While Western governments reacted to the global pandemic by sending cash payments to households— in the United States, three rounds totaling $3,200– Beijing gave little financial support to people. It offered only meager increases to unemployment insurance, which only a fraction of the millions of unemployed workers were able to claim.

Beijing decided instead that the best way it could help workers was to get them back to work. In practice, it meant assisting companies to restart production rather than sending cash to households. It did that with its pursuit of the zero-Covid strategy, which involved taking drastic action to seal the country off from foreign travelers and imposing protracted lockdowns wherever it detected the SARS-CoV-2 virus.

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.

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.

Germany and Japan are mighty exporters with, respectively, eight million and ten million manufacturing workers. A country doesn’t need so many people to have a robust semiconductor industry: A few hundred thousand highly trained workers are enough. In 2025, China will graduate more than twice as many PhDs in STEM fields as the United States— and many in American universities are Chinese nationals likely to repatriate.

Sometimes I think that the United States’ tech competition with China— chaotic policymaking under Trump, porous implementation under Biden— has ended up in the worst of all worlds. These restrictions have scorched China’s most dynamic companies without killing them, which riles them up to break free of American restrictions.