Transcript | The Engineering State and the Lawyerly Society: Dan Wang on his new book "Breakneck"

Below is a complete transcript of the episode. Thanks to CadreScripts for their great work, to Oana Grigor and Natalia Polom for checking and formatting, and to Zhou Keya for the image! Listen in the embedded player above.

Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China. In this program, we’ll look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.

I’m Kaiser Kuo, coming to you this week from Chapel Hill, North Carolina.

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Dan Wang has been on the Sinica Podcast a couple of times before, and I am delighted to have him back today. He is one of the sharpest and most original observers of China’s technology sector and manufacturing landscape — having won a certain level of fame for his annual letters and other essays, writing that somehow managed to combine on-the-ground insights with big picture perspectives. Dan has worked for Gavekal Dragonomics in Beijing since 2017 after a stint with the Paul Tsai China Law Center at Yale. He’s now at the Hoover Institute at Stanford.

If you’ve seen the PBS Nova documentary — Inside China’s Tech Boom — which I had the pleasure of narrating — it’s a film by David Bornstein — you’ve already encountered Dan. He was a featured voice helping to explain the deeper drivers behind China’s technological rise and talked eloquently, I thought, about the importance of process knowledge of what the Greeks called Metis, which is an important idea that’s really stayed with me and has become quite foundational to my understanding of China and the importance of manufacturing.

Today, we’re going to be talking about his new book, which comes out just about the time you’ll be listening to this. It’s called Breakneck: China’s Quest to Engineer the Future. It’s a book that posits, and here I’m greatly oversimplifying, that China is ruled by engineers, and they do what engineers like to do — they build. America, on the other hand, is ruled by lawyers. It’s an engineering state on the one hand and a lawyerly society on the other. Dan’s book is just full of memorable witticisms and pithy, trenchant observations. Perhaps, most importantly, it explores what each side might ideally learn from the other. They obviously each have their strengths and their weaknesses. So, I’m really anxious to ask Dan about whether he thinks Americans are actually learning the right lessons or just burying their heads in the sand and inhaling big plumes of copium.

Before we jump in, I want to point out that this book was especially interesting for me as somebody whose abortive doctoral dissertation was specifically about the rise of this engineering state, about the emergence of technocrats in post-Mao China. So, things might get a little in the weeds. I ask you forgiveness in advance and I will do my best to keep it reasonably accessible.

Dan Wang, welcome back to Sinica. And happy birthday, man.

Dan Wang: Thank you very much, Kaiser. And what better birthday present than to speak to old friends like this?

Kaiser: Yeah. It’s great to have you. We have to start with what, for me, was clearly the most important part of your entire book, which is that magical, and totally improbable, guitar-making hub in Guizhou that you stumbled upon as you and Christian Shepherd from the Washington Post, and another friend, you wrote your bikes through that mountainous province toward Chongqing. As a card-carrying guitar nerd, this totally blew my mind. I got to find this place. How does a little inland town end up just cranking out guitars for the whole world? I mean, is this just one of those serendipitous quirks of China’s industrial sprawl, or is there something systematic in how the state, in local governments, in entrepreneurial networks, how they operate, so that these clusters take root in the unlikeliest places?

And I guess, more importantly, were there any of you guys who were guitar players? And if so, did you guys try out some of the local handiwork while you were there?

Dan: Kaiser, you’re much cooler than me. You are a guitar player. I am a clarinet player. And I think, by coolness, that just really outranks me. How indeed did kind of a third or fourth-tier city in Guizhou become one of the great hubs of guitar making? Well, in 2021, when I was stuck in China during the summer due to the success of the zero-COVID strategy at the time, I asked two friends of mine, “Hey, why don’t we go on a really long bike ride somewhere in the southwest?” Which I find the most beautiful part of China. And so, over five days, we cycled from Weiyang to Chongqing. It was four days in Guizhou. the province of Guizhou, and then until the fifth day when we reached Chongqing. It was on our second or third day when we came across these giant guitar symbols on the side of the road.

So, there were these guitars that were hanging off street lights. There’s this giant guitar that was on a hill that was kind of this ornamental thing. And, off in the distance, there is another big guitar that you could see on the town square. And so, we were very puzzled by this. We, unfortunately, didn’t stop to try out the handicraft. I’m pretty sure that neither Christian,Teng, nor I are anything of real guitar players ourselves. And afterwards, I went to find that Chang’an County in Guizhou is indeed the largest guitar making hub in the world. I think it’s something like 30% of guitars in China is produced there. I have to get the exact figure in my book.

And that happened due to a great accident in which a lot of folks in Guizhou were moving to Guangdong. In the ’90s, Guangdong was making absolutely everything and anything. Some people were making guitars for export. And so, a lot of people from Guizhou just happened to move to a particular guitar factory. One of the things that we really found on our bike ride was, when you’re going through China’s countryside, Christian made this very astute observation that there are hardly any middle-aged or people in their 20s or 30s that you could find in Guizhou. It’s a lot of children being led with the grandparents, and that’s because anyone who is able to work has been moving over to the coastal areas, where you could have a much better job producing guitars or whatever it is for export.

And something that the local government in Chang’an did was that it found that, well, there’s a lot of people making guitars here. Guitars are not really endemic to the local culture of people playing guitar. That’s not really a Guizhou thing. That’s not really necessarily a Chinese thing.

Kaiser: I’m working to change that, but yeah.

Dan: Well, you’re a big force, Kaiser. Maybe we can change that. But it just attracted a lot of people to try to say, “Hey, why don’t you move back home to Guizhou. You can make a lot of guitars here.” And somehow that strategy worked. And so a lot of people moved back to Guizhou from Guangdong, and now they’re producing guitars mostly on the lower end. So, this is not the sort of things that will be sold in, I think, the high-end guitar shops that you would probably frequent, Kaiser, but there is some innovation here, and I expect that they will get better and better.

Kaiser: Yeah. I mean, it’s amazing how good quality the Chinese guitars have… I mean, it’s astonishing. And all of the major brands are actually making a lot of their guitars in China now. Indonesia is coming up in the world, but it used to be Japan and then South Korea. It’s migrated to China. From China off to Indonesia, I imagine. But there’s still quite a bit happening there in the whole guitar ecosystem, all the electronics, the effects pedals, and all that. It’s huge. I hope to one day make a pilgrimage to the guitar Mecca, and maybe even spend some time there and get some free stuff.

Dan: I’ll show you my cycling route, Kaiser.

Kaiser: Yeah. No, that’d be great.

Dan: You can pedal there.

Kaiser: Ha, right. Yeah, no, I’m not going to do that. But yeah, the enticement is just the usual package of tax incentives of steeply discounted infrastructure promises of raw materials. What did they do to entice people to a place like that? What do they typically do?

Dan: I think the typical enticement is, yes, we will give you the infrastructure, we will give you the taxes, and we will also let you be close to the hometown, where a lot of people want to be. A lot of folks in Guizhou, folks in the southwest, can’t necessarily love the Southeast and Guangdong, where they were working. “It’s too humid,” they might say, you know, “We don’t love the Cantonese food. Where’s all the spices? Where’s all the pickles? Where is the really pungent flavors that folks in Guizhou are used to?” And so, this coincided with, sort of, this rural revitalization program that Beijing has emphasized for quite a while now.

And so, I think it is just this big happy accident that I would say a pretty random place, Guizhou, it’s just making so many guitars now.

Kaiser: Awesome. Dan, I know you’re going to end up on every major podcast talking about this book, so I want to avoid just asking you about the main themes or going through chapter by chapter. Instead, I was hoping that we could use the main themes of the book as kind of jumping off point to explore a lot of the questions that popped into my head as I read it, questions I’m sure you’ve thought about as well. Not necessarily things that made their way into the pages of the book itself, but let me start here. I mean, we can all rattle off the obvious differences between an engineering state and a lawyerly society. You got speed versus procedure, certain social orderliness versus the chaos of pure market forces.

But what are what are some of the more subtle trade-offs, the ones that most people don’t even know that they’re making, that maybe shaped daily life in each system? I’m thinking predictability, dignity, moral legitimacy. I mean, which of these things matters to people who live inside each system?

Dan: Yeah. Well, I want to push you a little bit on this, Kaiser. I mean, I wonder which is the system that delivers legitimacy. I could posit that the lawyerly society has some degree of legitimacy because there are some procedures in place that people expect that rules have to be followed, and maybe the lawyers are better at following the rules. On the other hand, the Communist Party, I think, would say, well, we have much greater legitimacy. We have this, what is that term? Whole process, substantive democracy, which we are delivering much better things for the people. And so, I think legitimacy is a concept here that we can play around a little bit with. What I’ll say is