Is it better to be run by engineers, lawyers or regulators? Can you build an economy on luxury handbags or do you need advanced manufacturing? Dan Wang, author of Breakneck: China's Quest to Engineer the Future discusses why China outbuilds America, how the young and ambitious succeed in China, and the secret to finding the best Chinese restaurants.
You can order his new book here, read his annual letters on China here, and check out London's best Suzhou noodles here.
If you want more from Works in Progress you can read the magazine here or listen to our episode about land in East Asia here.
You can watch or listen on YouTube, Spotify, or Apple Podcasts.
Transcript
Sam Bowman: Hey, welcome to the Works in Progress podcast. My name's Sam Bowman. I'm one of the editors of Works in Progress.
Pieter Garicano: And I'm Pieter Garicano, another editor with Works in Progress.
Sam: Our guest today is Dan Wang. Dan is the author of a new book, "Breakneck: China's Quest to Engineer the Future." And I also recommend that listeners look up your annual letters, which are some of the best writing full stop, but by far the best writing that I regularly see on China. They're absolutely fascinating, incredibly insightful, and your new book brings together so many of those insights, so many more. It's really well written. It's a great read and I think it's going to be one of the most important books of the year.
Dan, I want to start by asking about the different factions within Chinese politics and the Chinese Communist Party. We're often used to thinking of the CCP in the West as a kind of monolith, but in your book you go into some of the different factions and some of the different ideological battles that take place within China. So can you start by talking to us about these?
Dan Wang: My simple model for thinking about the Chinese Communist Party is that it is a Leninist technocracy with grand opera characteristics. So it is obviously Leninist because it is led by a core cadre of professional revolutionaries that see their job as heaving the population into journey. And then it is technocratic because it has this heritage of the examination system that has been administered since Imperial times, that has really been boosted by the Communist Leninist system.
It has grand opera characteristics because it is pretty practical until it collapses into the preposterous. And one of the points I make in my book is that there's a pretty thin line between rationality and irrationality. You can be enforcing pandemic controls, which are making sure to break the chains of transmission, making sure that not too many people are dying all the way until you get to a lockdown of 25 million people being unable to leave their apartment compounds over the course of eight weeks, which is what happened to Shanghai in 2022.
So within this framework of Leninist technocracy with grand opera characteristics, I think what we can have is some people who are a little bit more into the technocratic elements. And I would say that there's a core part of the Communist Party since Deng Xiaoping brought China back from the brink from the Mao years, who are simply very interested in growth. These are people who perhaps have more training abroad who have spent some time in Europe and the US who have a pretty keen sense that Japan, Korea, Taiwan, have grown much more quickly than the People's Republic have. And they're really interested in just trying to drive a lot of growth forward.
And then you have parts of the Chinese Communist Party, which are a little bit more into the grant opera tradition. This is where I situate Xi Jinping. So every couple of years he will have a major celebration of the death of Karl Marx and you can see this giant portrait of Karl Marx hanging in the Great Hall of the People. There's a lot of flags, giant red flags where it is garlanded by the central committee.
And then if you take a look at some of the video footage of the Party Congress, which takes place every five years, it really feels like a Wagnerian opera. Without all that noise, the political downfalls might well be greater. And so Xi Jinping is someone who I think has a very keen sense of pageantry. He has a very keen sense of the apocalyptic, he has a very keen sense that growth is not the only thing there is. There has to be some centralized campaigns of inspiration that really drive the people forward, really manage the propaganda well, really discipline the party.
And so you can try to create these sort of factions of here's a Beijing faction, here's a Shanghai faction within the Communist Party. The way I think about it is there's this tension between Leninism on the one hand and economic growth on the other.
Sam: And this is something that I find you talk about people being forced to study Xi Jinping thought, and I'm really curious what actually is Xi Jinping thought? How would a scholar of Xi Jinping thought try to summarize it for somebody like me who is almost completely unfamiliar with it?
Dan: Some people study Xi Jinping thought because it's their job. I study Xi Jinping thought because it's fun. My simple encapsulation of Xi Jinping thought is that Xi Jinping is trying to achieve the centenary goal, which is encapsulated by the Communist Party, which is to achieve the great rejuvenation of the Chinese ethnostate by the year 2049, which is the centenary of the Communist Party's founding.
And within that, what Xi Jinping wants to do is to try to have about a dozen different goals, some of which include poverty alleviation, discipline in the party, economic growth, having a strong military, and you can stuff a couple of more things within this capacious framework. But I think the general framework that I would have for Xi Jinping thought is at its most simple, it is to make China great again under the leadership of the Communist Party.
And maybe the emphasis should really be placed on Communist Party leadership rather than the great rejuvenation of the people. Because if Xi has to choose, I think he will choose the party over the country, but he would like to have the Chinese people feel rejuvenated, whatever that means, but has to also be under the leadership of the Communist Party.
Sam: And does this include prescriptions about means or is this focused on ends and pragmatic about how China is supposed to achieve these ends?
Dan: I think there has been a shift. Xi is the third great ruler of China over the last 70 years. First great ruler of China was Mao Zedong, who ruled from 1949 to 1976 when he passed away. And I think Mao was first and foremost a poet. He was second, a great warlord and third, a murderous dictator who plunged the country into all sorts of catastrophes over his years in this role.
And so for Mao, I think the project of the ethnostate, the project of the rejuvenation of the Chinese people was first and foremost an aesthetic project. A lot of what he tried to do was to create some sort of beauty as he understood it in this sort of very bizarre literary theory lens of how to view the Chinese people.
So Mao was first and foremost a poet and then a warlord. Deng Xiaoping was a lot of these things as well, but he was much more focused on economic growth. He was very much interested in maintaining the primacy of the Communist Party, but he was able to relax a lot of these dictates and really try to focus on making China as rich as possible.
And I think Xi might be somewhere in between. He cares about economic growth, he understands that growth is really important for the Communist Party in order to establish its legitimacy. He understands that growth is really important because that gives China much more space for maneuver in all sorts of things. He doesn't want to go back to poverty, but there is this again, grand opera element here in which he cares about the way that China is achieving growth.
And so I think there is an end of achieving the great rejuvenation of the Chinese nation, but the means also has to be there as well. Where there has to be leadership by the Communist Party, there has to be some commitment to Marxism-Leninism, there has to be some commitment to the Confucianism that is endemic to Chinese history and he really cares about the way that China grows rich.
He doesn't want China to grow rich through the way that America has grown rich in the last 20 years, which is substantially driven by financialization on one coast with Wall Street as well as tech on the other coast, a lot of consumer internet represented by Silicon Valley. He wants China to grow rich by investing a ton in heavy industry in much more of a Soviet way. So there is a means that Xi prefers.
Pieter: So a lot of your book is about the training that the leaders have had in the People's Republic. You make a big point of them all being engineers and Xi himself is also a chemical engineer by training. But I'm kind of curious, how rigorous are these degrees that these leaders took? How highly should we actually think of Xi's competencies given that he studied engineering?
Dan: Not terribly rigorous, especially not rigorous when Xi studied engineering, chemical engineering in the years that he was in Tsinghua, which was at the tail end of the Cultural Revolution. So Xi grew up as the son of one of China's most important state leaders who ended up being the party Secretary of Guangdong Province, drove a lot of liberal reform. But Xi's father was at various points out of the good graces of Beijing.
And so he was sent away into the countryside and Xi himself didn't have a very happy childhood because his father was purged for various reasons, but he managed to get into China's top science and engineering university on the basis of being a worker-peasant-soldier programme. And so I think he was classified either as a worker or a soldier, I think probably more of a soldier.
But this was a time when you didn't really have to get really good grades in order to get into China's top university. Later on, he had a degree in I believe Marxist economics. And so this is what his doctorate is in, so we have to call him heir doctor professor Xi PhD. But this isn't in the sort of engineering of the sort that you and I love.
So I think a lot of the training of engineers in China's public bureau is frequently perfunctory at best. Many people who had engineering degrees never actually did any engineering projects. I believe Hu Jintao, the previous general secretary of the Communist Party did actually help to build a dam and his premier who had training in geology actually did some geological work.
But it is a little bit unusual and not all of them have done any sort of real engineering. But the way that I want to take this still a little bit seriously is that I want to say that the engineering culture, the engineering spirit is at least somewhat endemic to the Chinese political culture that stretches back into imperial times. So the emperors starting from basically 0BC in the first Chinese imperial dynasty, the Qin dynasty, they had barely hesitated to conscript a lot of people to build great walls or to build grand canals. These are fortification systems. These are hydraulic systems really to try to conscript the population into building a lot of these really big mega projects that took centuries really to achieve.
And a lot of these emperors also didn't really hesitate to completely restructure a peasants' relationship to land. And so I think that China has been practicing a form of absolutism way before any European monarchs with the idea in the 17th century or the 18th centuries. And so they had been really practicing a sort of absolutism.
And I also feel like China hasn't had the chance to develop very much of a liberal tradition in part because the Imperial exam system determines the status of a lot of the intelligentsia in China. And so you don't get really far trying to advance through the court by advocating for constraints on the emperor generally. There has been some of a liberal tradition in China, but it hasn't been very vibrant. And that's in part because the court has completely captured the intelligentsia and this is why we also have just very extensive meddling in the lives of people over a very long period of time.
Sam: But how important is traditional Chinese culture to Chinese elite today? Are they embracing the heritage of the Qing? Are they reading the books? Is this like the Soviet Union in the 1940s when they re-embraced it as part of a new nationalism? How much do they care about what happened before 1949?
Dan: Very difficult to try to establish that with any sort of objective truth. I think that it is certainly the case that the Communist Party talks extensively about how great and wonderful various Chinese imperial dynasties were in the past. And I think for the most part it is more than just paying lip service to the glories of past Chinese culture.
I think there is some sense that the party wants to maintain the heritage of Confucius, maintain the heritage of Mencius and all of these other Chinese philosophers. I think there is a sense that they really do celebrate some of these great books from China in the past, and I think it is a little bit more than just any sort of lip service to past glories because if they don't refer extensively to past glories in China, what are they going to do?
Talk about this German philosopher who is really important in the 1870s who has this giant beard and who had carbuncles on his face. Now that sounds really, really weird. Why would they be celebrating a kind of an imperialist foreign ideology, a sort of Marxism that they, I would say barely practice themselves anymore? They have to draw something more fundamental to that and they have to draw on some sort of traditional Chinese culture in order to establish some of their cultural legitimacy.
Sam: You talk about in the book, I guess a sort of intellectual movement that you call the industrial party or that are called referred to as the industrial party. And there's really a line that really sticks out in my mind and you kind of say there sort of backwards inventing fascism. I wonder if you can talk a little bit about who these people are, what they believe and how this fits into the sort of intellectual heritage of both pro-communist China and also sort of pre-modern or pre-contemporary communist China.
Dan: The industrial party in China is not a formal political party. The Communist Party of China has a de facto political monopoly over all political parties in China. Technically, if you take a look at the People's Republic, there's also eight other parties including something called the Democratic Party or something. And these are all obedient and very loyal to the Communist Party. So the Communist Party is not the sole party, but it is above all of the other parties.
The industrial party is more of a meme-based movement that was organized through the Chinese blogosphere essentially through the 2000s and it still persists today to some extent. So these are a lot of people who are organized under a couple of core blog posts. The Chinese are just like us, they think about blog posts quite a lot as well.
And so a lot of the industrial party is, I want to be clear that I'm just caricaturing a lot of these views, but the view is that heavy industry solves all problems. There is no problem that heavy industry cannot solve. And so a lot of what they're trying to do is to advocate for organizing the state under the pursuit of science and technology projects.
It is very dismissive of the financial sector, it's very dismissive of service sectors at large. It is to say that China needs to build steel, China needs to build semiconductors, China needs to build, build. Now, I think there is a popular encapsulation of this view that perhaps more folks have heard of and that is the "Three Body Problem." The author here is Liu Cixin. He wrote this trilogy of the Three Body Problem. He also had another big book that's called the "Wandering Earth."
The "Wandering Earth" is one of these books that have been adapted into a movie over the last couple of years, and this is one of these big blockbuster movies that was really popular in China. And the core premise of the "Three Body Problem" and "Wandering Earth" is that humanity is under some sort of alien threat, some interstellar threat. And what the state really needs to do is to organize the entirety of society, band together under a technocratic government and defeat this foreign threat.
In both cases and in the books, it is actually kind of successful in the "Three Body Problem." The Chinese end up working pretty well with the US and they have some sort of world government in order to defeat the big alien threat. And so this is one of these core texts that I think is one of these big or texts that a lot of the industrial party is organized around.
But there is a pretty vibrant movement here where Liu Cixin is not the only author. A lot of this is organized under this still a sense of fierce nationalism that China was defeated first by the European imperial powers second by this brutal fascist invasion by Japan. China hadn't been defeated, but it had been kind of close and China was suffering very extensively under Japan's invasion throughout the thirties and the forties.
And the core diagnosis of a lot of the industrial party is that China was invaded, China was humiliated because it did not have science and technology. And so I look at this discourse and I think, well, isn't this a straightforward reinvention of fascism in the 1930s and the 1940s?
And I take a look at some of these texts by especially the Italian futurists in the 1930s, they produced some fantastic art. It is very geometrical. I really enjoy looking at these sort of fractured prism based art of aeroplanes and trains and in some cases wonderful pieces of machinery.
And they had a very strong aesthetic sense that technology is political and technology can be very beautiful and I think this is what a lot of the industrial party is. They would never say that they're trying to invent fascism, but having a technocracy administer a state bent on pursuing science and technology, I don't know if there's other ways to describe it.
Pieter: It is funny you mentioned that on Instagram I get a lot of aesthetic building accounts. One of the things I'm interested in and the other day up popped in my feed a post about Italian rationalism, which was a movement according to this art aesthetic account that flourished in Italy in the 1920s, thirties and forties before declining.
And I thought, wow, that's an interesting one to pick out, but you are right. The aesthetics are really, really interesting and much more so interestingly than anything Germany did over that period. The focus on futurism and the focus on the aesthetics of technology and so on is very, very striking from Italy in particular in that era and interesting. And I was not aware that that was such an important part of, or that was an important part of this kind of group or this memeplex in China.
Coming back to this industrial party question, how niche is this? Who's engaging with it? Is this part of this kind of more extreme like right wing blogosphere, is this something that it's widely read and consumed are the younger cadres reading it?
Dan: For the most part, the industrial party texts are pretty mainstream in society and one might even imagine that this is actually a central guiding movement for the central committee and the Politburo of the Communist Party even today.
So almost everything would be extensively censored in China. The government censors everything - they have censored at times the first line of the Chinese national anthem "Arise who do not want to be slaves," which is something that the Shanghai residents were sharing extensively during the Shanghai lockdown. They censor all sorts of independent journalism. They've censored my website in China as well, but there has been kind of one movement that hasn't suffered very extensive censorship and that is the industrial party.
And one can even say that some of the core ideas of the industrial party, namely that China was defeated by the imperialists and the fascists due to a lack of technology, which I think is not too controversial of an idea, broadly speaking even among everybody else who looks at China. And then the second big idea that modern China today really needs to be organized to pursue a lot of advanced manufacturing.
One could say that this is a part of the ethos of the Chinese state, not just under the communist regime but also under the Taiwanese government, which has also felt a lot of these urgent needs to improve technology as well.
And so if you take a look at a lot of these texts in China, the industrial party hasn't been very extensively censored. Every so often you see that they have visits from high ranking members in the Communist party. A lot of their texts are actually sponsored by think tanks that are directly affiliated with the state. And so these people are kind of thriving.
Now, every once in a while someone will say something odd. There has been one member of the industrial party who has been one of these big blogosphere members who has been pretty supportive of Ukraine's fight against Russia. His remarks are occasionally censored, but for the most part I would say that the industrial party ethos is now baked in.
Pieter: And more broadly, if you are someone, if you're in your early twenties and you decide that your goal in life is to become general secretary, what do you do? Who do you hang out with? Where are you and what are the choices you're thinking about making in the next 10, 15 years?
Dan: Pieter, you're a young, ambitious person interested in politics in your twenties. Are you asking because you're interested? Well, here's what I recommend that you do.
The first is that it helps to have a family member who is high ranking in the party. So Xi famously is part of what people would call the Princeling faction because his father was one of the, at times one could say one of the 10 most important members of the Communist Party under Mao Zedong and also under Deng Xiaoping.
And so it helps to have a high ranking member in the party, but that hasn't been a requirement traditionally, even now there are still a lot of smart folks who are able to get into the senior ranks of the party without having illustrious family heritage. In part that is because the communist party has been relatively meritocratic.
The Imperial Chinese state is famous for administering the exam system and that I think has produced a measure of aristocracy that one doesn't necessarily find in many other countries. It would help if you dedicated yourself to studying Marxism Leninism. And now Xi Jinping thought - the Chinese are really looking constantly at selecting for the brightest kids in school and also encouraging them to become members of the Communist Party.
If you're a bright young thing in elementary school, starting in elementary school in China, people might be given what is just a red silk scarf in which you are identified as a very smart young person. Your name would be a red pioneer. And starting from that point, your teachers would be looking out for the red pioneers and constantly encouraging them to go to the right schools, join the party, and then doing the right thing.
In universities, if you do in fact join the party, maybe get an engineering degree in university, then you might be selected to test into the civil service system in China. And the traditional path for getting yourself raised throughout the party is first you have to know where the political winds are blowing. The party state talks endlessly about itself. You can watch the daily newscasts, you can read the daily newspapers, you can read the monthly Party theory magazine, which I did when I was living in China, which is a fascinating fun magazine to look through called "Seeking Truth."
You read all of these texts, you try to figure out what Xi Jinping's next objective is. Xi Jinping is changing his mind quite a lot. He cares about poverty alleviation one month. He cares about environmental issues the other month, science and technology the month after that. And so you kind of want to know where the winds are blowing and then you dedicate yourself really to serving the party and serving the people.
So one of the features of the Chinese communist state is that for the most part, you're not allowed to administer your hometown or the region that you're from, the province that you're from. And so you don't have these phenomena like in the United States where Joe Biden was from the Pennsylvania, Delaware area, these two states are right next to each other. And Joe Biden spent his entire political life representing Delaware before becoming president. In China, you're not allowed to administer your home province because starting from imperial times, they have been nervous that you could develop some factionalism within your own state. And so if you're from the Northeast, you would be rotated to govern a state in the southwest.
So you start from the village level, you try to get promoted into a third-tier city. So say if you are 25, if you're just out of university, you'll apply for a job with a party and they'll give you a village to run. Is that how this works?
That's right. You're probably being sent to the villages. That is a sign of trust within the system that you're expected to administer some of the poorest places in China. And that is where you prove your chops to be able to develop your life. And you can't run the party, you can't run the country without having some experience in a pretty poor part of China. That is true for Xi and his predecessor Hu Jintao as well.
So you start on this party level, you might get into a third tier city next, and then you might be asked to be the party secretary of a state-owned enterprise. So this is a telecoms company, an aviation company, an energy company. You might be tasked to run perhaps a think tank. One of the all think tanks are of course subservient to the communist party. And so maybe you'll be expected to administer a think tank, administer a party school, and then you're off to the big leagues to run a city as important as Shanghai or Shenzhen. And then you might be inside the central committee by the time that you are in your forties or fifties. And then after that you might have a chance to be general secretary of the Communist Party.
Sam: How much and how does the CCP tolerate or encourage useful dissent and debate internally? I don't mean questions about whether the CCP should run the country, but I mean questions about which taxes should we raise or should this dam that we're building be this large or this large or should we be investing in solar or should we be investing in nuclear or hydro? How do they encourage that and how much can they encourage that given that it's quite difficult to have a debate about anything that doesn't end up leading to lots of other questions that they might not want to have asked?
Dan: That is framing the question exactly right, because where is the line between technocracy and politics? That line could shift very, very easily. And one of the problems of autocratic systems is that you never really know where that line will shift. And so at a first approximation, I would say that the 24 men who run the political bureau of the Communist Party, the politburo, are at a first approximation, perhaps the only 24 people in the country who are allowed to do politics. Everything else is about the efficient administration of their will that they will transmit down after they have settled matters of politics and ideology.
And so a lot of these other things, I think China is broadly pretty meritocratic and also pretty broadly technocratic. You can't build a bridge, you can't build a subway system, you can't build a high-speed rail system without a considerable degree of rationality and a lot of technocracy, and this is for the most part, I think Chinese are pretty good at this stuff. The subways work really well.
Obviously the fascists have a legendary way with trains. And I would say that the high-speed rail system in China works extremely well. Cities work very, very well. I am very, very fond of Shanghai. Shanghai has these big leafy boulevards, it has cafes all over the place. You're never more than 15, 20 minutes away from a subway stop.
Shanghai had about 500 parks in the city in 2020 when I was living there. And by the end of this year it plans to have about a thousand parks in the city. And so a lot of these ways China is administered really well when it comes to a lot of technocratic energy policy.
A lot of their plans make a lot of sense to locate solar where it is, where the sun is most plentiful in the west, locate a lot of wind production there as well, build a lot of ultra high voltage transmission lines and build that into the coasts in a way that you have all sorts of these strange issues that are preventing rationality in the energy production systems in the UK and the US that you don't really run into these issues in China.
The problem, as you point out very well Sam, is that many things implicate politics and you never really know where the line is going to be. It might be that you work on kindergarten education policy, which year should children really start kindergarten, you might think that doesn't implicate politics at all, but then maybe that runs into some sort of a demographic issue and you don't really know where these sort of lines are.
And I think one of these challenges and ambiguities in autocratic systems is that yes, you try to be technocratic in general. I think that China does a pretty good job, but politics pervades and you never really know when you fall into the pit.
Pieter: Sorry, you mentioned the solar. They seem to be doing well transmission, they've built big infrastructure projects, but why do we believe that they are allocating capital effectively? Why isn't this going to be like every other centrally planned regime in history, where over time they'll make more and more mistakes and Xi Jinping has to decide whether to bet on computer vision versus LLMs and over time will make more and more mistakes and it's going to slow them down. Why isn't that happening here?
Dan: The first thing to say is that China has gotten a lot of things right. I would say that what is really important is to get a lot of things, get a couple of big things, and then you can make a lot of other mistakes. And even if they pile up, that's not so important.
And so I really enjoyed the document that Sam produced about the comparisons between the UK and France. And so even though France looks politically much more dysfunctional than the UK at the moment, they got a lot of things right which is to build a lot more housing and to build a lot more energy systems. And so you get a couple of big things right? And you have the ability to make a lot of other mistakes.
And if you take a look at the history of China over the last 40 years when it's really gotten rich, I spent a lot of time thinking about how they did get a lot of big things right in terms of how to finance the industrialization, in terms of managing the political economy, in terms of motivating the cadres, in terms of encouraging private enterprise when they should have been encouraging it.
So these are things that a lot of other developing countries haven't really figured out. It is pretty clear that China has grown much more decisively than India has over the past. Right now that's no longer true, but over the past China has grown much better than India has, much better than Brazil has, much better than Indonesia and Mexico have as well.
And so I think the first thing to say is that the political leadership has been able to do a lot of good things well. The other thing that I would add is that China has not only a very strong state, it has also a lot of very strong entrepreneurs.
There is this fierce churning dynamic entrepreneurial sector in China where things are kind of messy in a lot of different ways in I think highly positive and salubrious functions for society.
There is just kind of this messiness in Chinese society where as much as the party state breathes down your neck, a lot of people simply don't listen and they try to look for ways around the dictates. And that is I think a distinguishing feature of Chinese people that is kind of like Americans as well, where they just kind of see what they can get away with in a way that I think doesn't really characterize a lot of Europeans nor a lot of, let's just say Japanese people where they tend to be a little bit more faithful to what the state really wants them to do.
And so you have a strong state, you also have a lot of dynamic spirit. The state isn't always aware, maybe isn't even mostly aware of what the people are trying to do, of what companies are trying to do. And the state has the adaptability I think much more so than the Soviet system of understanding when it has a success on its hands, like DeepSeek. And then really trying to co-opt that and to say, well, good job DeepSeek, now you're part of us and we're going to try to support you in many different ways.
And I think the other part that I would mention here is that maybe central planning will not work over the longer run. Perhaps that is even the most likely scenario. But if you are able to just stay on your feet and not collapse in any sort of a big way, maybe you can hope that your adversary collapses more quickly than you can.
And so Napoleon's great phrase here is that the game goes to he who does not lose, and Napoleon mostly won his battles and then he lost five big ones and that resulted in total defeat. And so I think one of the big hopes of China today as well as Russia today is that, well, maybe we will eventually implode, but let's hope that our adversaries in the west implode faster than we can because they have all sorts of problems themselves. I think that is a hope, that's not a strategy, but we can't always assume that it is going to be the central planning autocratic power that will fall first, maybe others fall first.
Sam: This is one of the really central themes of your book that the sclerosis - and you focus on the United States, but I mean clearly Europe has this sclerosis even more so than the US does - of the West, which is something that most of us are used to talking about in fairly insular terms. We're usually used to talking about the problem with housing supply being constrained in California being a problem for Californians or more broadly for Americans or people who'd like to move to California.
The book really refocuses that and puts this in terms of great power competition between the US and China. And I think it's a very, very interesting and novel frame on what is called the progress studies or abundance agenda type debate.
In looking at China and looking at what China gets right, did you come away with or have you come away with new feelings about how to solve some of these problems in the western world or do you think that there basically isn't anything we can take from China, it's just too singular to China itself, and we can't really take any leaves out of their book or wouldn't want to take any leaves out of their book?
Dan: I think I want to split the west into let's say two different blocks. The first block is the United States and the second block is Europe, UK, and maybe I'll throw in Japan as well - untraditional choice for the West I grant. But what separates the West just not by democracy, I would say, is that the Americans are dynamic, they know how to grow and the others do not. And so that is my rough and simple measure for thinking about things.
In the first page of my book, I say that Europe and Japan are made up of these mausoleum economies, and I think that what really unites Americans are the Chinese, and I think these are the two most alike people in the world. These people look for shortcuts. They have a sense of the technological sublime, they have a sense that they are great powers and that every other country needs to fall in line. They have pretty strong states, but also states that can't really control what's going on in their own borders - the Chinese not very well to say nothing of the Americans.
And so I think that the Chinese and the Americans are both really dynamic peoples. And the other way that I think the West should be split between the US and everywhere else is that I think the US used to be an engineering state itself. And I think certainly it is the case that Europe and Japan were engineering states, but I have a sort of a sense that the Americans have more ability to achieve engineering once more.
And so the US had these two great growth spurts in terms of physical construction. There was a big growth spurt in the second half of the 19th century when the elites really built a lot of infrastructure, transcontinental railroad, all of these different canals, skyscrapers in Chicago and Manhattan. And then there was another big growth spurt during World War II and after World War II when they knit the country together further with highways and then the lawyerly society took over in the 1960s.
And one of the things I'm really interested in is to say, well, is the US able to have a third growth spurt after the first two? And one of the things I also want to be very clear about is that I think the US doesn't have to imitate China.
It doesn't have to copy China wholesale, it doesn't have to get to Chinese levels of construction cheapness. It doesn't have to get to Chinese levels of construction speed here as well. I'll praise the Europeans a little bit. I think that it would be good enough for the US to get to French or Spanish or Japanese levels of construction because they are able to build high-speed rail systems and subway systems at pretty high quality and you don't hear of massive trampling of human rights issues out of Japan or Spain.
I think that is where the US needs to be, but I'm much less optimistic about the Europeans at large because I don't think that they will really have this dynamic spirit that the US has some shot of achieving.
Pieter: If I may add to that, I was very struck because if I think of the engineering states in Europe, it's like Spain, Italy and France are the three countries where I'm aware of that the leadership almost all have engineering backgrounds and in many ways they've proven pretty good at public works, Spain, great rail networks and good highways.
But we think about which economies in Europe are still dynamic and still innovative. I think of the Danes, the Dutch, the Scandis, the Brits of course, within Europe I'd say are probably the most dynamic ones out there. What do you think explains that, Dan?
Dan: I think there are certainly some engineering states in Europe. Maybe it is the case that the Netherlands are an engineering state because the country has been under sea level for a very long time. And so they have been, there's this term by a 1950s historian in the US named Karl Wittfogel called Oriental hydraulic Despotism, that you have these giant states that are organized to manage water issues. So maybe we can throw in the Dutch as western hydraulic, whatever it is that have a hard time managing their water issues, though they're doing it quite well.
I think it is definitely the case that Spain and Italy and France are pretty good and they're pretty technocratic at building quite a lot of stuff, though they're not very dynamic. I think it's really interesting that you bring up the Danes as a potential success here. I just came out of a month in Denmark, which I had a really good time and I thought it was actually really amazing how well they were building. They're building more subway networks, and you can see this because they have a label of the year that their new subway station opened and some of these new subway stations took place in 2019. And I thought, oh, wow, you're able to build subways after 1919. That's actually pretty good to have something done this century.
The subway systems in Denmark are super clean, they're cleaner than China, maybe they're even cleaner than Japan. They're fully automated. Trains come every two, three minutes or so. And so this is kind of a really functional system.
On the other hand, I wonder to what extent the Europeans are able to achieve anything beyond excellent provision of public infrastructure because the continent as a whole, both of which are so much better than the US, hasn't done terribly well in terms of a lot of dynamism.
Over the course of my month in Denmark last month, Novo Nordisk lost about 30% of its market value when it had a lower revenue guidance, but it has been kind of outcompeted by the US Ozempic competitor with Eli Lilly and other great European successes, I'm not sure are on very good footing. ASML is doing very well in the Netherlands, but they're suffering a lot of these geopolitical headwinds controlled by the Americans and perhaps rejected by the Chinese.
And the other issue broadly with European stock market is that a lot of it is held up by French handbags. And I wonder if the Asians stopped buying all of these wonderful French handbags to what extent European market values will collapse.
And so here's actually something that I'm really interested to get both of your thoughts on because both of you have thought much more deeply than me about the causes of European stagnation. Now, I know both of you have used that Europe is a bit of a hand basket. The UK especially is even more of a hand basket. But I really want to try to steelman the case that I wonder if the Europeans could actually rouse themselves and be very dynamic there. What is the possible case here?
Because I see Europe as being completely buffeted by these two other great powers. The Chinese are actively industrializing. Europe has been a big sense in the US that the Chinese will industrialize the Americans. But actually if you take a look at the data, China has been much more effective at deindustrializing Germany, Japan, South Korea, which are much more competitive on these industrial goods that the US isn't even actually producing for the most part anymore.
And I wonder if the Europeans will also be comprehensively outcompeted by the Americans, whether that is in the biotech sector or frankly anything else in terms of the financial services or tech. But I'm really trying to find a silver lining here for Europe to become much more dynamic. So far, I don't see it.
After the latest round of the trade war, the China suspension of rare earth magnets sent a lot of German automakers panicking. I was thinking that, oh, maybe this one, these crises moments is really going to kick their efforts up a notch to really try to compete. But then that panic has sort of subsided again. And I think all of us have lived through these 20 crises moments, which we really should have, which really should have roused the Europeans. But what do you think is Europe and the UK really going to get their act together?
Sam: One thing that you talk about the US as being a country of lawyers, and you are clear that there are some advantages to that. And I think that the comparison with Europe is quite a good way of seeing those advantages because you take an issue like freedom of speech, which isn't primarily an economic issue, but does have some pretty important implications economically.
And the European approach to many issues is what I would call basically a regulatory approach where you have a single technocratic body. It isn't focused on some sort of growth goal the way maybe a Chinese equivalent would be, but it is focused on having a bunch of experts, supposedly experts resolve on a situation, collect evidence, and make a decision, and for that decision to be basically unchallengeable.
Whereas in the US adversarial system where there are courts and where there's a constitution, that in practice tends to be very, very extensive. And the constitution in practice does in fact constrain the government in quite significant ways. You end up with outcomes that are much more liberal for want of a better term, or much less prone to sclerosis than Europe has. So in that sense, the lawyerly based society does have a win on the other Western block, if not on the Chinese approach, which has its own disadvantages that are pretty obvious, I think.
What is the best possible case for European dynamism? So, I think the case for Europe is twofold. The first is that a lot of the advantages Europe has are really, really hard to get if you don't have them. Europe is a very, very low corruption place. It has very, very strong relatively to the rest of the world, private property rights. It has very, very, very good respect for the rule of law.
It has not perfect freedom of speech, but it has much better freedom of speech protections than most countries and most areas in the world. All of these things are very, very difficult to create if you don't have them. And Europe does have them.
Where Europe really struggles, and this is part two of the reason to be bullish on Europe, is on things that are really stupid and really, really self-inflicted wounds.
So I think of Europe's problems as being maybe kind of three or four really big ones. Number one is especially in the last 20 years, energy prices. And I think that has been largely self-inflicted by Europe's very, very enthusiastic embrace of what you might call degrowth environmentalism.
I think there are versions of environmentalism that involve more electricity output, more abundant energy and can go hand in hand with economic growth. But Europe has instead gone for a version of environmentalism that has involved less electricity output, higher energy prices, and less overall industrial production.
Europe also, despite its claims to having a single market and being this gigantic economic block actually is not nearly as well integrated as a single economic market as the US or China. Europe really is much more like a collection of 27 economies that have quite a good free trade agreement with each other than it is like a single country.
So there's much less cross-border trade within Europe than you would expect from looking at it if the US was the same size in terms of its economy or population or China. So there's actually much less trade within the European Union than you would expect if it was genuinely a single market.
Third is something that Pieter has talked about, and I want him to field this, but Europe's labor market regulations I think are its really, really fundamental economic regulatory problem. I talk about housing shortages as being the really, really big problem that the US and the UK have. And I think that's true.
I think that Europe does actually have some housing shortage problems, but much more important is how difficult it is to fire people, which makes it very difficult to hire people and makes it very difficult for companies to take bets, and that makes it much harder for them to be innovative.
And then the fourth hypothesis that I'm less sure of, but I think there is quite a lot too, is that Europe has sort of inadvertently ended up with a much more highly regulated and much more constrained financial system following 2008 than the rest of the world, even though the whole world adopted quite similar financial regulations.
Now, I heard Tyler Goodspeed, an economist make this argument a few months ago, and his argument is that the structure of banking markets in Europe is such that we have, most countries in Europe have a couple of big banks, whereas in the US you have thousands of small banks. And what this has meant is that all the banks in Europe have been held up by the strictest financial regulations intended to avoid another financial crisis.
They may be very prudent, but they've made it much harder for those banks to lend to startups, to growing companies and to innovative companies. And also on the demand side, on the company side, businesses are much more dependent on debt financing and on borrowing from banks in Europe than they are in the US. Something like 80% of European financing, of financing of companies in Europe happens via bank lending compared to something like 30% in the United States.
So these kinds of rules interact because companies are much more dependent on bank lending and because banks are much more constrained by them. Now, I don't think these four factors are all of the problem by any means, but I think that they're probably the biggest problems. And the reason to be bullish on these things is that most of them are pretty straightforward to fix. It's challenging from a political point of view, but there isn't a mystery as to why European economies are so sclerotic. It's really just a question of how do we design policies to fix these things. Pieter, do you want to add to that?
Pieter: I subscribe to everything that Sam said. I think the two things I'd add on Europe, one slightly serious, but still important is Dan, you mention that they're dependent on selling handbags to the developing world as it gets richer, but there's a more serious underlying point here, which is basically for all of human history, at least the last 200 years as a country has gotten richer, its inhabitants have decided to spend less time working and more time in Europe.
This is true with the Chinese middle classes. This is increasingly true with the Indian middle classes. And if we think of - especially we think of the very optimistic cases around AI and people having lots of free time - the Amalfi Coast, at least for the foreseeable future can only be had by coming to Italy. And so I think if you think of the Baumol cost disease kind of world, Europe has the very unique position of being able to be the string quartet where even though your productivity does not rise, you get to eat many of the productivity rises that happen abroad.
Of course, that's not a very nice future, appealing future to many Europeans, but it's one I think which certainly places a pretty strong lower bound on how bad things can get.
The other point I'd make is that if you actually look at levels rather than levels of change, Europe's economy - Italy, which is conventionally seen as one of our Europe's worst basket cases, still has a GDP per capita which is three times China's. So despite, and if you look at adjusted for hours worked, the gap is of course even larger.
And so despite what we say about Europe's economic problems vis a vis the rest of the world, it's still extraordinarily productive, has tons of human capital, and that seems like a success which shouldn't be ignored.
And this is something I also wonder a lot with China, which Sam and I were discussing before this call, which is if China had 300 million habitants, would we think of it as this great success story or this great challenge? It's no richer than Russia is, and we don't think of the Russian economy as a particularly impressive achievement. Could we just say that perhaps China's story is primarily one of scale or is there really something to admire there as well?
Dan: Well, I think there is something to admire in all cultures, even the culture of the Amalfi Coast. But I think you're right that scale is certainly a very big part of China's success. The US had this big freakout over Japan in the 1980s, which looks pretty silly now. Japan is a third of the population of the US and the ratio is growing smaller now every single year. But if Japan were three times bigger on par with America scale, there would be something more to worry about.
I think the big worry that I have, which also flows into the European discussion, is that China is really big and it continues to gain in technological sophistication all the time. I've just had a piece come out in this month's issue of Foreign Affairs, which I point out with my co-author Arthur Kroeber, that China's technological engine still has a lot of juice to run. If you take a look at China's advanced manufacturing, pretty much their two big areas of weakness are semiconductors and aviation.
I think they're making pretty good progress on semiconductors. They're making less good progress on aviation. But if you take a look at industrial robotics, if you take a look at drones, all sorts of automotives, China is basically on par with I think South Korean levels and will get to German and Japanese levels quickly enough, and they are going to be producing much more cheaply at 60% of the cost of an equivalent German product.
And so this is where I also feel it's about the trajectory, it's about the growth rates. It's not just about the levels. And this is where I'm still wondering whether there is a bull case for Europe, and I'm having a little bit of fun here poking you too to make the bull case for Europe. And so I'm sorry about teasing you, but I think the worry that I have continues to be that Europe further deindustrializes.
We've already seen this a little bit in the data that China has waged a far more successful trade war against Europe than it has against the United States so far. A lot of its most dynamic companies continue to fall. Amalfi coast is great, but not all European countries are really enamored of tourism. We've seen a lot of tourism restrictions out of Barcelona in particular where it seems like the local residents just want to grab the violin and smash that string quartet. They're not really happy about this string quartet playing all the time.
And there's quite a lot of European cities. I wonder if this is still the case in London where average incomes are lower than average monthly rent, and I wonder how long these sort of things are going to persist. It's pretty clear now that the populist parties in Europe are all leading in the polls. Perhaps they can't all form governments. Perhaps none of them will form governments, but populism is now pretty baked into the continent.
I'm not sure that these populists will really have the sort of technocratic solutions that are going to produce the energy or eliminate the labor restrictions. I don't see them doing that. And so is there still a bull case for Europe given that politics are kind of challenging and that economically it seems like they're just getting outcompeted in all sorts of ways as well?
Pieter: So Dan, let me ask you about the deindustrializing point. You make this point that China is going to converge on Germany and Japan very soon in certain manufacturing technologies. I find it hard to reconcile that with the actual stated level development that people say China has - $13,000 GDP per capita. South Korea, which is another East Asian manufacturing powerhouse, is actually at parity in terms of output per head with many European countries.
And so how do we reconcile this idea that somehow China is going to eat our lunch, it's going to surpass us technologically, but also by most metrics of income, consumption and levels of individual wealth, they are still much closer to a middle income country than they are to their East Asian neighbors. How do you explain that?
Dan: To answer the paradox, I think we have to determine what value we assign to manufacturing. And I think one could be kind of an economist, I'll just say to use a derogatory word and say that manufacturing isn't very important, which I think has been kind of the consensus among the profession for a while.
And I take the opposite view that production is really, really important, and I think this is something that the engineering state is more correct on - that manufacturing capacity per se is pretty important and the manufacturing sector is not very large. It is not very large in China. Manufacturing value add of GDP, I think is something like 31% or so. For the US it is something like 13%. And for the UK it's just single digits. Let's not even go there.
So if you think that manufacturing is important, which I do, if you think production and productive capacity is pretty important, then even though it is pretty small, the country that has a lot of it is going to be in a pretty good place.
So even for highly industrialized countries like South Korea where manufacturing value add is pretty high, perhaps on par with China, so I have to double check the figures, they are under a lot of threat from Chinese manufacturing. I think that China is simply climbing the same ladder of industrialization that South Korea climbed in terms of producing a lot of steel, producing a lot of ships, chemicals, semiconductors now and once South Korea deindustrializes it is going to be looking not so good anymore.
And so a lot of what I've written about in my Foreign Affairs piece is that even if consumption in China is fairly limp, even if they are not going to be a financial powerhouse, even though they're not going to be a cultural powerhouse like the UK, they're going to have a lot of productive capacity.
And that is going to matter economically as well as geopolitically mostly for what it does to other countries because they're going to deindustrialize, their economies are going to weaken, their organized interest groups are going to get more pissed off and the politics will also get weaker as well.
Sam: Is your view, could you talk a bit more about the economic model or the economic rationale of what you've just said? The geopolitical point I completely accept, or at least I completely understand, if you don't have the ability to make aeroplanes and tanks and battleships, then you will find it difficult to fight people who do. The economic rationale there doesn't seem as clear.
Dan: I want to first acknowledge that the advanced manufacturing is not going to save any economy. I think the economic rationale for pursuing really advanced manufacturing is not necessarily very, very high in some critical industries like semiconductors. What is the global employment of semiconductors? Well, it's probably on the order of 1 million to 10 million people on a very generous definition of taking a look throughout the entirety of the supply chain.
And yet these one to 10 million people are producing a really critical industry. And if you don't have something like a semiconductor industry, then a lot of other following innovations are also not possible within all sorts of digital devices in the world.
And so I think what is important here is that China is able to have decent growth. Right now it is growing at 5%. There are some who allege it to be lower. I don't really want to get into a discussion of Chinese GDP, but I think China still has sufficient compelling growth and part of what gives the Communist Party political resilience has been building a lot of stuff.
If you are living in a Chinese village off in the southwest in the mountains of Guizhou where I spent five days cycling in 2021, Guizhou has about 50 of the world's 100 tallest bridges. And the Communist Party has been building all of these amazing bridges where villages feel much more connected to each other, cutting down travel from let's say a day into a matter of half an hour. And that is real. And people feel really good about having these sorts of achievements, call it propaganda of the deed.
But if you build a really gigantic dam, some people look at that and they feel, wow, this is amazing. Call it propaganda of the deed. But if you have these drone shows, which I find a little bit silly, but people really like these shimmering drones at night, which are kind of a replacement for fireworks.
Sam: I love those by the way. I think they're incredible, just for what it's worth.
Dan: I think they're kind of lame, but whatever floats your boat.
And if you're living in a city, even a third tier city in China, you're getting more parks, you're getting cleaner air, you're getting better subway systems, you're getting connected to high-speed rail, you're able to travel to other big cities, you're able to travel to these villages and that all feels pretty good.
And so I think maybe the case for advanced manufacturing is not very clear, but it is great if you have it. And it is even better if your adversaries don't because again, this is where kind of politics gets in the way of technocracy.
We take a look at a lot of European Union spending. A lot of it is subsidies for agriculture. How important is agriculture? Well, economically not that much, but politically, extremely so. A lot of it is trying to manage the automotive sector's feelings for when they're being defeated by the Chinese. Those people have a lot of political power.
And so if the organized interest groups get even more organized and get really complaining about a lot of these sort of things, they do present more political problems than economic challenges.
Sam: So talking more about the actual economic upside here, you write a lot both in your letters and in your book about the importance of process knowledge and something which the Chinese have been very good at attaining and perhaps is one of the explanations for why American firms have been falling behind. But why does the market kind of undersupply this? Why if it's so important, do Intel or Boeing not do the thing they could have done in order to not start falling behind? What's the market failure that you think is at play here?
Dan: Process knowledge is not valued by the market because it's not very easily measurable. So process knowledge is the name I give to the residual of everything about technology that we can't really capture very easily.
So technology is the tools and the equipment to produce, let's say a piece of semiconductor. It is also the written knowledge that consists of the blueprints and patents for how to design an Intel chip. But then if you actually want to make chips, there's 1,000,001 things that's impossible to write down and that also isn't encoded in the instructions.
And so you really have to know how to store the wafers, how to manage the lighting, how to manage the electrical charge that separates a good fab like TSMC from a bad fab.
Let's just not even get into these names here, but I think the process knowledge is really important. It's not very well measured by the market. Here's where I am a little bit more critical of the sort of letting your economy be driven by the mandates of stock investors, which I think is a little bit more true of the US and perhaps the UK as well.
In China, as Mike Bird recently noted in our recent episode here, economic growth has been pretty good, 8% to 9% on average over the last 20 years. And then its stock market has been completely flat. And what's going on here? Well, the Communist Party isn't that enamored of the stock market. It's a little bit weird that this communist system has a stock market in the first place.
And I think what is also true in China is that they have enormous amounts of redundancy that track down profitability. You have state-owned enterprises that employ far too many people. You have a lot of redundancy in all sorts of equipment. You have all sorts of people doing the same thing all the time.
And where the system really proves its worth is in the middle of a major pandemic like what we saw in 2020 in which the US and much of the west couldn't make masks and cotton swabs and the Chinese were able to because they were able to retool their supply chain super, super quickly. You don't have just in time production, you don't have slogans from Tim Cook saying inventory is evil, rather you have just a lot of capacity to do stuff.
Pieter: So I just came back from a trip to India and the Indians are fascinated with China, both as a development story but also as a kind of icebreaker which is testing relations with the West as a newly empowered Asian country. One thing that was a common refrain is that the US' relationship with China and the problems Americans have with China today are because America simply can't suffer a rival of a similar size.
They it does not have so much to do with ideology or with security interests. There's just no space for another major power on the world stage. Do you think if the Chinese Nationalist Party had won the Civil War in 1949, do you think America would have the same challenges with Chinese growth that it has today?
Dan: It might well have far greater problems with China because there is a case that the Nationalist Party could make China much stronger and richer than the Communist Party has done so far. And so with the KMT, the Nationalist Party has succeeded in making Taiwan relatively rich and also an advanced manufacturing power. And I suspect that if the Nationalist Party was administering China right now, I think they would be equally nationalistic nursing its grievances against incursions by imperialist powers and Japan and very intent on making civil society much stronger than it is and making China a much greater technological power than it is.
I think one could make a case that Washington DC is very proud and very paranoid. I think it is definitely the case that the freakout about Japan in the 1980s looks pretty silly. Not only in retrospect, but at the time they were their treaty allies. And should America really have been super scared that the emperor could sell his land under his palace and then somehow buy the state of California because that was what it was worth? No, all of that looks pretty similar. That looks pretty silly in retrospect and maybe even so at the time because Japan was so much smaller.
Now I don't really care to defend the Washington DC viewpoint, but the security threats that they fear could be treated in several buckets. It could be the case that Beijing decides to launch a military conflagration over the island of Taiwan, in their words liberate Taiwan into socialism. And that could be a pretty big fear for the US because perhaps Beijing will move on to the Philippines and Japan next. Specialists discuss and debate in the community whether Beijing really wants to seize the Philippines and Tokyo. But that is one of these fears of DC that is really hard to put to bed.
One could fear that China will do unto Vietnam and Malaysia what it has done to the Cantonese in Hong Kong, which is to say that all of China's near neighbors must come to Beijing regularly and kowtow for the general secretary's pleasure. And to the extent that threatens American or Western interests, that is a discussion point that you don't want the entirety of East Asia and perhaps the Asian Pacific under the sway of the Chinese who are not very nice to a lot of its people in Tibet or Xinjiang or Hong Kong or really anywhere else I would say.
And the other big fear I think has to go back to this manufacturing, the question of advanced technologies, part of the reason that the Americans reacted against China's Made in China 2025 programme, which is this big industrial plan to say, we're going to dominate all the industries that you Americans and you Europeans and you Japanese are really good at. We're going to do unto the semiconductor industry, what we have done to the solar industry. The Americans said, what we don't really like that we lost and completely lost the solar industry first to the Germans and now to the Chinese. And we rather like to keep Intel and Boeing. Thanks.
Now, the Americans haven't really run Intel and Boeing very well. I might say that they ran them very badly indeed, but for the most part I think it is right for these countries to defend their interests. So there is this sort of geopolitical question of not letting the world be administered from Beijing. There's this economic issue and there is also this security issue. Again, specialists can debate to what extent the US should really be motivated by all of these things, but I don't think that all of them are illegitimate concerns.
Sam: We are coming up on time. And so with that, quite chilling from that quite chilling point, I want to ask something completely different, which is Dan, you and I are both great lovers of Chinese food, you know a lot more about it than I do. The world has moved on from associating Chinese food equals a version of Cantonese food. Some people know Sichuanese food, maybe a few other regional cuisines.
Can you talk about where you think an intrepid food lover should be looking at within China? What regions, what types of dishes that people might not be aware of? And also where, if anywhere can they find those in the West, in the US, in Europe, wherever.
Dan: My soul is very much sympathetic to the southwest. So these are the three provinces of Sichuan and Guizhou as well as Yunnan. This is where my heritage is. This is the land that James C. Scott referred to as Zomia Highlands, Southeast Asia. And in these mountains you have a lot of chili peppers as well as fermented foods. And you hop across a different mountain range and the food could be quite substantially different.
So I think most of the world now knows Sichuan food. Sichuan has these two big cities Chengdu and Chongqing, it lies inside this big basin. Both of these two cities are inside this big basin. And so the first thing I would say is that Sichuan has quite interesting food in these little mountain villages. And that is true for Guizhou as well. And I think that is especially true for Yunnan where I think there is no possible similarity that could unite something into a cuisine called Yunnanese food. When the north is historic Tibet, it's purely Himalayan and the South is raw jungle because it feels quite like Thailand. So how do you come up with a cuisine that encapsulates snow mountains as well as jungle?
And then I think the other big region that I would think a little bit about is this region of Anhui, Anhui province, which is in eastern China, that's next to Shanghai. And this is quite a region that is also pretty mountainous. It has been poor up until the recent past. Now Anhui is actually producing quite a lot of China's electric vehicles, but for a while it was better known for just sending a lot of its migrants out to Shanghai to work.
Anhui food is kind of not very well known, I would say even in Shanghai where it's not too far, the food is really stinky, it is really pungent. It could be pretty salty again because mountains produce fermentation and all sorts of salty food.
So those are the places that I would think about. Now, I think it is a little bit challenging to imagine that these foods could be recreated overseas. It would always be a pale imitation because even in Beijing and Shanghai, we have pretty pale imitations of Yunnanese food. Yunnanese food is characterized by a lot of herbs. It's characterized by a lot of mushrooms and these things don't ship very well even across the country.
And so usually when I'm in wonderful food cities like London, I try to eat all sorts of, I don't know, Indian food or these other foods that I've been quite excited about when I was in London recently. Most of the time I don't eat a lot of Chinese food abroad, but something I was surprised by was that in London's Chinatown I saw recently a restaurant, I believe it's called Dumplings Legend. You can put that in the show notes, but this is Suzhou noodles. It is a really wonderful broth and it has a lot of crab roe inside. And so I believe this is the first outpost of this big Suzhou restaurant chain that decided to put it in London. And so that's something I was really happy to see when I was there recently.
Pieter: Oh yeah, I remember reading in preparation for this episode, your most recent post again on your blog about your last trip to Shanghai. And you mentioned that you think that the food, while still brilliant, has gotten worse somewhat as it's becoming more made for influencers and pictures and it's less to be savored. What I thought was a very striking image.
And the really striking image is that Chinese people, especially younger people, if you go into a restaurant in China, almost all of them are looking down at their phones all the time there. Why is that? Why is influencer culture so much stronger in China?
Dan: It's a good question. I'm not very sure. If you just go to a lot of East Asia, people on average are just absorbed into their phones on average, much more than Europeans are. It's almost socially acceptable for people to be just staring at their phones even when they're eating with others. People are on their phones all the time when they're in the subway, not really speaking to other people.
A lot of Chinese cities are now built to be photographed. This is something called Wang Hong culture, which refers to just essentially famous on the internet. And this is just everything is meant to be Instagrammed or Little Red Booked. And this is just something that I find really bizarre about East Asia in general and maybe China in particular, where I feel it is a little bit worse even than the rest of East Asia.
Pieter: This is going to be a big area of disagreement between me and Sam because he thinks Tiktokification is a good thing. But perhaps this is a Europe bull case, is the fact that over 10, 15, 20 years, their brains will be slightly less fried if they manage to avoid this.
Dan: That's right. I think that is one of these big, nice European bull cases. I think on average Europeans have much better mental health than Americans. They may even have better physical health than Americans. I've married an Austrian and I think there are all sorts of good things about just the sort of lifestyle in Europe, but still I am pretty concerned that a lot of things will break because the populist wave will hit once the deindustrialization sinks in further.
Sam: Dan, thank you so much for joining us. If you want to read more from Works in Progress, visit worksinprogress.co. Thanks very much for listening.
Image credit: ‘Xi Jinping portrait 2019' by Press Service of the President of the Russian Federation / Roman Kubanskiy, via Wikimedia Commons (https://commons.wikimedia.org/wiki/File:Xi_Jinping_portrait_2019.jpg), licensed under CC BY 4.0. Used and modified.’
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