In last week’s edition, we featured a piece on the Electro-Industrial stack that will build the future as software gets embedded into industrial systems and how America is behind China on critical elements of this stack. This piece in some ways builds on that. It is actually a critical review of a new book on China, the world is raving over – “ Breakneck: China’s Quest to Engineer the Future” by Dan Wang. The review is unique in that the author not only gives a glimpse of the book but also shares tons of his own data to support and sometimes question the points made in the book. It is indeed a longish review. For a shorter review, Noah Smith does a good job. For those who prefer a audio/video format to get a sense of the book, here’s the NYT’s editor’s podcast with Dan Wang.
Whilst the book is largely about China, it does compare and contrast a lot with America with its central theme as follows:
“China is an engineering state, building big at breakneck speed, in contrast to the United States’ lawyerly society, blocking everything it can, good and bad.”
To drive home the point, the author of the review adds from his own experience with the Chinese rail system for example: “If waterworks and canals were once the marvel that “impressed the early modern European travelers [in China] more than any other,” today that distinction must belong to the country’s 42,000 kilometer HSR system. In less than two hours I was in Wushan, 500 kilometers from metropolitan Chongqing. By contrast, it takes 3 hours on Amtrak’s Acela to go 350 kilometers from NYC to DC—assuming, and it is not a safe assumption, that the train does not break down.”
And then he goes on to cite data on how China is indeed a country of engineers:
“Today, China’s undergraduates overwhelmingly continue to choose engineering as their major (34%), down slightly as share from the 1990s but likely due to reclassification (creating a management discipline). Over that same period, China experienced an unprecedented explosion in undergraduate enrollment: from 3.17 million students in 1997 to 19.7 million in 2022. While questions remain about quality, the old Napoleon line applies: quantity has a quality all its own. In a year, there are nearly 7 million undergraduates studying engineering in China (mostly mechanical, electric, and civil). The closest competitor is management at 3 million (15%).
And even as enrollment has grown, the split between humanities / social sciences (philosophy, economics, law, education, literature, history, art) vs science / engineering (science, engineering, agriculture, medicine, management) remains roughly one-third to two-thirds. And the funniest stat: Engineering: 6,742,664 vs. Philosophy: 12,400.
The engineering tilt is even more intense at the graduate level. The data below compare the evolution of masters and PhD enrollments between 2011 and 2022. Over 43% of China’s 556,000 PhD students in 2022 and 35% of China’s 3 million masters students were studying engineering, both up from 2011.”
And it isn’t just producing engineers; the country has been run by engineers:
“Breakneck also makes a big to-do about the supposedly engineering dominated Politburo and its Standing Committee (PBSC). It notes, for example, that under Jiang Zemin—an electrical engineer by background—the entire PBSC was filled with engineers. The book also points out, accurately, that Hu Jintao was a hydraulic engineer specializing in water management, while Xi Jinping studied chemical engineering at Tsinghua…In 2002, a stunning 70% of Politburo members had undergraduate engineering degrees.” The author notes that it has since fallen to now still a high 33%.
The book claims that this is where America lost out: “The book wants to argue that America must care more about its industrial structure, its industrial base, and its technical talent pool. These are characterized, in large measure, by communities and networks of engineering and technical expertise laden with tacit knowledge…These intangibles are real, and they can disappear to the detriment of the broader economy and innovation ecosystem. Knock-on innovations follow from seemingly “traditional industries,” such as production of LCD displays, and as Intel’s CEO Andy Grove similarly argued in 2010, by offshoring so much so fast America “broke the chain of experience.””
He quotes from the book: “American manufacturers spent the better part of three decades unwinding its stock of process knowledge when it opened so many factories in China. Every US factory closure represents a likely permanent loss of production skill and knowledge. Line workers, machinists, and product designers are thrown out of work; then their suppliers and technical advisers struggle as well. Entire American communities of engineering practice have dissolved, leaving behind a region known as the Rust belt. But they were continuously scorned by economists and executives, who sought low-wage production in the name of globalization. Still today, many American economists doubt there is anything special about manufacturing and put their faith in the inevitable march to a service economy.”
He then asks the question “Why have so many manufacturers crumbled?”
“Part of the reason, he suggests, is “financialization.” Namely, “the culture of financial investors. Wall Street has been far keener to invest in capital-light businesses.” But most importantly: “the problem lies with American policy-makers and executives who fail to grasp the importance of process knowledge” Quoting the author: “The United States must regain, at a minimum, the manufacturing capacity to scale up production that emerges from its own industrial labs. If it does not, continuing to value scientific breakthroughs rather than mass manufacturing, then it might lose whole industries once more—as it did by inventing the solar photovoltaic panel but relying on China to produce them. The United States likes to celebrate the light-bulb moment of genius innovators. But there is, I submit, more glory in having big firms making a product rather than a science lab claiming its invention. Otherwise, US scientists would once again build a ladder toward technological leadership only to have Chinese firms climb it”
The review and to a lesser extent the book seem to be critical of other aspects of Chinese development. But the book comes across as a must read nonetheless, for those who want to understand China and in turn the future of the world.
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