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’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.

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.

Throughout this book, I’ve avoided calling Xi’s regulatory storm a “tech crackdown.” While disciplining digital platforms and the real virtual economy with one hand, Beijing has with its other dispensed favour to harder technologies like semiconductors. Xi was trying to reorient technology companies to be less focused on virtual or financial innovation, and for the best and brightest from Tsinghua and Peking Universities to work in strategic industries instead.

Underlying Beijing’s actions against digital platforms is a suspicion that tremendously profitable digital companies are not producing value for the rest of society. Entrepreneurial dynamism in online education, social media, or fintech are producing various forms of social harm. The virtual economy, including cryptocurrencies and the metaverse, sucked up too much talent and money. Xi and the rest of the Politburo were discomfited that the cutting edge of the economy seemed to have been driven by the vagaries of investors rather than the interests of the 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.