Works in Progress Podcast

Hey, welcome to the Works in Progress
podcast. My name's Sam Bowman.

I'm one of the editors
of Works in Progress.

And I'm Peter Garicano, another
editor with Works in Progress.

Our guest today is Dan Wang. Dan is
the author of a new book, Breakneck:

China's Quest to Engineer the Future.

And I also recommend that listeners
look up your annual letters,

which are some of the
best writing full stop,

but by far the best writing
that I regularly see on China.

They're absolutely fascinating,
incredibly insightful,

and your new book brings together so
many of those insights, so many more.

It's really well written.

It's a great read and I think it's going
to be one of the most important books

of the year. Dan,

I want to start by asking about the
different factions within Chinese politics

and the Chinese Communist Party.

We're often used to thinking of the
CCP in the West as a kind of monolith,

but in your book you go into some of
the different factions and some of the

different ideological battles
that take place within China.

So can you start by
talking to us about these?

My simple model for thinking about the
Chinese Communist Party is that it is a

Leninist technocracy with
grand opera characteristics.

So it is obviously Leninist because
it is led by a core cadre of

professional revolutionaries that see
their job as heaving the population

into journey.

And then some it is technocratic
because it has this heritage of the

examination system that has been
administered since the Imperial times,

that it's really been boosted by
the Communist Leninist system.

It has grand opera characteristics
because it is pretty practical until it

collapses into the preposterous.

And one of the points I make in my
book is that there's a pretty thin line

between rationality and irrationality.

You can be enforcing pandemic controls,

which are making sure that to
break the chains of transmission,

making sure that not too many people
are dying all the way until you get to a

lockdown of 25 million people being
unable to leave their apartment

compounds over the course of eight weeks,

which is what happened to
Shanghai in 2022. So within this

framework of aness technocracy
with grand opera characteristics,

I think what we can have is some people
who are a little bit more into the

technocratic elements.

And I would say that there's a core
part of the Communist Party since Deng

Xiaoping brought China back from
the brink from the Mao years,

who are simply very interested in growth.

These are people who perhaps have more
training abroad who have spent some time

in Europe and the US who have a pretty
keen sense that Japan, Korea, Taiwan,

have grown much more quickly
than the People's Republic have.

And they're really interested in just
trying to drive a lot of growth forward.

And then you have parts of
the Chinese Communist Party,

which are a little bit more
into the grant opera tradition.

This is where I situate Xiaoping.

So every couple of years he will
have a major celebration of the

death of Karl Marx and you can see this
giant portrait of Karl Marx hanging

in the Great Hall of the People.
There's a lot of flags,

giant red flags that

where it is garlanded by
the central committee.

And then if you take a look at
some of the video footage of the

Party Congress, which takes
place every five years,

it really feels like a Wagnerian
opera. Without all that noise,

the political downfalls
might well be greater.

And so Xi Jinping is someone who I think
has a very keen sense of pageantry.

He has a very keen sense
of the apocalyptic,

he has a very keen sense that growth
is not the only thing there is.

There has to be some centralised campaigns
of inspiration that really drive the

people forward, really
manage the propaganda well
really discipline the party.

And so you can try to create these
sort of factions of here's a Beijing

faction, here's a Shanghai faction
within the Communist Party.

The way I think about it is there's
this tension between Leninism on the one

hand and economic growth on the other.

And this is something that I find you
talk about people being forced to study.

Xi Jinping thought,

and I'm really curious what actually
is Xi Jinping thought is there,

how would a scholar or Xi Jinping thought,

try to summarise it for somebody like
me who is almost completely unfamiliar

with it.

Some people study Xi Jinping
thought because it's their job.

I study Xi Jinping
thought because it's fun.

My simple encapsulation of Xi Jinping
thought is that Xi Jinping is trying to

achieve the centenary goal, which is
encapsulated by the Communist Party,

which is to achieve the great rejuvenation
of the Chinese ethnostate by the year

2049, which is the centenary
of the Communist party's
founding. And within that,

what Xi Jinping wants to do is to
try to have about a dozen different

goals, some of which
include poverty alleviation,

discipline in the party, economic
growth, having a strong military,

and you can stuff a couple of more
things within this capacious framework.

But I think the general framework that
I would have for Xi Jinping thought is

at its most simple,

it is to make China great again under
the leadership of the Communist Party.

And maybe the emphasis should really
be placed on communist party leadership

rather than the great rejuvenation of
the people. Because if Xi has to choose,

I think he will choose the
party over the country,

but he would like to have the
Chinese people feel rejuvenated,

whatever that means,

but has to also be under the
leadership of the Communist Party.

And does this include prescriptions
about means or is this focused

on ends and pragmatic about how China
is supposed to achieve these ends?

I think there has been
a shift. The previously,

I think the Xi is the third grade
ruler of China over the last

70 years. First great ruler
of China was Mao Zedong,

who ruled from 1949 to
1976 and he passed away.

And I think Mao was first
and foremost a poet.

He was second, a great warlord and third,

a murderer dictator who
plunged the country into all
sorts of catastrophes over

his years in this role. And so for Mao,

I think the project of the Ethnostate,

the project of the rejuvenation of the
Chinese people was first and foremost an

aesthetic project.

A lot of what he tried to do was to create
some sort of beauty as he understood

it in this sort of very bizarre
literary theory lens of how to

view the Chinese people.

So Mao was first and foremost a poet
and then a warlord. Deng Xiaoping was

a lot of these things as well, but he
was much more focused on economic growth.

He was very much interested in maintaining
the primacy of the communist Party,

but he was able to relax a lot of these
dictates and really try to focus on

making China as rich as possible. And I
think Xi might be somewhere in between.

He cares about economic growth,

he understands that growth is really
important for the communist party in order

to establish its legitimacy.

He understands that growth is really
important because that gives China much

more space for manoeuvre
in all sorts of things.

He doesn't want to go back to
poverty, but there is this again,

grant opera element here in which
he cares about the way that China is

achieving growth.

And so I think there is an end of
achieving the great rejuvenation of the

Chinese nation,

but the means also has to be there as
well. Where there has to be leadership by

the communist party, there has to be
some commitment to Marxism Leninism,

there has to be some commitment to the
confusionism that is endemic to Chinese

history and he really cares about
the way that China grows rich.

He doesn't want China to grow rich through
the way that America has grown rich

in the last 20 years,

which is substantially
driven by financialization
on the one coast Wall Street

as well as tech on the other coast,

A lot of consumer internet
represented by Silicon Valley.

He wants China to grow rich by investing
a tonne in heavy industry in much more

of a Soviet way. So there
is a means that Xi prefers.

So a lot of your book is about the
training that the leaders have had in the

People's Republic.

You make a big point of them all being
engineers and she himself is also

a chemical engineer by training.
But I'm kind of curious,

how rigorous are these degrees
that these leaders took?

How highly should we actually think of
she's comorbidities given that he studied

engineering?

Not terribly rigorous, especially not
rigorous when she studied engineering,

chemical engineering in the
years that he was in Tsinghua,

which was at the tail end
of the cultural revolution.

So Xi grew up as the son of one of
China's most important state leaders who

ended up being the party
Secretary of Guangdong Province,

drove a lot of liberal reform.

But Xi's father was at various points
out of the good graces of Beijing.

And so he was sent away into the
countryside and Xi himself didn't

have a very happy childhood because his
father was purged for various reasons,

but he managed to get into China's top
science and engineering university on the

basis of being a worker
peasant soldier programme.

And so I think he was classified
either as a worker or a soldier,

I think probably more of a soldier.

But this was a time when you didn't
really have to get really good grades in

order to get into China to stop
university later on. He had a degree

in I believe Marxist economics.

And so this is what his doctorate is in,

so we have to call him hair
doctor professor Xi PhD.

But this isn't in the sort of
engineering of the sort that you

and I love.

So I think a lot of the training of
engineers in China's public bureau

is frequently perfunctory at best.

Many people who had engineering degrees
never actually did any engineering

projects. I believe Hu Jintao,

the previous general secretary of the
Communist Party did actually help to build

a dam and his premier who had training
in geology actually did some geological

work.

But it is a little bit unusual and not
all of them have done any sort of real

engineering.

But the way that I want to take this still
a little bit seriously is that I want

to say that the engineering culture,

the engineering spirit is at least
somewhat endemic to the Chinese political

culture that stretches back into
imperial times. So the emperors

starting from the basically 0BC in
the first Chinese imperial dynasty,

the Qing dynasty,

they had barely hesitated to conscript
a lot of people to build great

walls or to build grand canals.
These are fortification systems.

These are hydraulic systems really to
try to conscript the population into

building a lot of these really big mega
projects that took centuries really to

achieve. And a lot of these emperors
also didn't really hesitate to completely

restructure a peasants
relationship to our land.

And so I think that China has been
practising a form of absolutism way before

any European monarchs with the idea in
the 17th century or the 18th centuries.

And so they had been really
practising a sort of absolutism.

And I also feel like China hasn't
had the chance to develop very much

of a liberal tradition in part
because the Imperial exam system

determines the status of a lot
of the intelligentsia in China.

And so you don't get really far
trying to advance through the court by

advocating for constraints
on the emperor generally.

There has been some of a
liberal tradition in China,

but it hasn't been very vibrant.

And that's in part because the court has
completely captured the intelligentsia

and this is why we also have just very
extensive meddling in the lives of people

over a very long period of time.

But how important is traditional
Chinese culture to Chinese elite today?

Are they embracing the heritage of
the Ching? Are they reading the books?

Is this like the Soviet Union in the 1940s
when they re-embraced it as part of a

new nationalism? How much do they
care about what happened before 1949?

Very difficult to try to
establish that with any sort of

objective truth.

I think that it is certainly the
case that the Communist party

talks extensively about how great
and wonderful various Chinese

imperial dynasties were in the past.

And I think for the most part it is
more than just paying lip service to the

glories of past Chinese culture.

I think there is some sense that
the party wants to maintain the

heritage of Confucius,

maintain the heritage of Mencius and
all of these other Chinese philosophers.

I think there is a sense that they really
do celebrate some of these great books

from China in the past,

and I think it is a little bit more
than just any sort of lip service

to past glories because
if they don't refer

extensively to past glories in
China, what are they going to do?

Talk about this German philosopher
who is really important in the 1870s

who has this giant beard and
who had carles on his face.

Now that sounds really, really weird.

Why would they be celebrating
a kind of an imperialist

foreign ideology, a sort
of Marxism that they,

I would say barely practise
themselves anymore?

They have to draw something
more fundamental to that
and they have to draw on

some sort of traditional Chinese culture
in order to establish some of their

cultural legitimacy.

You talk about in the book,

I guess a sort of intellectual movement
that you call the industrial party or

that are called referred
to as the industrial party.

And there's really a line that really
sticks out in my mind and you kind of say

there sort of backwards inventing fascism.

I wonder if you can talk a little
bit about who these people are,

what they believe and how this fits into
the sort of intellectual heritage of

both pro-communist China and also sort
of pre-modern or pre-con contemporary

communist China.

The industrial party in China
is not a formal political party.

The communist party of China
has a defacto political

monopoly over all political
parties in China. Technically,

if you take a look at
the People's Republic,

there's also eight other parties including
something called the Democratic Party

or something. And these are all obedient
and very loyal to the Communist Party.

So the Communist Party
is not the sole party,

but it is above all of the other parties.

The industrial party is more of
a meme-based movement that was

organised through the Chinese
blogosphere essentially through the

two thousands and it still
persists today to some extent.

So these are a lot of people who are
organised under a couple of core blog

posts. The Chinese are just like us,

they think about the blog
posts quite a lot as well.

And so a lot of the industrial party is,

I want to be clear that I'm just
caricaturing a lot of these views,

but the view is that heavy industry
solves all problems. There is no problem

that heavy industry cannot solve.

And so a lot of what they're trying to
do is to advocate for organising the

state under the pursuit of
science and technology projects.

It is very dismissive
of the financial sector,

it's very dismissive of
service sectors at large.

It is to say that China
needs to build steel,

China needs to build semiconductors,
China needs to build, build. Now,

I think there is a popular encapsulation
of this view that perhaps more

folks have heard of and that
is the Three Body Problem.

The author here is Liu Cixin.

He wrote this trilogy of
the Three Body Problem.

He also had another big book
that's called the Wandering Earth.

The Wandering Earth is one of these
books that have been adapted into a movie

over the last couple of years,

and this is one of these big blockbuster
movies that was really popular in

China. And the core premise
of the Three Body Problem and

Wandering Earth is that humanity
is under some sort of alien

threat, some interstellar threat.

And what the state really needs to do
is to organise the entirety of society,

band together under a
technocratic government and
defeat this foreign threat in

both cases and in the books.

It is actually kind of successful
in the Three Body Problem.

The Chinese end up working pretty well
with the US and they have some sort of

world government in order to
defeat the big alien threat.

And so this is one of these core texts
that I think is one of these big or texts

that a lot of the industrial
party is organised around.

But there is a pretty vibrant movement
here where Cixin is not the only author.

A lot of this is organised under this
still a sense of fierce nationalism

that China was defeated first by the
European imperial powers second by

this brutal fascist invasion by Japan.
China hadn't been defeated,

but it had been kind of close and China
was suffering very extensively under

Japan's invasion throughout
the thirties and the forties.

And the core diagnosis of a lot of
the industrial party is that China was

invaded, China was humiliated because
it did not have science and technology.

And so I look at this
discourse and I think, well,

isn't this a straightforward reinvention
of fascism in the 1930s and the

1940s?

And I take a look at some of these
texts by especially the Italian

futurists in the 1930s, they
produced some fantastic art.

It is very geometrical.

I really enjoy looking at these sort
of fractured prisim based art of

aeroplanes and trains and in
some cases wonderful pieces of

machinery.

And they had a very strong aesthetic
sense that technology is political and

technology can be very beautiful and
I think this is what a lot of the

industrial party is. They would never say
that they're trying to invent fascism,

but having a technocracy
administer a state bent on

pursuing science and technology,

I don't know if there's
other ways to describe it.

It is funny you mentioned
that on Instagram I get a
lot of aesthetic building

accounts.

One of the things I'm interested in and
the other day up popped in my feed a

post about Italian rationalism,

which was a movement according to
this art aesthetic account that

flourished Italy in the 1920s,
thirties and forties before declining.

And I thought, wow, that's an interesting
one to pick out, but you are right.

The aesthetics are really,

really interesting and much
more so interestingly than
anything Germany did over

that period.

The focus on futurism and the focus
on the aesthetics of technology and

so on is very,

very striking from Italy in particular
in that era and interesting.

And I was not aware that that
was such an important part of,

or that was an important part of this
kind of group or this memeplex in China.

Coming back to this
industrial party question,

how niche is this? How
who's engaging with it?

Is this part of this kind of more
extreme like right wing blogosphere,

is this something that it's widely read
and consumed are the younger cadres

reading it?

For the most part,

the industrial party texts are
pretty mainstream in society and one

might even imagine that
this is actually a central

guiding movement for the central
committee and the Politbureau of the

Communist Party even today.

So almost everything would
be extensively censored

in China.

The government censors
everything the they have censored

at times the first line of the
Chinese national anthem arise

who do not want to be slaves,

which is something that the Shanghai
residents were sharing extensively during

the Shanghai lockdown. They censor
all sorts of independent journalism.

They've censored my
website in China as well,

but there has been kind of one movement
that hasn't suffered very extensive

censorship and that is
the industrial party.

And one can even say that some of the
core ideas of the industrial party,

namely that China was defeated by the
imperialists and the fascists due to

a lack of technology,

which I think is not too
controversial of an idea,

broadly speaking even among everybody
else who looks at China. And then the

second big idea of the modern
China today really needs to be

organised to pursue a lot
of advanced manufacturing.

One could say that this is a part
of the ethos of the Chinese state,

not just under the communist regime but
also under the Taiwanese government,

which has also felt a lot of these
urgent needs to improve technology

as well.

And so if you take a look at
a lot of these texts in China,

the industrial party hasn't
been very extensively censored.

Every so often you see that they have
visits from high ranking members in

the Communist party.

A lot of their texts are actually
sponsored by think tanks that are

directly affiliated with the state. And
so these people are kind of thriving.

Now,

every once in a while someone will say
something odd that there has been one

member of the industrial party
who has been one of these big

blogosphere members who has been
pretty supportive of Ukraine's fight

against Russia. His remarks
are occasionally censored,

but for the most part I would say that
the industrial party ethos is now baked

in.

And more broadly, if you are someone,

if you're in your early twenties and
you decide that your goal in life is to

become general secretary, what do
you do? Who do you hang out with?

Where are you and what are the choices
you're thinking about making in the next

10, 15 years?

Pieter, you're a young,

ambitious person interested
in politics in your twenties.

Are you asking because
you're interested? Well,

here's what I recommend that you do.

The first is that it helps to
have a family member who is high

ranking in the party.

So Xi famously is part of what people
would call the Princeling faction

because his father was one of the,

at times when could say one of the 10
most important members of the Communist

Party under Mao Zedong and
also under Deng Xiaoping.

And so it helps to have a high
ranking member in the party,

but that hasn't been a
requirement traditionally,

even now there are still a lot of smart
folks who are able to get into the

senior ranks of the party without
having illustrious family heritage.

In part that is because the communist
party has been relatively meritocratic.

The Imperial Chinese state is famous for
administering the exam system and that

I think has produced a
measure of aristocracy that
one doesn't necessarily find

in many other countries.
It would help if you dedicated

yourself to studying Marxism Leninism.

And now Xi Jinping thought
the Chinese are really

looking constantly at selecting
for the brightest kids in

school and also encouraging them to
become members of the Communist Party.

If you're a bright young
thing in elementary school,

starting in elementary school in China,

people might be given what
is just a red silk scarf

in which you are identified
as a very smart young person.

Your name would be a red pioneer.
And starting from that point,

your teachers would be looking out
for the red pioneers and constantly

encouraging them to go to the
right schools, join the party,

and then doing the right
thing In universities,

if you do in fact join the party, maybe
get an engineering degree in university,

then you might be selected to
test into the civil service

system in China. And the traditional
path for getting yourself

raised throughout the party is first you
have to know where the political winds

are blowing. The party state
talks endlessly about itself.

You can watch the daily newscasts,
you can read the daily newspapers,

you can read the monthly
Party theory magazine,

which I did when I was living in China,

which is a fascinating fun magazine
to look through called Seeking Truth.

You read all of these texts,

you try to figure out what Xi Jinping's
next objective is Xi Jinping is changing

his mind quite a lot. He cares
about poverty alleviation one month.

He cares about environmental
issues the other month,

science and technology
the month after that.

And so you kind of want to know where
the winds are blowing and then you

dedicate yourself really to serving
the party and serving the people.

So one of the features of the Chinese
communist state is that for the most part,

you're not allowed to administer your
hometown or the region that you're from,

the province that you're from. And so
you don't have these phenomenons like in

the United States where Joe Biden was
from the Pennsylvania, Delaware area,

these two states are
right next to each other.

And Joe Biden spent his entire political
life representing Delaware before

becoming president in China,

you're not allowed to administer your
home province because starting from

imperial times,

they have been nervous that you could
develop some factionalism within your own

state. And so if you're
from the Northeast,

you would be rotated to govern
a state in the southwest.

So you start from the village level,

you try to get promoted
into the third city.

So say if you are 25, if
you're just out of university,

you'll apply for a job with a party
and they'll give you a village to

run. Is that how this works?

That's right. You're probably
being sent to the villages.

That is a sign of trust within
the system that you're expected

to administer some of the
poorest places in China.

And that is where you prove your
chops to be able to develop your life.

And you can't run

the party,

you can't run the country without having
some experience in a pretty poor part

of China that is true for Xi and
his predecessor Jintao as well.

So you start on this party level,

you might get into a third tier city next,

and then you might be asked to be the
party secretary of Detang's Enterprise.

So this is a telecoms company, an
aviation company, an energy company.

You might be tasked to
run perhaps a think tank.

One of the all think tanks are of course
subservient to the communist party.

And so maybe you'll be expected
to administer a think tank,

administer a party school,

and then you're off to the big
leagues to run a city as important as

Shanghai or Shezhen.

And then you might be inside the central
committee by the time that you are in

your forties or fifties.

And then after that you might have a
chance to be general secretary of the

Communist Party.

How much and how does the CCP tolerate or

encourage useful dissent
and debate internally?

I don't mean questions about whether
the CCP should run the country,

but I mean questions about
which taxes should we raise or

should this dam that we're building be
this large or this large or should we be

investing in solar or should we
be investing in nuclear or hydro?

How do they encourage that and how
much can they encourage that given that

it's quite difficult to have a debate
about anything that doesn't end up leading

to lots of other questions that
they might not want to have asked?

That is framing the question
exactly right, because

where is the line between
technocracy and politics?

That line could shift very, very easily.

And one of the problems of autocratic
systems is that you never really

know where that line will shift.
And so at a first approximation,

I would say that the 24 men who run
the political bureau of the Communist

Party, the politbureau, are
at a first approximation,

perhaps the only 24 people in
the country who are allowed to do

politics.

Everything else is about the
efficient administration of their

will that they will transmit down after
they have settled matters of politics

and ideology. And so a
lot of these other things,

I think China is broadly pretty
meritocratic and also pretty broadly

technocratic. You can't build a bridge,
you can't build a subway system,

you can't build a high-speed rail
system without a considerable degree of

rationality and a lot of technocracy,
and this is for the most part,

I think Chinese are pretty good at this
stuff. The subways work really well.

Obviously the fascists have
a legendary way with trains.

And I would say that the high-speed rail
system in China works extremely well.

Cities work very, very well. I
am very, very fond of Shanghai.

Shanghai has these big leafy boulevard,
it has cafes all over the place.

You're never more than 15, 20
minutes away from a subway stop.

Shanghai had about 500 parks
in the city in 2020 when I was

living there.

And by the end of this year it plans
to have about a thousand parks in the

city.

And so a lot of these ways
China is administered really
well when it comes to a

lot of technocratic energy policy.

A lot of their plants make a lot of
sense to locate solar where it is,

where the sun is most
plentiful in the west,

locate a lot of wind
production there as well,

build a lot of ultra high voltage
transmission lines and build that into the

coasts in a way that you have all
sorts of these strange issues that are

preventing rationality in the
energy production systems in

the UK and the US that you don't really
run into these issues in China. The

problem, as you point out very well Sam,

is that many things implicate politics
and you never really know where the line

is going to be. It might be that you
work on kindergarten education policy,

which year should children
really start kindergarten,

you might think that doesn't
implicate politics at all,

but then maybe that runs into some sort
of a demographic issue and you don't

really know where these sort of lines are.

And I think one of these challenges and
ambiguities and autocratic systems is

that yes, you try to be
technocratic and general.

I think that China does a pretty good job,

but politics pervades and you never
really know when you fall into the pit.

Sorry, you mentioned the solar.

They seem to be doing well transmission,

they've built big infrastructure
projects, but why do we believe that?

That they are allocating
capital effectively?

Why isn't this going to be like every
other century plan regime in history and

over time they'll make more and more
mistakes and Xi Jinping has to decide

whether to bet on computer
vision versus, I dunno,

LLMs and over time to make more and more
mistakes and it's going to slow them

down. Why isn't that happening here?

The first thing to say is
that China has gotten a lot of

things.

I would say that what is really
important is to get a lot of things,

get a couple of big things, and then
you can make a lot of other mistakes.

And even if they pile up,
that's not so important.

And so I really enjoyed the
document that Sam produced about the

comparisons between the UK and France.

And so even though France
looks politically much more
dysfunctional than the UK

at the moment,

they got a lot of things which is to build
a lot more housing and to build a lot

more energy systems. And so you
get a couple of big things right?

And you have the ability to
make a lot of other mistakes.

And if you take a look at the history
of China over the last 40 years

when it's really gotten rich,

I spent a lot of time thinking
about how they did get a lot of big

things in terms of how to finance
the industrialization in terms of

managing the political economy in terms
of motivating the cadres in terms of

encouraging private enterprise when
they should have been encouraging it. So

these are things that a lot
of other developing countries
haven't really figured

out.

It is pretty clear that China has grown
much more decisively than India has over

the past. Right now that's no longer true,

but over the past China has grown much
better than India has much better than

Brazil has much better than
Indonesia and Mexico have as well.

And so I think the first thing to
say is that the political leadership

has been able to do a
lot of good things. Well,

the other thing that I would add is that
China has not only a very strong state,

it has also a lot of very
strong entrepreneurs.

There is this fierce churning
dynamic entrepreneurial sector in

China where things are kind of messy
in a lot of different ways in I think

highly positive and salubrious
functions for society.

There is just kind of this messiness
in Chinese society where as much as

the party state breathes down your neck,

a lot of people simply don't listen and
they try to look for ways around the

dictas. And that is I think
a distinguishing feature
of Chinese people that is

kind of Americans as well,

where they just kind of see what
they can get away with in a way that

I think doesn't really characterise
a lot of Europeans nor a lot of,

let's just say Japanese people where
they tend to be a little bit more

faithful to what the state
really wants them to do.

And so you have a strong state,

you also have a lot of dynamic
spirit. The state isn't always aware,

maybe isn't even mostly aware of
what the people are trying to do,

of what companies are trying to do.

And the state has the adaptability
I think much more so than the Soviet

system of understanding when
it has a success on its hands,

like DeepSeek. And then really trying
to co-opt that and to say, well,

good job DeepSeek,

now you're part of us and we're going
to try to support you in many different

ways. And I think the other part
that I would mention here is that

maybe central planning will
not work over the longer run.

Perhaps that is even the
most likely scenario.

But if you are able to just stay on
your feet and not collapse in any

sort of a big way,

maybe you can hope that your adversary
collapses more than more quickly than you

can.

And so Napoleon's great phrase here is
that the game goes to he who does not

lose,

and Napoleon mostly won his battles
and then he lost five big ones

and that resulted in total defeat.

And so I think one of the big hopes
of China today as well as Russia

today is that, well, maybe
we will eventually implode,

but let's hope that our adversaries
in the west implode faster than we can

because they have all sorts of problems
themselves. I think that is a hope,

that's not a strategy, but

we can't always assume that it is going
to be the central planning autocratic

power that will fall first,
maybe others fall first.

This is one of the really central themes
of your book that the sclerosis and you

focus on the United States,

but I mean clearly Europe has this
sclerosis even more so than the US does

of the West,

which is something that most of us are
used to talking about in fairly insular

terms. We're usually used to talking about
the problem with housing supply being

constrained in California being a problem
for Californians or more broadly for

Americans or people who'd
like to move to California.

The book really refocuses that and
puts this in terms of great power

competition between the US and
China. And I think it's a very,

very interesting and novel frame on
what is called the progress studies

or abundance agenda type debate.

In looking at China and looking
at what China gets, right,

did you come away with or have you
come away with new feelings about how

to solve some of these problems in the
western world or do you think that there

basically isn't anything
we can take from China,

it's just too singular to China itself,

and we can't really take any leaves out
of their book or wouldn't want to take

any leaves out of their book?

I think I want to split the west
into let's say two different

blocks.

The first block is the United
States and the second block is

Europe, UK,

and maybe I'll throw in Japan as well
- untraditional choice for the West I

grant. But what separates
the West just not

by democracy, I would say,

is that the Americans are dynamic,

they know how to grow
and the others do not.

And so that is my rough and simple
measure for thinking about things.

In the first page of my book,

I say that Europe and Japan are made
up of these mausoleum economies,

and I think that what really
unites Americans are the

Chinese, and I think these are the
two most alike people in the world.

These people look for shortcuts.

They have a sense of the
technological sublime,

they have a sense that they are great
powers and that every other country needs

to fall in line. They
have pretty strong states,

but also states that can't really
control what's going on in their own

borders. This Chinese not very well
to say nothing of the Americans.

And so I think that the Chinese and
the Americans are both really dynamic

peoples.

And the other way that I think
the West is should be split

between the US and everywhere else
is that I think the US used to be an

engineering state itself.

And I think certainly it is the case
that Europe and Japan were engineering

states,

but I have a sort of a sense that
the Americans have more ability to

achieve engineering once more.

And so the US had these two great
growth spurts in terms of physical

construction.

There was a big growth spurt in the
second half of the 19th century when the

elites really built a lot of
infrastructure, transcontinental railroad,

all of these different canals,

skyscrapers in Chicago and Manhattan.
And then there was another big growth

spurt during World War II and after
World War II when they knit the country

together further with highways and then
the lawyerly society took over in the

1960s. And one of the things I'm
really interested in is to say, well,

is the US able to have a third
growth spurt after the first two?

And one of the things I also want to be
very clear about is that I think the US

doesn't have to imitate China. It
doesn't have to copy China wholesale,

it doesn't have to get to
Chinese levels of construction

cheapness.

It doesn't have to get to Chinese levels
of construction speed here as well.

I'll praise the Europeans a little bit.

I think that it would be good enough
for the US to get to French or

Spanish or Japanese levels of
construction because they are able to

build High-speed rail systems and subway
systems at pretty high quality and you

don't hear of massive trampling of
human rights issues out of Japan or

Spain. I think that is
where the US needs to be,

but I'm much less optimistic about the
Europeans at large because I don't think

that they will really have this dynamic
spirit that the US has some shot

of achieving.

If I may add to that,

I was very struck because if I think
of the engineering states in Europe,

it's like Spain,

Italy and France are the three countries
where I'm aware of that the leadership

almost all have engineering backgrounds
and in many ways they've proven pretty

good at public works, Spain, great
rail networks and good highways.

But we think about which economies
in Europe are still dynamic and still

innovative. I think of the
Danes, the Dutch, the Canadians,

the Brits of course,

within Europe I'd say are probably
the most dynamic ones out there.

What do you think explains that, Dan?

I think there are certainly some
engineering states in Europe.

Maybe it is the case that the Netherlands
are an engineering state because the

country has been under sea level for a
very long time. And so they have been,

there's this term by a
1950s historian in the US

named Karl Wittfogel called
Oriental hydraulic Despotism,

that you have these giant states that
are organised to manage water issues.

So maybe we can throw in the
Dutch as western hydraulic,

whatever it is that have a hard
time managing their water issues,

though they're doing it quite well.

I think it is definitely
the case that Spain and

Italy and France are pretty good and
they're pretty technocratic at building

quite a lot of stuff, though
they're not very dynamic.

I think it's really interesting that
you bring up the Danes as a potential

success here. I just come
out of a month in Denmark,

which I had a really good time and I
thought it was actually really amazing how

well they were building.
They're building more subway networks,

and you can see this because they have a
label of the year that their new subway

station opened and some of these new
subway stations took place in 2019.

And I thought, oh, wow, you're
able to build subways after 1919.

That's actually pretty good to
have something done this century.

The subway systems in
Denmark are super clean,

they're cleaner than China, maybe
they're even cleaner than Japan.

They're fully automated. Trains
come every two, three minutes or so.

And so this is kind of a really
functional system. On the other hand,

I wonder to what extent
the Europeans are able to

achieve anything beyond excellent
provision of public infrastructure

because the continent as a whole,

both of so much better than me hasn't
done terribly well in terms of a lot of

dynamism over the course of my
month in Denmark last month,

Novo Nordisk lost about 30% of its
market value when it had a lower revenue

guidance, but it has been
kind of outcompeted by the US

Ozempic competitor with
Eli Lily and other great

European successes,

I'm not sure are on very good footing.
ASML is doing very well in

the Netherlands,

but they're suffering a lot of these
geopolitical headwinds controlled by the

Americans and perhaps
rejected by the Chinese.

And the other issue broadly with
European stock market is that

a lot of it is held up by French handbags.

And I wonder if the Asian stopped buying
all of these wonderful French handbags

to what extent European
market values will collapse.

And so here's actually something that
I'm really interested to get both of your

thoughts on because both of you have
thought much more deeply than me about the

causes of European stagnation. Now,

I know both of you have used that
Europe is a bit of a hand basket.

The UK especially is even
more of a hand basket.

But I really want to try to stealman
the case that I wonder if the

Europeans could actually rouse themselves
and be very dynamic there. What is the

possible case here?

Because I see Europe as being
completely buffeted by these two other

great powers. The Chinese
are actively industrialising.

Europe has been a big sense
in the US that the Chinese

will industrialise the Americans. But
actually if you take a look at the data,

China has been much more effective at
the industrialising Germany, Japan,

South Korea,

which are much more competitive on these
industrial goods that the US isn't even

actually producing for
the most part anymore.

And I wonder if the Europeans will also
be comprehensively outcompeted by the

Americans,

whether that is in the biotech sector
or frankly anything else in terms of the

financial services or tech.

But I'm really trying to find a silver
lining here for Europe to become much

more dynamic. So far, I don't see it
After the latest round of the trade war,

the China suspension of rare earth
magnets sent a lot of German automakers

panicking. I was thinking
that, oh, maybe this one,

these crises moments that is really
going to kick their efforts up a notch to

really try to compete. But then that
panic has sort of subsided again.

And I think all of us have lived
through these 20 crises moments,

which we really should have, which
really should have roused the Europeans.

But what do you think is Europe and
the UK really going to get their act

together?

One thing that you talk about the
US as being a country of lawyers,

and you are clear that there
are some advantages to that.

And I think that the comparison with
Europe is quite a good way of seeing those

advantages because you take an
issue like freedom of speech,

which isn't primarily an economic issue,

but does have some pretty important
implications economically.

And the European approach to many
issues is what I would call basically

a regulatory approach where you
have a single technocratic body.

It isn't focused on some sort of growth
goal the way maybe a Chinese equivalent

would be, but it is focused
on having a bunch of experts,

supposedly experts resolve on
a situation, collect evidence,

and make a decision, and for that
decision to be basically challengable.

Whereas in the US adversarial system
where there are courts and where there's a

constitution, that in practise
tends to be very, very extensive.

And the constitution in practise does in
fact constrain the government in quite

significant ways.

You end up with outcomes that are much
more liberal for want of a better term,

or much less prone to
sclerosis than Europe has.

So in that sense,

the lawyerly based society
does have a win on the other

Western block, if not
on the Chinese approach,

which has its own disadvantages
that are pretty obvious, I think.

What is the best possible
case for European dynamism.

So, I think the case
for Europe is twofold.

The first is that a lot of the
advantages Europe are really,

really hard to get if you don't
have them. Europe is a very,

very low corruption place. It has very,

very strong relatively to the rest of
the world, private property rights.

It has very, very, very good
respect for the rule of law.

It has not perfect freedom of speech,

but it has much better freedom of speech
protections than most countries and

most areas in the world. All
of these things are very,

very difficult to create if you don't
have them. And Europe does have them.

Where Europe really struggles,

and this is part two of the
reason to be bullish on Europe,

is on things that are
really stupid and really,

really self-inflicted wounds.

So I think of Europe's problems as being
maybe kind of three or four really big

ones. Number one is especially
in the last 20 years,

energy prices.

And I think that has been largely
self-inflicted by Europe's very,

very enthusiastic embrace of what you
might call degrowth environmentalism.

I think there are versions
of environmentalism that
involve more electricity

output, more abundant energy and can
go hand in hand with economic growth.

But Europe has instead gone for a version
of environmentalism that has involved

less electricity output,
higher energy prices,

and less overall industrial
production. Europe also,

despite its claims to having a
single market and being this gigantic

economic block actually is not nearly
as well integrated as a single economic

market as the US or China.

Europe really is much more
like a collection of 27
economies that have quite a

good free trade agreement with each
other than it is like a single country.

So there's much less cross-border trade
within Europe than you would expect from

looking at it if the US was the same size
in terms of its economy or population

or China. So there's actually much less
trade within the European Union than you

would expect if it was a major
than you would expect if it was

genuinely a single market. Third is
something that Pieter has talked about,

and I want him to field this,

but Europe's labour market
regulations I think are, its really,

really fundamental economic
regulatory problem.

I talk about housing
shortages as being the really,

really big problem that the US and
the UK have. And I think that's true.

I think that Europe does actually
have some housing shortage problems,

but much more important is how
difficult it is to fire people,

which makes it very difficult to hire
people and makes it very difficult for

companies to take bets, and that makes
it much harder for them to be innovative.

And then the fourth hypothesis
that I'm less sure of,

but I think there is quite a lot too,

is that Europe has sort of inadvertently
ended up with a much more highly

regulated and much more constrained
financial system following 2008

than the rest of the world,

even though the whole world adopted
quite similar financial regulations. Now,

I heard Tyler Goodspeed, an economist
make this argument a few months ago,

and his argument is that the structure
of banking markets in Europe is such that

we have, most countries in Europe
have a couple of big banks,

whereas in the US you have
thousands of small banks.

And what this has meant is that all the
banks in Europe have been held up by the

strictest financial regulations intended
to avoid another financial crisis.

They may be very prudent,

but they've made it much harder for
those banks to lend to startups,

to growing companies and to innovative
companies. And also on the demand side,

on the company side,

businesses are much more dependent on
debt financing and on borrowing from banks

in Europe than they are in the us.
Something like 80% of European financing,

of financing of companies in Europe
happens via bank lending compared to

something like 30% in the United States.
So these kinds of rules interact

because companies are much more dependent
on bank lending and because banks are

much more constrained by them. Now,

I don't think these four factors
are all of the problem by any means,

but I think that they're
probably the biggest problems.

And the reason to be bullish on these
things is that most of them are pretty

straightforward to fix. It's challenging
from a political point of view,

but there isn't a mystery as to why
European economies are so sclerotic.

It's really just a question of how do
we design policies to fix these things.

Pieter, do you want to add to that?

Yeah, I mean I subscribed
to everything that Sam said.

I think the two things I'd add on Europe,

one slightly serious, but
still important is Dan,

you mentioned that they're
dependent on selling handbags

to developing world gets richer,

but there's a more serious
underlying point here,

which is basically for all of human,

at least the last 200 years as
a country has gotten richer,

its inhabitants have decided to spend
less time working and more time in Europe.

This is true with the
Chinese middle classes.

This is increasingly true with the Indian
middle classes. And if we think of ...

especially we think of the very optimistic
cases around AI and people are having

lots of free time. The Amalfi Coast,

at least for the foresee future
can only be had by coming to Italy.

And so I think if you think of the
Baumol cost disease kind of world,

Europe has the very unique position
of being able to be the string quartet

where even though your
productivity does not rise,

you get to eat many of the
productivity rises that happen abroad.

Of course, that's not a very nice future,

appealing future to many Europeans,

but it's one I think which certainly
places a pretty strong lower bound on

how bad things can get. The other point
I'd make is that if you actually look at

levels rather than levels of
change, the Europe's economy, Italy,

which is conventionally seen as one
of our Europe's worst basket cases,

still has a GDP per capita,
which is three times China's.

So despite, and if you look
at adjusted for hours worked,

the gap is of course even larger.

And so despite what we say
about Europe's economic problems

vis a vis the rest of the world, it's
still extraordinarily productive,

has tonnes of human capital,

and that seems like a success
which shouldn't be ignored.

And this is something I also
wonder a lot with China,

which Sam and I were
discussing before this call,

which is if China had
300 million habitants,

would we think of it as this great
success story or this great challenge?

It's no richer than Russia is,

and we don't think of the Russian
economy as a particularly impressive

achievement.

Could we just say that perhaps that
China's story won primarily of scale or is

there really something
to admire there as well?

Well, I think there is something
to admire in all cultures,

even the culture of the
Amalfi Coast. But I think

you're right that scale is certainly
a very big part of China's success.

The US had this big freakout
over Japan in the 1980s,

which looks pretty silly now.

Japan is a third of the population
of the US and share the ratio is

growing smaller now every single year.

But if Japan were three times
bigger on par with America scale,

there would be something more to worry.
I think the big worry that I have,

which also flows into the European
discussion, is that China is

really big and it continues to gain
in technological sophistication

all the time.

I've just had a piece come out in
this month's issue of foreign affairs,

which I point out that with
my co-author Arthur Kroeber,

that China's technological engine still
has a lot of choose to run that. If you

take a look at China's
advanced manufacturing,

pretty much their two big areas of
weakness are semiconductors and aviation.

I think they're making pretty
good progress on semiconductors.

They're making less good
progress on aviation.

But if you take a look at industrial
robotics, if you take a look at Crohn's,

all sorts of automotives,

China is basically on par
with I think South Korean

levels and will get to German and
Japanese levels quickly enough,

and they are going to be
producing much more cheaply 60%

of the cost of a equivalent German
product. And so this is where I also,

it's about the trajectory,
it's about the growth rates.

It's not just about the levels.

And this is where I'm still wondering
whether there is a bulk case

for Europe,

and I'm having a little bit of fun here
poking you too to make the bull case for

Europe.
And so I'm sorry about teasing you,

but I think the worry that I
have continues to be that Europe

further industrialises,

we've already seen this a little bit in
the data that China has waged a far more

successful trade war against Europe
than it has against the United States so

far. A lot of its most dynamic
companies continue to fall.

Amalfi coast is great,

but not all European countries
are really enamoured of tourism.

We've seen a lot of tourism restrictions
out of Barcelona in particular

where it seems like the local residents
just want to grab the violin and smash

that string quartet.

They're not really happy about this
string quartet playing all the time.

And there's quite a
lot of European cities.

I wonder if this is still the case in
London where average incomes are lower

than average monthly rent,

and I wonder how long these sort of
things are going to persist. It's pretty

clear now that the populist parties
in Europe are all leading in

the polls. Perhaps they
can't all form governments.

Perhaps none of them
will form governments,

but populism is now pretty
baked into the continent.

I'm not sure that these populists will
really have the sort of technocratic

solutions that are going to produce
the energy or eliminate the labour

restrictions. I don't see them doing that.

And so is there still a bold
case for Europe given that

politics are kind of challenging
and that economically it seems like

they're just getting out competed
in all sorts of ways as well?

So Dan, let me ask you about
the de industrialising point.

So you made this point that China's
going to converge on Germany and Japan

very soon in certain
manufacturing technologies,

but I've had hard to reconcile with the
actual stated level development that

people say China has. Right?
$30,000 GDP per capita.

South Korea, which is another East
Asian manufacturing powerhouse,

is actually at parity in
terms of output per head with

many, many European countries.

And so how do we reconcile this
idea that somehow China is going to

eat our lunch, it's going to
surpass us technologically,

but also by most metrics
of income in consumption

and levels of individual wealth,

they are still much closer
to a middle income country

than they are to their East Asian
neighbours. How do you explain that?

To answer the paradox,

I think we have to determine what
value we assign to manufacturing.

And I think one could
be kind of a economist,

I'll just say to use a derogative word
and say that manufacturing isn't very

important,

which I think has been kind
of the consensus among the
profession for a while.

And I take the opposite view that
production is really, really important,

and I think this is something that the
engineering state is more correct on

that manufacturing capacity per se is
pretty important and the manufacturing

sector is not very large. It
is not very large in China.

Manufacturing value add of GDP,

I think something like 31% or
so for the US is something like

13%. And for the UK
it's just single digits.

Let's not even go there. So if you
think that manufacturing is important,

which I do, if you think production
productive capacity is pretty important,

then even though it is pretty small,

the country that has a lot of it is
going to be in a pretty good place.

So even for highly industrialised
countries like South
Korea where manufacturing

value add is pretty high,
perhaps on par with China,

so I have to double check the figures,

they are under a lot of threat
from Chinese manufacturing.

I think that China is simply climbing
the same ladder of industrialization that

South Korea climbed in terms
of producing a lot of steel,

producing a lot of ships, chemicals,

semiconductors now and once South
Korea de industrialises it is going to

be looking not so good anymore.

And so a lot of what I've written about
in my foreign affairs piece is that even

if consumption in China is fairly limp,

even if they are not going
to be a financial powerhouse,

even though they're not going to be
a cultural powerhouse like the UK,

they're going to have a
lot of productive capacity.

And that is going to matter economically
as well as geopolitically mostly for

what it does to other countries
because they're going to industrialise,

their economies are going to
weaken their organised interest.

Groups are going to get more pissed off
and the politics will also get weaker as

well.

Is your view,

could you talk a bit more
about the economic model or the

economic rationale of
what you've just said?

The geopolitical point I
completely accept, or at
least I completely understand,

if you don't have the ability to make
aeroplanes and tanks and battleships,

then you will fight it difficult
to fight people who do.

The economic rationale
there doesn't seem as clear.

I want to first acknowledge that

the advanced manufacturing is
not going to save any economy.

I think the economic rationale for
pursuing really advanced manufacturing is

not necessarily very,

very high in some critical
industries like semiconductors.

What is the global employment
of semiconductors? Well,

it's probably on the order of 1 milli on
to 10 million people on a very generous

definition of taking a look throughout
the entirety of the supply chain.

And yet these one to 10 million people
are producing a really critical industry.

And if you don't have something
like a semiconductor industry,

then a lot of other following innovations
are also not possible within all

sorts of,

they power essentially the entire
every single digital device

in the world.

And so I think what is important
here is that China is able to

have decent growth. Right
now it is growing at 5%.

There are some who alleged it to be lower.
I don't really want to get into a

discussion of Chinese GDP,

but I think China still has
sufficient compelling growth

and part of what gives it the
Communist party political resilience

has been building a lot of stuff.

If you are living in a Chinese
village off in the southwest

in the mountains of Guizhou where
I spent five days cycling in 2021,

Guizhou has about 50 of
the world's 100 tallest

bridges.

And the communist party has been building
all of these amazing bridges where

villages feel much more
connected to each other,

cutting down travel from let's say
a day into a matter of half an hour.

And that is real.

And people feel really good about
having these sorts of achievements,

call it propaganda of the deed. But
if you build a really gigantic dam,

some people look at that and
they feel, wow, this is amazing.

Call it propaganda of the deed.
But if you have these drone shows,

which I find a little bit silly,

but people really like these
shimmering drones at night,

which are kind of a
replacement for fireworks.

I love those by the way. I think they're
incredible, just for what it's worth.

I think they're kind of lame, but
whatever floats your boat too.

And if you're living in a city,
even a third tier city in China,

you're getting more parks,
you're getting cleaner air,

you're getting better subway systems,

you're getting connected
to high-speed rail,

you're able to travel to other big cities,

you're able to travel to these villages
and that all feels pretty good.

And so I think maybe the case for
advanced manufacturing is not very clear,

but it is great if you have it.

And it is even better if your
adversaries don't because again,

this is where kind of politics
gets in the way of technocracy.

We take a look at a lot of
European Union spending.

A lot of it is subsidies for agriculture.
How important is agriculture? Well,

economically not that
much, but politically,

extremely so a lot of it is trying
to manage the automotive sector's

feelings for when they're
being defeated by the Chinese.

Those people have a
lot of political power.

And so if the organised interest
groups get even more organised

and get really complaining about
a lot of these sort of things,

they do present more political
problems than economic challenges.

So talking more about the
actual economic upside here,

you write a lot both in your letters
and in your book about the importance of

process knowledge and something which
the Chinese have been very good at

attaining and perhaps is one of the
explanations for why American firms have

been falling behind.

But why does the market
kind of undersupply this?

Why if it's so important,

do Intel or Boeing not do the thing
they could have done in order to

not start falling behind?

What's the market failure that
you think is at play here?

Process knowledge is not valued by the
market because it's not very easily

measurable.

So process knowledge is the name I give
to the residual of everything about

technology that we can't
really capture very easily.

So technology is the tools
and the equipment to produce,

let's say a piece of semiconductor.

It is also the written knowledge that
consists of the blueprints and patents for

how to design an intel chip. But then
if you actually want to make chips,

there's 1,000,001 things that's impossible
to write down and that also isn't

encoded in the instructions.

And so you really have to
know how to store the wafers,

how to manage the lighting, how to
manage the electrical charge that makes,

that separates a good fab
like TSMC from a bad fab.

Let's just not even get
into these names here,

but I think the process knowledge is
really important. It's not very well

measured by the market.

Here's where I am a little bit more
critical of the sort of letting your

economy be driven by the
mandates of stock investors,

which I think is a little bit more true
of the US and perhaps the UK as well.

In China, as Mike Bird recently
noted in our recent episode here,

economic growth has been pretty good,

8% to 9% on average
over the last 20 years.

And then its stock market has been
completely flat. And what's going on here?

Well, the Communist Party isn't
that enamoured of the stock market.

It's a little bit weird that this
communist system has a stock market in the

first place.

And I think what is also true in China
is that they have enormous amounts of

redundancy that track down profitability.

You have state-owned enterprises that
employ far too many people. You have a lot

of redundancy in all sorts of equipment.

You have all sorts of people
doing the same thing all the time.

And where the system really proves
its worth is in the middle of a major

pandemic like what we saw in 2020 in which

the US and much of the west couldn't make
masks and cotton swabs and the Chinese

were able to because they were able
to retool their supply chain super,

super quickly. You don't
have just in time production,

you don't have slogans from Tim
Cook saying inventory is evil,

rather you have just a lot
of capacity to do stuff.

So I just came back from a
trip to India and the Indians

are for them. The great
fascination is China,

both as a development story but
also as a kind of icebreaker,

which is testing relations with the
West as a newly empowered Asian country.

And one complaint or one
thing was a common refrain

is that the US' relationship
with China shows that

the problems Americans have

with China today are because America
simply can't suffer a arrival of a

similar size.

There's not so much to do with
ideology or with a security interests,

but really a question of who gets to be,

there's no space for another
major power on the wild stage.

And so I'm wondering you
as a transpacific watcher,

do you think if the
Chinese nationalist party

had won the Civil War in 1949,

do you think America would have the
same challenges with Chinese growth

that it has today?

It might well have far greater
problems with China because

there is a case that the nationalist
party could make China much stronger and

richer than the communist
party has done so far.

And so with the KMT,

the nationalist party has succeeded
in making Taiwan relatively rich and

also in advanced manufacturing power.

And I suspect that if the nationalist
party was administering China right now,

I think they would be equally
nationalistic nursing.

Its grievances against incursions
by imperialist powers and Japan

and very intent on making civil society
much stronger than it is and making

China a much greater
technological power than it is.

I think one could make a case that
Washington DC is very proud and very

paranoid. I think it is definitely the
case that the freakout about Japan in the

1980s looks pretty silly.
Not only in retrospect,

but at the time they were
their treaty allies. And should

America really have been super scared
that the emperor could sell his

land under his palace and then somehow
buy the state of California because that

was what it was worth? No, all
of that looks pretty similar.

That looks pretty silly in retrospect
and maybe even so at the time because

Japan was so much smaller.

Now I don't really care to defend
the Washington DC viewpoint,

but the security threats that they fear
could be treated in several buckets.

It could be the case that Beijing decides
to launch a military conflagration

over the island of Taiwan, in their
words liberate Taiwan into socialism.

And that could be a pretty
big fear for the US because

perhaps Beijing will move on to the
Philippines and Japan next specialists

discuss a debate in the community
whether Beijing really wants to

seize the Philippines and Tokyo.

But that is one of these fears of DC
that is really hard to put to bed. One

could fear that China will do unto

Vietnam and Malaysia
what it has done to the

Cantonese in Hong Kong,

which is to say that all of China's
near neighbours must come to Beijing

regularly and kowtow for the
general secretary's pleasure.

And to the extent that threatens
American or Western interests,

that is a discussion point that you
don't want the entirety of East Asia and

perhaps the Asian Pacific under the sway
of the Chinese who are not very nice

to a lot of its people in Tibet
or Jiang or Hong Kong or really

anywhere else I would say.

And the other big fear I
think has to go back to this

manufacturing, the question
of advanced technologies,

part of the reason that the Americans
reacted against China's made in China

2025 programme, which is this
big industrial plan to say,

we're going to dominate all the industries
that you Americans and you Europeans

and you Japanese are really good at.
We're going to do onto the semiconductor

industry, what we have done to the
solar industry. The Americans said,

what we don't really like that we lost
and completely lost the solar industry

first to the Germans
and now to the Chinese.

And we rather like to keep
Intel and Boeing. Thanks. Now,

the Americans haven't really
run the Intel and Boeing

very well. I might say that
they ran them very badly indeed,

but for the most part I think it
is right for these countries to

defend their interests.
So there is this sort of a

geopolitical question of not letting
the world be administered from Beijing.

There's this economic issue and there
is also this security issue. Again,

specialists can debate to what extent
the US should really be motivated by all

of these things, but I don't think that
all of them are illegitimate concerns.

We are coming up on
time. And so with that,

quite chilling from that
quite chilling point,

I want to ask something completely
different, which is Dan,

you and I are both great
lovers of Chinese food,

a lot more about it than I do.

The world has moved on from associating
Chinese food equals a version of

Cantonese food. Some people
know Sichuanese food,

maybe a few other regional cuisines.

Can you talk about where you think
an intrepid food lover should

be looking at within China? What regions,

what types of dishes that
people might not be aware of?

And also where, if anywhere can
they find those in the West,

in the US, in Europe, wherever.

My soul is very much sympathetic to the

southwest. So these are the three
provinces of Sichuan and Guizhou

as well as. So this is
where my heritage is.

This is the land that James C
Scott refer to as Zomia Highlands,

Southeast Asia.

And in these mountains you have a
lot of chilli peppers as well as

fermented foods.

And you hop across a different mountain
range and the food could be quite

substantially different. So I think most
of the world now knows Sichuan food.

Sichuan has these two big
cities Chengdu and Chongqing,

it lies inside this big basin.

Both of these two cities
are inside this big basin.

And so the first thing I would say is
that Sichuan has quite interesting food in

these little mountain villages. And
that is true for Guizhou as well.

And I think that is especially true
for Guiyang where I think there is no

possible similarity that could unite
something into a cuisine called Guiyangese

food.
When the north is historic Tibet,

it's purely Himalayan and the South is
raw jungle because it feels quite like

Thailand.

So how do you come up with a cuisine that
encapsulates snow mountains as well as

jungle?

And then I think the other big region
that I would think a little bit about is

this region of Anhui, Anhui
province, which is in eastern China,

that's next to Shanghai.

And this is quite a region that
is also pretty mountainous.

It has been poor up until the recent past.

Now Anhui is actually producing quite
a lot of China's electric vehicles,

but for a while that was better known for
just sending a lot of its migrants out

to Shanghai to work. Anhui food
is kind of not very well known,

I would say even in Shanghai where it's
not too far, the food is really stinky,

it is really pungent. It could be pretty
salty again because mountains produce

fermentation and all sorts of salty food.

So those are the places that
I would think about now,

I think it is a little bit challenging
to imagine that these foods could be

recreated overseas.

It would always be a pale limitation
because even in Beijing and Shanghai,

we have pretty pale
limitations of Guiyangese food.

Guiyangese food is
characterised by a lot of herbs.

It's characterised by a lot of mushrooms
and these things don't ship very well

even across the country.

And so usually when I'm in
wonderful food cities like London,

I try to eat all sorts of, I don't know,

Indian food or these other foods
that I've been quite excited about

when I was in London recently.

Most of the time I don't eat
a lot of Chinese food abroad,

but something I was surprised by was
that in London's Chinatown I saw recently

a restaurant, I believe it's called.
You can put that in the show notes,

but this is Suzhou noodles.

It is a really wonderful broth and
it has a lot of crab roe inside.

And so I believe this is the
first outpost of this big

suho restaurant chain that
decided to put it in London.

And so that's something I was really
happy to see when I was there recently.

Oh yeah, I remember reading in
preparation for this episode,

your most recent post again on
your blog about your last trip to

Shanghai. And you mentioned that you think
that the food, while still brilliant,

has gotten worse somewhat as
becoming more made for influencers

and pictures and it's less to be savoured.

What I thought was a very striking image.

And the really striking
image is that Chinese people,

especially younger people, if you
go into a restaurant in China,

almost all of them are looking down at
their phones all the time there barely.

Why is that? Why is influencer
culture so much stronger in China?

It's a good question. I'm not very sure.

If you just go to a lot of East Asia,

people on average are just absorbed
into their phones on average,

much more than Europeans are.

It's almost socially acceptable for
people to be just staring at their phones

even when they're eating with others.

People are on their phones all the
time when they're in the subway,

not really speaking to other people.

A lot of Chinese cities are now
built for to be photographed.

This is something called
Wong Hang culture,

which refers to just essentially
famous on the internet.

And this is just everything is meant to
be Instagrammed or Little Red Booked.

And this is just something that I find
really bizarre about East Asia in general

and maybe China particular,

where I feel is a little bit worse
even than the rest of East Asia.

This is going to be a big area of
disagreement between me and Sam because he

thinks the ification is a good thing.

But perhaps this is a Europe bull
case, is the fact that over 10, 15,

20 years,

the brains would be slightly less
fried if they managed to avoid this.

That's right. I think that that is one
of these big, nice European bull cases.

I think on average Europeans have much
better mental health than Americans.

They may even have better
physical health than Americans.

I've married an Austrian and I think
there are all sorts of good things about

just the sort of lifestyle in Europe,

but still I am pretty concerned that
a lot of things will break because the

populist wave will hit once the
Deindustrialization sinks in further.

Dan, thank you so much for joining us.

If you want to read more from Works
in Progress, visit worksinprogress.co.

Thanks very much for listening.