America vs. China

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One of the more tragic TV show cancellations of the last decade was this show I really love to call it a review. From the mundane, like there was an episode about eating pancakes to the more interesting, I like the show because it's funny, but also because it may be noticed something about real life, which is that we really do live in a very review-obsessed culture. There's no experience to personal or intimate or sacred to avoid being the subject of a review. People review not just their cancer treatment, but their experience of cancer. People review the sermons they hear in church to date they go on. Everything. I this week read reviews for chili recipes for beans. A backpack I already own, three separate reviews of the novel glorious exploits, which I already read, just to see if anyone besides my friend Zev had loved it as much as I did. A different podcaster here might fall into the trap of speculating about what all this reviewing means, what it says about us modern humans that we want to testify constantly, about the quality of subjective experiences. I instead am raising the specter of our review epidemic to point to one area that shockingly mostly goes unreviewed. A core part of human life that I cannot recall reading a straightforward prose and cons review for. Countries. The countries we live in. Where you live determines so much about your life, and countries you may have noticed are very different from each other. But while you can read reviews of vacation destinations, you'll almost never read a review that describes, here are the pluses and minuses of being a citizen here. Maybe it's too big a task, maybe we're afraid of being impolite or judgmental, I don't know. All I've noticed is that most of us review pretty much everything, except one of the most important things. Most of us, except for my guests today. Dan, can you introduce yourself? Yeah, I am author of Breakneck China's Quest, Tengenero the Future. I'm speaking to you from San Francisco. I'm a research fellow at the Hoover Institution at Stanford, and I'm really excited to be on the show. Thank you for joining us. Dan Wong does not refer to himself as a country reviewer. This is my silly frame, not his. But I'm very curious about modern China. A place I know too little about. This despite how often China shows up in our headlines, including our trade talks this week. In Dan's new book, it actually kind of functions as a review of both China and America. His writing voice is a critics voice, meaning he's not a stand for either place. He's dispassionally trying to think through how each country works, how it doesn't, how each could be better. And I wanted him to join us on Surgeon Gen, because reading him, I learned about China, but I also learned about America. So okay, just tell me like your story. Tell me about your relationship with China and how that's evolved as you've moved through your life and your career. My family is from Southwestern China, a region called Yunnan, which is heavily mountainous, very far away from the coasts, where the food is spicy and the people are relatively relaxed. My parents and I am emigrated from Yunnan. When I was seven years old, we moved to Toronto in Canada. I mostly grew up in Ottawa, and so I'm still a Canadian citizen. My parents and I also moved when I was 16 to Box County, PA, as this is Philly Burbs, where my parents still are. And I feel like I've spent about equal amounts of my life between the US, Canada, as well as China. Now, I studied philosophy in college. I dropped out to go work in tech. I went to go work in Silicon Valley. And in the year 2016, I thought that what Silicon Valley had been doing, that a lot of these consumer startups, a lot of cryptocurrencies, I thought that was much less interesting than what was going on in China. And so at the start of 2017, I moved to China to be a technology analyst at a global macro research firm. Okay, so you were in America working in tech during the rise of crypto, and you were just like, this doesn't seem that interesting. I'm interested in what is happening in China right now. Like what was happening in Chinese tech industry that you were like, this seems like a more interesting use of my mind. At the time, the Chinese government had announced this major industrial plan called Made in China 2025, which raised a lot of hackles with the US government, because Beijing essentially said there are 10 major industries that we really want to dominate in the future. These include important industries like shipping and semiconductors and agricultural equipment and clean technologies, and they specified the amount of market share that Chinese companies ought to have in the world. And so I thought that these things, like memory chips, ultra-high voltage transmission, electric vehicle batteries, those are just much more exciting than when Silicon Valley was dreaming of at the time. And before you had become sort of like repulsed by the smallness of the dreams of Silicon Valley, did you have an idea, like I feel like the popular conception that I hear from many people working in Silicon Valley is that China is sort of this force that is coming to steal American IP. And like you have to protect your ideas, you have to make sure that like they don't somehow get over there. Did you have that view or did you not have that view? I think that I had that view and I think there's a west coast flavor of how China got really good, and that is that the Chinese stole a lot of IP. And then I think there is also an east coast view of how China got good, and that is because the Chinese were essentially cheating and creating a market through industrial subsidies. And I think there is a small kernel of truth in both of these views, but I think both of these views are actually pretty silly. And I think you cannot get to the technological frontier as China has through just a lot of stealing or through just a lot of subsidies that there was much more going on there. And I definitely felt that. And I think there is a little bit more, maybe I can be slightly more philosophical than that. I grew up in Ottawa, which is not the biggest city in Canada, so I think it's like the third or fourth largest city in Canada. And there is a well-trail pathway for a lot of Canadians to go establish themselves in the US. I think there is a definite sense that a lot of the most ambitious Canadians go to California say. And you kind of have this conception as a Canadian that New York or San Francisco is this luminous quartz center in which everyone really has to be there. I actually got to San Francisco and I was pretty disappointed with a lot of the infrastructure, which hasn't really been fixed today. I mean, you walk through San Francisco as I will do in a few hours. And there's still a lot of syringes on the ground. There's still a lot of people unable to find housing and the infrastructure is deeply broken. There's all sorts of ways in which the Bay Area is profoundly disappointing in the same way that even New York City, which has relatively functional mass transit, still has these screechingly loud subways that arrive themselves with this metallic screech. I was attracted to the US as a relatively ambitious young Canadian person and then did not find it. All that it was cracked up to be. So I ended up spending six years in China between three of his main economic hubs, first Hong Kong, second Beijing, third Shanghai. For the rest of this conversation, Dan's going to talk about what he learns living as so few of us get to, a life split between the world's two competing superpowers. He appreciates both places and for each country he also has notes, very clear ideas about what America should take from China and vice versa. But before we get to all that, I actually wanted him to just draw me some mental postcards, postcards of Hong Kong, Beijing, and Shanghai. I wanted this both because my mental image of these cities is really weak, but also because a critic doesn't just give you an opinion about what's good or bad, they teach you if they're good a new way of noticing. They've lend you a sharper way to watch and to listen. So to begin, Hong Kong. Hong Kong is this really incredibly beautiful place. It really feels like as if Manhattan had toppled into Maui. So they have these incredible skyscrapers that are very beautiful. Hong Kong Island is ringed by mountains and it is essentially a big tropical island where you can go climbing after your day at the office and then these skyscrapers and go see some pretty amazing wildlife and then eat tropical fruits at night. So there's something pretty incredible about that particular natural setting. My life was to live near a subway stop on the western side of the island near Hong Kong University. Every day I would go through these throngs of people and through the subway, which comes every two to three minutes at peak hour and is mostly pretty packed, but functions very, very well. I would take a screechy, not at all screechy. These are relatively quiet and there are these glass doors to prevent people from jumping onto the tracks or getting shoved onto the tracks and you enter these really big masses of people, but everyone is very polite. The subways are air conditioned. I take something like four stops east into the central business district, get off and go into the office. But Hong Kong also felt economically quite stagnant, economically quite bureaucratic. I wrote a little bit about this about how Hong Kong feels pretty stuck since the 1990s. It was a really advanced city back then, but has not changed very substantially. It's entirely ruled by a bunch of property tycoons. Hong Kong is a city that works really well if you are an expat working in the financial industry and what you want mostly is the sip cocktails all day. And that was not my life, which is why I ended up in Beijing. So Hong Kong is, let's call it Manhattan on Maui. Beijing is this Stalinist city. All of these incredible, wonderful, imperial buildings were torn down during the mouse rule and replaced with these cruise chav like concrete blocks. I lived relatively in the center of the city and so I ended up walking to work. I was walking through one of Beijing's most luxurious outdoor mall areas, which is very strange. If we tone stores, there's an Apple store right there. I picked up a coffee every morning at Starbucks. It was a 15, 20 minute walk to the office and that ended up being pretty pleasant. Beijing is thrilling in all sorts of ways, but I also was a little bit more distressed by the mysteries as well as the sinister elements. And where I lived in Beijing was the embassy district. You would see the full complement of security come into view pretty much every day. Not only regular police, but also the people's armed police, which wears military uniforms and they sort of patrol around the streets quite often. And every so often you would see the professional military, which is the people's liberation army. And I think everything about Beijing was meant to protect state power. And so you have big places like TAM and Square and it feels a little bit like all of these boulevards were built more for army parades than for ordinary life. And then when I lived in Shanghai, I think the contrast between Shanghai and Beijing is especially stark. Shanghai is definitely my favorite city of all of these. Maybe it is still my favorite city in Asia. It was built by the French in very substantial part as well as the Americans in the British who were all imperialists over lords in the city. But what the French vested in their zone, the French concession was these very leafy boulevards full of cafes and buildings built in the southern French style. And it was a really comfortable place. Shanghai has been kind of a zone of eastern China where people have enjoyed finer things in life, teas and excellent cuisine and composing poetry for hundreds of years. That is the reputation of that part of China. And it just felt incredibly comfortable. And we really did feel that it was valid to call Shanghai the Paris of the East. We would all tease our friends in Beijing. What are you doing in western Pyongyang? Because it just helps those in all of us. Great cities and contrasts actually. And did you feel like you'd found the function that you'd been looking for? Did you feel like you'd found a place where on arrival, did you have the feeling of, oh, like this is a place where things essentially work? No. I'm still trying to find my luminous center of life. I think there are really well-functioning things in China for many people. But I'm going to be cast as an eternally dissatisfied Canadian. But there are good things in all places. I think my issue with Shanghai, if you spend much time there, and there are a lot of things about the city that feels very, very stuck since the 1990s because the property tycoons have ruled it for a long time. And we can remember some of these big protests led by young people, especially in the year 2019. I ended up being not so surprised that a generation of people who feel really stuck and unable to afford their housing would protest over all sorts of things, mostly political freedoms. But I understood that a lot of young people felt dissatisfied. But maybe the closest of the thrills that I was seeking was represented by Shanghai, which was much more comfortable, felt really dynamic, and people also knew how to live well as one knows in New York and one does not know in San Francisco. I have to admit, Dan does strike me in the short time I've gotten to speak to him as perhaps an eternally dissatisfied person, which is not a bad definition of a critic. The upside of that professional dissatisfaction is everything it makes Dan notice. Listening to him, I feel like I'm a camera floating down foreign streets, asking always what's it like to live here. As a professional person, as a middle class person, how's the public transit? How's the housing can anyone afford it? Are the parks comfortable? Do I feel safe wandering? Can I let my guard down without being vigilant about criminals or agents of the state? I've lived in the same place for 20 years, New York City. But this conversation was reminding me how little I noticed it. I live in my head, my phone, a book, a podcast. I don't usually notice the space as I walk in, unless someone else primes me too. This week I heard the screech of the subway. I noticed the dysfunctional highway on ramp in my neighborhood, off Atlantic Avenue, built by some kind of sick pervert who gets off in the sound of honking horns. Dan's work though is about noticing more than just infrastructure. And I wanted to know from him how the economy feels to Chinese citizens, spending money, paying taxes, getting health care, because what I'd heard so far from other people confused me. For instance, is China actually at all communist? Do I even understand communism right now? Now, PJ, I think it is not a default that you are reasoning through China in terms of communism, because I think the Communist Party is doing its best to hoodwink you that it is still some sort of a socialist utopia. And I think certainly it is the case that China has a lot of these trappings of communism. They have this great pageantry. They celebrate the major birthdays of Karl Marx. It's really strange to have the entire Politburo, traped in red flags with this portrait of a gigantic German beard that is hanging over all of them. But the Chinese Communist Party, they sing the international and they talk about themselves as a very communist state. And I think there's a lot of problems with that view that I want to challenge. And what about the other things that I would associate with a normal understanding of either a communist or socialist country? Like high taxes, a big social safety net. None of those things particularly seem to apply in China either? No, not at all. So my view is that China is probably the most right wing regime in the world that is masquerading as a left wing regime. What should a socialist regime do while probably tax the rich and give to the poor? And China has a pretty threat bear social welfare net. There's no property taxes in China. And so there's no property taxes at all. It is pretty minimal. They haven't really been able to implement this. So the main source of wealth for most people around the world is their home. And so essentially there's no wealth tax in China. Rather, a lot of the taxation in China comes from consumption taxes, which of course is regressive in nature because the poor spend a relatively higher share of their income on consumption than the rich. And this is also a country that has decided to arrest a lot of union organizers. It has arrested a lot of Marxist-reading groups. It enforces very traditional gender roles where the men have to be macho and the women have to bear their children. And there are a lot of ways in which I think that China feels like 1950s Eisenhower America, which keeps out immigrants and just focuses a lot on building giant manufacturing companies. And my favorite quote from Xi Jinping in the last couple of years is that we should not build a major welfare system. Otherwise people might grow lazy. It's so like 80s Republican. This is exactly an instance in which the Chinese Communist Party sounds like Ronald Reagan. It's so weird. It's so funny because America is a country that honestly, I actually think we have in some ways a robust social safety, particularly compared to China, but where the idea, the specter of communism in so many quarters is really taboo. It's so funny to imagine a country pretending to be socialist, pretending to be communist and being like secretly Republican. Is secretly Republican, is that just like my American filter or does that read seem right? I am sure that in the comments, there's going to be a bunch of people roasting me about the idea that China is not a socialist. Every time I propose this idea that actually China looks pretty right-wing, a bunch of tankies will show up in my comments to say that, Dan, you know nothing about China. Now first, I acknowledge that China is a very Londonist system. And there are like core parts of Marxism, Leninism in the Communist Party. What London really advocated for was state control of the commanding heights of the economy. And China definitely controls a lot of the commanding heights of the economy. If you take a look at a lot of strategic sectors, important sectors to the state, all of it is state-owned. So take a look at the telecommunications companies, the team mobiles of China, the airline companies, the oil companies, all of these are actually explicitly state-owned companies. And so there is an element of state control in China. And there is also an element of redistribution from wealthier provinces like Shanghai into poorer provinces like Wichou. But I think that for the most part, if your taxes are low, if your social welfare net is threat-bear, and if you're arresting Marxist or reading groups, then you don't get to call yourself Marxists anymore. I mean, what's funny to me is if you imagine a country that wants low taxes, low immigration, but their concession towards sort of Marxism would be, the state should be deciding corporate winners and losers and redistributing state resources according to what whoever's in power thinks is correct, it sounds like Trump is up. Yeah, that's actually a good point. And I think it's not sufficient to sing happy birthday to Marx, but they kind of get away with it, and a lot of leftists still give them cred because they sing the international out. So this is Dan's view of what China's like economically in 2025. The same way that in America, there are ideas our politicians paid lip service to while trampling, fiscal conservatism, democracy, etc. In China, communism and Marxism are things that the ruling class loudly celebrates and mostly ignores, while finding inventive ways to out-compete America at our favorite sport, capitalism. To live in China, maybe even more than here, means to learn to notice the difference between the captions and the images they're meant to describe. We're going to take a short break, and when we return, Dan's going to talk about the biggest actual difference he sees between these two countries. Welcome back to the show. So Dan's big theory, the one he spends the most time discussing in his book, is that the largest difference between China and America lies in the kind of professional who runs the country. Dan says, unlike America, China is a country run by engineers. Very literally, China at various points in the recent past was governed directly by engineers. And from 1980 onwards, essentially when Deng Xiaoping took over the reigns of the power of the state from Mao Zedong, Deng looked at the wreckage of the Mao years, in which the Mao had absolutely devastated the state through the cultural revolution. And Deng Xiaoping took a look at Mao, decided that Mao was primarily a romantic, a poet, a warlord, and that Deng Xiaoping do absolutely the opposite of everything that Mao did. Now what is the natural opposite of a poet while it's definitely an engineer? And so Deng Xiaoping decided to promote a lot of engineers into the top ranks of the Communist Party. By the year 2002, this was actually Deng Xiaoping had left the scene, all nine members of the Standing Committee of the Politburo, which is the highest-ruling echelon within the Communist Party, they were all trained in engineering. And this was engineering of a very Soviet sword. They were trained as hydraulic engineers and electrical engineers and civil engineers. And my contention is that China is a country I call the engineering state because they sort of treat all sorts of problems as engineering exercises. So first, they spend a lot of time engineering the physical environment. Engineers like to build stuff absolutely everywhere. So I'm thinking about roads and bridges and hyperscalers and coal plants and solar wind, transmission lines absolutely everywhere. China is still building a lot of high-speed rail. They announced that China has built the world's highest bridge. And so they kind of build more mega projects anytime the economy trembles. And this is kind of their stimulus package as well. Unlike in America where our infrastructure crumbles, where new public projects are rare, expensive and slow, the engineers who run China are always building something new, unencumbered by a lawyerly red tape. But Dan says that the engineering mindset in China isn't just applied to infrastructure. You see it in how the government engineers the economy too. When Dan was there, he watched as Xi Jinping decided crypto was a bad idea. And so started incentivizing the tech companies to invest in more productive stuff like semiconductors. Dan says that the engineers who run China, they don't just engineer the physical world and the economy. The third part of the country they try to engineer is actually the citizenry itself. Most fundamentally China I think is made up of social engineers. They're not just physical engineers, they're also social engineers. Which is why I spend a lot of time thinking about the one child policy as well as your COVID in which the numbers right there in the name, there's no ambiguity about what these policies could possibly mean. And they sort of treat the population as well as broader society as if it were just yet another building material to be torn down and remolded as they wish. And how much that though is also about if you have a government staff with engineers that is not just about the political culture or the political system or different thinkers making arguments about what political success should look like. But literally like a government full of engineers is both going to know how to build things and have a belief that building things is good. Yeah, I think there's definitely an element in which if you are running a city, if you're part of a state-owned enterprise, a lot of the parts of the Chinese government is just constantly making plans for the next big bridge or the next subway stop or the next high-speed rail line such that when the political leaders ever give their sign off, there's a lot of shovel ready projects that they are able to do. And so people are planning for these sort of things all the time. I think that's a great contrast with the US where it takes a really long time to be able to decide to do infrastructure. It takes a lot of whipping in the US Congress in order to get big infrastructure bills passed. And by the time you pass something like a big infrastructure bill, let's build some broad ban for all, which is one of the big initiatives of the bipartisan infrastructure act. By the time you actually decide to do it, it turns out that none of the government agencies have done sufficient mapping to do a lot of these projects. And so the Chinese government is always doing more mapping. They're always on the lookout for new projects to do. The civil service actually makes these sort of plans and the political leaders are very inclined to sign off on these plans so long as they feel like they have the funds because this is something that they're really excited to offer to the people. This is kind of the way for them to establish their legitimacy. Why doesn't Gavin Newsom of California? And why doesn't Governor Hocault of New York try to establish their legitimacy by building better subways and building better California high-speed rail to prove to the people that they're really interested in development? I really wish that more American mayors and governors were attending ribbon-cutting ceremonies as they used to in the past with the opening of something like the Brooklyn Bridge. This was something else I hadn't noticed. I can't remember the last time I saw an American politician at a ribbon-cutting ceremony. Dan writes about how in China, overseeing successful infrastructure projects is key to any politician rising in national political stature. He talks about how in China, you never really expect to see a politician like Joe Biden, a senator from Delaware who really stayed most of his career in Delaware until assuming the vice presidency than the presidency. Instead, he describes how ambitious Chinese politicians get essentially sent by the party on tour. They'll be placed for a few years in one of the country's more far-flung rural provincial areas. If they can do a good job there, then they can rise nationally. In doing a good job means building something big and expensive that kick starts the local economy. China's engineering culture has produced tons of development and opportunity in the kinds of rural places that in America are often overlooked. Dan rode through some of these areas on bike where he began to better understand China. In the summer of 2021, I scared up two friends with me to go to the southwestern mountains of Guajuo Province to do a big cycling trip. We cycled about 600 kilometers over five days, mostly through the province of Guajuo. Guajuo is heavily mountainous, relatively inaccessible, and far away from the coasts, and it is China's fourth-porus province. What my friends and I were amazed and delighted to find was that Guajuo's level of infrastructure was absolutely superb. We were cycling on these just open roads and new highways, which we didn't really expect to find. It was absolutely a cyclist's dream. It was only later on that I reflected on how strange it is that Guajuo has excellent levels of infrastructure. Guajuo, China's fourth-porus province, has about 15 airports. It has high-speed rail. It has 45 of the world's tallest bridges. It's here at 15 airports? Yes. It's not all enormous. Guajuo's population is about 40 million people, which is about California's population, much more than California. But it has plenty of airports to serve a substantial population, even though many of these people aren't able to be able to afford to fly. But I think it is really striking that China's fourth-porus province has much better levels of infrastructure than New York State or California, which are much richer by order of magnitude. So I was able to take the high-speed rail from Shanghai to Guajuo, which took about seven hours. How is the status of California high-speed rail? Essentially nonexistent. I think it is this national joke how slowly California is actually trying to build its rail network. And how does that happen? How did China so easily pull off lots of high-speed rail where California takes a very long time? These projects were actually announced, I believe, at about the same time. Yeah, I think it is a pretty striking contrast between China's high-speed rail and California high-speed rail. In the year 2008, voters in California proved a referendum to say that California really ought to build high-speed rail between its two main economic hubs, San Francisco, as well as Los Angeles. And in the same year, China actually began construction of its first high-speed rail system between Beijing and Shanghai. And coincidentally, actually, if you take a look at the length of these two rail lines, they are actually about the same length. But that's where the similarities end. Because what has happened with California high-speed rail? Well, a very small stretch of it has been built in the desert. And the first segment is expected to open by the year 2032, connecting the cities of Bakersfield and Merced, which are not especially close to San Francisco and LA. And right now, the cost of California high-speed rail is drifting northwards of $125 billion. And in China, three years later, they actually completed high-speed rail. The Beijing Shanghai started operating in 2011. They built it at a stated cost of about $40 billion. And according to official news over the first decade of its operation, China completed about 1.4 billion passenger trips between Beijing and Shanghai. Dan's point is that American politicians sometimes make this mistake of only celebrating how many jobs a product produces. Jobs are good, but the politicians will skip over whether the project was ever finished, whether it helped the public. But Dan says that China's culture of very unrestricted building with public money, that runs into serious problems, too. There's a story in Dan's book about one aspiring politician in Guizhou who spent $21 billion trying to turn a local city into a ski destination with fake snow machines and what the politician said was Asia's longest ski lift. The tourists never showed up. And so the politician was later punished by the ruling party, throwing jail, forced to apologize in a humiliating fashion in a national documentary. Dan says in general in Guizhou, he sees a shadow lurking underneath some of these beautiful bridges and public transit. The significant debt load the province has been saddled with. Guizhou builds these really expensive. Tall bridges and it's unable to make the interest payments on all of these bridges because these bridges aren't stimulating quite enough economic activity to justify their presence. And so Guizhou is substantially out of money and there are all sorts of environmental costs with pouring carbon-intensive concrete into the ground for projects that are perhaps not necessary. And there's also a human displacement cost with a lot of these projects. Now I think bridges don't necessarily have to displace a lot of people. But if you're building something like a dam, you're going to displace a lot of people. The great project of the 1990s was the Three Gorgeous Dam, which is the largest power station in the world. It is this gigantic dam in China Southwest. And it is something that the Chinese worked on for over two decades and essentially displaced over a million people away from this flood sounds of the Southwestern mountains. And I think that when it comes to just engineering, engineering, physical engineering, I think that the benefits substantially outweigh the costs. Because what residents in Guizhou have is a sense of change in their landscape and therefore their lives. If you were living in a super remote village and there's all of these tales of young kids who have to get up early and climb over three mountains in order to get to school. And then a highway or a bridge can really change their lives. Maybe right now, if you build a super tall bridge, it is a bridge to nowhere. We're pretty quickly, you know, to nowhere has become two soundwares. And so I think that it is also really amazing to have a sense of physical dynamism. Because if you can see that your life is changing around you, you're getting you subway lines, you're getting better parks, you're getting new bridges. I think that's kind of how the Communist Party is also able to deliver a degree of political resilience. Because people get more optimistic about the future because they see their lives getting better in the past. And I think that is one of these crucial things that the Communist Party has been able to deliver that hasn't been deeply appreciated. So that's how Dan sees China as an engineering state where it's easy for the government to build. And the downside is that sometimes the government makes expensive mistakes without much accountability. He sees a fundamental contrast in America. A country where instead of engineers, we're in large part run by lawyers. The United States has been ruled by lawyers since the very beginning. Among the founding fathers, most of them were lawyers, folks like John Adams. And if you take a look at the first 16 U.S. presidents from George Washington to Abraham Lincoln, 13 of them were lawyers. The declaration of independence reads like the start of a great legal brief. Five of the last 10 U.S. presidents went to law school. It is especially lawyerly within the Democratic Party. Almost every single nominee to be president from the Democrats between 1980 to 2024, including Kimola Harris in the most recent election, all of the presidential nominees had gone to law school. I had not understood the degree to which the political class in America is so lawyer-laden. Not just our presidents, 47% of our senators hold law degrees, 31% of our House members. It's just something we're so used to, I think we almost can't see it. Dan even sees our current president through this lens. Not as a lawyer per se, but as someone who's drawn much of his power through his role as a creative entrepreneur of the American legal system. You cannot take a look at the business career of Donald Trump and not identify that lawsuits have been absolutely central. This man has sued absolutely everyone. He has sued his former business partners. He now sues his political opponents. He sues the New York Times for $15 billion. He has sued his former lawyers. And I think there is something in Trump's governing style that feels, you know, throw accusations, often write, intimidate people and try and establish guilt in the court of public opinion. And so I think if you are living in Washington, DC, you would absolutely appreciate that. Lawyers totally run the show. They're in charge of absolutely everything. And I think this is, you know, part of the good and bad parts of America today. What do you see as a downside of Americans sort of lawyer-leave-led country? Like, what is bad about living in a country of lawyers? I think the good and the bad at the same time is that I think lawyers are, for the most part, fundamentally hand-made in for the rich. And obviously there's many types of lawyers. There's many parts of, you know, social impact litigation. But I think fundamentally the lawyer-leaf profession, mostly to protect the rich. And America is the best place in the world to be super rich. If you're rich in America, the state won't come, take all your taxes like the Europeans and the state won't smash your business like the Chinese. You can pretty easily transmute a lot of your wealth into some degree of political power in the US. If you're part of the rich in New York City, you don't really have to worry about high housing costs. You can buy one of these skinny skyscraper units that overlook Central Park. The rich in California live in these big houses in Athens, pretty close to Silicon Valley. The rich don't have to take the part or the screechingly loud NYC subway to work. They have their own means of getting around. And I think it is mostly the middle class that is struggling to deal with getting to work, affording housing and finding good jobs for themselves. And what I would really like is for the rich to let go of the American political process. And especially to stop blocking projects that would deliver better and cleaner energy to people and for the government to be able to build the sort of projects that the middle class needs. Let's talk about the good parts. I mean, one contrast between America and China is like much more liberalism, like many more, like you agree, like legal protections for citizens. Like do you connect that to us being a lawyer country or does that like what's good about living in lawyerville? Yeah, a lot of things attracted me to lawyerville, which is part of the reason that I left China at the start of 2023 and moved back to the US, which is a country I totally missed when I was living in China. There's kind of a sense of the apocalyptic that hangs over you. Even the elites in Beijing don't necessarily have excellent protection. So imagine if you're working for a tech company in Beijing and then Xi Jinping decides to smash your company because they're not fitting in with the political trends. If you're working in finance in Beijing, Xi Jinping announced two years ago that there was going to be a cap on financial salaries. People could not earn more than $400,000. And if you earn more than that, maybe you have to give back some of your back pay. And even if you're a party elite or a military or state elite within the Communist Party, within the Chinese government, you never really know when one of your patrons will be felt by one of Xi Jinping's anti-corruption probes. And if he goes down, then your entire network goes down as well. And so there's something strange about authoritarian systems in general and maybe China in particular, in which not even the elite feel well protected. So that's an upside, dancies, to our country ruled by lawyers. Elites and also non-elites are more motivated to dream up new ideas. Knowing that if something works out, they probably won't be ripped off or obliterated by changing political wins. The law, we hope, protects innovators. And if a lot of Americans feel like probably our super-rich tech companies have too much power, those same Americans probably would not want to live in a country where the president directly tells those companies what to do or dismantles them when he's displeased with them. We're going to take a short break. And then I'll ask Dan to talk about the thing we at Surch Engine have actually been most curious about, Chinese manufacturing, and American job loss. Welcome back to the show. So there's this piece of conventional wisdom in America that Dan questions. This idea that America comes up with ideas sends them to China to be manufactured, and Chinese companies just copy us. Certainly that does happen. We actually covered it in our all-American barbecue scrubber episode. But Dan's skeptical that it's actually the dominant true story these days. When it comes to technology, Dan writes about how much innovation now comes directly from China. And he has a story that partly explains how that came to be. He believes Chinese workers who spent years manufacturing high-tech gadgets learned a lot, and eventually started to dream up their own new devices. Oftentimes, those workers learned while employed in China-based factories owned by American companies, like Apple and Tesla. This training by American engineers, American managers, what this means is that Chinese workers are kind of the living-beating heart of a lot of communities of engineering practice. And this is where a lot of new knowledge creation is generated. Chinese workers have practice putting together all of these fantastic products every day. These factory managers are solving three new problems a day before breakfast, and they are keeping all of this process knowledge alive. And what that means is that if you have this process knowledge on existing products, it also gives you the ability to make new products as well. And so, the fantastic scenario that I want to propose is that, imagine if Apple decided in the year 2008 that it wasn't going to produce all of its iPhones in Xinjiang, imagine if it was going to produce all of these iPhones in, let's say, the state of Pennsylvania. I think this is too fantastical to imagine because the infrastructure and the labor costs are not there in Pennsylvania. But if it were, then Pennsylvania could have become the great electronic center of the world in the way that Xinjiang is today. Xinjiang is now making most of the world's drones. It is making a lot of electric vehicle batteries, making not just iPhones, but all sorts of other incredible electronics products. This is a lot of what the US lost, and I think this is what the US really needs to be able to regain because unless you have the communities of engineering practice, right now you can't generate the products of the future. The way that I would have thought about iPhone manufacturer before is the reason it happens in China is because it's a place where you have people willing to do work. Hours that Americans probably wouldn't want to work for wages that Americans probably wouldn't want to be paid. That's sort of like, okay, Americans get to design the iPhone. We make a lot of money off the intellectual property, and then our consumers get to buy them. The thing I would have been missing is that if you put the iPhone factory in Pennsylvania, the people who are just learning how to make iPhones, all the extra experience they're getting, eventually they're going to apply that to lots of other technological innovations that might not even be phones, but it might be things that because they know how to do this, now they know how to do that. You have innovation coming out of that that America misses. That's right. The technology production is really an ecosystem. A saying in Silicon Valley is that knowledge travels at the speed of beer. You're a coffee. You just try to through these sort of things and you come up with new products. There's a lot more knowledge circulation within China, within the Shenzhen area where people really want to hustle. They're constantly looking out for new products and you're able to set up a new factory line by recruiting thousands of workers or all really skilled pretty quickly, get a lot of funding for them, and then create some new product. Now, some of these may be pretty dumb like the hoverboard. This is an early Shenzhen product that I used to cover, but the more that you are able to just have this practice and these muscles in order to do a lot of things, you're able to iterate really, really quickly. Something that really strikes me is that there's, according to just the common data point out in the world of automotive manufacturing, it takes years for a Detroit automaker or German automaker or Japanese automaker to conceptualize a new model of a car and then years later to get it on the roads for consumers to buy. In China, that scale of development, that cycle of development, it's something like 18 months or two years. And so, you know, the Chinese are working much harder, I'm working much faster than the Americans. It's not the Chinese who went to Detroit to kind of hypnotize the American automakers to move slow. The Chinese are just much more competitive, they end up having the ability to move really, really fast. Dances Chinese manufacturing as dynamic, as inventive, as vibrant in a way that I think a lot of people want America to be. Something people want to revive here, but are unsure how to. Dan used to write his observations in the annual letters he penned from China, but over time, he started to feel that his safety there was becoming more imperiled. At first, it was small things. Some of the books he would order in the mail would be seized by sensors. But then, the Chinese government detained some Canadians who were living in China. And Dan, one day found that his personal website, where he posted his writing, had been blocked by the government, added alongside websites like The New York Times to the great Firewall. He worried about the attention he was attracting. And so, he moved back. There's a lesson in there about China's liberalism, and Dan's desire for the freedoms the West offers. He was talking to me after all from San Francisco, a city where he both notices the syringes and squeaky subways, but also notices his freedom to complain about them. I asked Dan which parts of China he thought we should ultimately copy. For instance, should the US use China as a blueprint to try to quickly build out a bunch of public infrastructure? Dan's answer surprised me. Well, to be very clear, I hope that the US doesn't learn from China in terms of any aspect of its construction. I think that Chinese construction is often wasteful. And I do really want to respect that a lot of people would want to have substantive due process in terms of being able to resist some of these engineering projects. I do not want to say that the US needs to become like China in order to build infrastructure. I think that if we wanted to learn better infrastructure, let's go to Europe. My wife and I spent most of the summer in Europe. We were mostly living in Copenhagen and Denmark. And the Danes have actually been building really good infrastructure, new subway lines, new subway stations, their driverless. They come every couple of minutes. And I think the Danes are also not very well known for trampling over the rights of a lot of its citizens. And you know, you can also see this in Paris and Rome and Madrid and Tokyo, where they are able to build subway lines. And literally something like one-nithe, the cost of the New York Second Avenue subway. And so we don't have to follow the Chinese. They have been able to build infrastructure at good cost and protecting the rights of a lot of people. Those are also countries that I assume that have like strong traditions of organized labor. Like what are we doing that's so different? I think one major difference is that the US followed the British tradition of common law in which judges have a lot of power relative to legislatures, to block a lot of projects. And I think high housing costs, high construction costs, is not unique to the United States. You also see this in Canada, the UK, New Zealand, and all of these Angelfone countries that followed the British model. And I think at a first approximation, my view when it comes to urban planning is don't trust anyone who speaks English. I think that it is better to just follow the French, the Spanish way, the Japanese way. In the Japanese, they do pretty rigorous environmental assessments managed by the Ministry of the Environment. And the difference with a lot of these other countries is that you cannot allow citizens to keep filing lawsuit after lawsuit in often a pretty malicious way in order to defeat a project. I think a lot about the offshore wind project off the coast of Senat Tuket. It was right where the Kennedys have their getaway. K-Blind, yeah. These rich people hired like top law professors from the Harvard Law School in order to delay this project, which ended up dragging out for something like 20 years before the developers gave up. And these rich people were very successful in blocking a clean technology product in order they claimed to save the whales or something. And so this is something that the rich in America are able to do that the rich in Japan or France are not able to do. So Dan wants us to find a way to stop letting rich Americans use the courts to control the government, particularly local government. Dan would be happy if America were influenced this way. His concern is that instead our government really our president is learning the exact wrong lessons from his Chinese counterpart. I just wrote an essay about how I think the United States is learning some of the worst aspects from China right now. I took a look at some of these things that Donald Trump has said about Xi Jinping over the past decade. And Trump gave an interview in which he said, and I quote nearly verbatim, that Xi is so smart, brilliant, everything nearly perfect. There's no one in Hollywood like this guy. As if I think the implication here was that Xi Jinping was so handsome that not even Tom Cruise has the charisma to play him. And so I think this is just one of these really weird things that comes out of Donald Trump's mouth. And my sense reporting a little bit from my experiences living in Beijing during the first Trump trade war was that a lot of Chinese were still pretty okay with Trump despite the trade war, despite the trade war because he had a real respect of Xi Jinping. And even I felt that Trump never said a bad word about the Chinese people up until COVID when he got very nasty and calling it the confluence or something. And Trump had always reserved meaner remarks for the Japanese as well as the Germans. And so when Donald Trump praises Xi Jinping's great koife of hair, this well-pomated he does have a great koife of hair. I have to say. Yeah, I wish I had it. And so I think it is pretty unfortunate that the US is learning the worst aspects of China. I suggest that what we have in the US is authoritarianism without the good stuff, without the good stuff of functioning logistics, well-ordered manufacturing bases, robust train service. I just wish that the US could learn some of the good parts of China rather than having a building spree of gilded ballrooms and detention centers. Let's build mass transit instead. And my great hope is that the US could be, let's say, 20% more engineering in which it is able to build more homes, build better mass transit, build a better manufacturing base such that it is able to solve a lot of its own problems. And my great hope is that China can be 50% more lawyerly so that this state can actually learn to respect people's rights. The state isn't interested in completely strangling Chinese people's cultural impulses because I think that Chinese have amazing culture. They are so funny. They have a lot of great creativity, a lot of which is strangled by official China. And I really wish that one day the Communist Party could learn to frankly leave the people alone and not to engage in these utopian social engineering projects that is meant to keep them into modernity and then so. It's funny. It's like part of what you're describing is it's not really a coincidence and it might be part of the functional part of the relationship between these two countries which is that when one stumbles the other sometimes surges forward the stumbling one learns from the other than the one who's in front oh it's like does something kind of stupid the other one pulls ahead but that we're that there's a kind of cooperation in the competition in a strange way. Cooperation within competition sounds like a very nice Chinese formulation because there are a bunch of Marxists who are reason and contradictions so already you're becoming more Chinese PJ. It happens so fast. Thank you dad. Dan Wang, his excellent excellent book about China is called Breakneck China's Quest to Engineer the Future. There's so much in there we didn't even touch on a really recommend picking it up. It's smart, it's vivid, it's also a very brisk greed. Go check it out. The Surge Engine is a presentation of Odyssey. It was created by me, PJ vote, and truthy pinominee. Garrett Graham is our senior producer. This episode was produced by Emily Maltaire. Theme, original composition and mixing by Armin Bazarian. Fact checking this week by Mary Mathis. Our executive producer is Leah Restennis. Thanks to the rest of the team at Odyssey, Rob Morandi, Craig Cox, Eric Donnelly, Colin Gainer, Moira Curran, Josephina Francis, Kirk Courtney and Hillary Schaff. Our agent is Orin Rosenbaum at UTA. If you would like to support our show, get ad free episodes, zero reruns, and some extras, please consider signing up for Incognito mode. You can join Incognito mode at Surge Engine. Show. Last week we published an episode of what we're calling stumpers where we took your unanswerable questions and I humiliated myself live in public. It was very fun. Again, if you want to check out Incognito mode, you can find it at Surge Engine. Show. Please follow and listen to Surge Engine wherever you get your podcasts. Thank you for listening. We'll see you in two weeks.