As China emulated America’s past successes, the US government got busy undermining its own strengths. A procedure-obsessed left conspired with a thoughtlessly destructive right to constrain the government. Neither the left nor the right allows the state to deliver essential goods expected by the public. The Biden administration may have ushered through historic bills on industrial policy, but executive agencies were so obsessed with procedural concerns that little building actually took place before voters reelected Donald Trump, who has threatened to cancel many of these projects. The United States is still a superpower that is able to outclass China on many dimensions. But it is also in the grips of an ineffectual state where people are increasingly concerned with safeguarding a comfortable way of life.

Xi has talked about achieving national greatness without backing it up with economic growth. The trouble is that when people suffer— as they do through a property collapse, high unemployment, or lockdowns— they start to wonder what they are really getting. It’s certainly not enrichment. When they’re given a cold, hard smack in the face by something that certainly doesn’t feel like greatness, they become unmoored. This sense of alienation has been a big reason to rùn.

Xi has forcefully reminded China’s tech companies that they cannot represent a power center that challenges the state’s sovereignty. It was, in other words, an attempt to change the cultural mindset of companies. The Communist Party reminded them that it retains the discretionary power to engineer all aspects of society, which means putting tech companies in their place.

There might be something to be said for this sort of approach. What if, say, the US government had responded to the 2008 financial crisis by reshaping Wall Street’s risk management culture rather than engaging in the endless negotiations that yielded a 2,300-page statute that nobody understands? But Xi’s attempt to achieve cultural change has left people disgruntled and whole industries disfigured.

The trouble with Xi Jinping is that he is perhaps 60 percent correct on everything. He’s driving toward a usually admirable long-term goal. But in the name of achieving change, the engineering state delivers such beatings on people or industries that they are unable to pick themselves back up again. Even if Xi’s judgments are right, his brute-force solutions reliably worsen things. Does big tech have too much power? Fine, but stomping out their businesses has traumatized entrepreneurs. Are housing developers taking on too much debt? Yes, but driving many of them toward default subsequently triggered a collapse in homebuyer confidence, prolonging a property slump. Does the government need to rein in corruption? Definitely, but Xi has terrorized the bureaucracy to the point of paralysis.

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.

Beijing has been taking the future dead seriously for the past four decades. That is why China will not outcompete the United States. The engineering state has delivered great things. But the Communist Party is made up of too many leaders who distrust their own people and have little idea how to appeal to the rest of the world. They will continue to bring literal-minded solutions for their problems, attempting to engineer away their challenges, leaving the situation worse than they found it. Beijing will never be able to draw on the best feature of the United States: Embracing pluralism and individual rights. The Communist Party is too afraid of the Chinese people to give them real agency. Beijing will not recognize that the creatives and entrepreneurs it is chasing into exile are not the enemy. It will not accept that their creative energy could bring as much prestige to China as great public works.