the epicenter of AI—so many of our doctoral students are fascinated by the technology and by its diffusion, and trying to understand how all kinds of different businesses, industries, and organizations can adopt and utilize AI. One of my doctoral students, Greg Zschaschel, has been researching AI in law enforcement. He has spent two years looking at how a police agency in Southern California has been adopting AI and building a cutting-edge technology hub—the Real Time Crime Center, or RTCC. He’s looking at AI innovation as a sociotechnical accomplishment achieved by human and technological agents through operational routines, cooperation patterns, and professional discretion in carrying out day-to-day work. He has been a speaker at leading professional associations for police leaders based on his research. Just this May, we delivered a panel presentation on AI and emerging technology in modern policing at the IACP Tech conference. After three years of studying in the program—with 26 months of intense ethnographic observations and extensive interviews with people at the agency—he is going to defend his dissertation later this month.

With Dr. Will Massy, who obtained his doctorate two years ago, we are looking at the emergence of the Silicon Valley AI ecosystem—the frontier labs, the infrastructure layers, the applications, as well as the discourses of ethics and responsibility of AI scientists and developers, regulators, and other key stakeholders dwelling in this ecology. I also have a project with Dr. Nate Mortkovitch, another graduate from our program, and we've been analyzing congressional hearings on AI. Back in 2018, there were only a few congressional hearings on AI at the federal level; now there are thousands of AI-related bills moving through state-level legislatures every year. We’re interested in this form of institutional talk as the metaphors and rhetorical styles of the participants play a key role in constructing what counts as responsible and ethical AI and in revealing the intersecting ideologies of interest groups. 

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As for my solo work on AI, I have been doing ethnographic research of AI field-level events for the past eight years. I hope to weave the human stories with the technological innovation, and provide an account for this new societal transformation. Occasionally I serve as a judge for AI hackathons, but most of the time I am there attending, listening, interacting, and observing. 

My colleague Mike Janes and I have both had the privilege of speaking to your students in the EDBA program about messaging and communication. What’s especially valuable about Saint Mary’s program from your perspective?

We are a pioneer in the Bay Area—and Saint Mary’s grounding in a liberal arts tradition has made our program unique. SEBA established this Executive DBA program eight years ago, and we have nurtured professionals, managers, partners, founders and business owners, presidents and CEOs, and activists and trailblazers to become thought leaders in their field. Our students are mainly from California, but also from the East Coast and elsewhere across the US.

We attract very talented people who see value in a terminal degree in business; with boundless information and accelerating changes everywhere, it is more important than ever to do independent and academically sound research that draws from and informs one’s practices. The program is rigorous, flexible, and very much tailored to every practitioner-scholar’s vision of how they want to contribute to building a better world. We meet for whole days on selected weekends on this tranquil campus, nestled in pastoral rolling hills, perfect for inquiries with undivided attention, playing with innate curiosities, and creating and testing ideas with colleagues who are equally enchanted by the art of knowing. The way one of the doctoral students puts it is this: “By coming to the EDBA program, it's like you're seeing the ones and the zeros, the code behind all of the knowledge.”

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Talk a little bit about your own Saint Mary's journey.

I journeyed to Saint Mary’s from big universities and major metropolitan cities. I fell for the charm of this close-knit community. A famous ancient Chinese poet wrote about the Peach Blossom Spring, a fabled land where people lived an idyllic life separate from the chaotic outside world for hundreds of years. Moraga is like a hidden utopia, and the College, with its Lasallian heritage and Catholic roots, nourished and resonated with my background in Confucian, Taoist, and Buddhist teachings. 

Having taught across the many different business programs, I continue to be inspired by our students. For undergraduate students, the College is like their home, and this home is certainly alive due to their presence. For them, there’s the added benefit of pursuing a liberal arts education on a campus with long arcades, the gardens, bells, and fountains, and endless grass and trees. A calm and fresh mind in harmony with nature and with an architectural design centered on spiritual growth is perfect for a young person to live their college life. 

The MBA students encounter a different side of the College: They come to campus in the evenings and on weekends, when the hustle and bustle of the day dials down. But they fill the place with their ambition and hard work, and their growth is enriched by deep lifelong bonds formed with fellow learners. 

The doctoral students bring to campus a special kind of energy. Whether they are in their 30s or 70s or anywhere in between, they share a love for intellectual renewal and mastery: Honing skills in research methods, data analysis, and academic writing, culminating in a dissertation and continued dissemination of knowledge, they fulfill a unique role in bridging the divide between academia and the real world. 

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Saint Mary’s has animated and stimulated my scholarly growth. I have always been interested in contradictions, opposites, dualism, and duality. A college tucked in an idyllic valley seems to stand in sharp contrast with the fast-paced, hypercompetitive culture of the Silicon Valley, but successful and competitive professionals in the tech world come to us, sometimes as a triple-Gael with multiple degrees from Saint Mary’s, to continue to thrive in the new economy. At times, the AI world seems to command all the world’s admiration and acceptance, yet it takes a Pope to lay out one of the most forceful critiques of AI. Tensions like this are interesting; there might be truth to tensions. 

In my view, one of the central tensions in human existence is that between what we say and what we mean. A puzzle that the great British literary theorist I.A. Richards asked is: How could people possibly say what they meant? The point is, we use signs—whether linguistic, physical, vocal, and visual artifacts, or complex events and large-scale movements—to communicate something with someone, and yet we can never do justice to the meaning being conveyed. The sign that we use inevitably refers to other signs which need further signs for their explanation. Humans are caught in the web of signs and cannot go outside of such a web for meaning. As meanings are being made and communicated, they are never the really “real” and truthfully “true,” precisely because there are always gaps, slippages, delays, and slips between the signs and their meanings. My work has a uniting drive: chasing the sign down to its deepest rabbit hole, like what Alice did in her Wonderland, and measuring the distance between nonsensical absurdness and everyday sense-making. 

Part of what I have theorized is a semiotic approach to understanding the process of institutionalization and institutional change. Institutionalization has been seen as a sociological and psychological process by which something that is external and objective to the human subject becomes taken for granted as real. I recognized that that “something” is a sign, and that sign can be partially taken for granted while a great deal of tensions, opposites, and complexities are in play behind a facade of assumed homogeneity. 

Such tensions and complexities are discussed in depth in my recent book, China’s Capitalist Transformation: The Rhetoric that Mattered. It examines the process of institutionalization in the context of introducing market institutions into a socialist central planning economy. China established the stock market, a quintessentially capitalist institution, in 1990, as a radical step in the economic reform and against resistance by ideologues at the time. By 2014, China’s stock markets had become the second largest in the world, behind the United States. Today, 250 million Chinese invest in the stock market. This is not just an economic story; it is a story of how a people have to persuade and be persuaded of a radical change—and as I see it, the semiotic artistry plays a key role in this process. This is relevant to all kinds of change, whether it’s about Chinese market reform or connected to adoption of a management innovation like Total Quality Management—or about AI.

Ideology and Rhetorical Shifts

In looking at China’s capitalist transformation, you don’t describe a straightforward shift—A to B, boom, done. You talk about malleability of terms and things being in flux. So what is the rhetoric that mattered?

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As a rhetorician and semiotician, when I study change, I see a coevolution of labels, meaning, and material practices, or what people say, mean, and do. These are indeed separate components of the “thing”—the sign—and they are decoupled. Sometimes the words, meaning, and the material forces move in the same direction; sometimes they move in opposite directions. Most times, each undergoes metamorphosis of its own: The initial label may become many labels; numerous labels may point to a single meaning; or one label can have multiple and divergent meanings; each may or may not correspond with variations in the material products or practices. So, there is no such thing as a straightforward change; just to sort out what is changing is messy! 

In the West, the widely perceived decoupling takes place when a company adopts a policy or proclaims a commitment but doesn’t actually follow through. We call it window dressing, lip service, or hypocrisy. But organizations do these so prevalently—and sometimes even genuinely—as they truly believe they are doing what they proclaimed. They believe that doing such-and-such means such-and-such; they have taken such a belief so much for granted that they are incapable of questioning otherwise. We say that the belief has been legitimized and guides policies even though the policies are decoupled from action. 

However, what China did is a “reverse decoupling,” a term coined in a recent review of my book in a leading journal in management and organization research. It aptly describes the uniqueness of China’s transformation: China’s reform leaders realized they had to unfreeze that taken-for-granted belief before they made grand and radical proclamations. So, they permitted experimentations, allowed drastic deviations, dismantled some entrenched organizational forms, all the while proclaiming allegiance to the fundamental principles of socialism. Obviously, things were contradictory, and no one was satisfied: The change was too radical, not radical enough, or completely wrong.

The institutional messaging of China’s change involved careful rhetorical maneuver. Core slogans were kept or only slightly modified; oxymoronic terms and phrases were invented that are intentionally ambiguous and polysemic; words are wrenched loose from their conventional category and placed in a different category and infused with new meaning. 

For example, phrases such as the socialist market economy merge two concepts that were deeply held as contradictory into one unifying slogan that defines the nature of China’s economy. Factories and enterprises previously run by the state and known as state-operated were then called state-owned, and then they became state-owned assets, and even state-owned capital when the ideas of ownership, assets, and capital were progressively accepted. Public ownership as the principle of China’s ownership system is stretched to include state-owned shares or state-owned equity of any publicly listed firms, including private companies. In a nutshell, realities shifted, but words only subtly changed to make it look like stability and order were maintained.

In China, it has been the elites who make the rhetorical shifts. Talk about the importance of ambiguity in language as a way of creating a space for possibility of meaning.

In the West, we tend to prefer speaking in a clear and straightforward manner. Good writings are unambiguous and concise. English is probably a little more capable of doing that. Chinese use suggestive and ambiguous rhetoric quite a lot, and the Chinese writings tend to be abstruse and allusive. Communication is not just sharing information or an instrument for something else; think about language as a way of life and a way of relating to each other. The quality and depth of relationship depend on the aesthetics of everyday language, colorful and rhematic by references to allegories, poetry, and historical idioms. Indirectness, allusiveness, subtlety, and irony—complex rhetorical styles are perhaps reflective of the nuances and multidimensionality of human connection.  

Such notions can be found in the West; strategic ambiguity is a concept widely studied in the management literature. Leaders use ambiguous terms strategically, so that different—even opposing—audiences interpret the same words to mean different things. Companies face pressures from all kinds of different stakeholders—community, government, consumers, employees, and shareholders—who may have very different ideas of what they ought to do. So companies learn to speak in an equivocal way in order to gain support and move on.

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But does the cat catch mice?

One of the quotes that you use as a touchstone for understanding the capitalist transformation in China is Deng Xiaoping's cat theory: “It doesn’t matter if a cat is black or white, if it catches mice it’s a good cat.”

That's a very famous saying of Deng Xiaoping, and it sums up the kind of pragmatic spirit of the Chinese reform—which was directly influenced by US philosophers including John Dewey and Charles Sanders Peirce. An eminent Chinese scholar and educator studied with Dewey at Columbia University in the 1910s and brought pragmatist philosophy to China. Deng Xiaoping's pragmatism argued, in essence: Let’s not talk about ideology—Is a white cat good or a black cat good? Let's just talk about whether they can catch a mouse.

Deng didn’t invent this saying; it is a popular proverb in his hometown in the Sichuan province. According to the folk custom, people would buy cats in the market to bring home to catch mice. The sellers would put cats in a bag, and the buyers could only draw a cat from the bag without seeing what the cat looked like. It was done this way to ensure all cats would be sold, regardless of whether the buyers liked their colors or not. Deng was sending a strong signal to the ideologues: That's not our game now. Yet he uses indirect language with a great deal of humor. This practical way of going about life, based on the wisdom of customs, makes phrases like the socialist market economy intuitive and tangible to the people. Yet because it is not giving concrete orders or setting rules, it leaves the space wide open for interpretation and action. 

As you noted, China's transformation is in contrast to the shock therapy of states that had been occupied by the Soviet Union or part of the Warsaw Pact. With China, this was a much more gradual transformation—one that is still ongoing.

There wasn't a consensus that the gradual approach would be successful. In the early years of the reform, many Chinese intellectuals looked up to the shock therapy approach. It is consistent, coherent, and as humans, we want that. However, it turns out that moving to boldly proclaimed system designs where all pieces fit together may underestimate the difficulties of change. Changes that are piecemeal, fragmented, incremental, and cyclical can be unclear and trigger cognitive dissonance, but they allow for ongoing adjustment and local discretion. 

China’s transformation is an effort to translate institutional innovations originated in the West within the Chinese context. Many new labels were imported, along with new concepts, ideals, rules, and practices. But it was important for people to rub those labels and ideals against the Chinese condition, which took time and involved intense negotiations. Numerous societal-wide controversies broke out amongst elites who were contentious, acrimonious, and with waxing and waning influences. What resulted were hodgepodges of mixed labels and ideas that didn’t belong to pre-existing categories, but gave rise to local adaptations and hybrid forms of organizations. 

One of the points you make is that China as a country is essentially run like a company. And companies are not run democratically.

Exactly. How the Chinese leaders managed this transformation can serve as a useful case for any company trying to lead a very difficult and radical change—including communication and messaging to divided and polarized audiences internal and external to the organization, and careful orchestration of the discordance between symbols and their meaning. The deliberate distance between rhetoric and reality accommodates and balances divergent and competing interests under extreme uncertainty and ambiguity. 

I call the Chinese transformation “loosely coupled change”—symbols and materialities retain their independence and are only weakly connected and partially synchronized. Organization science tells us that loosely coupled organizations enjoy distinct advantages, such as agility and intelligence at the edges. In loosely coupled change, leaders confronting ideological contradictions seek to dismantle the seemingly unchangeable beliefs and values without using radical vocabularies. Instead, leaders build ironies in messaging using novel linguistic formulations that drive a wedge between words and their taken-for-granted interpretations. Since people also see the environment as ironic and paradoxical, and understand the irony of the leadership, such collective sense of ironies may prevent total collapse and even help maintain continuity during the course of change. 

Many new labels were imported, along with new concepts, ideals, rules, and practices… What resulted were hodgepodges of mixed labels and ideas that didn’t belong to pre-existing categories, but gave rise to local adaptations and hybrid forms of organizations.

Corporations are indeed run undemocratically, and corporate leaders can take a page from China’s playbook. What was counterintuitive was that China was perhaps less authoritarian during the reform years than a typical corporate hierarchy. There would not have been hundreds of millions of entrepreneurs and globally competitive industries if blind submission to authority had been the norm. Instead, we see rapid feedback loops between the top and the bottom, multilateral accountability across hierarchical and lateral levels, and leaders engaging extensively in rhetorical construction of their legitimate authority. 

One of the other points that you make is that for years scholars tried to fit China into other existing models—and assess that, for example, capitalism won’t work in China because it doesn't have the same kind of religious and cultural heritage as the West. They saw China as an anomaly—and yet its importance is tremendous, given its scale.

I grew up in China and lived and witnessed part of the transformation. This is a unique civilization and has transformed multiple times in the past thousands of years, and is still transforming. The three philosophical traditions of Confucianism, Taoism, and Buddhism blend together to shape the worldview of a Chinese person. That definitely provides a lot of capacity for ambiguity, uncertainty, and tolerance for the unsettledness of meaning.  

In management and leadership studies, researchers say that the Chinese may have what is called a “paradox mindset,” the idea that this and that are opposites, but they're both true. And they are interrelated and evolving and eventually becoming their opposite, the yin and the yang in every area of life. A paradox mindset doesn’t mean anything goes; on the contrary, Chinese were extremely attentive to naming and defining things. This may seem at odds with the equivocal style of communication, but I see it as an acceptance of impermanence and non-action. Acknowledging things are impermanent reduces hubris and forces scrutiny of the senses. Valuing non-action increases capacity for indeterminacy and malleability. 

Part of China’s heritage is coded in its distinct language: ideographic rather than phonographic, primacy in the written language as opposed to the spoken language, systematic absence of pronouns and subjectless sentences…I learned about the distinctiveness of the Chinese language when I went to college at Tsinghua University in Beijing. The university was built on suburban land previously part of an Imperial garden. Initially built as a preparatory school for sending students to the US, Tsinghua is now known as the top STEM university in China. However, it also has a long and cherished tradition in the humanities. More than a hundred years ago, distinguished liberal arts educators at Tsinghua had studied in the US or Europe and sought to master both Chinese and Western learnings and bridge the two cultures. My education was very much shaped by that tradition. It was important that you understand both humanities and natural sciences and that you draw from both to grow into a whole person. 

So it is only natural that I approach AI from a humanist perspective. I ponder AI’s implications for civilization and humanity. Pope Leo XIV’s Magnifica Humanitas gives great clarity on how AI amplifies problems of the technocratic paradigm and the concentration of digital power, exacerbating new forms of slavery and colonialism. He is concerned about safeguarding our humanity. This, I believe, should be the priority of spiritual leaders and educators.  

At the same time, looming over AI development in the United States is a sense that the US needs to lead the way in developing models, because if it doesn't, China will.

Absolutely—the metaphor is that of an arms race. That’s definitely prevalent in the congressional hearings we have analyzed, and in the everyday narrative. But I don’t know how much of that rhetoric is a way to justify spending and investment. This linguistic framing thrives on old tropes and conditions people to certain unproductive attitudes and sentiments. 

I would like to encourage using novel rhetoric and thinking about unconventional imaginaries. To me, AI versus humans is a bigger question to contend with than US versus China. Every religion or spiritual tradition has offered great insights into what humanity means. But humans have committed countless atrocities against other humans. So, merely aligning AI values with human values does not seem reassuring to me. If, given the development of the AI technologies, one day AI will indeed far surpass humans and exercise dominance over humans, what can humans do now to increase our chance of survival when that moment comes? 

Pope Leo XIV’s call to “disarm AI” is a wake-up call. But how can we disarm a technology when it is more intelligent and capable than us? I think we have to recognize how valuable the human linguistic act is: the act, the intent around it, the subtext and context, the audience, and the response are what make frontier models work. We have to go back to language, to all languages and systems of meanings in this human world, including the culture of the US and that of China. We examine the semiotic chains that enable physical acts of coercive force, often enabled by unjustified forms of authority within organizations and hierarchical relationships within society. We figure out the semiotic mechanisms that contain, defuse, or otherwise nullify those chains. We train LLMs to be higher moral agents, far more civilized, so that they wouldn’t use their superior force against humans. Let’s hope that the US and China can partner on that effort. Let’s hope that human language can save humanity.