Over time, centralized control creates profound distortions— unbalanced sectoral growth (typically favoring capital-intensive industries), bloated state enterprises, chronic under- or overcapacity, and epic waste. China’s state-owned enterprises, for example, generate about 20 percent of Chinese output, but account for more than three-quarters of all corporate borrowing.

A Chinese citizen born when the country completed its first expressway would— by the time she reached the legal driving age of eighteen in 2011– be able to drive on a highway system that surpassed the length of the US interstate system. By 2020, China had built a second batch of expressways that again totaled the length of the US system. The first expanse of highways took eighteen years to build; the second took half that time.

Cars quickly filled these roads. In 1990, there were half a million automobiles in the country; in 2024, there were 435 million, many of them electric. China didn’t just build cars and highways. It also built mass transit. From 2003 to 2013, Shanghai added as much subway track as the entire system in New York City. In 2025, fifty-one Chinese cities have subway lines, eleven of which are longer than New York’s. China now has a longer high-speed rail network than the rest of the work put together, ten times the length of Spain’s and Japan’s (second and third in the world, respectively). Sleek railcars in silver zooming on elevated bridges are telegenic things, their pictures adorning billboards and book covers. This system completes around two billion passenger trips each year.

By the mid-2010s, Chinese companies figured out how to make all the German tools, as well as the entirety of the solar value chain. The plunge on solar power costs over the last decade has been driven less by breakthroughs in science— which is the United State’s strong suit— than by efficient production, which is China’s strength. The beneficiaries are not only the climate but also China’s national power.

Science matters of course. China remains weak in chips and aviation in part because these are much more scientifically complex industries than solar. Not every technology improves through iterative adjustments to manufacturing processes, but a great deal can follow its logic. When lots of companies are doing similar things, in a brutally competitive environment where profit margins are small, they establish communities of engineering practice like Shenzhen. These factories will never be as glamorous as the desirable branding represented by Apple or Tesla. Every day, millions of workers go to factories to build up technological process knowledge.

Xi isn’t just ambitious about manufacturing. A better word to describe his views might be “completionist.” Andrew Batson, research director at Gavekal Dragonomics, came upon a 2024 boast from the minister of industry and information technology that China has a “comprehensive” industrial chain, since it produces something in each of the 419 industrial product categories maintained by the United Nations to classify industrial production. It’s a very Chinese sort of boast.

The engineering state still has many strengths. There is one thing I haven’t changed my mind about since 2017: I remain more confident than ever that China will become a technological leader in manufacturing industries.

Marxists like to reason through contradictions. What is the central contradiction facing China? I submit that we must reconcile two realities when we read the headlines. First, the rich, the creative, and the desperate have chosen to rùn from the economic and political gloom that pervades Xi’s third term. Second, the manufacturing sector continues to go from strength to strength in the mastery of electric vehicles, clean technology, and other advanced technologies.

How might they be reconciled? With the idea of the engineering state.