How the US and China Are Destroying Themselves | Dan Wang
In a Nutshell
Dan Wang argues that China vastly outpaces the US in manufacturing, infrastructure, and energy production—building 1,500 ships vs. 5, 300GW solar vs. 30GW, and 40 nuclear plants vs. zero—thanks to rapid iteration, dark factories, and an engineering state, while closing the AI gap despite US export controls. Both nations are self-sabotaging: China via Xi's property/tech crackdowns, one-child policy horrors, and censorship stifling creativity; the US through de-industrialization, tariffs eroding alliances, and deporting skilled immigrants. The winner will be whoever stops making hubris-driven mistakes, with "Made in China" poised to rival "Made in Germany" in quality.
These notes were generated by AI and may contain inaccuracies.
Chinese are far ahead of Americans. Last year, United States built around five ships; China built about 1,500 ships. American automaker takes average five or six years to think of new model and release it; in China, speed of iteration is 18 months, three times faster. Last year, China built 300 gigawatts of solar power alone; US built 30 gigawatts. China has 40 nuclear power plants under construction; United States has zero.
Both US and China intent on losing, making big mistakes and self-beatings. Dan Wang, author of Breakneck: China's Quest to Engineer the Future, research fellow at Stanford Hoover Institution. For six years in China, technology analyst at economic research firm Gavekal Dragonomics, trained to think about China through lens of political economy, especially technology achievements.
OpenAI launched most powerful AI model. Elon Musk announces Grok is best AI. Google claims new model is smartest AI ever made. US can build and maintain largest, most powerful, advanced AI infrastructure. US ahead of China on AI, but at best moderate lead, not decisive. Silicon Valley capable of magical thinking, but does not translate to Washington DC. Magical thinking that better AI gives decisive strategic advantage via superintelligence, while China cannot catch up, not compelling. China will catch up quickly.
Every country complex; China with 1.4 billion people especially so. Three main economic hubs differ: Beijing called 'western Pyongyang' by Shanghai residents—centralized, Stalinist, political system, concrete buildings, dust storms. Shanghai commercial hub, 'Paris of the East'—French-designed leafy boulevards, cafe-lined streets, better weather. Southwest defined by regional beauty, mountains, distinct personalities, ethnic diversity. Similar to US: San Francisco Bay Area different from New York City, Texas, Washington DC.
Chinese economy incredibly competitive; if selling products, most competitive system in world. China far ahead of US: produced excellent models despite US export controls for nearly decade on leading firms. Chinese models not substantially behind American alternatives. Chinese produce open-source models, more cheaply run. Some Chinese video generation models ahead of US. Beyond best models, China vastly outbuilding US in electrical power: more coal, nuclear, solar, wind. Last year, 300 gigawatts solar; US 30 gigawatts. 40 nuclear plants under construction; US zero.
China has advanced dark factories—lights off, hardly any human workers, fully automated. Backbone is masses of factories making iPhones, consumer electronics, electric vehicles, batteries—China far ahead of US. Well-developed production ecosystems: factories for batteries, sensors next to each other; managers go next door for parts. Dense networks of 70 million manufacturing workers: mass workers, medium-skilled, high-skilled engineers—most skilled in world. Disparities scary when combined. Not sure US sophisticated models more valuable than vibrant industrial ecosystem.
China's leadership mostly engineers, promoting physical dynamism. 20 years ago, cities had no subway lines; now dozen or two dozen. First high-speed rail 15 years ago; now twice as many as rest of world combined. Tall bridges connect villages, subways, rail, electrical power, manufacturing base—all from engineering state.
Fundamental problem: engineers cannot stop social engineering, population engineering, treating population as building material. One-child policy believed Western Malthusianism of 1970s—mathematical formulas for optimal population to maintain environmental carrying capacity; calculations bunk. Missile scientist Song Jian convinced leadership, justifying brutality: 35 years, 300 million abortions, 100 million women sterilized. Campaign of rural terror.
Living in China produces adventures. Personal website danwang.co blocked in spring 2022—small casualty, but surprising for rinky-dink site. Information environment: WeChat messages blocked by state censors in Tencent before receipt. State shuttered most independent journalism; strict controls.
Censorship like Perry Link's 'anaconda in a chandelier': giant anaconda coiled in chandelier above dinner table. No need to fear it emerging; knowledge it's there intimidates, causes self-censorship. Corrosive to creative thinking. Determination not to be intimidated, tell truth: spectacular manufacturing, public works achievements, but Communist Party grave mistakes like zero-COVID.
Important for us who value independent thinking, critical thinking, not to allow censorship inflict our consciousness too much.
Both countries intent on losing, delivering self-beatings. Model: country ahead makes mistakes from overconfidence, hubris; behind feels crack of whip to catch up. Suspicious of 'China must win' due to manufacturing or 'lose' due to demographics. Both have strengths; dynamic process, both run faster.
In 2021, Xi Jinping ordered controlled demolition of property sector, smacked tech entrepreneurs like Jack Ma—felt strong after managing COVID well. Property slowdown, tech crackdown cause of China's economic problems today.
US felt ahead; Trump eroded alliances with tariffs, de-industrialized America. Trump's first term: lost 80,000 manufacturing jobs. Hurtful: Department of Homeland Security deported 300 South Korean engineers from Georgia Hyundai plant building EV batteries. Unpleasant; looks bad to world—engineers in France, Taiwan, South Korea doubt taking US jobs in Georgia, Alabama, Texas.
Country that stops making mistakes wins. China better if Communist Party more restrained, less social engineering, 'engineers of the soul'. US better without strange political figures beating allies and home front.
Message to both: do less, please.
Decade from now, 'made in China' viewed as excellent quality like 'made in Germany', 'made in Japan'. Future of manufacturing moves to China.
Silicon Valley founders inspirational, hardest-working, ambitious, created economic value. But not delivered to rest of country, which feels entrepreneurs different. Not Silicon Valley's fault—San Francisco, California, US governments failed basic services: orderly clean streets, low crime, affordable housing, thriving growth. California drove net out-migration to Texas, Arizona.
Hope Silicon Valley thinks broadly, supported by politicians to deliver benefits to ordinary Americans not connected to Silicon Valley.
Jobs more exposed to AI vs. less: young workers in AI-exposed jobs see 16% slower employment growth—high-income knowledge work AI handles. Not going back to no-AI world; enormous opportunity. Automated or augmented depends on tasks: increasing scope or shrinking?
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