China is good at making things and is getting better. Since launching economic reforms in the early 1980s, it has become the world’s hub for producing everything from toys to smartphones, and, more recently, solar panels and electric vehicles.
While Americans lament their crumbling infrastructure, China is rapidly expanding high-speed rail, subway systems, and airports across the country. Chinese tech products, from autonomous vehicles to drones to addiction-inducing algorithms, have won over global consumers and put companies such as BYD, DJI, and TikTok in pole position.
China’s prowess in engineering and manufacturing is now at the center of the U.S.–China rivalry in artificial intelligence. Despite Washington’s efforts to block China from advancing in AI, the country has continued to make progress in developing chips and training state-of-the-art large language models.
Dan Wang moved to Canada at age seven from Yunnan in southwestern China. A former tech analyst at Gavekal Dragonomics, his stints in Hong Kong, Beijing, and Shanghai allowed him to closely observe China’s trajectory. In his new book, Breakneck: China’s Quest to Engineer the Future, Wang compares the country’s “engineering” state, which favors large-scale manufacturing, with America’s “lawyerly” society, which he believes hinders new construction and development.
Now a research fellow at the Hoover Institution at Stanford University, Wang spoke to Rest of World about the significance of the push for “made in America,” the chip war between China and the U.S., and America’s diminishing ability to attract top tech talent.
The interview has been edited for length and clarity.
Americans have lately become obsessed with manufacturing, when a few decades ago, they were celebrating globalization and the outsourcing of manufacturing. You write in your book that the U.S. lacks a manufacturing workforce. How do you see today’s calls to bring manufacturing back to America?
We live in a material world, and it is important for countries to have manufacturing capacity because there’s always the possibility of some sort of conflict if you don’t.
I think there was definitely a consensus up until the mid-2000s that it was totally fine for America not to be making toys and socks and even slightly sophisticated goods, like televisions. But I am more inclined to say that if you can’t make the simple things, you also can’t make the complex things, because technology is much like a ladder. If you lose several steps in the ladder, you can’t reach the really critical goods.
If you can’t make the simple things, you also can’t make the complex things.”
President Trump has argued that tariffs will boost American manufacturing. Are tariffs or subsidies effective at reshoring manufacturing?
I’m really skeptical that Trump’s tariffs are going to boost manufacturing. The U.S. has lost some 40,000 manufacturing jobs since “Liberation Day” in April.
I think that Biden’s industrial policy instincts were more correct, but the execution was poor. It didn’t really seem like they needed to move at breakneck speed in anything aside from semiconductors. In everything else, they were much more obsessed with procedures rather than delivering results.
U.S. policymakers are debating whether they should export fewer chips to China to curb AI development or export more to prevent Chinese rivals from building their own alternatives. How do you view this debate?
My view is that the initial export controls carried out under the first Trump administration were haphazard. They were not strategic.
As the U.S. government decided to restrict some technologies to China, it should have been more serious about these restrictions. But due to a somewhat permissive licensing policy maintained by the U.S. Department of Commerce, due to the Chinese firms being able to smuggle or buy these technologies on the black market, due to the fierce resilience of companies like Huawei that refused to fail, and due to the very extensive lobbying efforts of American companies to continue to supply to Chinese customers, the export control policy was severely weakened.
I am skeptical that tariffs are going to reindustrialize America.”
You write about the rise of Chinese tech manufacturing but also the state’s suppressive policies like zero-Covid and the one-child policy, which drove many elites abroad. Does an authoritarian system help or hinder innovation in tech?
The effect of authoritarian systems on technology advancement is not straightforward. If we take a look at Stalin’s Soviet Union, it was a time of incredible repression when Stalin was sending a lot of people into gulags. And we have examples of many scientists staggering out of gulag and immediately building great weapons for Stalin as part of the war effort. We have the Third Reich in Germany making considerable advancements in rockets and fighter jets in order to help make advancements as well.
Even in the U.S., we have the Manhattan Project and the Apollo missions, which resemble central planning. I am skeptical of any argument that says that authoritarian systems cannot innovate in technology or science simply because they lack free speech.
In Breakneck you write that China will graduate more than twice as many STEM students as the U.S. in 2025. Many talented Chinese have in the past ended up in America, but now some choose to return to China. With the Trump administration placing more restrictions on immigration, what will the talent pipeline look like in the coming years?
When the Americans and Soviets were both sending rockets into space, an American saying was: “Well, Russians and Americans both got a lot of Germans building rockets, and our Germans are better than their Germans.” I sometimes wonder whether Americans can say that “Our Chinese are better than their Chinese.” It is too soon to say.
I certainly want to acknowledge that the U.S. is sometimes less attractive, in part, because even some of the best places to live, like New York and San Francisco, are not very functional places.
Trump’s immigration policy is probably going to be disastrous for American technological leadership. It doesn’t make sense to cut science funding by as much as half. It doesn’t make sense to turn off the U.S. as an attractor to some of the scientists yearning for some aspect of freedom, and it doesn’t make sense to deport a lot of people who could form the manufacturing industrial base in the U.S.
I am skeptical that tariffs are going to reindustrialize America and that aggressive deportations are going to make the U.S. into some sort of great scientific power.
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