Abundance and China

Could America pursue an abundance agenda without the threat of the PRC? And can podcasters change the world?

To discuss, ChinaTalk interviewed Ezra Klein and Derek Thompson, who need no introduction, as well as Dan Wang, who has written all those beautiful annual letters and is back in the US as a research fellow at Kotkin’s Hoover History Lab. He has an excellent book called Breakneck coming out this August, but we’re saving that show for a little later this year.

Today, our conversation covers…

• The use of China as a rhetorical device in US domestic discourse,

• Oversimplified aspects of Chinese development, and why the bipartisan consensus surrounding Beijing might fail to produce a coherent strategy,

• The abundance agenda and technocratic vs prophetic strategies for policy change,

• How to conceptualize political actors complexly, including unions, corporations, and environmental groups,

• The value of podcasting and strategies for positively impacting the modern media environment.

Ezra Klein: ... Going back to at least the 2010s, probably before, I’ve begun to really notice this feeling in American politics that they can build and we can’t. This became a pathway through which different kinds of bipartisan legislation that would not otherwise have been bipartisan began to emerge.

The re-emergence of industrial policy in America is 100% about China. Take China out of the equation, and there is no re-emergence of American industrial policy. It’s reasonable from the American perspective, when you’re trying to understand American politics, to understand China as an American political object, because that’s what it actually is in our discourse.

American policymakers don’t understand China at all. Most of what they think about it has a high chance of proving to be dangerously misguided. Dan will be much more expert here than I will, but I’m very skeptical of the bipartisan consensus that has emerged. Nevertheless, it’s completely trackable that China exerts a force on American politics. It has reshaped the American political consensus, often in ways that operate in the shadows because they don’t become part of the major partisan fights of modern American politics. (...)

Dan Wang: I would always be the first person to put my hand up to say I know nothing about what’s going on in China. That is always true...

China is very messy. That is always my first proposition about China — it is very big, and many things are true about China all at the same time. They are a country that claims to be pursuing “socialism with Chinese characteristics,” which is still one of the most wonderful political science terms ever.

What sort of socialism is this? In my view, this is one of the most right-wing regimes in the world. A country that would make any American conservative salivate in terms of its immigration restrictions, its incredible amount of manufacturing prowess, and its enforcement of very traditional gender roles in which men have to be very macho and women have to bear children.

China is all of these things. It is also a place where there are really wonderful bike paths, specifically in Shanghai. This year, Shanghai has completed around 500 parks. By 2030, they want to create 500 more parks. It is a country that is getting better and getting worse all at the same time.

Ezra Klein: This goes back to this idea of envy — the degree to which the right envies China is fascinating. It doesn’t just want to compete with it or beat it. It’s not just afraid of it. What it wants is to be more like it.

America’s politicians are so obsessed with trying to take manufacturing back from China, which I don’t think they have a well-thought-through approach to doing, that they look quite ready to give up America’s financial power. They seem to have reconceived of dollar dominance, which used to be called the “exorbitant privilege” because we got so many advantages from it, as some sort of terrible weakness that has hollowed out our industrial base and that we need to shatter.

Throughout history, being the power that controls the money flows has proven to be an extraordinary lever of control. But it has been recast in current New Right thinking as a sort of feminized decadence — something that “not real” countries and “not real” powers do, a distraction from the “real economy” and the “real work” of making things.

I’m not against bringing back manufacturing. I support the CHIPS Act. There are many aspects of manufacturing that I would like to bring back. But we can become so envious that it becomes hard to see our own advantages and strengths, and then make serious policy built on what we are doing well. That strikes me as one of the profound weaknesses of Washington’s approach to policymaking. It is so obsessed with what we are not doing well that it seems ready to set fire to what we are doing well.

Dan Wang: Edward Luttwak has this term “great state autism,” which he created regarding the US thinking about the Soviet Union. There is certainly an aspect, once you are a “superpower,” of becoming obsessed with the other party. You have to choose your enemies very carefully because you will end up looking quite a lot like them.

I wonder in which way the US is actually quite mimetic in thinking about how to be like the other superpower. In my sense, China — after the 2008 financial crisis, or perhaps after 2012 when Xi came into power — Beijing decided it does not really want to look too much like the US, which has been driven by Wall Street on one coast and Silicon Valley on the other in terms of economic growth.

Rather, Beijing has this purely mercantilist view, which would be recognizable to anyone in the 18th century, which is, “Let’s just make a ton of products. That is our source of power, that is our source of advantage.” (...)

I definitely want to defend the dulcet tones of both Ezra and Derek, but as an amateur member of the community of China watchers, there are debates that aren’t easily resolved. For example, a question I would pose to US policymakers would be: Do you judge it is in America’s interest that China is richer, or is America better off if China is poorer? Having that answer would help structure many subsequent policy choices.

There is debate within the China community about how expansionist China is. They certainly want Taiwan — no question there. But is the next step that they want to take Vietnam, Philippines, as well as Japan? People are extensively debating this. When we can answer these more technocratic questions and reach some agreement, many things become easier.

This isn’t about Ezra’s show, but in the US there aren’t many experts really trying to debate and resolve these questions. In my field studying Chinese technology development and manufacturing, policymakers frequently use the laziest trope that China got where it is totally through stealing. This is easily disprovable, yet we hear it all the time. As long as we can’t move beyond these tropes, it becomes much more difficult to resolve even the harder questions.

Ezra Klein: ... My views are actually quite weak on many of these things. There are areas where I have very strong views about how America should build more and faster. A big portion of the book Derek and I wrote is fundamentally motivated, as we say at the end, by competition with China. We believe we won’t continue thriving as a nation in terms of our own strength if we don’t get better at manufacturing, construction, deployment, innovation, and cyclical experimental policy. There’s something for us to learn and compete with there.

On the narrower level, there’s a view that has taken hold in Washington that some version of decoupling is the way forward. One place where I’m uncertain — not certain I disagree, but the conventional view is so dominant that I’m more interested in the counter-argument — is Tom’s argument from the Huawei campus and his other experiences. He suggests we should do with China in the 2020s what we did with Japan in the 1980s and 1990s when they were outcompeting us on cars: create joint ventures in America where we develop their technological and manufacturing processes and embed them in our own companies. China did this with us too.

In Washington, this is considered virtually unsayable. I’d like to hear a better argument against it than I’ve heard because it’s not obvious that our current approach will accelerate the sophistication of our manufacturing chains.

My view is similar to Dan’s — I’d like us to have more precise conversations about means and ends. But that’s difficult in the current political atmosphere where you have to out-compete others to be symbolically tough or hawkish. (...)

Regarding what we need to do to accelerate our manufacturing and innovative ecosystems, the question of whether we should be decoupling or trying to couple and do tech transfer, engaging in more direct competition with products like Chinese EVs while heavily subsidizing our own industries with clear goals — that doesn’t seem completely crazy to me.

by Jordan Schneider, Ezra Klein, Derek Thompson and Dan Wang, ChinaTalk |  Read more:

Image: YouTube/Zhong Zaiben (钟在本)
[ed. Nice to read such a thoughtful discussion of US/China policy. More informed than most. I've exchanged a couple emails with Dan Wang and am very much looking forward to his upcoming book Breakthrough. If you're unfamiliar with Dan and his annual essays on everything China, I highly recommend you check out his: 2023 letter and 2022 letter.]