December 4, 2025 • 26 mins
In his new book Breakneck, tech analyst Dan Wang argues China’s engineering mindset has given it an edge in all sorts of domains, including climate technologies, while America’s lawyerly mindset is holding it back. This week on Zero, Wang tells Akshat Rathi what the world can learn from China and how the US could start to compete on green tech in the future.
This episode was recorded as part of the SOSV Climate Tech Summit.
Explore further:
- Dan Wang’s book, Breakneck - Penguin
- China's Winning the Energy Exports Race - Bloomberg
- China’s Green Tech Firms Pour Billions Into Overseas Factories - Bloomberg
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd. Special thanks to Sommer Saadi, Mohsis Andam, Sharon Chen and Laura Millan. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to zero. I'm akshatrati. This week lawyers Versus engineers.
China is a country of superlatives. It makes the most
number of solar panels, wind turbines, batteries, and electric cars.
(00:24):
It also is the largest builder of new coal power plants,
the largest builder of new nuclear power stations, and the
country with the longest high speed rail network. The list
goes on and on. Because China builds, builds, and builds.
It's one reason why the country has become the fascination
of the green movement. China now has a huge lead
(00:46):
in all types of climate technologies, and it is using
that to electrify its economy at a breakneck speed. But
why has China been able to build while many far
richer countries have fallen behind. It's not just because China
is a dictatorship, argues technology analyst and author Dan Wong.
(01:07):
In his new book Breakneck. He paints a vivid picture
of the social, cultural, and governance differences that have turned
China into a nation of builders. Dan says that China
is a country with an engineer's mindset, while the US
has a lawyer's mindset. I spoke with Dan a few
weeks ago as part of the SOSV Climate Tech Summit
(01:29):
to learn what China gets right, where it's going wrong,
and what lessons other countries can take from China's extraordinary
green tech buildout. Welcome to the SOSV Climate Tech Summit, Dan,
and welcome also to the Zero podcast for Bloomberg Green.
Speaker 2 (01:49):
Great to be here at chot SO.
Speaker 1 (01:50):
I learned a lot about China from your book, Breakneck
Congrades on its success. We are talking on a climate
podcast and a climate tech summit, so there is a
lot of interest from the climate crowd on what China
has been able to achieve on its dominance in green tech.
But before we come to that, let's start out with
(02:12):
the main thesis of the book that you lay out,
which is that China is an engineering state while the
US is a lawyerly state. You have first time experience
living in both countries and at interesting times. Could you
briefly give examples that are illustrative to these two frames.
Speaker 2 (02:32):
The time that I lived in was between twenty seventeen
to twenty twenty three in China, and which I felt
like it really was a momentous period in which Donald Trump,
in his first administration had launched his first trade war.
China was growing ever more capable in all sorts of technologies,
including clean tech. I also lived through zero COVID, which
(02:53):
was the centerpiece of my experience. And the China is
a country I call the engineering state in my book
because various points it has been ruled entirely by engineers
at the senior most levels of the Communist Party. The
engineers in China treat the physical environment as a giant
engineering exercise. They build a lot of homes and hyperscalers,
(03:15):
and solar and wind and coal plants as well. China
also treats the economy as a big engineering exercise, in
which they tend to shuttle young people here and there
in order to work on more strategic industries. And they
also treat society as a big engineering exercise, as I
show through the examples of zero COVID as well as
(03:36):
the one child policy, which the number is right there
in the name, and there's no ambiguity about what sort
of engineering projects these are. I contrast that with the
United States, which I call the lawyerly society. I mostly
wrote this book out of the Yale Law School. It's
still kind of surprising to me that every president needs
to earn a degree from Yale Law before they can
be in the White House. And the Democratic Party is
(03:57):
especially lawyerly, but the Republicans are pretty lawyer as well.
The issue with lawyers is that they block everything good
and bad, so you don't have stupid ideas like the
one child policy, so don't have very functional infrastructure anywhere,
and it is really difficult to build clean technology on
par with China in the US.
Speaker 1 (04:14):
And this framing of engineers versus lawyers, why do you
think that was the important framing that people needed to
know now versus say, what's dominated US China discourse, which
is free market capitalism versus state led capitalism, or democracy
versus authoritarianism, or academic terms like leninism.
Speaker 2 (04:35):
Yeah, all of these terms have a place, and I
think that the US and China are both really important
countries that are in competition and have a lot of
frictions with each other. Most of these terms come from
nineteenth century political scientists, so terms like capitalists socialist only
Leninist comes from perhaps the twentieth century. And I just
(04:58):
wanted to be inventive and playful and coming up with
a new term for understanding these two countries. I think
that what distinguishes China right now is construction, a lot
of construction of homes hyperscalers again, coal, wind, solar, nuclear,
or whatever it is. And the United States excels at obstruction,
which is that it cannot build homes where it is needed,
(05:19):
especially in big cities like New York and San Francisco
and Boston. It is not building solar and wind or
transmission lines at a fast enough pace. There are now
thirty three nuclear plants under construction in China. There's zero
under construction in the US. Maybe we can debate about
whether there should be more nuclear, but I think there
just should be more clean technologies of all sorts, and
(05:41):
right now China is doing that. And I think that
is just one of several frameworks that we can use
to understand a lot of what has been happening in
the US as well as a lot of what's been
happening in China.
Speaker 1 (05:51):
And if we take the historical frame here for a
little bit, we do know that America has built in
the past, and it did so when there were lawyers around.
So what has changed in America's mindset to build now?
Because maybe the number of lawyers has increased, but it's
not like lawyers were a rare commodity at that time.
Speaker 2 (06:15):
Absolutely, I think that the US has always been loyally
among the founding fathers, most of them were lawyers. For
sixteen US presidents from Washington to Lincoln, thirteen of the
more lawyers. But the United States had been a proto
engineering state. It built a lot when it was a
mostly empty country where there were a lot of especially
European immigrants drifting into mostly the East Coast, and there
(06:39):
was a consensus among the elites that this big country,
a vast empty space, really needed to build. And so
the US used to be a proto engineering state when
it built canal systems, train systems, skyscrapers in Chicago and Manhattan,
and then in the twentieth century major projects like the
Hoover Dam or the Manhattan Probably Checked Apollo missions or
(07:01):
the Interstate Highway system. And what changed, I think, essentially,
was the nineteen sixties in which the American engineering state
made too many mistakes and that has to be frankly conceded,
in which urban planners like Robert Moses had completely overrun
a lot of dense neighborhoods in New York City in
which the US Department of Agriculture was spraying DDT and
(07:23):
other pesticides throughout the country, and in which people had
grown really tired of a role by technocrats which were
a little bit too cozy with the industrial companies, especially
the automotive companies as well. And so I think the
United States turned into a lawyer le society throughout the
nineteen sixties for excellent reasons. A lot of the lawyers
(07:43):
turned away from being creative deal making types of the
sort that are most obvious on Wall Street, in which
the lawyers were working with the railroad barons to raise
bonds for them, or eminent domain people out of their way,
and for good reason, a lot of the lawyers turned
into were litigators and regulators, led by people like Ralph Nader.
(08:03):
But I think the challenge right now is that a
lot of the law schools, a lot of the law students,
a lot of lawyers are still obsessed with solving the
problems of the nineteen sixties. Rather, I say, let's solve
the problems the twenty twenties, which is in sufficient homes,
in sufficient mass transit, and insufficient solar wind and transmission lines.
Speaker 1 (08:22):
So the loyally society has swung too hard towards obstructionism,
is the case you make. So one place where the
US has been able to build has been when it
has a perceived enemy. A lot of the successes in
the twentieth century come during the Cold War, for example,
where you talk about the Apollo Mission. These are driven
(08:43):
because there's an enemy and the US wants to be
in a race where it wants to win. Now, many
in the US see China as the enemy or want
to try and compete with China. But if you flip
that side of the narrative and look at it from
the Chinese perspective, is the driving force behind the Chinese
(09:04):
engineering mindset, the building mindset the same as it is
in America to try and beat America.
Speaker 2 (09:10):
I think it is the same as America throughout the
nineteenth century, in which there was a lot of need
for infrastructure and not so much necessarily motivated by the
external threat. Although that is a part of it, I
think that we can also frankly acknowledge that there is
an external component to China's building. The highway systems in
(09:31):
Tibet are pristine not so much because the Tibetans really
desperately needs excellent highways, but it is to prepare for
military eventualities around the Himalayas. But I would say that
in general, China's construction is mostly to meet domestic political goals,
which is to demonstrate to the people that the Chinese
(09:51):
government is able to deliver for their material welfare. If
you are a resident of Shanghai, every year you're getting
more and more parks every year. There is generally expansions
of the subway lines, such as you're able to get
around much more easily. If you're more rural in more
rural areas, maybe you're getting new bridges, maybe you're getting
connected to the high speed round network, and so that
(10:12):
is also very real as well.
Speaker 1 (10:15):
And I think there's.
Speaker 2 (10:16):
Also a domestic political need for some degree of sovereignty.
So I think that China has electrified very substantially, just
as a share of electricity and total energy production only
slightly behind Japan, which is the only other major economy
that is more electrified, but China will overtake Japan soon enough.
One out of every two cars sold by the end
(10:38):
of this year will be electric in China. I think
that is mostly due to the fact that it is
pursuing some degree of energy sovereignty, such that they're reading
all of these reports from the Americans to say that
China has these choke points. The USS these choke points,
China is very dependent on Middle East oil and gas,
and so they can stop the flow of these ships
(10:59):
in China's saying Okay, well, let's not be powered by
Middle East oil and gas. Let's be powered through our
cars with domestic solar, domestic wind, domestic nuclear, and domestic coal.
And so I think that the primary target for China
in terms of a lot of energy production is more
about the sovereignty than about climate, although in this case
there are a lot of happy agreements between the two.
Speaker 1 (11:21):
And let's stick with that, because if we take the
race framework, which definitely dominates American way of thinking, you
could take four or five areas where the US is
trying to compete with China AI chip making, trade, biotech,
soft power. But then when it comes to green tech,
(11:42):
America is happy to let China go ahead and dominate,
whereas it's going to push fossil fuels. They are on
two different lanes, so to speak. On the energy equation,
and China as a result, has become the largest exporter
of these technologies we've talked about. I mean, it's not
just about Chinese products made in China going out, it's
(12:02):
Chinese products made in other parts of the world. Almost
every continent has some form of Chinese green tech manufacturing. Now, So,
say at some point America realizes that climate change is
real and the future is going to be powered by green,
cheap electricity, what kind of strategic areas should America look
(12:23):
to start to build in because it certainly cannot overcome
all this lead that China has in every sector in
green tech, right.
Speaker 2 (12:32):
Yeah, No, I think the challenge with America really is
that I think that it did not necessarily make any
strategic decision that it will not pursue clean technology. Is
it's just something that sort of happened. In the same
way that there was not necessarily any high level strategic
decision to have a lot of manufacturing move to the
Asian Pacific and to China in particular. There's just something like,
(12:55):
you know, a million and one business decisions, let's simply
let it happen. I think one American superpower is wishful thinking.
That they will never acknowledge that they are so behind
in any technologies, because I think that still there's a
lot of discourse from the American elites to say China
is not at all a technology innovator. They are only
(13:16):
capable of stealing, not innovating. This is something that a
lot of American senators, for example, like Senator Tom Cotton
is able to tweet that the Chinese are not actually
economically competitive, they're just held afloat through industrial subsidies, which
I think is at this point not true any longer.
Perhaps it was true some earlier point in the past,
and so I think this is going to be pretty challenging.
(13:36):
I think, especially under the peculiarities of President Donald Trump,
who is really against wind turbines, in particular, calling it
the scam of the century. I find that quite interesting
and strange. Perhaps if we want it to be very
optimistic about US clean energy going forward, it seems like
the Trump administration is much more friendly towards nuclear power generation,
(13:56):
and so maybe at least for the next three and
a half years, it seems like it is going to
we're going to have to count on nuclear for generating
most of the answers here.
Speaker 1 (14:04):
Yeah, Advance geothermal is the other one that Secretary Chris
Wright talks a lot about because America has strengths to
try and build on what it has through shale oil
drilling that's been done in the oil and gas industry,
but could be applied to geothermal, which is a much lower,
almost clean source of electricity. But you brought up Wall
(14:26):
Street there, and it's worth making a note that a
lot of America is driven by Wall Street because your
big massive pension funds are managed in Wall Street, and
they vote with shareholders to try and decide where corporate
America is going. And that program has very much voted
(14:47):
for an asset light profit maximizing opportunity for American companies.
So when you say that manufacturing sort of moved to Asia,
not through government decision, but because of things like Wall
Street saying, well, making it cheaper in Asia is better
for profits, whereas in China the system that exists is
(15:09):
okay with inefficiency. They do want profits and they do
want market dominance, but that can come later. Initially, the
goal is to build, especially when it comes to companies.
So if we want to go to a point where
America starts to build. Wall Street is looking for efficiency.
(15:30):
How do you make the two work, because initially a
lot of the building will have to be inefficient, government subsidized,
be strategic, and that doesn't seem like the flavor of
the month.
Speaker 2 (15:43):
Absolutely, I think that is going to be one of
these cultural challenges that the US needs to face. That
it's not just the lawyers. I agree that Wall Street
has a lot to answer for itself, that the Wall
Street along with the corporate sector. There is this quote
attributed to Tim Cook that is evil, that what Apple
really wants is just in time production, the Toyota method,
(16:05):
whatever it is. And so there is just this general
drift in America towards some measure of efficiency, which could
also be understood as considerable degree of brittleness, in which
the US actually was not able to be very efficient,
for example, in the production of masks and cotton swabs
during the early days of the pandemic. That the US
(16:28):
is not very efficient at producing something like munitions after
it shipped a lot of shells to Ukraine and its
self defense against Russia. So there are all sorts of
ways in which the US is broken down. A lot
of my book is about the cultural views of the elites.
This is not a policy prescription book. I do not
say which statutes and regulations really need to be changed.
(16:50):
What I really really like is for the Americans to
have a little bit of a better sense of valuing
technology production, valuing communities of engine doing practice, and to
be quite a lot better at being able to manufacture
important things, value the circulation of process knowledge, and not
be so much held back by these efficiency concerns and
(17:13):
profitability concerns.
Speaker 1 (17:18):
After the break, I asked Dan what his vision for
the US is and whether AI robots are the answer
to the Malays. If you're enjoying listening to Zero, please
take a moment to rate and review the show on
Apple Podcasts and Spotify. Recently, Gwyneth Fries wrote, thank you, Akha.
I always learned so much from how you structure the conversation.
Thank you, Gwinnett. You're saying there is a vision that
(17:56):
exists in China where the Chinese communist power is trying
to meet the material needs of its people, and that's
the social contract it has, and it's delivering on that
contract so far, and so it's worked. Whereas America feels
a little adrift. You know, there isn't a Cold War
style enemy waiting. China sometimes is made to look like one,
(18:18):
but really, you know a lot of people are still
in the Francis Fukayama end of history. You know, liberalism
has won, liberal democracies have won. Is there a new project?
If you were to give Americans a vision for what
they should aim for to be able to deliver on
the things that you talk about, what kind of vision
would you want Americans to grab.
Speaker 2 (18:39):
I think that the vision of America that I would
like to see would be self motivated, and there would
not be through treating China as an adversary, And it
is to simply meet a lot of what it's people
demand in terms of people complain quite a lot about
cost of living, for example, cost of living in bigger
cities like New York and Sanria, Cisco and Boston where
(19:01):
housing is quite unaffordable. That people to some degree want
mass transit, and people want a lot more public investments.
And I want the US to be the best version
of itself, and I want the Chinese to be the
best version of themselves as well. And the way that
I think that we can get here a little bit
better is for the US to become let's say, twenty
(19:22):
percent more. Engineering does not have to be very high,
but let's just build a little bit more of the
things that the people want. For example, California high speed rail,
which was approved by referendum now nearly twenty years ago,
and very little of it has been built. This is
kind of just I believe, a national embarrassment that California, says,
one of the richest entities in the world, wants to
(19:43):
build this and is simply unable to build very much
of it at all. And I wish that China can
be fifty percent more loyally. I would really love for
the Chinese people to feel like they can be in
a country where they can flourish in which the state
does not feel need constantly to strangle their creative impulses,
(20:03):
that the state actually learns to value individual rights and
actually means it, and that I would also really love
if the Communist Party could just one day learn to
leave the people alone rather than trying to engineer them
towards some measure of national greatness.
Speaker 1 (20:17):
Well, that's a good place to come from a vision perspective,
but I do want to hit on one dark side
of the engineering state that you'd referred to earlier in
the conversation, but also you spend a bunch of time
in the book looking at the one child policy, the
zero COVID policy, you know, the one child policy which
your parents and the friends that they had back home experienced,
(20:39):
the kinds of brutality that you note in the book,
plus the zero COVID policy that you know, half of
it was pretty great for you, but then the other
half was pretty brutal. What is it about the engineering
mindset that leads to that kind of brutality.
Speaker 2 (20:57):
I think that the engineering state is made up not
only of hydraulic engineers. Fundamentally, the problem with the engineering
state is that they are fundamentally also social engineers, and
they cannot stop themselves from treating society as if it
were just another vast hydraulic system to be shifted this
way and that through a series of valves. And I
(21:20):
think a lot about, you know, for example, the detention
of ethno religious minorities, especially in qing Tiang region. I
think a lot about zero COVID, and I think a
lot about the one child policy, which they treat people
as yet another building material to be torn down and
remolded as they wish. And I think the problem with
some of China is that living in China made me
(21:42):
realize that a state could be too efficient, that you
could have too much state capacity if people are unable
to resist something like the one child policy, which, over
the course of its thirty five year existence, according to
China's official statistics, they conducted about three hundred million abortions,
which is roughly the population of the United States. And so,
you know, to have these sort of national traumas being
(22:05):
visited by a highly efficient state against the people, I
think that this is something that we don't want to see,
which is why I wish that China could be fifty
percent more loyally to have to some extent a federal
traditionary that is separate from the executive that is able
to protect the rights of the people. I don't think
we'll ever get there so long as the Communist Party
(22:26):
is in charge, but I would really love for there
to be actually substantive legal protections for Chinese to be
able to resist some of the worst impulses of social engineering.
Speaker 1 (22:36):
And in the last few minutes I've left, I want
to try and look a little bit forward, because AI
features in your book briefly to try and tell sort
of a little bit of the history where it comes
from cybernetics that was developed in Soviet Union. The goal
was to try and figure out whether you could actually
create a society using these hydraulic engineering type methods to
(22:58):
create that perfect socialist society. Well, we are now in
an age where AI is way more powerful than the
computers that existed in the past, and there is this
temptation to try and use it for all sorts of things.
So how do you think AI fits in the way
in which governance of these two countries should take advantage
(23:20):
of this technology and where is the risk?
Speaker 2 (23:23):
I think that AI right now is one of these
things where there is definitely a race between these two countries,
and I don't know how exactly it will shake out.
Because there's some people in Silicon Valley who believe that
AI is something like God in a box which will
just reach superintelligence and it will just solve pretty much
all of humanity's problems. I'm a little bit skeptical of
(23:44):
that approach, and I think what I want to suggest
is that we can't count China out on artificial intelligence.
In part because China is just building so much electrical
power at a much faster pace than the US, and
at some point AI will become a power problem in
which the US will need to solve a lot of
its energy challenges. Right now, there's a lot of talent
(24:05):
in the US which are of Chinese heritage who went
to Chinese universities. Right now, they are living and working
in California, but it could possibly be the case that
they decide to move to China in part because of
the erraticness of the Trump administration right now. Right now,
China is constrained on a lot of chips. But again,
(24:26):
here's where Donald Trump, being very erratic, might simply gift
a lot of these chips to China so long as
Nvidia pays an export tax. And so, you know, a
lot of these things are uncertain. But I think that
the US and China are racing towards AI, and that
race is actually profoundly uncertain. I think that we can't
count China out and we can't expect necessarily for the
(24:46):
US to win.
Speaker 1 (24:47):
So last question for you, do you think that AI
and AI powered robots would be necessary if the US
is to bring back manufacturing, bring back building.
Speaker 2 (24:58):
It probably would have help, But I think that I
would just focus on manufacturing much more directly, because I
think that it is really important to make things, and
we can't outsource all of our views to AI. AI
might be unfriendly. AI might only be really good at
making us make better power points, and so I think
that to target manufacturing, we should actually work on building
(25:19):
better manufacturing.
Speaker 1 (25:21):
Thank you, Dan, Thank you very much a chat, and
thank you for listening to zero. Now for the sound
of the week. That's the sound of scuba divers seeing
(25:45):
a coral reef. The world has reached its first catastrophic
tipping point, where at current temperatures, scientists say widespread diebacks
of corals have begun. They say the world's warm water
coral reefs will not remain at any meaningful scale unless
immediate steps are taken to bring global average temperature rise
back down to one point two degree celsius compared to
(26:08):
pre industrial levels. If you liked this episode, please take
a moment to rate and review the show on Apple
Podcasts and Spotify. This episode was produced by Oscar Boyd
with the help of Annam Asarakus. Our theme music is
composed by wonderly special thanks to Samersadi, Moses Andam Laura
Milan and Sharan Chan. I'm Akshatrati back soon.
Welcome to zero. I'm akshatrati. This week lawyers Versus engineers.
China is a country of superlatives. It makes the most
number of solar panels, wind turbines, batteries, and electric cars.
(00:24):
It also is the largest builder of new coal power plants,
the largest builder of new nuclear power stations, and the
country with the longest high speed rail network. The list
goes on and on. Because China builds, builds, and builds.
It's one reason why the country has become the fascination
of the green movement. China now has a huge lead
(00:46):
in all types of climate technologies, and it is using
that to electrify its economy at a breakneck speed. But
why has China been able to build while many far
richer countries have fallen behind. It's not just because China
is a dictatorship, argues technology analyst and author Dan Wong.
(01:07):
In his new book Breakneck. He paints a vivid picture
of the social, cultural, and governance differences that have turned
China into a nation of builders. Dan says that China
is a country with an engineer's mindset, while the US
has a lawyer's mindset. I spoke with Dan a few
weeks ago as part of the SOSV Climate Tech Summit
(01:29):
to learn what China gets right, where it's going wrong,
and what lessons other countries can take from China's extraordinary
green tech buildout. Welcome to the SOSV Climate Tech Summit, Dan,
and welcome also to the Zero podcast for Bloomberg Green.
Speaker 2 (01:49):
Great to be here at chot SO.
Speaker 1 (01:50):
I learned a lot about China from your book, Breakneck
Congrades on its success. We are talking on a climate
podcast and a climate tech summit, so there is a
lot of interest from the climate crowd on what China
has been able to achieve on its dominance in green tech.
But before we come to that, let's start out with
(02:12):
the main thesis of the book that you lay out,
which is that China is an engineering state while the
US is a lawyerly state. You have first time experience
living in both countries and at interesting times. Could you
briefly give examples that are illustrative to these two frames.
Speaker 2 (02:32):
The time that I lived in was between twenty seventeen
to twenty twenty three in China, and which I felt
like it really was a momentous period in which Donald Trump,
in his first administration had launched his first trade war.
China was growing ever more capable in all sorts of technologies,
including clean tech. I also lived through zero COVID, which
(02:53):
was the centerpiece of my experience. And the China is
a country I call the engineering state in my book
because various points it has been ruled entirely by engineers
at the senior most levels of the Communist Party. The
engineers in China treat the physical environment as a giant
engineering exercise. They build a lot of homes and hyperscalers,
(03:15):
and solar and wind and coal plants as well. China
also treats the economy as a big engineering exercise, in
which they tend to shuttle young people here and there
in order to work on more strategic industries. And they
also treat society as a big engineering exercise, as I
show through the examples of zero COVID as well as
(03:36):
the one child policy, which the number is right there
in the name, and there's no ambiguity about what sort
of engineering projects these are. I contrast that with the
United States, which I call the lawyerly society. I mostly
wrote this book out of the Yale Law School. It's
still kind of surprising to me that every president needs
to earn a degree from Yale Law before they can
be in the White House. And the Democratic Party is
(03:57):
especially lawyerly, but the Republicans are pretty lawyer as well.
The issue with lawyers is that they block everything good
and bad, so you don't have stupid ideas like the
one child policy, so don't have very functional infrastructure anywhere,
and it is really difficult to build clean technology on
par with China in the US.
Speaker 1 (04:14):
And this framing of engineers versus lawyers, why do you
think that was the important framing that people needed to
know now versus say, what's dominated US China discourse, which
is free market capitalism versus state led capitalism, or democracy
versus authoritarianism, or academic terms like leninism.
Speaker 2 (04:35):
Yeah, all of these terms have a place, and I
think that the US and China are both really important
countries that are in competition and have a lot of
frictions with each other. Most of these terms come from
nineteenth century political scientists, so terms like capitalists socialist only
Leninist comes from perhaps the twentieth century. And I just
(04:58):
wanted to be inventive and playful and coming up with
a new term for understanding these two countries. I think
that what distinguishes China right now is construction, a lot
of construction of homes hyperscalers again, coal, wind, solar, nuclear,
or whatever it is. And the United States excels at obstruction,
which is that it cannot build homes where it is needed,
(05:19):
especially in big cities like New York and San Francisco
and Boston. It is not building solar and wind or
transmission lines at a fast enough pace. There are now
thirty three nuclear plants under construction in China. There's zero
under construction in the US. Maybe we can debate about
whether there should be more nuclear, but I think there
just should be more clean technologies of all sorts, and
(05:41):
right now China is doing that. And I think that
is just one of several frameworks that we can use
to understand a lot of what has been happening in
the US as well as a lot of what's been
happening in China.
Speaker 1 (05:51):
And if we take the historical frame here for a
little bit, we do know that America has built in
the past, and it did so when there were lawyers around.
So what has changed in America's mindset to build now?
Because maybe the number of lawyers has increased, but it's
not like lawyers were a rare commodity at that time.
Speaker 2 (06:15):
Absolutely, I think that the US has always been loyally
among the founding fathers, most of them were lawyers. For
sixteen US presidents from Washington to Lincoln, thirteen of the
more lawyers. But the United States had been a proto
engineering state. It built a lot when it was a
mostly empty country where there were a lot of especially
European immigrants drifting into mostly the East Coast, and there
(06:39):
was a consensus among the elites that this big country,
a vast empty space, really needed to build. And so
the US used to be a proto engineering state when
it built canal systems, train systems, skyscrapers in Chicago and Manhattan,
and then in the twentieth century major projects like the
Hoover Dam or the Manhattan Probably Checked Apollo missions or
(07:01):
the Interstate Highway system. And what changed, I think, essentially,
was the nineteen sixties in which the American engineering state
made too many mistakes and that has to be frankly conceded,
in which urban planners like Robert Moses had completely overrun
a lot of dense neighborhoods in New York City in
which the US Department of Agriculture was spraying DDT and
(07:23):
other pesticides throughout the country, and in which people had
grown really tired of a role by technocrats which were
a little bit too cozy with the industrial companies, especially
the automotive companies as well. And so I think the
United States turned into a lawyer le society throughout the
nineteen sixties for excellent reasons. A lot of the lawyers
(07:43):
turned away from being creative deal making types of the
sort that are most obvious on Wall Street, in which
the lawyers were working with the railroad barons to raise
bonds for them, or eminent domain people out of their way,
and for good reason, a lot of the lawyers turned
into were litigators and regulators, led by people like Ralph Nader.
(08:03):
But I think the challenge right now is that a
lot of the law schools, a lot of the law students,
a lot of lawyers are still obsessed with solving the
problems of the nineteen sixties. Rather, I say, let's solve
the problems the twenty twenties, which is in sufficient homes,
in sufficient mass transit, and insufficient solar wind and transmission lines.
Speaker 1 (08:22):
So the loyally society has swung too hard towards obstructionism,
is the case you make. So one place where the
US has been able to build has been when it
has a perceived enemy. A lot of the successes in
the twentieth century come during the Cold War, for example,
where you talk about the Apollo Mission. These are driven
(08:43):
because there's an enemy and the US wants to be
in a race where it wants to win. Now, many
in the US see China as the enemy or want
to try and compete with China. But if you flip
that side of the narrative and look at it from
the Chinese perspective, is the driving force behind the Chinese
(09:04):
engineering mindset, the building mindset the same as it is
in America to try and beat America.
Speaker 2 (09:10):
I think it is the same as America throughout the
nineteenth century, in which there was a lot of need
for infrastructure and not so much necessarily motivated by the
external threat. Although that is a part of it, I
think that we can also frankly acknowledge that there is
an external component to China's building. The highway systems in
(09:31):
Tibet are pristine not so much because the Tibetans really
desperately needs excellent highways, but it is to prepare for
military eventualities around the Himalayas. But I would say that
in general, China's construction is mostly to meet domestic political goals,
which is to demonstrate to the people that the Chinese
(09:51):
government is able to deliver for their material welfare. If
you are a resident of Shanghai, every year you're getting
more and more parks every year. There is generally expansions
of the subway lines, such as you're able to get
around much more easily. If you're more rural in more
rural areas, maybe you're getting new bridges, maybe you're getting
connected to the high speed round network, and so that
(10:12):
is also very real as well.
Speaker 1 (10:15):
And I think there's.
Speaker 2 (10:16):
Also a domestic political need for some degree of sovereignty.
So I think that China has electrified very substantially, just
as a share of electricity and total energy production only
slightly behind Japan, which is the only other major economy
that is more electrified, but China will overtake Japan soon enough.
One out of every two cars sold by the end
(10:38):
of this year will be electric in China. I think
that is mostly due to the fact that it is
pursuing some degree of energy sovereignty, such that they're reading
all of these reports from the Americans to say that
China has these choke points. The USS these choke points,
China is very dependent on Middle East oil and gas,
and so they can stop the flow of these ships
(10:59):
in China's saying Okay, well, let's not be powered by
Middle East oil and gas. Let's be powered through our
cars with domestic solar, domestic wind, domestic nuclear, and domestic coal.
And so I think that the primary target for China
in terms of a lot of energy production is more
about the sovereignty than about climate, although in this case
there are a lot of happy agreements between the two.
Speaker 1 (11:21):
And let's stick with that, because if we take the
race framework, which definitely dominates American way of thinking, you
could take four or five areas where the US is
trying to compete with China AI chip making, trade, biotech,
soft power. But then when it comes to green tech,
(11:42):
America is happy to let China go ahead and dominate,
whereas it's going to push fossil fuels. They are on
two different lanes, so to speak. On the energy equation,
and China as a result, has become the largest exporter
of these technologies we've talked about. I mean, it's not
just about Chinese products made in China going out, it's
(12:02):
Chinese products made in other parts of the world. Almost
every continent has some form of Chinese green tech manufacturing. Now, So,
say at some point America realizes that climate change is
real and the future is going to be powered by green,
cheap electricity, what kind of strategic areas should America look
(12:23):
to start to build in because it certainly cannot overcome
all this lead that China has in every sector in
green tech, right.
Speaker 2 (12:32):
Yeah, No, I think the challenge with America really is
that I think that it did not necessarily make any
strategic decision that it will not pursue clean technology. Is
it's just something that sort of happened. In the same
way that there was not necessarily any high level strategic
decision to have a lot of manufacturing move to the
Asian Pacific and to China in particular. There's just something like,
(12:55):
you know, a million and one business decisions, let's simply
let it happen. I think one American superpower is wishful thinking.
That they will never acknowledge that they are so behind
in any technologies, because I think that still there's a
lot of discourse from the American elites to say China
is not at all a technology innovator. They are only
(13:16):
capable of stealing, not innovating. This is something that a
lot of American senators, for example, like Senator Tom Cotton
is able to tweet that the Chinese are not actually
economically competitive, they're just held afloat through industrial subsidies, which
I think is at this point not true any longer.
Perhaps it was true some earlier point in the past,
and so I think this is going to be pretty challenging.
(13:36):
I think, especially under the peculiarities of President Donald Trump,
who is really against wind turbines, in particular, calling it
the scam of the century. I find that quite interesting
and strange. Perhaps if we want it to be very
optimistic about US clean energy going forward, it seems like
the Trump administration is much more friendly towards nuclear power generation,
(13:56):
and so maybe at least for the next three and
a half years, it seems like it is going to
we're going to have to count on nuclear for generating
most of the answers here.
Speaker 1 (14:04):
Yeah, Advance geothermal is the other one that Secretary Chris
Wright talks a lot about because America has strengths to
try and build on what it has through shale oil
drilling that's been done in the oil and gas industry,
but could be applied to geothermal, which is a much lower,
almost clean source of electricity. But you brought up Wall
(14:26):
Street there, and it's worth making a note that a
lot of America is driven by Wall Street because your
big massive pension funds are managed in Wall Street, and
they vote with shareholders to try and decide where corporate
America is going. And that program has very much voted
(14:47):
for an asset light profit maximizing opportunity for American companies.
So when you say that manufacturing sort of moved to Asia,
not through government decision, but because of things like Wall
Street saying, well, making it cheaper in Asia is better
for profits, whereas in China the system that exists is
(15:09):
okay with inefficiency. They do want profits and they do
want market dominance, but that can come later. Initially, the
goal is to build, especially when it comes to companies.
So if we want to go to a point where
America starts to build. Wall Street is looking for efficiency.
(15:30):
How do you make the two work, because initially a
lot of the building will have to be inefficient, government subsidized,
be strategic, and that doesn't seem like the flavor of
the month.
Speaker 2 (15:43):
Absolutely, I think that is going to be one of
these cultural challenges that the US needs to face. That
it's not just the lawyers. I agree that Wall Street
has a lot to answer for itself, that the Wall
Street along with the corporate sector. There is this quote
attributed to Tim Cook that is evil, that what Apple
really wants is just in time production, the Toyota method,
(16:05):
whatever it is. And so there is just this general
drift in America towards some measure of efficiency, which could
also be understood as considerable degree of brittleness, in which
the US actually was not able to be very efficient,
for example, in the production of masks and cotton swabs
during the early days of the pandemic. That the US
(16:28):
is not very efficient at producing something like munitions after
it shipped a lot of shells to Ukraine and its
self defense against Russia. So there are all sorts of
ways in which the US is broken down. A lot
of my book is about the cultural views of the elites.
This is not a policy prescription book. I do not
say which statutes and regulations really need to be changed.
(16:50):
What I really really like is for the Americans to
have a little bit of a better sense of valuing
technology production, valuing communities of engine doing practice, and to
be quite a lot better at being able to manufacture
important things, value the circulation of process knowledge, and not
be so much held back by these efficiency concerns and
(17:13):
profitability concerns.
Speaker 1 (17:18):
After the break, I asked Dan what his vision for
the US is and whether AI robots are the answer
to the Malays. If you're enjoying listening to Zero, please
take a moment to rate and review the show on
Apple Podcasts and Spotify. Recently, Gwyneth Fries wrote, thank you, Akha.
I always learned so much from how you structure the conversation.
Thank you, Gwinnett. You're saying there is a vision that
(17:56):
exists in China where the Chinese communist power is trying
to meet the material needs of its people, and that's
the social contract it has, and it's delivering on that
contract so far, and so it's worked. Whereas America feels
a little adrift. You know, there isn't a Cold War
style enemy waiting. China sometimes is made to look like one,
(18:18):
but really, you know a lot of people are still
in the Francis Fukayama end of history. You know, liberalism
has won, liberal democracies have won. Is there a new project?
If you were to give Americans a vision for what
they should aim for to be able to deliver on
the things that you talk about, what kind of vision
would you want Americans to grab.
Speaker 2 (18:39):
I think that the vision of America that I would
like to see would be self motivated, and there would
not be through treating China as an adversary, And it
is to simply meet a lot of what it's people
demand in terms of people complain quite a lot about
cost of living, for example, cost of living in bigger
cities like New York and Sanria, Cisco and Boston where
(19:01):
housing is quite unaffordable. That people to some degree want
mass transit, and people want a lot more public investments.
And I want the US to be the best version
of itself, and I want the Chinese to be the
best version of themselves as well. And the way that
I think that we can get here a little bit
better is for the US to become let's say, twenty
(19:22):
percent more. Engineering does not have to be very high,
but let's just build a little bit more of the
things that the people want. For example, California high speed rail,
which was approved by referendum now nearly twenty years ago,
and very little of it has been built. This is
kind of just I believe, a national embarrassment that California, says,
one of the richest entities in the world, wants to
(19:43):
build this and is simply unable to build very much
of it at all. And I wish that China can
be fifty percent more loyally. I would really love for
the Chinese people to feel like they can be in
a country where they can flourish in which the state
does not feel need constantly to strangle their creative impulses,
(20:03):
that the state actually learns to value individual rights and
actually means it, and that I would also really love
if the Communist Party could just one day learn to
leave the people alone rather than trying to engineer them
towards some measure of national greatness.
Speaker 1 (20:17):
Well, that's a good place to come from a vision perspective,
but I do want to hit on one dark side
of the engineering state that you'd referred to earlier in
the conversation, but also you spend a bunch of time
in the book looking at the one child policy, the
zero COVID policy, you know, the one child policy which
your parents and the friends that they had back home experienced,
(20:39):
the kinds of brutality that you note in the book,
plus the zero COVID policy that you know, half of
it was pretty great for you, but then the other
half was pretty brutal. What is it about the engineering
mindset that leads to that kind of brutality.
Speaker 2 (20:57):
I think that the engineering state is made up not
only of hydraulic engineers. Fundamentally, the problem with the engineering
state is that they are fundamentally also social engineers, and
they cannot stop themselves from treating society as if it
were just another vast hydraulic system to be shifted this
way and that through a series of valves. And I
(21:20):
think a lot about, you know, for example, the detention
of ethno religious minorities, especially in qing Tiang region. I
think a lot about zero COVID, and I think a
lot about the one child policy, which they treat people
as yet another building material to be torn down and
remolded as they wish. And I think the problem with
some of China is that living in China made me
(21:42):
realize that a state could be too efficient, that you
could have too much state capacity if people are unable
to resist something like the one child policy, which, over
the course of its thirty five year existence, according to
China's official statistics, they conducted about three hundred million abortions,
which is roughly the population of the United States. And so,
you know, to have these sort of national traumas being
(22:05):
visited by a highly efficient state against the people, I
think that this is something that we don't want to see,
which is why I wish that China could be fifty
percent more loyally to have to some extent a federal
traditionary that is separate from the executive that is able
to protect the rights of the people. I don't think
we'll ever get there so long as the Communist Party
(22:26):
is in charge, but I would really love for there
to be actually substantive legal protections for Chinese to be
able to resist some of the worst impulses of social engineering.
Speaker 1 (22:36):
And in the last few minutes I've left, I want
to try and look a little bit forward, because AI
features in your book briefly to try and tell sort
of a little bit of the history where it comes
from cybernetics that was developed in Soviet Union. The goal
was to try and figure out whether you could actually
create a society using these hydraulic engineering type methods to
(22:58):
create that perfect socialist society. Well, we are now in
an age where AI is way more powerful than the
computers that existed in the past, and there is this
temptation to try and use it for all sorts of things.
So how do you think AI fits in the way
in which governance of these two countries should take advantage
(23:20):
of this technology and where is the risk?
Speaker 2 (23:23):
I think that AI right now is one of these
things where there is definitely a race between these two countries,
and I don't know how exactly it will shake out.
Because there's some people in Silicon Valley who believe that
AI is something like God in a box which will
just reach superintelligence and it will just solve pretty much
all of humanity's problems. I'm a little bit skeptical of
(23:44):
that approach, and I think what I want to suggest
is that we can't count China out on artificial intelligence.
In part because China is just building so much electrical
power at a much faster pace than the US, and
at some point AI will become a power problem in
which the US will need to solve a lot of
its energy challenges. Right now, there's a lot of talent
(24:05):
in the US which are of Chinese heritage who went
to Chinese universities. Right now, they are living and working
in California, but it could possibly be the case that
they decide to move to China in part because of
the erraticness of the Trump administration right now. Right now,
China is constrained on a lot of chips. But again,
(24:26):
here's where Donald Trump, being very erratic, might simply gift
a lot of these chips to China so long as
Nvidia pays an export tax. And so, you know, a
lot of these things are uncertain. But I think that
the US and China are racing towards AI, and that
race is actually profoundly uncertain. I think that we can't
count China out and we can't expect necessarily for the
(24:46):
US to win.
Speaker 1 (24:47):
So last question for you, do you think that AI
and AI powered robots would be necessary if the US
is to bring back manufacturing, bring back building.
Speaker 2 (24:58):
It probably would have help, But I think that I
would just focus on manufacturing much more directly, because I
think that it is really important to make things, and
we can't outsource all of our views to AI. AI
might be unfriendly. AI might only be really good at
making us make better power points, and so I think
that to target manufacturing, we should actually work on building
(25:19):
better manufacturing.
Speaker 1 (25:21):
Thank you, Dan, Thank you very much a chat, and
thank you for listening to zero. Now for the sound
of the week. That's the sound of scuba divers seeing
(25:45):
a coral reef. The world has reached its first catastrophic
tipping point, where at current temperatures, scientists say widespread diebacks
of corals have begun. They say the world's warm water
coral reefs will not remain at any meaningful scale unless
immediate steps are taken to bring global average temperature rise
back down to one point two degree celsius compared to
(26:08):
pre industrial levels. If you liked this episode, please take
a moment to rate and review the show on Apple
Podcasts and Spotify. This episode was produced by Oscar Boyd
with the help of Annam Asarakus. Our theme music is
composed by wonderly special thanks to Samersadi, Moses Andam Laura
Milan and Sharan Chan. I'm Akshatrati back soon.
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