For much of this past decade, Wang worked for an economics research firm, Gavekal Dragonomics, spotting macro and geopolitical trends for hedge funds and other well-paying institutions, while living in Hong Kong, Beijing, and Shanghai, also traveling the country extensively, looking at Chinese trends on the ground. Now, back in America, Wang has formulated this book into standalone chapters, loosely copying the format of the annual letters that he used to send out from China, which riffed on his thoughts of the past year. Wang begins, “Socialist China detains union organizers, levies light taxes, and provides a threadbare social safety net. The greatest trick that the Communist Party ever pulled off is masquerading as leftist…. China is an engineering state, which can’t stop itself from building…. Deng Xiaoping promoted engineers to the top ranks of China’s government throughout the 1980s and 1990s. By 2002, all nine members of the Politburo’s standing committee—the apex of the Communist Party—had trained as engineers…. Xi Jinping studied chemical engineering at Tsinghua, China’s top science university. For his third term as the Communist Party’s general secretary starting in 2022, Xi filled the politburo with executives from the country’s aerospace and weapons ministries…. The fundamental tenet of the engineering state is to look at people as aggregates, not individuals…. The chief feature of the engineering state is building big public works, no matter the financial or human cost.”
Wang worries about the loss of manufacturing capacity in America. He contrasts it with China’s ability to constantly build. “Embracing process knowledge means looking to people to embody eternity rather than to grand monuments. Furthermore, instead of viewing “technology” as a series of cool objects, we should look at it as a living practice…. The National Nuclear Security Administration found that it could no longer produce “Fogbank,” a classified material used to detonate the bomb, because it hadn’t kept good records of the production process and everyone who knew how to produce it had retired. The NNSA then spent $69 million to relearn how to produce this material…. It’s rare for blueprints to encode enough information to be technologically valuable…. Process knowledge is hard to measure because it exists mostly in people’s heads and the pattern of their relationships to other technical workers. We tend to refer to these intangibles as know-how, institutional memory, or tacit knowledge. They are embodied by an experienced workforce like Shenzhen’s…. Shenzhen is a community of engineering practice where factory owners, skilled engineers, entrepreneurs, investors, and researchers mix with the world’s most experienced workforce at producing high-end electronics…. The value of these communities of engineering practice is greater than any single company or engineer. Rather, they have to be understood as ecosystems of technology.”
There is a takeaway, related first in an anecdote, from Wang’s return to America which stood out. “I found one item particularly quite irksome on my return to America in 2023: a yard sign that begins “In this home we believe science is real.” The Communist Party “followed the science” of zero-Covid to its logical conclusion: barring people from their homes, testing people on a near-daily basis, and doing everything else it could to break the chains of transmission. Four decades ago, it “followed the science” to forcibly prevent many pregnancies in the pursuit of the one-child policy…. We can agree that “science is real.” But we have to keep in mind that there is a political determination involved with how to interpret the science. And that is something the lawyerly society is better at. It has lawyers interested in protecting rights, economists able to think through social science, humanists who consider ethics, and many other voices in the mix, attempting to open policy prescriptions up for debate. China doesn’t have a robust system for political contestation; engineers will simply follow the science until it leads to social immiseration.”
China’s engineering society has other downsides. Wang discusses Xi’s recent effort to clip the wings of China’s own tech sector. “The Communist Party distrusts and fears the Chinese people…. Authoritarian systems aren’t good at disseminating bad news…. China’s crackdown consisted of both technocratic regulation and an effort to impose political discipline on a freewheeling sector. Xi has forcefully reminded China’s tech companies that they cannot represent a power center that challenges the state’s sovereignty…. The Communist Party reminded them that it retains the discretionary power to engineer all aspects of society…. In the name of achieving change, the engineering state delivers such beatings on people or industries that they are unable to pick themselves back up again. Even if Xi’s judgments are right, his brute-force solutions reliably worsen things…. Sometimes, the only thing scarier than China’s problems are Beijing’s solutions…. The Chinese government often resembles a crew of skilled firefighters who douse blazes they themselves ignited…. After alienating so many people, has Xi decided to change course? No, he’s doubling down on promoting engineers to leadership…. Social engineering will increase as well. In 2018, Xi praised teachers as engineers of the soul, a phrase first used by Joseph Stalin…. [Xi] has talked about how love of the party and the country needs to start young, which means to “grab little ones from the cradle.” The party’s messages need to “enter the mind, enter the heart, and enter the hands.””
Xi is also ready to isolate China from the West and go to war if need be to fulfill his vision of China’s future. “In speeches to China’s national security community, he has spoken about “ensuring normal operation of the national economy under extreme circumstances.” What does that mean? As usual, the top leader is oblique, but it suggests that he’s worried that China will one day be cut off from the rest of the world…. The intention, it feels to me, is to build China into a great fortress…. Xi has already put up higher walls. In 2018, while I was living in Hong Kong, I started to tell people that China might close its doors in forty years, by the centenary of the founding of the People’s Republic. At that point, it will once again become the Celestial Empire, its people serenely untroubled by the turmoils of barbarians beyond its borders…. It turned out that I was off by a centenary: China had been mostly shut in 2021, a hundred years after the founding of the Communist Party. The pandemic was like a practice run—an exercise in what life in China would be like with its doors closed to the outside world. Xi apparently liked what he saw…. At the end of 2024, the country felt more fortresslike than before the pandemic…. It’s not encouraging for the future of Chinese and American relations that there are only about a thousand American students studying in China. Just before the pandemic, there were ten times that many.”
Wang concludes by, again, pointing out what China’s engineering state sees at its highest priorities. “Rather than prizing efficiency and just-in-time deliveries, China has invested in redundancies and shock buffers…. China takes energy security seriously…. Low carbon capacity—solar, wind, nuclear—has to be understood as part of a broader motivation to make the country dependent on energy sources within its borders…. In 2023, China added twenty times more coal-burning capacity than the rest of the world put together…. That also explains why China is so enthusiastic about electrifying the auto fleet: It would rather burn domestic coal than Middle East oil to power its cars…. China takes food security seriously as well…. [Xi stated,] “The bowls of the Chinese people should be filled mostly with Chinese grain.” The pandemic and Russia’s invasion of Ukraine have made Beijing more conscious of food self-sufficiency. Chinese leaders have always been aware that food shortages have toppled imperial dynasties. And so one of the things that provincial governors are graded on is whether they are self-sufficient in rice and wheat, while mayors of major cities have to make sure that a variety of foods are grown locally.” Wang ends, “Communist Party propaganda blared in 2023, “China will always be a developing country.””
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