China

"Guthrie argued this was a mistake. And he was purporting to solve a major riddle: why Apple was perceived as a negative force in Beijing. Apple contributed greatly, creating millions of jobs and supporting a sophisticated supply chain that ricocheted well beyond its own needs. But its contributions were unknown because of Apple’s secretive, insular culture. He advocated something radical: Get the message out to everyone, sing it from the hilltops if necessary, until every government official understands just how much the country is gaining from Apple’s presence. “China wants the constant learning,” he says. “The fact that Apple helps bring up 1,600 suppliers for China—it’s an incredible benefit.”"

"China and the Middle East are regions where our ambitions have grown. Whereas Europe, and particularly the UK, are squeezing the life blood out of manufacturing, with overburdened legislation and excessive energy costs, stemming from poor energy policies, China has blossomed. In its pursuit of self-sufficiency, it has built an immense industrial infrastructure of the highest quality. To illustrate, if you take ABS plastic, which is useful for car dashboards and refrigerators, amongst myriad other uses, China was barely a player in 1990, with a trivial market…"

""Vincent perceives weak signals, he has a different bandwidth than other entrepreneurs to grasp at what stage of the cycle we are", emphasizes Denis Kessler, the president of Scor, who has seen him in action from Bolloré's board of directors, where he sat for ten years, and whose analysis is always based on his background as a doctor in economics. He had noticed that after the boom in global transport, linked to China's accession to the World Trade Organization, ship orders had been too numerous, and anticipated that the market would turn."

"My father was born in Sichuan and lived in Taiwan during his later years. He never forgot his love for his motherland. Whether he was buried in writing books about China early in life or expressing the wish for me to return home while living with me in the US in his later years, I could profoundly feel the deep emotions in his heart. Before he passed away, my father told me by his bedside that he dreamed of picking up a piece of white paper from the water, which had the words “Love for China” written on it. My father’s love for China shook me and gave me the courage and determination to choose."

"The new frontier is Asia. In Asian countries and regions, including Taiwan, the Chinese region including Hong Kong, Korea, Indonesia, Singapore, and Vietnam, a tremendous amount of capital began to pour in from all over the world around the start of the 21st century. As a result, new industries emerged, regions prospered, and cities developed. Cities attracted people, economic activity became lively, and that in turn attracted more new investments. For people and companies who have ideas and motivation and are not afraid of hard work, Asia today is the same as California in the 19th century. While we Japanese were idly passing the time as if taking a nap during the lost two decades, the neighboring countries were undergoing remarkable transformations. This can be aptly called a "paradigm shift" in the economy. The Industrial Revolution allowed Britain to rule the center of the world. After World War II, the supremacy shifted to America. After Japan's bubble economy, the focus is shifting towards China and India, and other Asian countries, in the 21st century. Historically, China and India have not been at the center of the world only for a very short period. These cradles of civilization have had a massive influence on the world in terms of ideology, religion, academics, culture, and political systems. Of course, Japan is one of the countries that has been strongly influenced by them. If we unravel world history, the Western systems did not become global standards until after the Industrial Revolution."

"This appealing theory was also naive, and it remains so. It assumes that once the theory is developed, and thus the strategy formulated, implementation goes without saying. In fact, as with the Chinese Great Leap Forward and as the Soviets also experienced, implementation is the crux of the matter. Human beings are capable of idealistic mobilization, but only when the outcome is not in doubt or when they have no choice. That was the case with the national liberation struggle. When results are lacking, they discredit the strategy, and demobilization of people follows. This accelerates the movement toward defeat, regardless of the strength of the leaders and the political parties that support them. Mao Zedong was a powerful man, and his party controlled all of China. This did not prevent the catastrophes now revealed by the Chinese government. The Great Leap Forward caused famines that resulted in the deaths of more than 30 million Chinese. The Cultural Revolution was even worse for China’s economic development capacity."

"Governments can also influence the prices of agricultural commodities and differentials between the prices of different origins. At the time of writing, the trade dispute between China and the U.S. has increased the price of Brazilian soybeans relative to the price of U.S. beans. Events can also impact price. For example, the outbreak of African Swine Fever in China has reduced Chinese demand for animal feed and had a significant impact on the world’s import demand for soybeans. However, the most important factor that affects the supply and demand of a commodity is the price of the commodity itself, both in outright terms and relative to alternative, competing crops. This leads to a circular situation where the price of a certain commodity will depend on its supply and demand, while the supply and demand depend, at least partially, on its price. This is a feedback loop with a time lag; the length of that time lag depends on which commodity you are discussing."

"But the capital is also a city of gravity and substance. Beijing attracts many of China’s smartest people, including scientists, technology leaders, and those seeking to advance in the Communist Party. The po-faced members of the Politburo don’t fool around. Greatness isn’t only a slogan for them: It’s a full-on, life-or-death pursuit. Beijing, for the rest of this book, stands in as the Communist Party and the central government. China’s leaders are driven by intense paranoia, doing everything they can to control the future."

"Over the past four decades, China has grown richer, more technologically capable, and more diplomatically assertive abroad. China learned so well from the United States that it started to beat America at its own game: capitalism, industry, and harnessing its people’s restless ambitions. If you want to appreciate what Detroit felt like at its peak, it’s probably better to experience that in Shenzhen than anywhere in the United States."

"It is almost uncanny how much the United States and China have been complementary of each other. It was no accident that the two countries established, for a few decades, an economic partnership that worked tremendously well for American consumers and Chinese workers. But on a political level, these two systems are a study in contrasts. While the United States reflects the virtues of pluralism and protection of individuals, China revealed the advantages and perils that come from moving quickly to achieve rapid physical improvements."

"It’s another of the ways that the United States and China are inversions of each other. Americans expect innovations from scientists working at NASA, in universities, or in research labs. They celebrate the moment of invention: the first solar cell, the first personal computer, first in flight. In China, on the other hand, tech innovation emerges from the factory floor, when a new product is scaled up into mass production. At the heart of China’s ascendancy in advanced technology is its spectacular capacity for learning by doing and consistently improving things."

"*Breakneck* is the story of the Chinese state that yanked its people into modernity—an action rightfully envied by much of the world—using means that ran roughshod over many—an approach rightfully disdained by much of the world. It is also a reminder that the United States once knew the virtues of speed and ambitious construction. Traversing dazzling metropolises and gigantic factories, *Breakneck* will illuminate the astounding progress and the dark underbelly of the engineering state. The lawyerly society has virtues, too, to teach China. Each superpower offers a vision of how the other can be better, if only their leaders and peoples care to take more than a fleeting glance."

"The year 2008 offers a direct comparison between California’s speed and China’s speed. That year, California voters approved a state proposition to fund a high-speed rail link between San Francisco and Los Angeles; also that year, China began construction of its high-speed rail line between Beijing and Shanghai. Both lines would be around eight hundred miles long upon completion. China opened the Beijing–Shanghai line in 2011 at [a cost of $36 billion](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor281). In its first decade of operation, it completed [1.35 billion passenger trips](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor282). California has built, seventeen years after the ballot proposition, a small stretch of rail to connect two cities in the Central Valley, neither of which are close to San Francisco or Los Angeles."

"The latest estimate for California’s rail line [is $128 billion](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor283). Why does it cost so much? Partly because some politicians have demanded that the train add a stop in their district, forcing the line to take a more tortuous route through [an extra mountain range](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor284). And partly because California’s rail authority prefers to [tout the number of high-paying jobs](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor285) it is creating rather than the amount of track it has been laying. The first segment of California’s train will start operating, according to official estimates, between 2030 and 2033. Which means that the *margin of error* for estimating when a partial leg of California’s high-speed rail will open is the same as the time it took China to build the entire Beijing–Shanghai line."

"Lawyers enable some of the success of Silicon Valley. You can’t build companies worth trillions without legal protections. But lawyers are also part of the reason that the Bay Area and much of the country are starved of housing and mass transit. The United States used to be, like China, an engineering state. But in the 1960s, the priorities of elite lawyers took a sharp turn. As Americans grew alarmed by the unpleasant by-products of growth—environmental destruction, excessive highway construction, corporate interests above public interests—the focus of lawyers turned to litigation and regulation. The mission became to stop as many things as possible."

"But there is hope for everyone. The most important thing that China and the United States share is a commitment to transformation. China is led by a Leninist party whose core aim is to mobilize society toward modernization. Its propaganda organs stage centralized campaigns of inspiration toward the centenary goal to achieve, by 2049, “a modern socialist country” and “the great rejuvenation of the Chinese nation.” The US commitment is more open-ended, inherent to the experiment to keep democracy going. That has been partly deformed, but we should revive the dream that government of the people, by the people, and for the people shall not perish."

"The United States has immense advantages over China: robust economic growth, an expanding and more youthful population, innovation in digital technologies, a larger network of alliances, and more. But we need to recognize that the engineering state has a giant advantage: China can build. That will matter if the two countries ever decide, in an apocalyptic scenario, to go to war. No military can be powered by artificial intelligence alone; it will need drones and munitions. And the engineering state is better set up to produce these in overwhelming quantity."

"We are still not appreciating the communities of engineering practice like Shenzhen, and at no point has there been real curiosity about how China’s technological capabilities have developed."

"China’s first interprovincial expressway opened in 1993, connecting Beijing with the nearby port city of Tianjin. Soon enough, highways reached everywhere. A Chinese citizen born when the country completed its first expressway would—by the time she reached the legal driving age of eighteen in 2011—be able to drive on a highway system that surpassed the length of the US interstate system. By 2020, [China had built a second batch of expressways](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor299) that again totaled the length of the US system. The first expanse of highways took eighteen years to build; the second took half that time."

"In spite of the challenges of deep rural isolation, China’s fourth-poorest province—where household income is one-fifteenth that of New York State—has vastly superior infrastructure: three times the length of New York’s highways, as well as a functional high-speed rail network. And Guizhou isn’t exactly an exceptional Chinese province. Across the country, the engineering state has relentlessly built public works, making Guizhou an extreme case of China’s growth strategy rather than a deviation from it."

"The state loves showing footage of big container ships that berth under enormous cranes, plucking from a mosaic of containers. As exports soared, China’s ports became the world’s busiest. [Shanghai alone moved more containers](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor302) in 2022 than all of the US ports combined. China’s export engine sputtered in the early 2000s, not for a lack of ports but for a lack of power in Guangdong. So the state invested in a network of new power plants mostly burning coal. In addition to using fossil fuels, China builds a third to a half of the world’s new wind and solar capacity each year. It is sending renewable energy from its sparse western provinces into its industrialized eastern provinces."

"In 1957, the world’s first commercial nuclear plant started producing electricity in Pennsylvania. In 1991, China's first commercial nuclear power plant started producing electricity. By 2025, China caught up to the United States in the number of nuclear plants: fifty-five and fifty-four, respectively. Though the United States might restart a few decommissioned reactors, it has just one under construction. Meanwhile, thirty-one are under construction in China. The only US nuclear plant built in the twenty-first century took fifteen years and $30 billion. In August 2024, China’s nuclear authority [approved construction of eleven new reactors](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor303), which are collectively expected to cost the same amount."

"The Communist Party celebrates the birthday of Karl Marx; to close out its party congress, held twice a decade, the military band plays the “Internationale” socialist anthem inside the Great Hall of the People. But as I said in my introduction, China is also a country governed by conservatives who masquerade as leftists. Perhaps no other self-proclaimed socialist country is as lightly taxed as China. Nearly three-quarters of China’s population are [spared from paying income tax](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor314). China has also failed to levy a broad property tax, leaving the bulk of rich city dwellers’ wealth untouched. It relies more heavily on consumption taxes, which are regressive because they burden the poor more than the rich."

"The engineering state isn’t finished with building big. “We will perform basic scientific research on the origin and evolution of the universe, carry out interstellar exploration such as Mars orbiting and asteroid inspection,” goes the opening section of the Fourteenth Five-Year Plan on science and technology. It gets better from there. “We will construct hard X-ray free-electron laser devices, high-altitude cosmic ray observation stations, comprehensive extreme condition experimental devices, deep underground cutting-edge physical experimental facilities with very low background radiation.” China wants not only to explore deep space but also to use “heavy icebreakers” for polar exploration in the deep sea."

"Environmental reviews continue to delay renewable projects. In 2024, the United States had 42 megawatts of operational offshore wind production, 932 megawatts under construction, and an astounding 20,978 megawatts undergoing permitting review, most of which are [waiting on environmental analyses](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor339) to be completed. Meanwhile, China is building most of the world’s renewable energy. In 2023, while the United States [added 6 gigawatts](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor340) of new wind installations, [China added 76](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor341). That year, China built two-thirds of the world’s wind and solar plants, as well as [four times more than the rest of the G-7](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor342) group of rich countries put together."

"Sometimes not even bankruptcy can stop an automaker from production. Zhido, a producer of small EVs, went bust in 2019; five years later, it had restructured, with government help, and [restarted its production lines](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor327). NIO Inc. was right on the brink of bankruptcy in 2020 until its home government of Hefei rescued it; the company has since turned around its fortunes and is once more shipping its electric vehicles. The United States offered extraordinary bailouts to Detroit automakers in the aftermath of the financial crisis. In China, local governments help companies out every day. As a result, few of the brands can achieve really big scale, and China has to depend on exports to absorb all the vehicles domestic consumers aren’t buying."

"So far, China hasn’t felt the economic pressure to abandon low-end manufacturing (clothing, footwear, and so on), in part because there are still a lot of poor Chinese provinces like Guizhou that have cheap labor. That trend might not hold given escalating tariffs. But if Xi is successful, it means that other developing countries (in Asia, Africa, and around the world) will be unable to climb the industrial ladder that China reigns over. Developed countries have reason to be alarmed as well. Since China is so large, it has the financial firepower to target any industry it wants for technological leadership. Small countries have had to pick their battles, as Denmark did in the wind industry and South Korea did with memory chips. China wants to have it all."

"One might think that it’s not the end of the world for the United States to build gingerly and at extravagant cost; it is a rich country, after all. But slowness today risks global disaster. There is no way to achieve large-scale decarbonization without large-scale construction, of the sorts of solar, wind, and electrical transmission projects that China has been so good at."

"China’s policymakers have declined to be bound by some of the fundamental tenets of Wall Street investors—reduce investment, shrink assets, produce profitability—all of which emphasize efficiency. ⁠Perhaps it will trigger financial distress in the future. So far, however, building big has improved the lives of regular people, not just a narrow set of elites. This lack of emphasis on efficiency has been key to another Chinese success: Part of the reason that China dominates advanced manufacturing technologies is precisely because it tolerates lower profits while cultivating a large workforce.⁠"

"Earlier in 2023, China announced its first population decline since 1960 (the year millions starved from Mao’s Great Leap Forward). The population drop was slight. But it was the start of a dip that will yawn larger each year for decades. By 2100, China’s population is projected to halve to seven hundred million. Childbearing is collapsing in China. The country’s official (and certainly overstated) number of new births has undershot even the most pessimistic projections. In 2019, China had fifteen million births; four years later, it fell to nine million. The number was below what the United Nations described as a “low-fertility scenario” only a few years before. [Six million Chinese married](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor394) in 2024, half the level of a decade ago. Chinese families now have a lifetime [average of 1.0 children](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor395), far below the 2.1 children needed for a stable population."

"The results of the Chinese government’s unceasing interventions in the economy are at best ambiguous. [Economic studies have shown](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor378) that the recipients of Chinese subsidies have, on average, lower productivity growth. Xi’s aggressive promotion of industry has triggered trade wars with not just the United States but also many developing countries as well. China’s tech successes are no convincing demonstration that a wise state can plan the future. When the state shoves its weight around—forcing foreign companies to hand over technology, showering a favored sector with subsidies, injuring a firm while elevating another—it is often far from being helpful. The forced technology transfer agreements meant to prop up China’s state-owned automakers instead robbed their need to invest in their own innovative capacities. China’s automotive successes come from companies like privately owned BYD, which had no foreign partners, after the entrance of wholly owned Tesla forced the company to raise its game."

"Though Qian Xinzhong didn’t hesitate to order late-term abortions, his preferred tool was sterilization. Abortions were messy and traumatic for all; sterilization was simpler to carry out and could represent a decisive solution. Doctors might automatically implant an IUD immediately after a birth, sometimes without bothering to inform the patient. Since women attempted to remove these implanted rings, Qian preferred tubal ligation—an irreversible procedure. He [advocated for universal sterilization](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor419) of couples who already had two children. That wasn’t implemented everywhere, although there are reports of maternity wards [sterilizing mothers immediately](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor420) after a second birth. Automatic sterilization was a step that provoked unease in Beijing. Since infant mortality was still high, rural families feared the permanent loss of the ability to have a child. But by 1999, [China’s health ministry statistics show](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor421) that 35 percent of married women of reproductive age had been sterilized."

"American administrations have complained about a host of China’s trade practices: forced technology transfers; currency manipulation that keeps exports cheap; subsidies and generous credit terms for local firms, sometimes funding their expansion overseas; and, worst of all, unauthorized cyber intrusions, or the state-directed hacking to steal US trade secrets. Overall, they create an environment for foreign businesses that is often unfair and sometimes baffling."

"On a 2023 inspection tour through Jiangsu province (like Guangdong, a manufacturing powerhouse), Xi said, [“The real economy is the foundation](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor380) of a country’s economy, the fundamental source of wealth creation, and an important pillar of national strength.” It is the basis, he continued, of “human production, life, and development.” He has repeatedly said that China needs to prioritize the real economy, which means the world of manufactured products, rather than the virtual or financial economy, sometimes referred to in state media as the “[fictitious” economy](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor381). State-affiliated researchers commonly denounce financialization with the hollowing out of manufacturing in the same breath."

"[Batson has furthermore detected](private://read/01k3jwt46q240aq6fe12mqkyr0/16_Notes.xhtml#_idTextAnchor382) a shift in Xi’s rhetoric on manufacturing. Previous Chinese leaders have talked about the importance of upgrading industry, which sometimes means limiting investment into labor-intensive or highly polluting sectors that China no longer needs. Xi has declared that China targets completionism, which means that not even “low-end industries” should move out of China. Rather than follow economic logic, in which production gravitates toward countries with lower labor costs—which the United States and other high-income countries have more or less accepted—Xi does not want industry to keep shifting around."

"How can the United States do better? As a starting point, it could develop a better understanding of how China has grown into a technology superpower. If members of Congress continue to resort to the laziest explanations (“they’re just stealing all our IP”), then the United States will never grasp the importance of building up process knowledge. And it will fail to gain urgency to fix its technological deficiencies."

"At the same time, Americans should develop a bit more humility about their own technological capabilities. The sooner that the United States treats China as a peer worth studying, the sooner it can develop a new playbook for success. Chinese companies are currently beating the rest of the world in the production of electric vehicle batteries. So why not allow a few of them to build factories, as they are trying to do, in states like Michigan, and force them to give up their technology? The US government could force Chinese battery makers to transfer intellectual property in exchange for accessing the giant US market for cars."

"China took up a lot of the dirty industries that the United States was happy to get rid of. In some cases, literally: Rare earth metals are not really rare. Processing them, however, demands enormous amounts of energy and water while spewing carcinogens into the atmosphere. Few parts of the Western world have the stomach for processing rare earth metals, which is why China controls this supply chain."

"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."

"One might think that it’s not the end of the world for the United States to build gingerly and at extravagant cost; it is a rich country, after all. But slowness today risks global disaster. There is no way to achieve large-scale decarbonization without large-scale construction, of the sorts of solar, wind, and electrical transmission projects that China has been so good at."

"The East India Company's food ship Lord Amherst had docked at Shanghai in 1832 with members of a trade mission eager to buy tea and silk in exchange for their own piece-goods and opium. They were given a cold reception by officials acting on imperial orders. The opium clippers continued to establish smuggling bases at Lintin Island, off Canton, and other strategic centres like Hong Kong. The authorities had finally raided warehouses on Lintin and boarded several armed junks waiting offshore to take the drug in. They seized and burned twenty thousand chests worth upwards of £2 million. (Some outraged shippers valued their losses as high as £5 million.) It was the long-expected, and not unwelcome, signal for British warships to come to the aid of all honest merchants in the sacred name of free trade. They demolished the weak Chinese forces in an operation which would pay the plumpest of dividends for a full century."

"A modern person is not necessarily a young person. Young people are naturally accustomed to the modern age; this is an enviable advantage, but not all young people can make good use of it. Some young people, because they do not know the trajectory of historical development, instead often stand on stale positions to challenge the modern age; even the catastrophe of China’s Cultural Revolution back then was initiated by a group of young people under the slogan “destroy the old and establish the new,”"

"In the early 1990s, it became clear to Greenberg that, in the decade ahead, some $2 trillion of infrastructure investment would be needed across Asia, Central Europe, the post-Soviet Commonwealth of Independent States, and Latin America.4 The need was driven by increased economic activity, growth, and privatization. For instance, as more people in Malaysia bought cars, the number of vehicles on the streets of Kuala Lumpur mushroomed, creating need for new and better highways. Similarly, as China’s economy expanded, the country needed a massively larger electricity grid to power it. As the economies of Latin America grew and living standards rose, countries needed new airports, communications networks, energy projects, highways, port refurbishment, and utility construction."

"Audacity, the principal ingredient in most informal and thus evolving organizations, is nowhere more evident than in guer- rilla warfare, which carries not knowing your place to the ulti- mate. Yet in every situation where guerrilla forces have been victorious because of the aggressiveness of local commanders— from colonial America to modern-day China, Algeria, Cuba— the next stage is so woefully predictable it has become a cliché: a hierarchy is formed, frozen in time, and fixed in place. While"

"Jobs eventually canceled the other phone ideas and declared multi-touch the future. He was adamant there’d be no keyboard, so the phone would be as full screen as possible. Apple’s engineers suddenly had to find suppliers that could build multi-touch displays at scale—something that didn’t exist at the time. There was no way Apple could send the specs to some factory and wait for the parts to be built; instead, it sent teams of engineers to Japan, Korea, Taiwan, and China to find hungry vendors it could work with to co-create the processes. “There were a few truly groundbreaking mass production processes we were involved with, where we really had to go around to find the best people in the entire world—the peak of what humans have developed for some of these technologies,” says a product manager. By early 2006, they had a full-screen prototype enclosed in brushed aluminum. Jobs and Ive “were exceedingly proud of it,” journalist Fred Vogelstein would later recount. “But because neither of them was an expert in the physics of radio waves, they didn’t realize they’d created a beautiful brick. Radio waves don’t travel through metal well.”"

"It’s no exaggeration to say the iPhone didn’t kill Nokia; Chinese imitators of the iPhone did. And the imitations were so good because Apple trained all their suppliers. Cook didn’t want Apple to be the developer of the world, and it wasn’t. It did, however, become the developer for China."

"The point, however, isn’t to condemn Cook or Apple. It’s to convey the predicament they’re in. At the turn of the millennium, Washington made a bet on China—a bet that free trade would liberalize the country and perhaps catalyze the creation of the world’s biggest democracy. Instead, trade enriched China and empowered its rulers. Cook shouldn’t be blamed by politicians for enmeshing Apple’s operations in China two decades ago, but he has erred by doubling down over the past decade despite mounting evidence that Xi has been ramping up repression at home and taking a more combative stance in international affairs. “You can say that we read them wrong, that we misunderstood China. But Jack Ma read China wrong, too. Every entrepreneur read China wrong,” says a supply chain expert who has lived in the country. “You look at what Deng Xiaoping and Hu Jintao were promoting—the [business class] didn’t see this coming. Xi changed the game completely. He’s another Putin in the making.” This person adds, “Look, I’m not a Cook fan. But you have to be sympathetic. He didn’t know what he was dealing with. Nobody did.”"

"Caterpillar imposed ‘five-star’ standards on its dealer workshops — a difficult level to meet in many parts of China. One problem was that Chinese machinery operators tried to save on labour costs by attempting their own repairs and maintenance rather than taking machines back to the dealerships. Even if used machines came back for repair, it was hard to find or train locals with the skill to do the job to the makers’ standards. The system that worked so well in Australia was floundering."

"Then came the sting. ‘He told me being a friend of China is never going to be easy,’ recalls Stokes. ‘He said something like: “We appreciate our friends from time to time but we don’t appreciate people who say they are friends of China and then are not friendly”.’"

"Stokes suspected intuitively what Knox knew from experience: the best way to do business in Asia was to use local customs. ‘We were very conscious in Asia of always collecting the money [for the goods distributed],’ says Stokes. The only safe system was the Asian one of having people physically collect owed money on time, like a landlord knocking on doors for rent. The Singaporeans ignored their own hard-won wisdom and tried to introduce the latest Western methods, employing a Harvard graduate who put in an American payment system. It didn’t work. It was a lesson that when in Asia, do as the locals do, something Stokes would remember in China much later."

""When I visited China 35 years ago with California Governor Jerry Brown, there were multitudes of people on bicycles. Shenzhen, now the factory of world production, was a fishing village. After the Cultural Revolution, people could barely feed themselves. Now, China is the second largest economy with high-speed trains crisscrossing the country, connecting megacities with a middle class larger than the entire US population. Shanghai schools are distinguished by having graduates who are only the best of the best. [...]"

"Wednesday, March 31, 2010 Nicolas Berggruen makes his debut as a guest columnist in The New York Times. Together with Nathan Gardels, he analyzes in the article "The Fault Lines Of Democracy" what he believes to be the flawed course of American democracy, which leads to the government's inability of elected politicians. The article is akin to a college essay and argues that China's politics are changing more dynamically and rapidly than those in America. Unlike China, it is stated, the United States is incapable of carrying out constitutional changes. The very thought of it is an abomination in Washington, Berggruen says. In conclusion, it says: America should soon start learning from China – naturally under Berggruen's guidance!"

"Play is itself quite a story. I founded it in 2005 at a time when in my opinion the Polish telecoms market was badly run, being dominated by big European companies, each of which was having to deal with tussles between its shareholders. Vodafone had a dispute with its Polish partner that ended with its Polish operation being bought by Polkomtel; France’s Vivendi and Deutsche Telekom’s T-Mobile were fighting over their asset in Poland; and France Telecom’s Orange was having a problem with its local partner. We saw an opportunity for a fourth player to start afresh and try to capture market share, so we sneaked into the market by buying telecoms licences. We didn’t bother with 2G and decided to bid only for 3G licences. It was unheard of for a private equity company to buy licences without any experience in building the infrastructure. But we found Netia, a small fixed-line independent, to help us as a local player in the Polish market. We ended up outbidding 3, the mobile phone provider backed by Hong Kong’s Hutchison Whampoa. The key to making this work was getting funding, which we did principally from China Development Bank. We had spotted in our privatisation and tender processes for upgrading Bulgaria’s telecoms that the Chinese government has a long-term strategic plan to become a major player in telecoms infrastructure. We saw that the best kit was coming from Chinese subcontractors, so we went straight to them and found that they had big plans. We had big plans too and suggested that we work together, building a new mobile telecommunications infrastructure in eastern Europe’s biggest country, with a population of 40 million. The Chinese like to take a long-term view, so we signed a letter of intent in China at the same time as we were bidding for licences. I used the occasion of an official state visit from Iceland to China to get the deal rubber-stamped, and so in the Palace of Heavenly Peace in Tiananmen Square there was an official signing ceremony as the climax of the state visit. We signed a letter of intent to buy all the equipment from Huawei, which has since emerged from the shadows as a dominant player in global telecoms, and it lobbied China Development Bank to make its first ever major loan in Europe. In total, this loan amounted to more than $1 billion. I have a great picture of the deal being signed by us and Huawei with the presidents of Iceland and China standing behind. It was an occasion that I am sure went a long way towards getting China Development Bank’s support and resulted in Huawei sending an army of Chinese engineers to Poland, where they helped us set up the towers, transmission and other infrastructure from scratch. We entered Poland as outsiders and targeted the youth market. It was tough going for the first two years but our patience paid off, and after about four years we broke even. Today, Play is profitable and growing significantly. It now has more than 11 million customers and a 20 per cent market share…"

"From a supply chain standpoint, China has preemptively moved to control the global supply of certain rare earth minerals used in the manufacture of EV batteries. For example, China controls over 60 percent of global lithium and cobalt refining capacity, ensuring that much of the EV world will depend on Chinese-owned companies for minerals production and processing.4 If someone could figure out a way to make hydrogen fuel cells more…"

"the West’s current path toward addressing climate change problems has a serious flaw. Western nations share an ecosystem with China, India, and Russia, where there’s no evidence of a real commitment to reducing fossil fuel use. Play that scenario out, and American and European taxpayers will have spent tens of trillions of dollars for radical emissions reductions, while China, India, and Russia will be polluting more. All that…"

"It’s also good to pay attention to tech trends that have the potential to disrupt economic models but haven’t hit their stride yet. Two examples relate specifically to the supply chain industry, where I’ve spent the past 13 years. 3D printing (also called industrial additive manufacturing) will drive seismic change in supply chains in the long term. It’s had a slow start—in the ’80s and ’90s, there was a joke that 3D printing was endlessly ten years away from being viable. Now, it’s being adopted for all kinds of purposes, especially in medicine. Ten years ago, dentists were giving patients a temporary tooth for a couple of weeks while a crown was made from an impression of the tooth. The last time I went to the dentist, he took measurements and told me to hang out for an hour while the office printed my crown. Hearing aids are 3D printed now, too; so are a lot of prostheses. Sophisticated industrial products, including structurally critical parts for jets, are 3D printed out of metal. As the cost continues to go down, I expect that 3D printing will be a growing part of local autonomous manufacturing. That will change the transportation industry, the global supply chain, and the entire geopolitical balance. Currently, the global economy is still based on an outdated model of sourcing cheap labor overseas, especially from China, and then paying a high price to get it transported to the consumer. For example, the goods travel on a plane or ship from Shanghai to Los Angeles, and then the dray containers go by rail to Chicago, where they’re put on a truck and driven to a warehouse in Kansas City. Eventually, the product is trucked the “last mile” to…"

"The 1960s were a period of consolidation as well as expansion of Rupert’s tobacco and cigarette interests. The takeover of Carreras and Rothmans led to expansion in other parts of the world. Using Rothmans as his flagship, he created a stir with his philosophy of industrial partnership in various countries where he embarked on new initiatives. Partnership companies were established on a bilateral basis in Australia and New Zealand, Malaysia, Singapore, Indonesia, Canada, Jamaica, Northern and Southern Rhodesia (now Zambia and Zimbabwe) and Nyassaland (now Malawi) − eventually even beyond the Iron Curtain in Russia and China."

"Until the early 1990s, most bluefin tunas went to Japan, and for a while afterward, toro became extremely popular in the United States. However, when the IT bubble burst in the U.S., demand increased towards Russia, and now it’s China. Hearing about the destinations of bluefin tuna gives insight into where the economy is booming. I genuinely think bluefin tuna has become a global commodity. However, I still wish something could be done about the price. Bluefin has become truly expensive, making it hard for ordinary people to afford."

"Lee Kuan Yew was able to apply a much more rational method. To solve a problem, he begins by considering all possible solutions: “I do not work on a theory.” “I am interested in what works.” “In the face of a difficulty, major problem, or an array of contradictory facts, I review what alternatives I have if the solution I propose does not work. I choose a measure that offers a strong probability of success, but if that fails, I have other options. I never find myself at an impasse.”"

"Lee Kuan Yew emphasizes that the purpose of a political system is not to organize elections but to produce good government. In other words, those in positions of responsibility should be the most competent and of impeccable honesty."

"options: “If, after trying several solutions, I discover that a certain approach works, then I extract the underlying principle of the chosen solution.”"

"“Seek truth from facts.”"

"Deng Xiaoping then sent tens of thousands of Chinese, officials and members of the Communist Party, to Singapore so they could make the most of Singapore’s achievements. China openly used the city-state as a cadre school to train numerous Chinese leaders, for example, by sending Jiang Zemin as early as 1980, who was the Vice President of the Commission for Foreign Investments and later the Mayor of Shanghai, to eventually become the head of state in 1993 and Deng Xiaoping’s successor. From 1985 to the 1990s, the Chinese government did not hesitate to recruit Dr. Goh Keng Swee, one of Lee Kuan Yew’s lieutenants and often considered the architect of Singapore’s economic development, as an economic advisor."

"They do not speak of equality; they know it is not of this world. They expect a lot from the best without demotivating them by taking the fruits of their efforts, as the country needs them too much in this time of intense competition!"

"If society is not competitive, it is destined to disappear."

"“Fifteen years ago, 50% of internet users were Americans. Asians were 19%. However, five years from now, Americans will be 12% of the internet population, and Asians will be 50%. (ellipsis) Until now, you could not become the number one internet company without being an American company. Companies like Google, Amazon, Yahoo US, and eBay—all American companies. In other words, if 50% of users were American, naturally, it would evolve into an English website with a business model suited to American lifestyles. So, Americans had the advantage of location. But from now on, Asians will become 50% of the internet population. In just five years. Already, Chinese internet users have surpassed Americans. 50% will be centered on China and Asia, with Americans becoming 12%. In this sense, we precisely gained the advantage of location. If we obtain the opportuneness of Heaven and the advantage of location, we must act.”"

"However, things are different now. In five years, only 12% of the internet population will be Americans, whereas 50% will be Asians. The number of internet users in China has already surpassed those in the US."

"He decides to implement a pilot project in his Sedico plant, and at the same time in one in China and the United States, where the glasses are produced in every part. It starts with the optician's prescription and ends with the finished product along a single production line, which also includes the lenses."

"In the following years, I challenged various markets with clothing sales as the core, experienced several failures, and made some business friends. In the end, I established "Fast Retailing Co., Ltd.". Currently, the company not only carries out Uniqlo's retail business throughout Japan, but also opens Uniqlo specialty stores in countries and regions such as the UK and China. In the process, we learned a lot of valuable things from our customers and our partners. What makes me proud is that the company also has a large number of hard-working excellent employees. On this occasion, I would like to express my heartfelt thanks to the directors and employees of the company for their great support and encouragement to me who is not very good in the past years."

"In March 1848, the discovery of gold reefs in the western United States, California, was reported in various publications. News quickly spread to the southern coast, attracting many villagers. In 1849, shipping companies in China published advertisements recruiting laborers to go to the United States for gold prospecting. The advertisement read: "The American people are the richest in the world, and they welcome the Chinese. Once you arrive in the United States, there are big houses to live in, high wages, good clothes, and food... Do not doubt, and immediately embark on the road to prosperity." (Wei Guanzhong, 1977: 1)"

"Ren Zhengfei, the president of China’s largest communication equipment manufacturer, has been invited by national leaders to visit abroad many times, but has never officially accepted any media interviews. Reporters from major media outlets complain that while they have interviewed many famous entrepreneurs, they have never managed to interview him."

"Latif Latif, chairman of the Global IPv6 Forum, clearly pointed out, “China will be the largest market for IPv6, and the key applications of IPv6 will first appear in China.” IPv6 is a technological highlight of the data communication industry. In October 2003, the Chinese government announced the launch of the CNGI project and planned to build the world’s largest IPv6 network by the end of 2005. This will provide Chinese communication equipment manufacturers with a “once-in-a-lifetime” opportunity."

"But was competition from Chinese manufacturers really impossible to predict? Cleantech entrepreneurs would have done well to rephrase the durability question and ask: what will stop China from wiping out my business? Without an answer, the result shouldn’t have come as a surprise."

". Even if things go smoothly, China’s economy is likely to overtake America’s as the world’s largest, which will surely prompt more people to ask: *How did they do it? How did China advance so quickly, particularly in such complex areas as advanced electronics?* Some portion of the disquieting answer is that Apple taught them. Year in, year out, Apple took the most cutting-edge designs, processes, and technical understandings from around the world and scaled them in China. One supply chain expert even adopts the language of a crime scene as he considers the whodunit at the heart of China’s advances in electronics. Look around, he says, “There’s Apple DNA everywhere.”"

"As one former Apple engineer puts it: “We’ve trained a whole country, and now that country is using it against us.”"

"Apple continues to spur Chinese development of cutting-edge processes, Americans may soon look up and see that China has become self-sufficient in advanced electronics, robotics, and chip fabrication. And from there it may be only a short leap to Xi Jinping’s goal of bringing about “the ultimate demise of capitalism,” as he pledged in 2013."

"Moreover, wages in China have soared, but they’ve soared for a reason—reflecting the skill sets of experienced workers, the competitive edge of its industrial clusters, and world-leading investments in automation. Or to put it simply, the Chinese worker comes *with* a robot. According to the Information Technology and Innovation Foundation, robot adoption in China is in “a class of its own, with its national and provincial governments committing massive amounts of money to subsidize adoption of robots and other automation technology.” As of 2022, the number of industrial robots deployed in China was above 290,000, more than half the global total; in India, it was 5,400, according to the International Federation of Robotics."

"Today, Apple works with more than 1,500 suppliers in fifty countries. But all roads lead through China: 90 percent of all production occurs in the country, and its much-vaunted assembly operations in Vietnam and India are no less dependent on the China-centric supply chain."

"“You have to add in that time cycle—from that part coming from China and into India,” this person says, pointing out that the lower labor costs of India get offset by the added logistics of sending freight from China. Historically, this engineer points out that when Japan, then Taiwan, and then China made their mark in global electronics manufacturing, they all started by supplying components, creating a foundation of technical expertise. Only afterward would a supplier of, say, motherboards, begin to vertically integrate and expand into taking on final assembly, test, and pack out; by contrast, Apple in India has been doing FATP for seven years and is only now trying to build up the competency of suppliers making parts. “My sense of it is, [Apple is] doing it ass-backwards,” this person adds."

"If you’re shipping a million of anything a day, there are only a handful of companies on the planet that can do it, and Apple found itself in that place with many technologies. You look at all the innovations, all the bespoke things Apple was doing—electronic components, surface mount technology processes, test processes—everything, even the data management for manufacturing one million units a day, all of that was proprietary to Apple. All protected in-house. Apple engineers were the general managers for this manufacturing supply base. But there wasn’t any way to do it, anywhere, but in China."

"David Landes: “If the gains from trade in commodities are substantial, they are small compared to trade in ideas.”"

"Tesla broke ground on the Shanghai Gigafactory in December 2018; by late 2019 China-made Model 3 vehicles were coming off the production line. Immediately they were a massive hit, and the Tesla Model 3 was China’s bestselling EV in 2020. Chinese consumers “didn’t want to buy anything being manufactured by Chinese brands; they all wanted Tesla,” says Parikh. “As soon as Tesla came, there was a paradigm shift from consumers, and that’s something the Chinese government saw. This was an opportunity to have the entire EV industry in China compete with, and learn from, Tesla.”"

"Then there was Apple’s signature line: “Designed by Apple in California. Assembled in China.” For some, the statement diminished the importance of China’s contributions. The country had developed extensive world-class industrial clusters on a previously unknown scale. Thousands of skilled engineers using sophisticated machinery had played a critical role in making Apple products functional and beautiful. Assembly wasn’t at all the crux of the partnership. The signature line looked outdated, seemingly structured to keep China in its place."

"Qualcomm’s case was the most public. China possessed great leverage over the California-based chip designer, an instrumental force in creating the 4G and 5G tech used in smartphones. The case has broadly been seen as a shakedown. Qualcomm revenues rest on being paid a licensing fee for every smartphone using its technology. As China became the world’s largest market for smartphones, Beijing demanded the fees be cut. Qualcomm put up a fight, but there was little it could actually do. In 2015 it agreed to launch a joint venture and pay a $975 million fine, the largest in China’s corporate history, to end the state’s three-year antitrust investigation. “They held us hostage for a billion dollars and stole our intellectual property. And there was no negotiating. We were just grateful that we got to keep our business model,” says one Qualcomm executive. During one ten-day period, two Qualcomm executives say the company grew so concerned about arrests that it stopped sending its people to the country. “We were afraid they would get kidnapped,” says one. The single negotiator Qualcomm did send opted to sleep on the company’s private jet during his stay. “He’d go to the meetings, but then he’d go back to the plane and would spend the night [there].”"

"The paradigm shift Apple initiated was so consequential that it left Chinese officials convinced that its JV model was broken. In 2018, officials in Shanghai allowed Tesla to become the first foreign automaker to establish a manufacturing plant in the country without a local partner. It was characterized in the press as a sweetheart deal, as if government officials had succumbed to the charm of Elon Musk. But China was acting in its own interest. When Musk proposed to open the factory within two years, the mayor of Shanghai convinced him to fast-track the effort to just twelve months, offering big incentives, including affordable land and tax benefits. “It was probably the fastest and most CapEx-efficient factory ever built in the car industry, let alone EVs, in the world,” says Harsh Parikh, then the head of global supply management for CapEx at Tesla."

"Thinking of Apple’s investment like a government program is instructive. Year in, year out, China didn’t have the talent or expertise to build the products that Jony Ive’s studio conceived, but the engineers Apple hired out of MIT, Caltech, and Stanford, or poached from Tesla, Dell, and Motorola, routinely got them up to speed. Apple could send a caliber of talent to China—what one Apple veteran calls “an influx of the smartest of the smart people”—that no government program ever could. And the culture was such that the Apple engineers would work up to eighteen hours a day. Moreover, whereas a government program could at best train a workforce to engineer products, it wouldn’t have the ability to actually purchase the goods. But Apple could and did."

"The fact was, China wasn’t just catching up to the West; its system was maturing into something novel. “One of the great ironies of our time,” Guthrie told students in 2013, “is that the largest Communist society in the world is also the most dynamic capitalist economy in the world. There’s a tremendous amount that we can actually be learning from China.”"

"O’Marah recognized that Apple’s strategy was brilliant. It accounted for why the company was running circles around the competition, turning revered companies like Nokia and BlackBerry into case studies of strategic failure. But it had one major flaw. Whereas smartphone rivals like Samsung could bolt a bunch of off-the-shelf components together and make a handset, Apple’s strategy required it to become ever more wedded to the industrial clusters forming around its production. As more of that work took place in China, with no other nation developing the same skills, Apple was growing dependent on the very capabilities it had created."

"It was common to predict that the party’s role would simply wither away, but Guthrie observed that it was evolving. Government officials were no longer a heavy bureaucratic hand weighing on development; in their relationship with local and foreign companies, officials were acting more like venture capitalists—the kind that take a cut of equity, sit on the board, and aim to promote growth."

"“The central government has control over personnel, whereas subnational governments run the bulk of the economy; and they initiate, negotiate, implement, divert, and resist reforms, policies, rules, and laws.” Such decentralization allowed for experimentation on a grand scale: what worked in Guangdong could be replicated in Shanghai. But Beijing was often patient: It waited for the results of these experiments rather than rushing ahead with them. This combination of decentralized decision-making, experimentation, and gradual adoption of new policies played a critical role in how China became a manufacturing powerhouse."

"To secure Apple’s China business, Cook amended its warranty policy in the country, pledging that eligible customers with broken phones would be given new units. The enhanced policy was like a godsend to the yellow cows. It turbocharged their illicit scheme to such an extent that Apple Stores in China soon had a separate line just for iPhone returns. When their turn came, some migrant workers would unpack entire backpacks filled with iPhones, returning each for a brand-new unit. The updated warranty policy had given the yellow cows a new source of iPhone supply: existing models. They began stealing them from consumers, in China and abroad, and then deployed special tools to amend the fifteen digit IMEI number—which in those days was printed on the back of the iPhone and again on the SIM tray inside. In some cases, the yellow cows would obtain a top-tier iPhone, take it apart and separately sell pricey components like the memory chip, replace them with inexpensive lookalike parts, and then return the tampered unit for a brand-new model. The yellow cows became so adept at this that even a well-trained Genius Bar worker couldn’t detect which phones had been tampered with."

"“It flipped so, so quickly,” Fadell recalls. “Because China was subsidizing so, so, so much. Giving people free land, free everything… They made it so attractive to the outside world. It was, like, you’d be dumb [not to move to China]. And once one person moved, they all had to move, because of the cheaper labor.”"

"The Guangdong Model is what made China the workshop of the world, particularly once Beijing took the blueprint and established it across the country."

"Cook would say in a calm, deliberative cadence: “Don’t… ever… be… afraid… to… be… unreasonable.”"

"By contrast, Taiwan’s critical, multi-decade role industrializing China through investment and worker training is widely recognized. At least three major books have been written on the subject in English since 2017."

"Apple itself estimates that since 2008 it has trained at least 28 million workers—more people than the entire labor force of California. China brilliantly played its long-term interests against Apple’s short-term needs."

"But Cook’s email to the board was a model of transparency relative to what he and Maestri would tell analysts on the earnings call just a few hours later. They informed Wall Street that Apple was expecting $89 billion to $93 billion of revenue in the holiday quarter, underwhelming investors. But they didn’t say a word about the muted sales of the XR, or the difficulties of forecasting, or that Cupertino now expected China revenues to shrink. Instead, they soothed investors with cheery sentiment. The obfuscation was brazen. Asked specifically about the XR, Cook replied that it’d been on sale for just five days so “we have very, very little data there.” Asked about “deceleration” in emerging markets including China, Cook said it was a “great question” and mentioned “we’re seeing pressure in… markets like Turkey, India, Brazil, Russia.” Then he switched to China, subtly moving from present tense—the nature of the question—and looked back a quarter: “In relation to China specifically, I would not put China in that category. Our business in China was very strong last quarter. We grew 16 percent, which we’re very happy with. iPhone in particular was very strong, very strong double-digit growth there.”"