Engineers Build, Lawyers Obstruct, China Eats Our Lunch

When Engineers Are in Charge

Need a million precision-milled millimeter-sized screws fast? There’s a cousin’s brother-in-law close by who can fill the bill. Unlike with Detroit’s motor-vehicle focus, China’s electronic and electronics-adjacent technologies get applied to a staggering array of products, from robots to smartphones to electric vehicles to solar panels.

About the only thing “communist” about China is the name of its ruling party, with a threadbare safety net that throws its weakest and least fortunate to the wolves. Xi Jinping has proclaimed that “welfarism” leads to “lazy thinking” that undermines self-reliance and hard work; China allots only about 10% of GDP to social spending, versus 20% in the U.S. and 30% in Europe. Ayn Rand, eat your heart out.

Building and production rule all, and build and produce China does, manufacturing between one third and one half of the world’s stuff, from solar panels to apartment buildings to motor vehicles. Many in the U.S. have come to view manufacturing as a mere intermediate step between an agricultural economy and asset-light, financially driven post-industrialism. As the saying goes, one doesn’t want to manufacture sneakers — far better to wear them.

Wang deftly explodes this worldview: A nation that cannot manufacture its own warships, enough artillery shells to last more than a month, or even the personal protective equipment needed in a pandemic, is at no small risk from the elements and from its enemies.

China’s libertarianism occasionally extends to invitations to foreign companies to compete in their domestic markets, also known as “catfishing.” This doesn’t refer to a romance scam, but rather to the introduction of foreign predators into the domestic manufacturing pond, which theoretically causes the native species to swim faster. The most spectacular example of this manifested with the establishment of Tesla’s China factories, which nearly drove BYD out of business. BYD soon upped its game to become the world’s biggest EV manufacturer.

Too Much of a Good Thing

Efficiency, though, often comes at the cost of stability. Just as aerodynamic smoothness can make an aircraft slippery and dangerous, and just as efficient, just-in-time production comes at the cost of resiliency, so too does an efficient, top-down economic model become vulnerable to catastrophic error.

Nowhere was this more the case than in China’s disastrous one-child policy: Current demographic projections have China’s population halving from 1.4 billion to 700 million by 2100. This demographic decay is not unique to China, of course, and no nation’s pro-natal efforts — parental subsidies, free childcare, and the like — seem to have to have arrested it successfully.

Wang is a deft and perceptive nonfiction practitioner with an eye for compelling narratives and background that underlie the book’s major themes. One of its most engaging stories centers on an obscure (at least to Western audiences), rotund, and charismatic missile designer named Song Jian, who mesmerized party conferences with his population control campaign. Unfortunately, Song had fallen under the influence of Paul Ehrlich, whose The Population Bomb foretold a global overpopulation apocalypse.

While the rest of the rich world only inadvertently slid into demographic decay, Song’s one-child policy drove China straight toward it at full speed. Worse, once a small-family mentality becomes culturally established, it proves impossible to shake off: If you’ve traveled abroad recently, it’s hard not to notice the classic seven-member Chinese family group: four grandparents, two parents, and a single grandchild—who may, at some point, find herself caring for her six elders.

Wang is not shy about identifying the flaws inherent in the Chinese engineering state, observing that “No other country would have let a missile scientist [Song Jian] anywhere near the design of demographic policy.” He further points out that Western social scientists and economists quickly identified the flaws in Ehrlich’s arguments, but even if they hadn’t, America’s “lawyerly society” would never have permitted the one-child policy’s murderous abuses.

Whipsawing Policy

The Chinese engineering state has been particularly rough on women: In the wake of the Revolution, Mao saw them as baby-making machines, followed by the forced abortions and sterilizations under the one-child policy. When the Party realized its error sometime around 2000, it reversed course yet again and pushed women back into baby-making mode, stigmatizing as “leftovers” the majority who now want zero or one child.

In the process of encouraging childbearing in recent years, the Party excluded women from power. Previously, women had served at the highest Party levels, including the politburo. Suddenly, a woman in power became a bad example to those now needed — in the Party’s opinion — to tend the home, children, and cooking. The Party’s advice to the spouses of unfaithful husbands? Live with it; if you make a fuss, he’ll lose face.

The chapter on the Chinese COVID-19 era rivets with its exposition of the limits, and the catastrophic costs, of the engineering state: It’s worth the price of the book alone. The pandemic sent the nation on a rollercoaster of pride and despair. First the anger over the government’s denial of its seriousness, and particularly over the persecution, and eventual death from the virus, of ophthalmologist Li Wenliang, who desperately tried to warn his colleagues and the government of the impending epidemic.

Next came pride at how China’s vigorous public health response allowed the nation to — initially — go about business as normal while the rest of the world was shutting down. However, that was a short-lived triumph: It was succeeded by the virtual incarceration of entire city populations in their apartments, where many nearly starved to death, and from which more than a few jumped to their deaths, followed by the actual incarceration of millions of the infected in grim quarantine facilities. (Perhaps unluckiest of all, as a group, were university students, most of whom were confined to quad dorm rooms for weeks at a time. Those stuck in Shanghai Disneyland at the quarantine’s onset did better, with free rides during the long testing process.)

Public anger at the lockdowns boiled over into near outright rebellion: One Beijing resident, who has not been heard from since, hung two banners from a bridge, the second one of which declared “Remove the national traitor Xi Jinping.” Alarmed by the public anger, the government removed the quarantine in late 2022, with deadly consequences: Not having access to the mRNA vaccines developed in the West, not bothering to vaccinate the population with its own less effective shots, and forbidding the sale of antipyretics like ibuprofen (which hid the diagnostic fever), as many as two million died within weeks, according to unofficial estimates. (China reported an absurdly low 120,000 death total to the WHO.)

Different Priorities

China has of late become intensely proud — often to the point of a vicious jingoism — and who can blame them? Over the past few decades, China has knit itself together with tens of thousands of miles of high-speed rail lines and superhighways and a unitary system of “everything-apps” like WeChat that put American consumer systems to shame. Within a single generation, the average Chinese citizen has seen their life improved to a degree that took a century in the West. In 1990, China had fewer than half a million automobiles: by 2024, 435 million.

The U.S., by contrast, has seen, if anything, a deterioration in the availability of housing, medical care, educational opportunity, and pensions: No wonder our politics are poisoned by grievance and malaise.

Once, the U.S. funded both institutions and things: the Erie Canal, the world’s first system of free primary and secondary education, the transcontinental railroad, a vast network of state land-grant universities, the interstate highway system, the DARPA-designed internet, to say nothing of the essential regulation of a world-beating network of radio and TV stations, air traffic control and airline safety, and life- and crop-saving weather forecasting. Today, the US spends only three percent of GDP on infrastructure, versus China’s more than seven percent.

Breakneck bubbles over with a sludge of process-driven obstruction. For example, consider that a mile of new U.S. subway costs five times as much as one in Europe, let alone in China.

China may be blotted with entire cities filled with empty apartments, but at least its people can afford them. Every significant rise in U.S. housing prices, observes Wang, represents a policy failure. The Chinese have become convinced that they have found a better system; Americans, who observe how difficult it has become to build almost anything, fear they may be right.

Room for Improvement All Around

In the end, Wang is optimistic about both systems: China would do well to trust its people more, and the U.S. would be better served if the left would abandon its process-driven opposition to building and the right would abandon its recent anti-science and anti-immigrant lurch.

While Breakneck’s almost entirely anecdotal approach enhances its readability and impact, it occasionally comes across as overly glib. Wang deploys an excess of ink, for example, to cover his four-hundred-mile bicycle journey to Chongqing. However, this reader, who should have been annoyed with such a fluffy digression, was left charmed and wanting to visit the city.

The book contains only the skimpiest reference section, not fit for the serious reader, let alone scholarly purpose. A small example: Wang describes, in painful detail, the disastrous metamorphosis of Boeing’s corporate engineering culture into a financial culture, a strong exposition that demands a reference note, in this case absent. (My recommendation: Peter Robison’s superb Flying Blind.) Astonishingly, the book lacks an index, an oversight that one hopes the publisher remedies in future printings.

This reviewer found Breakneck one of the most provocative and insightful national-level policy discussions he has come across: Despite its shortcomings, the general reader wishing to understand just why China seems to be overtaking the US, and what can be done about it, cannot do better.

William J. Bernstein is a neurologist, the co-founder of Efficient Frontier Advisors, an investment management firm, and a writer with several titles on finance and economic history. He has contributed to the peer-reviewed finance literature and has written for several national publications, including Money Magazine and The Wall Street Journal. He has produced several finance titles, and four volumes of history, The Birth of Plenty, A Splendid Exchange, Masters of the Word, and The Delusions of Crowds about, respectively, the economic growth inflection of the early 19th century, the history of world trade, the effects of access to technology on human relations and politics, and financial and religious mass manias. He was also the 2017 winner of the James R. Vertin Award from the CFA Institute.

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