Welcome to zero.

I'm akshatrati.

This week lawyers Versus engineers.

China is a country of superlatives.

It makes the most number of solar panels, wind turbines, batteries, and electric cars.

It also is the largest builder of new coal power plants, the largest builder of new nuclear power stations, and the country with the longest high speed rail network.

The list goes on and on.

Because China builds, builds, and builds.

It's one reason why the country has become the fascination of the green movement.

China now has a huge lead in all types of climate technologies, and it is using that to electrify its economy at a breakneck speed.

But why has China been able to build while many far richer countries have fallen behind.

It's not just because China is a dictatorship, argues technology analyst and author Dan Wong.

In his new book Breakneck.

He paints a vivid picture of the social, cultural, and governance differences that have turned China into a nation of builders.

Dan says that China is a country with an engineer's mindset, while the US has a lawyer's mindset.

I spoke with Dan a few weeks ago as part of the SOSV Climate Tech Summit to learn what China gets right, where it's going wrong, and what lessons other countries can take from China's extraordinary green tech buildout.

Welcome to the SOSV Climate Tech Summit, Dan, and welcome also to the Zero podcast for Bloomberg Green.

Great to be here at chot SO.

I learned a lot about China from your book, Breakneck Congrades on its success.

We are talking on a climate podcast and a climate tech summit, so there is a lot of interest from the climate crowd on what China has been able to achieve on its dominance in green tech.

But before we come to that, let's start out with the main thesis of the book that you lay out, which is that China is an engineering state while the US is a lawyerly state.

You have first time experience living in both countries and at interesting times.

Could you briefly give examples that are illustrative to these two frames.

The time that I lived in was between twenty seventeen to twenty twenty three in China, and which I felt like it really was a momentous period in which Donald Trump, in his first administration had launched his first trade war.

China was growing ever more capable in all sorts of technologies, including clean tech.

I also lived through zero COVID, which was the centerpiece of my experience.

And the China is a country I call the engineering state in my book because various points it has been ruled entirely by engineers at the senior most levels of the Communist Party.

The engineers in China treat the physical environment as a giant engineering exercise.

They build a lot of homes and hyperscalers, and solar and wind and coal plants as well.

China also treats the economy as a big engineering exercise, in which they tend to shuttle young people here and there in order to work on more strategic industries.

And they also treat society as a big engineering exercise, as I show through the examples of zero COVID as well as the one child policy, which the number is right there in the name, and there's no ambiguity about what sort of engineering projects these are.

I contrast that with the United States, which I call the lawyerly society.

I mostly wrote this book out of the Yale Law School.

It's still kind of surprising to me that every president needs to earn a degree from Yale Law before they can be in the White House.

And the Democratic Party is especially lawyerly, but the Republicans are pretty lawyer as well.

The issue with lawyers is that they block everything good and bad, so you don't have stupid ideas like the one child policy, so don't have very functional infrastructure anywhere, and it is really difficult to build clean technology on par with China in the US.

And this framing of engineers versus lawyers, why do you think that was the important framing that people needed to know now versus say, what's dominated US China discourse, which is free market capitalism versus state led capitalism, or democracy versus authoritarianism, or academic terms like leninism.

Yeah, all of these terms have a place, and I think that the US and China are both really important countries that are in competition and have a lot of frictions with each other.

Most of these terms come from nineteenth century political scientists, so terms like capitalists socialist only Leninist comes from perhaps the twentieth century.

And I just wanted to be inventive and playful and coming up with a new term for understanding these two countries.

I think that what distinguishes China right now is construction, a lot of construction of homes hyperscalers again, coal, wind, solar, nuclear, or whatever it is.

And the United States excels at obstruction, which is that it cannot build homes where it is needed, especially in big cities like New York and San Francisco and Boston.

It is not building solar and wind or transmission lines at a fast enough pace.

There are now thirty three nuclear plants under construction in China.

There's zero under construction in the US.

Maybe we can debate about whether there should be more nuclear, but I think there just should be more clean technologies of all sorts, and right now China is doing that.

And I think that is just one of several frameworks that we can use to understand a lot of what has been happening in the US as well as a lot of what's been happening in China.

And if we take the historical frame here for a little bit, we do know that America has built in the past, and it did so when there were lawyers around.

So what has changed in America's mindset to build now?

Because maybe the number of lawyers has increased, but it's not like lawyers were a rare commodity at that time.

Absolutely, I think that the US has always been loyally among the founding fathers, most of them were lawyers.

For sixteen US presidents from Washington to Lincoln, thirteen of the more lawyers.

But the United States had been a proto engineering state.

It built a lot when it was a mostly empty country where there were a lot of especially European immigrants drifting into mostly the East Coast, and there was a consensus among the elites that this big country, a vast empty space, really needed to build.

And so the US used to be a proto engineering state when it built canal systems, train systems, skyscrapers in Chicago and Manhattan, and then in the twentieth century major projects like the Hoover Dam or the Manhattan Probably Checked Apollo missions or the Interstate Highway system.

And what changed, I think, essentially, was the nineteen sixties in which the American engineering state made too many mistakes and that has to be frankly conceded, in which urban planners like Robert Moses had completely overrun a lot of dense neighborhoods in New York City in which the US Department of Agriculture was spraying DDT and other pesticides throughout the country, and in which people had grown really tired of a role by technocrats which were a little bit too cozy with the industrial companies, especially the automotive companies as well.

And so I think the United States turned into a lawyer le society throughout the nineteen sixties for excellent reasons.

A lot of the lawyers turned away from being creative deal making types of the sort that are most obvious on Wall Street, in which the lawyers were working with the railroad barons to raise bonds for them, or eminent domain people out of their way, and for good reason, a lot of the lawyers turned into were litigators and regulators, led by people like Ralph Nader.

But I think the challenge right now is that a lot of the law schools, a lot of the law students, a lot of lawyers are still obsessed with solving the problems of the nineteen sixties.

Rather, I say, let's solve the problems the twenty twenties, which is in sufficient homes, in sufficient mass transit, and insufficient solar wind and transmission lines.

So the loyally society has swung too hard towards obstructionism, is the case you make.

So one place where the US has been able to build has been when it has a perceived enemy.

A lot of the successes in the twentieth century come during the Cold War, for example, where you talk about the Apollo Mission.

These are driven because there's an enemy and the US wants to be in a race where it wants to win.

Now, many in the US see China as the enemy or want to try and compete with China.

But if you flip that side of the narrative and look at it from the Chinese perspective, is the driving force behind the Chinese engineering mindset, the building mindset the same as it is in America to try and beat America.

I think it is the same as America throughout the nineteenth century, in which there was a lot of need for infrastructure and not so much necessarily motivated by the external threat.

Although that is a part of it, I think that we can also frankly acknowledge that there is an external component to China's building.

The highway systems in Tibet are pristine not so much because the Tibetans really desperately needs excellent highways, but it is to prepare for military eventualities around the Himalayas.

But I would say that in general, China's construction is mostly to meet domestic political goals, which is to demonstrate to the people that the Chinese government is able to deliver for their material welfare.

If you are a resident of Shanghai, every year you're getting more and more parks every year.

There is generally expansions of the subway lines, such as you're able to get around much more easily.

If you're more rural in more rural areas, maybe you're getting new bridges, maybe you're getting connected to the high speed round network, and so that is also very real as well.

And I think there's.

Also a domestic political need for some degree of sovereignty.

So I think that China has electrified very substantially, just as a share of electricity and total energy production only slightly behind Japan, which is the only other major economy that is more electrified, but China will overtake Japan soon enough.

One out of every two cars sold by the end of this year will be electric in China.

I think that is mostly due to the fact that it is pursuing some degree of energy sovereignty, such that they're reading all of these reports from the Americans to say that China has these choke points.

The USS these choke points, China is very dependent on Middle East oil and gas, and so they can stop the flow of these ships in China's saying Okay, well, let's not be powered by Middle East oil and gas.

Let's be powered through our cars with domestic solar, domestic wind, domestic nuclear, and domestic coal.

And so I think that the primary target for China in terms of a lot of energy production is more about the sovereignty than about climate, although in this case there are a lot of happy agreements between the two.

And let's stick with that, because if we take the race framework, which definitely dominates American way of thinking, you could take four or five areas where the US is trying to compete with China AI chip making, trade, biotech, soft power.

But then when it comes to green tech, America is happy to let China go ahead and dominate, whereas it's going to push fossil fuels.

They are on two different lanes, so to speak.

On the energy equation, and China as a result, has become the largest exporter of these technologies we've talked about.

I mean, it's not just about Chinese products made in China going out, it's Chinese products made in other parts of the world.

Almost every continent has some form of Chinese green tech manufacturing.

Now, So, say at some point America realizes that climate change is real and the future is going to be powered by green, cheap electricity, what kind of strategic areas should America look to start to build in because it certainly cannot overcome all this lead that China has in every sector in green tech, right.

Yeah, No, I think the challenge with America really is that I think that it did not necessarily make any strategic decision that it will not pursue clean technology.

Is it's just something that sort of happened.

In the same way that there was not necessarily any high level strategic decision to have a lot of manufacturing move to the Asian Pacific and to China in particular.

There's just something like, you know, a million and one business decisions, let's simply let it happen.

I think one American superpower is wishful thinking.

That they will never acknowledge that they are so behind in any technologies, because I think that still there's a lot of discourse from the American elites to say China is not at all a technology innovator.

They are only capable of stealing, not innovating.

This is something that a lot of American senators, for example, like Senator Tom Cotton is able to tweet that the Chinese are not actually economically competitive, they're just held afloat through industrial subsidies, which I think is at this point not true any longer.

Perhaps it was true some earlier point in the past, and so I think this is going to be pretty challenging.

I think, especially under the peculiarities of President Donald Trump, who is really against wind turbines, in particular, calling it the scam of the century.

I find that quite interesting and strange.

Perhaps if we want it to be very optimistic about US clean energy going forward, it seems like the Trump administration is much more friendly towards nuclear power generation, and so maybe at least for the next three and a half years, it seems like it is going to we're going to have to count on nuclear for generating most of the answers here.

Yeah, Advance geothermal is the other one that Secretary Chris Wright talks a lot about because America has strengths to try and build on what it has through shale oil drilling that's been done in the oil and gas industry, but could be applied to geothermal, which is a much lower, almost clean source of electricity.

But you brought up Wall Street there, and it's worth making a note that a lot of America is driven by Wall Street because your big massive pension funds are managed in Wall Street, and they vote with shareholders to try and decide where corporate America is going.

And that program has very much voted for an asset light profit maximizing opportunity for American companies.

So when you say that manufacturing sort of moved to Asia, not through government decision, but because of things like Wall Street saying, well, making it cheaper in Asia is better for profits, whereas in China the system that exists is okay with inefficiency.

They do want profits and they do want market dominance, but that can come later.

Initially, the goal is to build, especially when it comes to companies.

So if we want to go to a point where America starts to build.

Wall Street is looking for efficiency.

How do you make the two work, because initially a lot of the building will have to be inefficient, government subsidized, be strategic, and that doesn't seem like the flavor of the month.

Absolutely, I think that is going to be one of these cultural challenges that the US needs to face.

That it's not just the lawyers.

I agree that Wall Street has a lot to answer for itself, that the Wall Street along with the corporate sector.

There is this quote attributed to Tim Cook that is evil, that what Apple really wants is just in time production, the Toyota method, whatever it is.

And so there is just this general drift in America towards some measure of efficiency, which could also be understood as considerable degree of brittleness, in which the US actually was not able to be very efficient, for example, in the production of masks and cotton swabs during the early days of the pandemic.

That the US is not very efficient at producing something like munitions after it shipped a lot of shells to Ukraine and its self defense against Russia.

So there are all sorts of ways in which the US is broken down.

A lot of my book is about the cultural views of the elites.

This is not a policy prescription book.

I do not say which statutes and regulations really need to be changed.

What I really really like is for the Americans to have a little bit of a better sense of valuing technology production, valuing communities of engine doing practice, and to be quite a lot better at being able to manufacture important things, value the circulation of process knowledge, and not be so much held back by these efficiency concerns and profitability concerns.

After the break, I asked Dan what his vision for the US is and whether AI robots are the answer to the Malays.

If you're enjoying listening to Zero, please take a moment to rate and review the show on Apple Podcasts and Spotify.

Recently, Gwyneth Fries wrote, thank you, Akha.

I always learned so much from how you structure the conversation.

Thank you, Gwinnett.

You're saying there is a vision that exists in China where the Chinese communist power is trying to meet the material needs of its people, and that's the social contract it has, and it's delivering on that contract so far, and so it's worked.

Whereas America feels a little adrift.

You know, there isn't a Cold War style enemy waiting.

China sometimes is made to look like one, but really, you know a lot of people are still in the Francis Fukayama end of history.

You know, liberalism has won, liberal democracies have won.

Is there a new project?

If you were to give Americans a vision for what they should aim for to be able to deliver on the things that you talk about, what kind of vision would you want Americans to grab.

I think that the vision of America that I would like to see would be self motivated, and there would not be through treating China as an adversary, And it is to simply meet a lot of what it's people demand in terms of people complain quite a lot about cost of living, for example, cost of living in bigger cities like New York and Sanria, Cisco and Boston where housing is quite unaffordable.

That people to some degree want mass transit, and people want a lot more public investments.

And I want the US to be the best version of itself, and I want the Chinese to be the best version of themselves as well.

And the way that I think that we can get here a little bit better is for the US to become let's say, twenty percent more.

Engineering does not have to be very high, but let's just build a little bit more of the things that the people want.

For example, California high speed rail, which was approved by referendum now nearly twenty years ago, and very little of it has been built.

This is kind of just I believe, a national embarrassment that California, says, one of the richest entities in the world, wants to build this and is simply unable to build very much of it at all.

And I wish that China can be fifty percent more loyally.

I would really love for the Chinese people to feel like they can be in a country where they can flourish in which the state does not feel need constantly to strangle their creative impulses, that the state actually learns to value individual rights and actually means it, and that I would also really love if the Communist Party could just one day learn to leave the people alone rather than trying to engineer them towards some measure of national greatness.

Well, that's a good place to come from a vision perspective, but I do want to hit on one dark side of the engineering state that you'd referred to earlier in the conversation, but also you spend a bunch of time in the book looking at the one child policy, the zero COVID policy, you know, the one child policy which your parents and the friends that they had back home experienced, the kinds of brutality that you note in the book, plus the zero COVID policy that you know, half of it was pretty great for you, but then the other half was pretty brutal.

What is it about the engineering mindset that leads to that kind of brutality.

I think that the engineering state is made up not only of hydraulic engineers.

Fundamentally, the problem with the engineering state is that they are fundamentally also social engineers, and they cannot stop themselves from treating society as if it were just another vast hydraulic system to be shifted this way and that through a series of valves.

And I think a lot about, you know, for example, the detention of ethno religious minorities, especially in qing Tiang region.

I think a lot about zero COVID, and I think a lot about the one child policy, which they treat people as yet another building material to be torn down and remolded as they wish.

And I think the problem with some of China is that living in China made me realize that a state could be too efficient, that you could have too much state capacity if people are unable to resist something like the one child policy, which, over the course of its thirty five year existence, according to China's official statistics, they conducted about three hundred million abortions, which is roughly the population of the United States.

And so, you know, to have these sort of national traumas being visited by a highly efficient state against the people, I think that this is something that we don't want to see, which is why I wish that China could be fifty percent more loyally to have to some extent a federal traditionary that is separate from the executive that is able to protect the rights of the people.

I don't think we'll ever get there so long as the Communist Party is in charge, but I would really love for there to be actually substantive legal protections for Chinese to be able to resist some of the worst impulses of social engineering.

And in the last few minutes I've left, I want to try and look a little bit forward, because AI features in your book briefly to try and tell sort of a little bit of the history where it comes from cybernetics that was developed in Soviet Union.

The goal was to try and figure out whether you could actually create a society using these hydraulic engineering type methods to create that perfect socialist society.

Well, we are now in an age where AI is way more powerful than the computers that existed in the past, and there is this temptation to try and use it for all sorts of things.

So how do you think AI fits in the way in which governance of these two countries should take advantage of this technology and where is the risk?

I think that AI right now is one of these things where there is definitely a race between these two countries, and I don't know how exactly it will shake out.

Because there's some people in Silicon Valley who believe that AI is something like God in a box which will just reach superintelligence and it will just solve pretty much all of humanity's problems.

I'm a little bit skeptical of that approach, and I think what I want to suggest is that we can't count China out on artificial intelligence.

In part because China is just building so much electrical power at a much faster pace than the US, and at some point AI will become a power problem in which the US will need to solve a lot of its energy challenges.

Right now, there's a lot of talent in the US which are of Chinese heritage who went to Chinese universities.

Right now, they are living and working in California, but it could possibly be the case that they decide to move to China in part because of the erraticness of the Trump administration right now.

Right now, China is constrained on a lot of chips.

But again, here's where Donald Trump, being very erratic, might simply gift a lot of these chips to China so long as Nvidia pays an export tax.

And so, you know, a lot of these things are uncertain.

But I think that the US and China are racing towards AI, and that race is actually profoundly uncertain.

I think that we can't count China out and we can't expect necessarily for the US to win.

So last question for you, do you think that AI and AI powered robots would be necessary if the US is to bring back manufacturing, bring back building.

It probably would have help, But I think that I would just focus on manufacturing much more directly, because I think that it is really important to make things, and we can't outsource all of our views to AI.

AI might be unfriendly.

AI might only be really good at making us make better power points, and so I think that to target manufacturing, we should actually work on building better manufacturing.

Thank you, Dan, Thank you very much a chat, and thank you for listening to zero.

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I'm Akshatrati back soon.