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’s reining in of tech giants are not altogether different from what a lot of American and European regulators wish to do to Silicon Valley. Every government in the world is grappling with companies that have too much influence over the flow of information and commerce. Individually, China’s regulations around antitrust, data protection, or financial risks may pass muster on technocratic grounds. But Beijing issued regulations with a speed and ferocity that no other state can match. It did so for reasons that the West would not: to shift investment and talent into state-prioritized industries and to crush the power that these companies were gaining at the expense of the state.

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.

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.

Beijing understands social media sites, like Facebook or TikTok, primarily as freewheeling platforms of expression. They bring little gain in economic productivity while creating huge potential for political unrest. Meanwhile, the Chinese leadership looks more longingly at places like Germany, a country that hasn’t developed digital giants but is firmly grounded in manufacturing industries.

In the United States, physics and mathematics PhDs hardly have a chance to consider working in their field before a tech giant or hedge fund picks them up at the sidelines of a conference, flashes them with a humongous pay package, and folds these eager minds into their glamorous embrace. Senior government advisors have more or less stated that Beijing intends to block these temptations. Yao Yang, a dean at Peking University, has remarked with satisfaction that salaries have fallen in the financial industry after regulators imposed a salary cap of $400,000 on the financial sector. Its idea, Yao said, is “to reduce the attractiveness of finance and increase the development of manufacturing.