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.
Related Quotes
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.
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.
The control neurosis of the engineers is the fundamental limit to China’s power. But it will also push China to be an advanced manufacturer with dominant positions in many of the high-tech supply chains of the twenty-first century, with military capacity to match and a good chance to challenge US hegemony in Asia.
And the focus on building is winning China some degree of support in developing countries as well.
Exporting China’s infrastructure is core to the Belt and Road Initiative (BRI), one of Xi’s signature initiatives. Chinese firms have taken their expertise in building roads, bridges, railways, tunnels, dams, and power plants abroad. And the sometimes also bring the sorts of surveillance systems and censorship tools that find eager customers among autocratic leaders. They have gone on a spending spree overseas, with $1 trillion worth of loans outstanding in 150 countries.
In Uruguay, Daniel Pena draws the same conclusions. The AI industry’s supply chain is convoluted and expansive. “They take energy from here, the data goes there, they extract minerals from somewhere, they bring workers from somewhere else,” he says. Against these sprawling impacts and the massive, powerful companies behind them, each community fighting their local struggle can feel isolated and disempowered, especially when hamstrung by their own governments that “need the companies to maintain an appearance of a stable economy.”