The Communist Party has relentlessly broken up entrenched interests, partly to prevent rich people from gaining political power and partly to spread material benefits throughout the country. It’s rise suggests that a country can grow powerful when it trains a lot of engineers and puts them to work, even under less-than-great institutional arrangements. In the words of one 1991 paper written by a trio of economists, “Our evidence shows that countries with a higher proportion of engineering college majors grow faster; whereas countries with a higher proportion of law concentrators grow more slowly.” Engineers are part of the reason that China has grown so much wealthier, despite its wavering commitment to secure property rights.

An official like Li Zaiyong might be more interested in building a gleaming hospital filled with sophisticated equipment. Their attention drifts, however, when it comes to installing the trained technicians capable of operating the facility, since the Communist Party is better at rewarding new construction than health outcomes.

I’ve come to realize that there are many way that China and the United States are inversions of each other. Households save a great deal of their earnings in China, while it is really easy to borrow money or spend on credit in America. In terms of national policy, China is much more focused on the supply side of the economy: It suppresses consumption as it favours manufacturers with preferential financing and all manner of policy support. The United States, meanwhile, is focused on regulating demand, for example, by imposing rent control in expensive cities or mailing out checks to consumers during the pandemic.

Never mind that China has gotten less growth from each unit of new investment since its big infrastructure binge of 2008. The Communist Party continues to build because it’s full of engineers and also because Marxist-Leninists don’t want to cede economic agency to the people.

China would be better off if it built less and built better. But we should also resist judging it by the standards of the United States, which is frankly underprovisioned in public infrastructure. Because there is perhaps one thing worse than an overactive state that can’t stop moving— and that is a state that can’t move at all.

That is what the engineering state is about. It likes to build not just public works but also manufacturing capacity. The engineering state resists economists as easily as lawyers. Economists may cite David Ricardo’s theory of comparative advantage as a reason to permit production to move away. The engineering state declines, aghast at losing manufacturing because it’s somehow cooler to be in services.

So far, China hasn’t felt the economic pressure to abandon low-end manufacturing (clothing, footwear, and so on), in part because there are still a lot of poor Chinese provinces like Guizhou that have cheap labour.