Dan Wang   is the son of Chinese immigrants to Canada. After he studied economics and philosophy in the US, he moved to China to work as an economic analyst in 2017. There he lived through the COVID-19 pandemic and reflected on his experiences in annual letters   .

In his book he compares the Chinese political, economic, and social system to the US system. His central metaphor is that the majority of China’s leaders are engineers and the majority of US leaders are lawyers. According to Wang, this fact explains not only China’s obsession with building infrastructure at an unmatched pace but also its misguided metric-driven social policies. The lawyer-focused US system on the other hand excels at obstructing housing and infrastructure projects, often to the benefit of the rich, which leads to stagnation and loss of trust in the government.

The book starts by highlighting the positive sides of China’s build-focused strategy. By comparing the speed and cost of major infrastructure projects to US counterparts he shows just how incredibly fast China can build new cities and transport infrastructure. He comparese the often discussed California’s High-Speed Rail   (estimated cost of $128B, planned in 2008, estimated completion of first segment in 2030s) with the Beijng-Shanghai high-speed rail   (estimated cost $36B, planned in 2008, completed in 2011).

While he has an overall positive opinion of China’s build-focused approach he also highlights that wrong incentives at the provincial levels exist, which lead to misallocation of infrastructure, e.g. ghost cities, too many provinces competing in the same industry. Another domain where China’s strategy excels is building up the process knowledge to increasingly dominate technologies like electronics, EVs, solar cells, often after luring Western companies to produce i

When comparing the US he echoes the major theses from Abundance , which was released a few months earlier. Since the 1970s the government’s capacity to build has been attacked from both left and right governments: the right by trying to limit the government’s scope following their ideology, and the left by introducing process, social and environmental regulation. Moreover, the high level of discretion given to judges means that housing and infrastructure projects can be easily delayed or stopped by strongly incentivised minorities. This has led to a stagnant US infrastructure, often many decades old, where new projects are either delayed or spiral out of budget. The private sector also lost a lot of production know-how by outsourcing manufacturing to China.

The negative side of China’s approach is visible in its social policies (Wang calls it population engineering). The engineering leadership is too focused on hitting quantifiable goals while ignoring nuances and suffering of individual groups. He explains the disastrous consequences of the One-Child policy (active from 1980-2015) which led to forced abortions and mass sterilisations of women especially in rural areas. More recently, he was affected by another social policy. He describes his daily life during the city-wide lockdown of Shanghai as part of China’s failed Zero COVID   policy. Residents were confined to their homes from April to June 2022 with limited access to food and medication. Nationwide protests in November and December led to an effective end of the policy.

In Wang’s opinion China is constraining the freedom of its population too much, which has negative consequences: low contribution to current mainstream culture, few global brands, few Nobel laureates. It also means rich Chinese are ( rùn   )-ning to other countries.

In his conclusion Wang derives policy suggestions for both China and the US and predicts which of the two powers will dominate in the future. China needs to adopt more pluralism, individual legal protection, a better safety net to boost domestic consumption, and give its own entrepreneurs more freedom and policy stability. The US on the other side needs to focus on building and delivering both good infrastructure and trust in its institutions. He pretty much echoes the recommendations from Abundance   . While the US won’t be able to out-manufacture China it should still aim to develop and maintain the capability to produce the things it invents itself. A lot of the current process knowledge can also be acquired by allowing Chinese firms to cooperate and produce in the US (a reversal of what China’s approach in the 2010s). Overall Wang predicts that China will dominate manufacturing and have a military that can challenge US hegemony in Asia. However, he thinks the US will continue to dominate culture, diplomacy, the world economy, and top international prestige. He himself has chosen to move back to the US in 2023.

I read the book while on vacation in Germany. I enjoyed the view into Chinese domestic politics and way-of-thinking. I was surprised that Wang doesn’t really focus on the AI arms race between the US and China. Isubscribe to his suggestion that the US, and the West in general, needs to get better at delivering modern infrastructure projects on time and budget. I think most people would agree. However, he offers little detail on how to achieve that.

Wang was recently on Tyler Cowen’s podcast. You can listen to the conversation here   .