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- [00:06]
A
Hi, I'm Santi Ruiz, and you're listening to Statecraft. Today I'm talking to Dan Wong. Dan has a new book out this week. It's called Breakneck China's Quest to Engineer the Future. Breakneck is a great read. I really enjoyed it. Dan spent the better part of the last decade in China and published a yearly letter summarizing his thoughts, his explorations, his eating, and so on. Breakneck is a lot like those letters. It goes all over the place. And this conversation also goes a lot of places. America's overabundance of lawyers, whether our ruling class should be all economists, stylish propaganda, the book collections of Yale professors, iPhone, manufacturing, forced sterilization, and planting cassava. One of the things I like most about Dan's work is that he's comfortable looking at China through multiple, very different lenses. Parts of Breakneck explicitly use China as a lens to think about the US about our own political culture, our institutions. Other parts of the book try very hard to take China on its own terms without reading our own culture into it. This is a long episode, one of the longest we've recorded. I think it's worth it. Tell me if you think the same. As a reminder, we publish the edited transcripts of all episodes at www.statecraft.pub. we spend a lot of time cleaning up these transcripts, adding notes and links, and so on. So if you like the podcast but you'd really prefer to read, you can. Lastly, if you like Statecraft, consider liking and subscribing on whatever podcast platform you listen to us to. We could use the love. Okay, without further ado, here's Dan. Dan Wong, thank you for joining Statecraft.
- [01:43]
B
It's my pleasure to be here, Santi.
- [01:44]
A
It's really good to have you. I want to start with this. How did your plan for Breakneck change over time? Like, how similarly did it turn out to your initial conception of the book?
- [01:53]
B
When I moved to China at the start of 2017, when Trump had just entered the White House for the first time, threatening to launch a trade war, I'd always been thinking, what is the right way to write about China? And as Trump's trade war morphed into a tech war that focused substantially on semiconductors and then AI and drones, I was thinking about whether I should write a book about China's technology development, especially focused on made in China 2025, which is this big industrial plan that I went to China in substantial part to study, this big Beijing desire to dominate key industries of the future. Then, as I was thinking more about this project as I actually wrote a lot of research notes for financial clients on semiconductors and the tech war. And I thought maybe no one actually wants to read a book about China and semiconductors. And so I try to broaden out my scope a little bit to think more about the US Side of the equation, given that I'm a Canadian who spent about equal parts of my life between China as well as the US So I really try to bring in the American dimension, too.
- [03:07]
A
Yeah, that is one of the things I liked most about the book, frankly, is that I felt like you're very explicit that one of the things you can get out of really paying attention to China is a better sense of America. And you're very conscious of the ways that you can do that and the ways that that framing can go wrong. Before we get into the actual subject, there's one more thing I wanted to ask you about book writing, which is you wrote a little note about the writing of the book. And I'll quote you here. You said that you became a better reader by writing this book because you learn to detect when writers succumb to laziness. And you say there are parts of every book where writers cover a topic they have little interest in out of some obligation. Is this true about every book? And if so, which part of breakneck does it describe that there's a topic you have little interest in?
- [03:48]
B
Oh, no. I'm afraid I just sprang a trap on myself that you activated. Santi. Hoisted by my own petard, as they would say.
- [03:57]
A
Something like that.
- [03:59]
B
I think that certainly it is really difficult to write a book that the writer totally wants to write, because writing is necessarily a solitary activity. But the best writers bring in some collaborative process through the editing into making this a book that makes broader appeal, makes more sense in ways that do improve the book. And I think that I am very pro editors. I have a great editor. I hired my own editor. I really try to work collaboratively and think well with my editors.
- [04:41]
A
You're really. I just want to interrupt and say you're really buttering me up here as a. My job title is editor. So I'm just. I'm eating this up right now. Dan.
- [04:48]
B
The greatest editor I know, Santi Ruiz. I think I would have been privileged to have worked with Santi for this book. But I recognize that the writer isn't always necessarily his or her own best guide into the best piece of writing. We know from a lot of fiction, in particular serialized fiction. Book one starts out great. Book seven has collapsed. And so it is better to have some sense of a guide in actually writing. And I am willing to listen. When someone tells me that this part of Chinese history, though it is potted, needs to be recapped, I try to minimize that as much as possible. I try to enliven some of the description of important things like the Cultural Revolution or the Great Leap Forward, but I try to also keep that to a minimum. And one other bit I'll say about this is that I try to make my book shorter rather than longer. And so if you take a look at my book page length, it's 288 pages. I did my best to keep it under 300 pages, and I much wanted to undershoot rather than overshoot. And so I didn't want to write a lengthy tome. I hope this is something that people can read and say, I wish I had a lot more, Dan.
- [06:00]
A
Well, I do want a lot more, Dan. And I thought the book was tremendously readable. I did not detect that the section that you describe in every book where you were phoning it in. Let's get to the actual material here. The main thesis of Breakneck China is an engineering state is your term, and the US is a lawyerly society. Those two terms, engineering state and lawyerly society, are your two poles. I'm not going to spend a ton of time on this thesis, but just to give listeners a flavor, I wonder if you could talk a bit about how this difference between engineering state and lawyerly society shows up in the leaders of our respective countries or the leadership classes of China and the U.S. very.
- [06:37]
B
Briefly, the U.S. is a lawyerly society because it has been lawyerly since the founding. Something like the Declaration of Independence reads like a legal document. Most of the founding fathers practiced law at some point. Among the first 16 US presidents from Washington to Lincoln, all but three of them had practiced law at some point. And even in the present moment, there are still way too many lawyers in the White House as well as the U.S. congress. So 47 U.S. senators with law degrees, one U.S. senator with anything resembling an engineering degree. Quite different in China, where there was a very conscious effort after 1980 by Deng Xiaoping to say Mao messed up. He messed up big time. He was a warlord and he was a poet, but he should have been a little bit more technocratic. And so Deng overcorrection was to promote a lot of engineering trained people into the Politburo. That really flowered by 2002, when the entirety of the Standing Committee of the Politburo which has nine members. That's the highest ruling echelon in China's political system. All nine of them had degrees in engineering of a very Soviet sort. And so I wanted to get past beyond these political frameworks from the past century, these terms like socialist or capitalist or neoliberal or democratic, really to try to have a sense, to try to understand what motivates the US and China today. So this is kind of my little device that I've hung my hat on to. I have a thread to draw throughout the book to try to explain what is the real difference between China and the US in the stylistic example.
- [08:13]
A
You do use some of the frameworks from the last century. At least somewhat tongue in cheek. There's a point where you say you sometimes I like to think about the Chinese system as Leninist technocracy with grand opera characteristics. Can you say a little bit about what that term means?
- [08:28]
B
The Communist Party is Leninist because it is founded by a cadre of people who view themselves as to be the vanguard of the revolution that is going to modernize the country. And so they view their main task as driving the country in different series of campaigns towards modernization. As they view is technocratic. Because China is pretty rational in terms of a lot of designs. You can't build a bridge. You can't build a subway system without some degree of rationality. Though California has been doing its best to try to prove that wrong. But a lot of engineering projects do have to be pretty technocratic since imperial times. China is famously the country that administered the imperial exam to all of its mandarins. Can debate how large of an influence this had on its political system. But I would say that China has been somewhat more technocratic than a lot of Western democracies, let's say. And it has grand opera characteristics. Because at various points China's rationalism shades into this preposterous hysteria in which everything collapses in some sort of great gotre Dameron where the gods really enter into Valhalla with these voluptuous noise. So I don't want to take the grand opera thought too far. But there is something really Wagnerian about the Leninist systems where there is something really life or death at all moments in Leninist systems because everything could collapse. Everything could go away. The entire political system might fall because of some minor slippage here. And that's one point in which I think that China has this apocalyptic sense that is somewhat endemic to a lot of communist Leninist systems. The other aspect that I want to point out here is that the line between practical and preposterous shades pretty easily into each other. And so one of my central chapters in the book is about living in China throughout the three years of Zero Covid, which started out impressively until everything completely collapsed. And at the start of 2020, when I was living in Beijing, Beijing was implementing the playbook that was suggested by the World Health Organization, which you had a cordon sanitaire, you had centralized quarantine systems, you kind of closed off the borders. And China was implementing that, somewhat to the envy of a lot of leftist commentators, including in the United States. But then as the virus became more and more transmissible, it just kept tightening and kept going down the system such that every step looked pretty logical on its own terms. That followed the logic of the previous step until China got to this point where its largest city, Shanghai, city of 25 million, where I was living in 2022, blocked people from exiting their apartment compounds over the course of eight weeks. And so this is also where the line between rational and irrational is pretty thin. And sometimes it collapses in this grand Wagnerian finale that isn't very good for the world.
- [11:38]
A
I want to stay on that point for a second because you've talked about how one of the problems or one of the things that makes the system brittle is that factional struggle is baked into the Leninist system. What does that mean exactly? Because I guess I'm just curious about the things that tip the Chinese system on occasion from hyper rationality into madness.
- [12:02]
B
Leninists struggle. It's what they do. It's what they get out of bed for. And so there is this very broad sense among the Communist Party that it needs to modernize the population by hook or by crook. Thinking back to the founding of the People's Republic in 1949, Mao Zedong and the rest of the Communist Party had just recovered from first a brutal fascist invasion by the Empire of Japan, and then fighting off the Nationalist Party that were backed by the Americans, eventually dispatching them to the island of Taiwan. They were thinking about, you know, what does it mean to be a modern country? And they were getting all of their answers from Joseph Stalin and the Soviet Union, which also repelled a brutal fascist invasion. And so there is this sense of struggle baked into the Chinese political system where if they aren't mobilizing the population into some sort of a great campaign, whether that is to produce steel and kill all the sparrows in the cause of the great leap forward, whether that is to bombard the headquarters and decapitate much of the top leadership, including Deng Xiaoping during the Cultural Revolution or to modernize economically in the case of Deng Xiaoping, or even to implement zero Covid and to tell people to stay home and not transmit the virus. China is a very campaign driven society where the leadership treats a lot of decisions as life or death. They are serious, they are self serious and they really feel like, you know, if they are not dragging the population somewhere, then what exactly are they doing?
- [13:51]
A
One thing I got a good sense of from reading Breakneck and from reading your yearly letters is the systems that are in place in Chinese society to mobilize these campaigns. So you talked a few years ago about reading every issue of Tushe, which is the Party's flagship theory journal as you describe it. And the point of the journal is to spell out where we are in socialism with Chinese characteristics, what we're thinking about, what are the kind of top down mandates and institutions like that journal or the practice of the constant slogans you see kind of memed in the US I think as you talk about, one really useful way to think about them is they're tools to try and coordinate a really massive apparatus around specific campaigns. Is that right?
- [14:35]
B
The Communist Party is driven by centralized campaigns of inspiration in which the top leadership sets priorities and then the cadres have to go out and implement these priorities layer by layer, all the way down to the village level, all the way down to the apartment compound level. And that is a system in which the person in charge of propaganda can be immensely powerful because that propaganda slogan is really setting the terms for what is the campaign of the moment. And so I spent a lot of time reading this theoretical magazine called Qiu Shi, which means seeking truth in Chinese. It comes from one of Mao's favorite phrases, seek truth from facts, which is something that Mao used. And then Deng are really promoted. So Seeking Truth is the Party's flagship theory magazine that is published once a month in this bright red font with a white background. Every issue's cover looks identical and it is just a fabulous reading experience. I recommend it. Santi, get your hands on a couple. I think it'll be great fun.
- [15:45]
A
Someone doing a good translation. Does it exist into English?
- [15:49]
B
That's a good question.
- [15:49]
A
Might be a good project for someone.
- [15:51]
B
Their other big flagship paper is the People's Daily. And People's Daily is published every single day. There are people who scrutinize it. I did not try to read the Party's pronouncements every day. That would be madness. Rather, I constrained myself to reading it once a month and Once a month, a copy of Qiushi would land in my mailbox. Every issue starts with a speech or an essay excerpt from Xi Jinping. His essay is in a different font from the rest of the magazines. And there would be these wonderful images of Xi Jinping or other top Chinese leadership going out to the villages, shaking hands, admiring the dancing from an ethnic group which has put on their ethnic garb in particular for the visit by the top leaders. And there will be these excellent pictures of really tall bridges or really big ports that are scattered throughout the magazine as well. And so I mostly read Xi's essay that is in the start of the magazine that is about three or four pages long. They are not usually super lengthy. And Xi is actually, you know, his propaganda team makes him out to be a fairly more folksy writer than you might imagine. Now there is a lot of really, really unreadable, dense prose coming out of his essays. The very first issue I picked up, I remember very starkly, it was an essay by on dialectical materialism. Really had to look up this term and imagine that why that in the world is Xi talking about dialectical materialism in the party's main magazine. But then there are a lot of other pieces that are really useful for understanding how the leadership is thinking about things. And so the leadership has this big propaganda apparatus, the magazines, the newscasts, which are daily. And there's a dozen of these big newscasts, a dozen of these big magazines and newspapers that are trying to tell the nearly 100 million strong member of the Chinese Communist Party, here is what the Politburo is thinking of and here is what you need to do. So for a while it might be poverty alleviation. That's a big thing that is perennially big on the mind of Xi Jinping. For a while it might be environmental protection, for a while it might be technological catch up. And so you get the guidance from the top leadership. And the core readership of Qiu Shi, I would say, consists of three groups. The first group are lower level officials in the villages as well as the second third tier cities who want to have a sense of, okay, well, this is what I need to do to prioritize myself and get myself noticed by the organization department in Beijing so that I can have a more plum position. The second are people with a little bit too much time on their hands. These are retired cadres who when they're tired of playing ma qiang over tea and gossiping with the rest of their neighbors, they take a glance at the newspapers and the magazines because that is their habit to do. Then the third group of people are eccentrics like myself, who was just kind of curious about what the rest of the party state was reading. That was a delightful, fun experience. So, again, a plug for Tosha. You can get your hands on a copy of to read it.
- [19:13]
A
That's great. That is a good plug. Let me have you summarize one more point from Breakneck, and then I want to get into some counter arguments and I want to have you respond to. As you point out, there's a useful rule of thumb for thinking about Chinese production and manufacturing. The rule of thumb is China produces a third of the world's manufacturing. It's like a nice concrete number to pin on. Will you talk a little bit about what the actual consequences of having engineers at the top of Chinese society have been beyond just a manufacturing boom? I think most Americans have a sense that China produces a lot of goods. But what are the other effects of an engineering state?
- [19:53]
B
Yeah, in certain areas, manufacturing production is not evenly distributed around the world, of course. And in certain areas, China has 80, 90% of global production capacity, just as semiconductors tends to be concentrated in a few advanced economies. And in certain goods, China has something like 90% of a chokehold. This is something that includes rare earth metals that we've very well understood in the aftermath of the second trade war launched by Donald Trump, in which China was able to suspend rare earth minerals and their magnets and automakers around the world found that they couldn't produce their cars. China produces around 90% of solar photovoltaic panels. And so there's no way to get solar that's not being produced in China. And this is almost every segment of the value chain of solar. Everything from the polysilicon processing down to the modules themselves, and a lot of active pharmaceutical ingredients. I see cited antibiotics as well as ibuprofen. China has about 90% capacity. And so within this 30% figure, there's hidden a few areas in which China is really, really dominant and the world's biggest producer of a lot of different goods. And I think that is in part a consequence of the engineering state. You know, this is why I don't want to use these political science terms from the prior century to try to understand what's going on at the moment. What is it that engineers like to do? Well, they build a ton of shit, whether that's roads or bridges or hyperscalers or coal plants or nuclear plants. China sort of treats building another big megaproject as the solution to any of its problems if the economy is weak? Well, the Politburo will announce just another big infrastructure program, something like flood control, which might well be necessary, but probably not the very best use of money to try to stimulate the economy. This month they announced that they're building this really big dam that I think will have something like four times the power output of the Three Gorges Dam, which is the next biggest, is going to use 60 times more concrete than the Hoover Dam in the United States. And so they just really like having megaprojects as the solution to any of their economic problems, frankly, also any of their political problems as well. And so one of the things that I think the Chinese system has decided is that it is somewhat difficult to do redistribution, but it is a lot easier to have these organized business interests to say, oh well, sure, we wouldn't mind another subway system, we wouldn't mind another high speed rail system, we wouldn't mind another really tall bridge. Doesn't really matter if the people really need these sort of things, and maybe sometimes they do, but that is just a corporatist way to really try to organize a lot of things. And so I think the engineering state is characterized by a leadership that is much more substantially trained by engineering than the United States on any measure. Previously it used to be more formal training. Not all of these Politburo members actually did anything but their engineering degrees. But now starting in 2022, Xi Jinping promoted a lot of people from the military industrial complex, the people who are launching rockets, the people who are building fighter jets, into the top ranks of the Politburo. And so these are who have practical experience managing mega projects. So you have people who are more technically trained and have better technical knowledge about how to build a lot of different things. You have people who are really willing to listen to the state owned enterprise sector as well as the economic ministries who are always planning more shovel ready projects like oh, let's build a new high speed rail system here out in the west, or let's give a new subway system here to this third tier city. There's a very big constituency in the political system for constructing more. And I think this is maybe the most important and dangerous part of my book is that they're not just physical engineers, they're not just building infrastructure. China's leadership is fundamentally made up of social engineers that treat society as just another optimization problem, as if the population could be torn down and remoted, as if it were just another big high speed rail project. And so this is why I spend a lot of time in my book talking about the one child policy, as well as zero Covid with the numbers right there in the name. There's no ambiguity about what these are. And so this is one of these ways that the Chinese leadership really constrain people's movement, constrain people's choices, because they believe that the population is just another optimization problem that could be channeled into their favorite areas as they wish.
- [24:49]
A
I definitely want to get into some of the social policy parts of Breakneck. I thought they were some of the most interesting parts and the most informative for me. But before we do that, I've got a couple counterarguments to this dichotomy that I want to throw out there. I'm not sure I believe them, but I want to throw them out here and see what you think. You pointed out that the US Senate right now includes something like 47 former lawyers and one engineer, which is true. But by some measures, the number of lawyers in the US government was way higher at times in history when we were building a lot more, when you could have characterized the US more as an engineering state than it is today. For instance, the number of members of Congress with a legal background in the late 1800s, when we're building a massive rail system, huge amount of heavy industries coming online, it's higher than today. So does that challenge the relationship between lawyers being high status and an inability to build, or am I overreading the hypothesis?
- [25:50]
B
Santia, you know what I call that? I call that progress. If the US Congress is less dominated by lawyers, I think that is probably good to have our legislators not come almost entirely from one profession. I think you raise a good challenge that I think is a very valid rebuttal to the central thesis of my book, which is that if the United States has been a lawyerly society since the very beginning, as I mentioned, since the founding, then how has it been able to get anything done at all? And I certainly acknowledge that the US has been an engineering state at various points in its history. Most notably, there were these two big spurts. First, in the second half of the 19th century, when the US was building the transcontinental railroad, the canal systems earlier, these fantastic cities with some of the first skyscrapers in the world, projects like the Brooklyn Bridge, these are all valid engineering state projects that the United States was engaging in. And then the second big spurt came after the war when Eisenhower built the highways, Robert Moses tore up a lot of New York City, and the country embarked on these big projects like Manhattan as well. As Apollo, which are eminently engineering state projects. So what has been the shift? Well, the shift I would present to you is that quantity is equality all its own. But quality is important too. And the quality of the lawyers in the United States changed quite a lot basically after the 1960s. So I would cite that a lot of lawyers were big in government, including throughout the war, including in the New Deal, when Franklin D. Roosevelt, as well as a lot of New Dealers were trained lawyers themselves. And I think the lawyerly training that they had back then were kind of these Wall street dealmakers in which you were working for the robber barons and the railroad tycoons to figure out, well, how do we build this railroad? Or how do we raise this bond offering to try to build these railroads? And so there were a lot of these creative types. The character of the lawyers very substantially changed in the 1960s. This is very well laid out in Paul Sabin's excellent work Public Citizens, in which the lawyers he wrote, moved away somewhat from the deal making type into much more the litigious regulatory type. After the catastrophes of the environmental movement in the 1950s, in which the US was spraying way too much DDT everywhere, after Robert Moses rammed just a few too many highways through elite circles in New York that were tired of having their neighborhoods ruined through the catastrophic war in Asia, first Korea and then second Vietnam, a lot of people got very tired of big government. And they had been skeptical of the government getting a little bit too cozy with the corporates as well. And so there was this big movement centered in elite law schools, especially Yale Law School, as well as the Harvard Law School, in which the students decided to say that we're going to sue the bastards. The bastards, meaning the government constrain their power. And that was the way that the lawyers turned into much more people that were trying to block deals rather than trying to create new deals. I think that is one of the things that happened throughout the 1970s. You know, WTF happened in the 1970s? Well, the lawyerly society taking shape, I would submit, is one of these things that happened.
- [29:21]
A
I think that is very plausible. And as you point out, I mean to argue against my own thesis here, it's true that the big infrastructure pushes in the U.S. you can kind of bucket in the second half of the 1800s and World War II and its after effects. I learned recently that when Robert Moses arrived in New York, no new bridge had been built in the city in a quarter century. So that there really were these, these phases even 100 years ago that look A lot like today's America where it is quite hard to build. But here's another question about the the kind of framing of these two societies. We're richer than China is. If you go back a little ways, you could also look at the the United Kingdom as a society that used to build a lot of it's now richer. It does not build nearly as much. You could call the UK much more of a lawyerly society, although maybe there are some meaningful differences between them and us. Is there some natural progression where at a certain point societies that were engineering states become richer? And something about the proliferation of interest groups with power or just regulatory accretion over time or the marginal value of a new piece of infrastructure being lower than the first time you built a transcontinental railroad, for instance. Is there something about those long term trends that mean we should expect China in 50 years or 100 years to be much more of a lawyerly society?
- [30:47]
B
Say Santi, what are you, an economist? I think I have a lot of derogatory words to say about lawyers and engineers, but nothing I can say would approach the social view of economists. Should we stop building just because we're rich? I don't think so because the US is now facing all sorts of affordability crises at the moment. I think it is really hard to look at the cities in the U.S. namely big cities like New York or San Francisco or Boston and say we have enough housing, thank you. I think it is really pathetic that California, basically one of the wealthiest states in the union, say we are going to build high speed rail and get nothing out of it. Essentially 20 years after voters approved a referendum in 2008 to actually build something like this. I think it is pathetic that New York City cannot build subways for less than $2 billion per mile. I think it is pathetic that New York is trying to upgrade the Port Authority bus terminal and it is going to take I think six years and a few billion dollars in order to upgrade a bus station. Just one. What is sort of puny civilization Are we living in Santi now? I certainly take your point that as countries grow richer, the interest groups start organizing. This is what Man Olson wrote about. It becomes much more sclerotic and it becomes much more difficult to do things. And I say that's not good enough. I think that we cannot end up looking like the British, which is not the lawyerly society, but the PPE society. It's not only that their prime ministers all go to Oxford University, they all study politics, philosophy and economics from Balliol College at Oxford University. They are really not building almost anything at all, from airport Runway to any sort of trains. And they have these insane housing prices. Where I was in London just recently. It is kind of unbelievable to imagine that average rent is higher than average monthly income. And so this is not where we need to be. America needs to be something better. As we've mentioned before, the US had these big growth spurts. I think we need another big growth spurt, not only to solve the problems that we have at the moment, which is housing, unaffordability, lack of mass transit. We also need to solve the problem of tomorrow, which is to decarbonize the economy much more substantially. And here is where I'm not expecting that China would ever become a lawyerly society, because first, China has no lawyerly society genes that are much more deeply embedded in its political system in the way that the US has. I think it is almost fair to say that China had a minimal liberal tradition throughout its 2000 years of imperial organized state history, which the court intelligentsia was entirely captured by the imperial exam system. The exam system administered who was going to be allowed to become one of the top mandarins, who allowed to advise the emperor. And very few people got close to the emperor by advocating for constraints on imperial power. And so the Chinese were practicing absolutism since about the year 0 BC, way before any European monarchs whiffed this idea. And I also believe that the Chinese modern communist system is really geared towards again, modernization in the Lenin sense, as well as building a lot to establish its political legitimacy. And so when you have few lawyerly genes in the political tradition as well as this modern communist system, and a substantial disregard for people and their public interest, as well as a lack of environmental protection that has wavered over the last few decades. When you add all of that up, I suspect that China will just keep building, just keep replacing their depreciating apartments and bridges and just treat that as the core project for the next few decades as well.
- [34:46]
A
To be clear, I would not like the US to go the way of the uk And I think I've made that very clear to my British friends, much to their chagrin at times on this podcast. But I, but I do want to push a little bit. Is there something in your view about increasing wealth in a society that makes it harder to build? Whether or not there are ways that we can, and I think we can make it easier to build in the U.S. i think there's a lot of things we could do to bring costs down to reduce Specific veto points. And at ifp we spent a lot of time thinking about this. But I do wonder, is there something structural about the fact that we're a much wealthier nation that just creates more opportunities for rent seeking, say than in a country that's playing catch up? Like, is there some structural thing that China experiences now where it's doing a huge amount of catch up growth that it won't be able to sustain as it gets closer to the frontier or to the per capita wealth of the us?
- [35:44]
B
There absolutely is. So it is not my base case, but I think that the potential way out of the engineering state is that residents in the really rich first year cities, especially Beijing, Shanghai and Shenzhen, decide that they don't want a big rare earth mineral processing plant really close to them. There have been protests of trash incinerators being placed in certain urban neighborhoods. And there have been instances of Chinese wealthier protesters defeating these sort of plans to try to move them elsewhere. So NIMBYISM is endemic to any person with property. And I think that is something that is going to be more real and biting. I think something else that is going to restrain the engineering state is just higher debt levels. So the Chinese government has built a lot of infrastructure that doesn't look very useful, certainly the infrastructure that isn't able to pay back the value of its bonds. And so at a certain point, their argument among a lot of Chinese is that, well, you know, you build this bridge to nowhere, but after you build the bridge to nowhere, become two somewheres. And so at various points that has been true. A lot of places desperately did need infrastructure in the past. And it is valid to connect these villages that are really in these mountainous outposts. But at a certain point, given declining population especially, it is not really going to be very valuable for building more highways, more high speed rail and more subways and more really tall bridges as well. And China is already suffering from a really high railway debt burden. And so I think I want to acknowledge that these are challenges against the engineering state, both among the wealthy opposition as well as the problem of debt. But I also think that there is still something to the Leninist system in which the Chinese government is really intent on dragging its population into modernity. It is inflected by its socialist heritage in which increasing the discretion of the state to build big projects is a noble act of socialism, where yes, just giving money to people is a despicable act of capitalism. Therefore we should be doing noble things rather than despicable things. And therefore we need to be building still more bridges. And so I think there's going to be restraints, but I think they're still going to be the engineering state 50 years from now.
- [38:06]
A
Last week I had Judge Glock on. He's a friend and an economic historian, and we didn't get to talking about this in our conversation, but he had a paper arguing that much of the infrastructure we build today in the US Just has way lower social returns than it used to. And I think there's something about this that's plausible and that you're describing, right? The transcontinental railroad is economically far more valuable than the second Avenue subway in New York City today, say. And so because the gains from the new project are not distributed so widely, they're not so large from that building. There's more incentive for you, the interest group, the local owner, to get your pound of flesh by trying to stop a project with litigation, etc, than if you're waiting for the new railroad to be built and the gains from that will be obvious to you. You could take that basic economic intuition and say, okay, American local politicians, mayors and governors used to be rewarded more politically for building things. There was obviously huge backlash to the railroads, but there was clear political gain to building major new infrastructure. What's the political gain that Chinese leaders, local leaders, get today for building that extra new bridge or that extra road or that extra coal plant? What's the feedback loop there that rewards individual politicians for making these big pushes?
- [39:31]
B
The Leninist system has three essential instruments for control. The first, as I already mentioned, is the propaganda system that sets priorities for the cadres in these centralized campaigns of inspiration. The second big instrument is the Ministry of Fear as well as the coercive apparatus that really tries to discipline people. And one of my favorite names in the Communist system is the Central Commission for Discipline Inspection. Can't get more Orwellian than that. And that is one of these things. That is the control apparatus within the party to really discipline disciplined people. Then the third great instrument within the Communist Party for governance is the Organization Department. This is the nomenclatura system in which there's a dossier compiled on every governor, every mayor, every party secretary of whatever to figure out how they're doing. And so this is a very engineering approach. It is giving you a report card of how you, Santi, as the governor of Gansu, has managed this year. Did you have a lot of political protests on your hands? Well, that's not very good. Did you build a lot of new airports? Well, that's probably pretty good. Did you manage food insecurity. Did you have any sort of a inspiring new idea to promote tourism? There's these hard metrics based on evaluation criteria that have sometimes made their way out into the public. And so we have some sense of how the organization department actually assesses its cadres. And so we can see the numerical grade levels that every mayor or governor or whatever is receiving. And all of these people are really trying to maximize their metrics. And for a long while, the cadre assessment system in China was pretty straightforward. If you had high GDP growth, that's great. If you had minimal political protests, even better. And so that was the way that a lot of people were getting promoted into more senior leadership. And for a long while, it was really easy to build a new airport and goose up your GDP because you have immediate construction jobs. For a long while, it was really good to build these silly tourism projects. You have these pointless replicas of European town squares that don't look very good. And so people were simply building because that's what the organization department has tried to do. Now, one of the things that Xi Jinping has done well, I think, was to try to remove these hard metrics in terms of cadre assessment. But there's some debate about whether Xi Jinping has actually done this well in practice. And so, in principle, I think it makes eminent sense not to focus on GDP as the only assessment of how well a mayor is doing. In principle, you know, something like environmental protection is good, but this instrument has been somewhat degraded. It becomes really difficult to assess how well you did in environmental protection. And so a lot of the cadre assessment system has eroded over the last 10 years under Xi Jinping. And there's some debate among the specialists about whether that has produced actual results in China. But that is one of the reasons that these leaders have built so much. In part because they're incentivized to. In part because it is really difficult to be dropped in the middle of a zone which you have no connection to and be expected to perform really well. One of the systems that's really important in China is that, in general, you cannot be the leader of your own hometown. You cannot be the leader of your home province. You don't have characters like Joe Biden, who spent his entire life representing the state of Delaware, which is essentially where he's from, with a detour in Pennsylvania. But in China, you're not allowed to govern your own province. So you grew up in the Northeast, you're dropped in the Southwest or the Southeast, whose manners are kind of alien to you. You have no idea how to develop this, so why not just build another big bridge or another big airport?
- [43:32]
A
Let me change gears a little bit. A couple months ago, when the tariff news was first breaking, Secretary of Commerce Howard Lutnick took some heat for going on TV and saying we were going to bring iPhone manufacturing back to the US now, something like a month later, I read your book and you say, I quote, this scenario sounds a bit fantastic, but if the iPhone were built in the United States rather than Shenzhen, then an American city, say Detroit, Cleveland, or Pittsburgh, might be hailed as a hardware capital of the world. So are you and Secretary Lutnick in agreement here about the value of bringing iPhone manufacturing back to the US I.
- [44:09]
B
Would love it if Secretary Lutnick could move to Ohio and build my iPhone. I think that would be fantastic. I think it is a better thought experiment than a actual policy prescription to imagine that states like Ohio, Michigan, where I'm speaking to you now, a lot of the fading industrial rust belt in the US could become the hardware capital of the world again, as Detroit and parts of Ohio once were. So I'm not especially optimistic that iPhone production can move back to the U.S. there are too many headwinds for the U.S. to become a major manufacturing power again. But I would just like to present the scenario that if the US Were actually building all of the iPhones that Shenzhen started making in 2008, then the US could have captured many more of the spillover benefits that came from manufacturing iPhones. Now, a lot of these spillovers benefits came in the form of training and labor force, so that you might have been building an iPhone for Foxconn one year, but you moved on to a rival smartphone maker in your second year, then you went to go assemble a drone in your third year, and then you went to go build some electric vehicle batteries in your fourth year, because you have this very fluid labor force that was very skilled and that applied their talents into building sometimes more sophisticated products. And that is something that I would like to see more in the United States. Because once you kick away the bottom rung of the ladder in terms of, there doesn't seem to be that much glory in turning screws in an iPhone. But once you kick away that segment of the ladder becomes much more difficult to be in more glorious industries like electric vehicle battery production as well. I'm not especially optimistic that the US Will be a big manufacturing power, but in this fantastic scenario, I want people to at least desire it so that we do have better policies in place. Such that the United States is not facing too many headwinds in manufacturing once.
- [46:11]
A
More, I think I also that's also a goal of mine. You point out several different reasons for Chinese manufacturing success, and one of them that you mentioned here is these deep pools of expertise, these quite fluid labor markets where you have tons of people doing different parts of the value chain. You list a bunch of the other things that you can point to, some IP theft. There are labor costs were lower, although that's increasingly not necessarily the case in manufacturing, as you point out. That was true a little while ago, but at least there are several different features of the Chinese manufacturing success story. My colleague Brian Potter asked me to ask you whether there's a hunger to succeed or a hustle mindset that is also a part of that manufacturing success story. For listeners who don't know, Brian writes a newsletter called Construction Physics, which is about the details of building here in the US and in his experience in the construction industry and talking to folks, he's come across many people who will flag that this is the challenge of competing with China. Is there some kind of deeper hunger or hustle in certain industries that people don't encounter in the U.S. is that reductive? Is there some truth to that? What's your experience?
- [47:22]
B
First, I want to say that maybe my favorite editor is Santi Ruiz of ifp. And second, maybe my favorite substacker is Brian Potter. I was privileged to read an earlier draft, the Origins of Efficiency, which is coming out next month, published by Stripe Press. And so I am a big fan of Brian Potter and his new book.
- [47:45]
A
Do you want to come on next week and do this again? Dan, this is great.
- [47:48]
B
Yeah, you can book me as much as you want. Santi. I want to be a fan of the podcast. I think there is is certainly a hunger and a sense of hustle in China, but I certainly don't want to say that is unique to China. Are Chinese bigger hustlers than Americans? No, I would say that they are complete peers in this regard. I think that Americans and Chinese are hustlers par excellence. And so that is not where I would situate the biggest part of China's manufacturing advantage. I think China's biggest manufacturing advantage is the pools of labor. This is what I call process knowledge in my book, in which people just know how to do things. And that can't really be written down in patents or blueprints or cannot be encoded in actual physical tools. They just have a sense of knowing how to store a wafer before it becomes you know an intel chip, how to really build a good electric vehicle battery, which involves all of these steps that are not easily transferable. That's one big part of China's big manufacturing success. And so that's the process. Knowledge is the first component. Second component that I would acknowledge is a lot of these criticisms about China not quite respecting ip. I think that is absolutely valid criticism that China is subsidizing a lot of manufacturers. I think that is absolutely valid. And for the people who are criticizing the Chinese for doing these sort of things, I would turn around and say, well, if these methods are effective, why doesn't the US actually do these sort of things? Why doesn't the US actually subsidize manufacturing much more substantially? Rather than turning every Solyndra into a cautionary tale, there's another component in which China has very actively welcomed American manufacturing on its own shores. This was pretty different from Japan. When Japan was the big industrial power in the 1970s and 1980s, Japan did not encourage much foreign investment. It made it really difficult for Americans to build every Mitsubishi product and every Sony product was almost entirely Japanese value added in its exports. And that was pretty different with China. China invited Apple and Tesla and a million and one other manufacturers to go into China, train its workforce and then export these products back. And this is part of the big advantage that China has had to really build a better workforce, import expertise, import better managerial techniques, import better quality control techniques in order to train its own workforce. And here again, I would ask the US well, if this method were very effective, why doesn't the US actually welcome a lot more electric vehicle and the battery manufacturers where the expertise in China is clearly better than in the US Why not have them built more plants in Michigan and Ohio? Why still be very resistant to that? You know, there's a. China became a major manufacturing power by hook or by crook. But I would say that a lot of it is just a workforce issue. There is valid hustle culture, although I wouldn't say that the hustlers in Shenzhen are any worse than the hustlers in Silicon Valley. There has been a lot of government involvement and then there were some policies that were effective. And so a lot of what DC could do is to have a good debate about which policies happen effective. And if they happen effective, why not copy them?
- [51:10]
A
I think that's right. Let's talk a little bit about the future of Chinese economic growth. What's your sense of slowing or flatline Chinese productivity growth? You've got global headwinds on exports. Potentially you know, depending on how the whole tariff thing shakes out, you've got an aging population that will soon be shrinking quite quickly as well. Taken together, all of these headwinds for economic growth for kind of the project of the CCP, what are the causes for optimism in that model? 20 years out, 30 years out?
- [51:44]
B
Yeah, I think that every factor that you cite is real and indisputable. But the exercise that I want to engage in is not to only look at these headwinds that are facing China and to ask, you know, how could the leadership also succeed? And so there's no dispute that China is facing huge amount of debt. China's population has already peaked. China's population is going down every year now. China's consumption spending has been limp. It is facing a property crisis. It is facing broad deflation. There's problems left, right and center. The issue is that if we take a look at any major economy, you can find all sorts of headwinds if you want it. And we don't have to go on about what these possible headwinds are for the United States at the current moment. But if you only wanted to look at the headwinds, you can construct an ugly picture about anything. And so coexisting with this ugly picture with China, I think it's also a. You can cherry pick some nice points too, which is that China is the world's largest automotive exporter. China's trade surplus and manufactured goods continues to rise. China is doing very well in artificial intelligence, which was not quite my expectation a year ago. China is still making these very good strides in advanced manufacturing. And so if we want to be Marxist about this, which I like to do every so often as a former reader of Teosha, how to Marxist reason while they reason through this concept of the contradiction. And what is the central contradiction of the moment? Well, it is first this economic headwinds as well as move on from the economics headlines and move into the business headlines. And you will see that China's electric vehicles and all sorts of products are continuing to make great advances overseas. And so how do we reconcile that? Well, I would say that about 50% of China's economy is pretty dysfunctional. There's 5% that's gaining spectacularly. And that 5%, I think, is the part that we need to spend much more time thinking about, because that 5% is going to continue to deindustrialize Michigan and Ohio. It's going to continue to deindustrialize Germany. It is the part that is threatening Silicon Valley's Dominance. And that has been a lot of my career so far, which is to not look at the broader morass of China's economy because there is also a really broad morass in American economy as well as. But for me to really look at the 5%, maybe even the top.05% of successes and ask, what if that momentum continues to succeed? Well, in that case, we're going to have a much weaker Germany, we're going to have a much weaker Japan, a somewhat weaker United States as well, because these countries will all be de. Industrialized to some extent. And what if China keeps making big strides in everything aside from AI, or even including AI? That is a pretty bad situation for the U.S. so that's, I think, more the scenario that we need to be driven by, not the headwinds that are more macro in nature.
- [54:46]
A
Whether or not you project economic growth out in the future, in recent years, that kind of incredible clip of Chinese economic growth has slowed. How do people on the ground think about that? What's their mental model for it? How does it affect their lives? Yeah, like do a little bit of man on the street explaining for me here.
- [55:05]
B
Well, the first thing I feel like I have to acknowledge is that 1.4 billion people, 1.4 billion different experiences. I will first acknowledge that there's tremendous nuance here, as in everything, but here's how the people that I know it experience things. So I lived in China's most dynamic zones, especially Beijing, as Shanghai, better than Hong Kong, where I also lived, where people have a broad sense that political environment is worsening. That is definitely the case that censorship over the last 12 years of Xi Jinping's role has been worse and worse. There has been much more of a crackdown on anything resembling independent journalism. Comedy clubs have been banned for a while. Chinese movies used to be, I think, more interesting than they are today. There's much more mainstream culture that is simply nationalist and very, very commercial. And so that is, I think, a universal sentiment. And then economically you have a variety of different experiences. If you're in a third tier city, these are places that are still growing at a faster clip from a lower base. These are cities that are still getting new subway systems, that are getting new parks where people feel like the future might well be improving. In first year cities like Beijing and Shanghai, they're still building some subway systems. Shanghai is building a lot of parks. By the end of this year, Shanghai is expected to have a thousand parks, which is one of these round metrics that the Chinese love to optimize. But I think in a very real sense, Shanghai is getting more pleasant from a very high base. And then I guess the economic experience is that for a lot of people, for a lot of younger people, their economic outcomes are usually not really great. If you are an elite in China, you're graduating from a top university, Beijing or Shanghai, you know, a lot of people end up working for the government, which is really low pay, but in a very secure job, which the state is taking care of a lot of. Your housing, your future child education costs. You get access to the state owned enterprise canteens. These are the same canteens that are cooking for the top leaders when they come by. So your lunch every day is actually really good and really cheap. But you don't make a ton of money. You might be doing that, you might be working for a village administration, which it's not that very, really fun, but you have a chance to enter the politburo one day. You might be working for China's most dynamic Internet companies. These are companies like ByteDance or Alibaba or Tencent, in which are working hours that are described in China as 996-09-00am to 9:00pm six days a week. I know that's how hard the Institute for Progress people work. But that's not really universal everywhere. And so the Chinese are working hard for these ByteDance like companies for pretty good pay, but not necessarily in a very happy way. And then outside of that, you know, you're probably working for companies that are not paying you very well, they're not giving you a lot of money still for nine, nine six hours. A lot of people are opting out of employment. China's youth unemployment is really, really high. They might want to try to open a bubble tea shop. They want to might want to open a cafe. I hear of friends in Shanghai who tell me that, you know, some cafes go down in a matter of days after a big launch goes wrong and then they just get replaced by the next cafe. How are they able to do these things? Well, they have wealthier parents who have apartments in Beijing or Shanghai. They have been allocated apartments by the state over the past few decades. You're able to liquidate one of these things and you're able to afford in good education in Los Angeles or something where you're able to rent a pretty nice home in LA or get even a nice car to be able to drive yourself to work. And so that has supported a lot of the economic dynamism in China. The property wealth has been a restraint against more broad discontent. But I think there is very broad discontent in China, just to summarize this long answer, which is that politically I think that a lot of young people are not terribly happy because they feel the censorship apparatus tightening around them. Some people don't care. They have all the entertainment that they need looking at the local instances of TikTok or Douyin. But for a lot of people, they have a very keen sense that the Internet they grew up with, it's much less vibrant than before. I think there is quite a lot of economic discontent in China where people don't have the economic opportunities that their parents have had. They're not working at jobs that they love. They don't have the prospect of coming into apartments that are allocated by the state. And then there is this still quite a lot of dynamism in third or fourth tier cities where people do have greater employment opportunities from a lower base. And all of that is made more possible because there is this luckier generation of parents in the past that are able to help out their kids either by letting them live at home or by liquidating one of their several apartments to support their bubble tea venture or something. So that's how the discontent is bottled up.
- [60:23]
A
Dan, this has all been fascinating, but I feel kind of bad that we've taken this long to get to the social engineering side, which at least to this reader was some of the most interesting stuff in the book. Now maybe that's because I've spent a lot of time reading you on manufacturing, thinking about the infrastructure side of things professionally and less time thinking and learning about the one child policy. But I want to ask you to walk through some of the history that you provide on the engineering state's attempts to engineer the soul, which is originally Stalin's phrase, but Xi likes the phrase too. What you do in Breakneck is basically re explain the one child policy through this engineering lens. Will you walk me through the history there. What is it about the engineering state that leads to the actual shape and form of the one child policy as it exists?
- [61:18]
B
I'm really glad you're picking that up Santi, because I did not expect this, but I have a clear favorite chapter of my book and I want to disclose to your readers that it is chapter four, One Child.
- [61:35]
A
It was also my favorite chapter.
- [61:37]
B
Thank you. The one child policy was something really fascinating to uncover part because I think it is just this very clear encapsulation of the theory and the practice of the engineering state. So the theory here is that one child policy grew in reaction to the mayhem of The Mao years after Mao died in 1976, Deng Xiaoping emerged to be the top leader by 1979. And Deng Xiaoping, along with his top peer, a fellow named Cheng Ying, who was in charge of the economy, were trying to figure out, well, how do we restart development in China? One of the things that they really feared was overpopulation and one of the major mine viruses that came out of the west throughout the 1960s. One of several was this population bomb Club of Rome argument that what we need to do is to stop countries from growing because they're going to blow themselves up with too many people. Too many Chinese people came into contact with this argument. And the problem in China then was that China had crossed about a billion people and the leadership didn't quite realize exactly how many people there was in China, in part because Mao's Cultural Revolution destroyed anything that could be as organized as a national census. So into this heady mix comes a missile scientist named Song Jian. Song was a brilliant mathematician. He was one of the chief theoreticians of cybernetics in China. He co wrote a textbook on this theme. He was one of the top, top missile scientists working in China. Song came into the hallways of power because that is what military leaders, military scientists had the prerogative to do and whispered into Beijing's ears that, well, what we really need is something like a one child policy. Here's some really fancy math that I've done on terrifically neat graph paper to show that population trajectories can be just as firmly controlled as missile trajectories. And so this is one of the stories told in this really remarkable book by anthropologist Susan Greenhalgh called Just One Child, in which she traced the intellectual lineage of Song Jian in the leadership in which the military scientist, an eminent engineer, was really able to influence population policy. And that was the first act of the one child policy. The second act of the one child policy was just this brutal enforcement that took place mostly in the countryside where people had a norm of having three or four children because that was the only way to have any economic security if you're growing up as a farmer in China, in which the state meted out over the course of the one child policy's lifetime, from 1980 to 2013, more than 300 million abortions. This is China's official statistics, which is about the population of the United States at present, and hundreds of millions of, of forced sterilizations as well. Again, these are both official statistics that are compiled by the National Health Commission in China. This was a campaign that is best described as campaign of rural terror. I wrote quite a lot about, you know, just these gruesome scenes in villages of babies being destroyed. And I don't really want to get into it here, but if you are curious to read it, these are some really wrenching scenes that I wrote about and picked up that took place in China's countryside. And the third great act of the one child policy is that after China concluded the one child policy in 2013, it has moved on to trying to re engineer the population to have quite a lot of kids again because it has realized that declining population is not so good for future economic prospects. But what Xi and the rest of the leadership has discovered is that it is pretty easy to prevent births if you are brutal enough. But it is really difficult to induce people to copulate because the state is not very good at making teenagers get it together. So they have not been very successful. But they are sending out party members to harangue women to ask when was your last period? And hey, why don't you have another child? Which is upsetting women in all manners of ways. But I think this is still an instance in which the Chinese leadership has learned nothing from the dangers of engineering the population.
- [66:14]
A
There's a lot to talk about here. But one of the things that really struck me in that chapter was the way in which, as you say, the one child policy starts as this kind of shock campaign. And it involves a campaign of rural terror. These persuasion groups where officials will come out to your house and tens or dozens or a hundred times to pressure you to, to have an abortion. But it also involves this really labyrinthine administrative apparatus, as you say. By 1990, to have a first child, a woman needed up to 12 documents from her workplace and party officials and to sign a consent form agreeing to contraceptive measures after birth. That was in order to have just your one allowed child. And as you, you also say, just another statistic that boggled my mind. By 1999, 35% of married women of reproductive age had been sterilized by the state. Yes, just remarkable. You talked in the book about how studying the one child policy changed your view on the idea of quote unquote, following the science or at least the, the framing of that idea. Will you say a little bit about that?
- [67:21]
B
You know, as I've started to present the idea of the engineering state and the lawyerly society to people, I like that people are often very thoughtful about. I'm not sure if it's better to be governed by engineers or Lawyers. And that is, I think, the correct attitude to have. Now, I made fun of you a little bit Santi earlier to say what are you an economist? But I want to say that actually there is the right profession to govern society. It is economists. And economists, I think are, I don't.
- [67:52]
A
Know if I'd go that far.
- [67:53]
B
I think they are just technocratic enough like the engineers and just humanist and social science y enough not to do anything as stupid as the one child policy. One of the things that redeems economists forever in my mind was that economists in the west as well as in China were the main people arguing against one child policy proposals. They were the main intellectuals criticizing things like the population bomb published by the Ehrlichs to say that, well, you know, preferences are dynamic and you shouldn't have this linear straight line extrapolation. So that is something that I want to say is quite nice about economists. They are the right in between. And as we get to these statements like following the science, I've become a little bit skeptical of these people who say that scientists need to rule because the scientists are the ones that are engaging in linear extrapolation of population trajectories. They are the ones advocating for the most severe lockdowns, which looked right at the time, but not necessarily very smart in retrospect. They are the ones that are saying that, well, maybe we need to fully stop the economy now in order to decarbonize. I think that is simply the wrong approach. I believe it was Winston Churchill who said that scientists need to be on tap, not on top. And I think what we need to have is pluralism in our governing elites. We shouldn't be ruled entirely by lawyers, we shouldn't be ruled entirely by engineers. There should be a little bit more pluralism such that we have some economists in the mix, we should have some humanists in the mix, we should have some lawyers, we should have some engineers, in which we have an earnest debate about what it is that the scientists are recommending. And here's where I think that it might be the prerogative of superpowers to really specialize. And so the US is definitely a lawyerly society and the Chinese are definitely the engineering state. But I think it is much more difficult to characterize other countries like Canada or Germany, they don't have a neat description here. There's no country ruled by dentists, for example. And I think it is the privilege of the superpowers to specialize. Now, I know you've had an interesting fellow on Asante named Edward Luttwak. And one of Luttwak's very nice phrases is sense of great power autism, in which these people have really narrow focuses. And so I think, you know, other more reasonably sized countries like Canada are also somewhat more reasonable in their mix of pluralism. And what I want is for both the Chinese and the Americans to be a little bit more reasonable in their pluralism and not be so autistic about their governing elites.
- [70:45]
A
I'm curious. You talked in past yearly letters about the Chinese nationals who try to get out and try to leave the country. And you spent a lot of time in northern Thailand where many Chinese expats end up. You talked about how in the past couple years have been rising numbers of Chinese nationals apprehended at the US Mexico border, people flying to Ecuador and then taking this perilous route through Panama to the American border. Practically speaking, today, if there's somebody who looks a lot like me or like you, lives in Beijing or Shanghai and runs their mouth on the Internet a little bit too much is disfavored by the authorities, how would this friend of ours practically leave the country? How would he get out?
- [71:30]
B
I think our friend would start by trying to apply for some sort of schooling in probably a European country because the European master's programs are considerably cheaper than the U.S. maybe they go to Australia, maybe they go to the Netherlands. So they try to get schooling that way. They pay the master's program fee, let's call it something like US$10,000. And then they probably have saved enough where they could get this money from their parents to get a visa to hang out for a few years in Europe. So a lot of Chinese nationals have washed up in Europe in particular. And so that is someone more elite who is able to afford and qualify for this sort of schooling abroad. If you're less elite, if you are more of a migrant worker, have no family to support, but you just really want to get out, then many people have traveled to Ecuador, where the only reason that they fly to Ecuador is that for a while, Ecuador didn't require a visa from Chinese nationals. Now that has changed. And then they walk up the Darien gap along with many Central and Southern Americans. The numbers there have collapsed since President Trump's crackdown on immigrants, in part because the United States has revealed itself to be much more hostile to Chinese migrants over the last few months. Under the Trump administration, that appetite has substantially evaporated among Chinese to really try to come to the US And I think that is a shame that this is Not a land of the Statue of Liberty beckoning those who yearn to be free. These are people who are quite dissatisfied with the regime. I think America would be stronger if it had more of these Chinese migrants here.
- [73:14]
A
Let's say this friend of ours is on a list somewhere and the state would not like him to leave the country and to be a critic of the. Of the state from outside. So he can't get that visa to Ecuador anymore and he won't get to go to that master's program in Belgium. What are his options?
- [73:34]
B
Chinese government has made it more difficult for Chinese nationals to go abroad, mostly by controlling who gets to have a passport. And so that is very real. A lot of even public school teachers have had to surrender their passports because Beijing doesn't like it when they go to on a nice holiday in Malaysia. And so that is very practical. And I think that has been a concern among Beijing that people go abroad and shoot their mouths off about the Communist Party. For a while, Beijing tolerated a lot of dissidents to go abroad. This was most prominent after 1989, when a lot of university students fled after in the aftermath of the Tiananmen massacre. And for the most part, China permitted them to. But now China has revealed that it is less eager for people to go abroad. It has become more sophisticated in controlling people through the their families. And it is just expecting you to stay at home and be good children. So there is perhaps rising discontent because people aren't even able to go to holidays in Malaysia, much less master's programs in Belgium. And I think that is one of these questions. How much discontent there is and whether the Communist Party is really able to bottle that up.
- [74:54]
A
Sure. I think you and I have similar taste in books. I know we both enjoyed Stalin's war by Sean McMeeken. And recently you came across James C. Scott's personal book collection donated to a local bookstore. I think we're both fans of Scott as well. Two questions. One is how much of Scott's personal book collection did you end up buying? And two is what have you been reading lately that you would recommend to me and our listeners?
- [75:24]
B
I was a fellow at the Yale Law School's Paltai China center, which meant I was based in New Haven when I was writing a lot of my book? I have a maybe one of my favorite bookstores in the world is called Gray Matter Books, in which a lot of Yale University professors give their used books to this very savvy curator that has this book collection. And so I visit Gray Matter Books Pretty much on every occasion that I have to be in New Haven. And one day I came across this collection shortly after James C. Scott died. There were several shelves of James C. Scott's books that I was happy to look at. I did the generous thing, which was that I bought only two or three volumes from that set. Now, obviously, I could have bought the entire shelf, but I think that would not be really the Scotian thing to do. And I think one of the things that Scott has really illuminated for me is that I think there is a very substantial tension in my own thinking about how much civilization to partake. Now, I reference grand opera, not so much because I love Wagner. I have pretty mixed feelings about Wagner. But I am generally an opera fan, especially of the Italian comic operas. Opera buffa, the funnies. Opera is very much associated with, quote, unquote, civilization as well as the court. But I have to reconcile my tastes, which are run a little bit more opera and costco, musical and novelistic, with my fierce instinct to be a barbarian and plant maize and plant cassava and hide out in the mountains and not partake in civilization. And so this is not something that I'm able to resolve very easily. Now I think I'll just leave statecraft with one book recommendation. And that is my favorite James C. Scott work, the art of not being governed. This is about Zomia, a land that I am very familiar with. I'm from the part of Zombia in southwestern China, which is very mountainous. And so Zomia refers to this broad expanse in highland southeast Asia that run as north as southwest China, where I'm from, to as far south as Vietnam, which there's just far too much jungle and mountain for the state to have practical control. And so these were peoples that avoided civilization. They planted a lot of maize and cassava in order to hide from the taxman, as well as the state coming over to them for conscription. They have an oral culture, which makes their ethnicity a little bit more malleable. And so I every so often dream of running off into the mountains and becoming a barbarian myself. And if there's anything that I would like for the listeners of Statecraft to do, it is to join me in my mountain tribe, become barbarians, and figure out how we can best resist the statecraft. What do you think?
- [78:18]
A
You. You heard the man. It has been. I've noticed, I think, in prepping for this conversation, that I've not talked nearly enough about Scott on statecraft. And maybe there's also a tension in my own project. And if I'd thought of that sooner. Maybe we could have had him on. Unfortunately, he passed away, I believe, a year ago. I'll leave you with one more question before we wrap. As we talked about already, Breakneck is largely about seeing America through the Chinese lens. What features of American culture or civic life that makes you most bullish on the American project in the 21st century?
- [78:57]
B
How about all of it? How about the fact that when you go to a bar in the US you can talk to a perfect stranger and have a nice conversation? I've just spent a month in Denmark. Something like that is really difficult to imagine. How about the fact that it is pretty easy to make friends in the US Whereas in most parts of Europe and Japan, your friends are made by high school or latest by college, and then you're done with having friends who all kind of live close around you. And even with the Trump administration, I will make no secret that I am very deeply distressed by many parts of the Trump administration's agenda. There's still something hopeful about this chaos and churn that Trump represents, that that is much more difficult to imagine in Europe and Japan, but represents something about the enormous dynamism in America that at least has a sense to really try to confront its own problems. And so I don't think that Trump is solving many of America's or maybe even any of America's great challenges. I think that's something I'm able to change my mind on. But just to have this raw life force and pure chaos of Trump himself, whom I think is a sweet, generous act of God, I think that is probably a hopeful thing that America is able to confront these types of questions.
- [80:23]
A
Well, I'll leave it there on that. Very thoughtful answer. Dan, it's been a real pleasure. Thank you for joining.
- [80:28]
B
Thank you very much. Santi.
- [80:39]
A
Sam.