I feel that Chinese success is being totally misread as the triumph of industrial policy. Hereās an alternative theory.
Chinese success is due to the general competence of Chinese institutions, of state capacity, of social trust. There is no possibility of capture by anything like the lobby, no space conducive to the hypertrophy of rent-seeking we find in the US (see attached).
The Chinese have a dramatically more effective political order; esp compared to the US. This stable and effective political order is in part due to and in part generative of social trust. Together they provide China with the greatest state capacity in the world.
The political order, the social trust and the state capacity is upstream of and makes possible the highly effective industrial policy that Western elites fetishize. Plenty of states have tried and are trying industrial policy. Almost all of them in vain.
Itās not industrial policy, but the Chinese political order that you need to pay attention to if you want to pull a China.
I think part of it, at least vis a vis US/China competition, is that US and western chattering classes find it hard to believe that the market-driven outcome of frontier AI could possibly be right. They basically believe, in their hearts, that the Chinese system, with its āindustrial strategy,ā has eclipsed capitalism. So they harbor the same inferiority complex toward the Chinese system that many Americans once harbored toward the EUās system. Their heuristic is that the industrial strategists of China have grasped the whole picture of the technological competition in a way that US industrialists, with their āprofit maximizing incentives,ā could not possibly have matched. And so any outcome in the economy that is not the result of āstrategyā is therefore prima facie worse than what the āstrategistsā have concocted. They also believe the Chinese strategists possess awesome powers of foresight and the ability to evade all tendencies of financial and economic gravity, due of course to āstrategy,ā really itās almost a kind of orientalism.
Meanwhile the U.S. industrialists are making new advances in math and science, and the fastest-growing businesses in history, by spending hundreds of billions of dollars on high-margin chips whose legacy is in rendering video games, cramming them underneath tents if need be, and investing generational capital into new energy generation technologies as they do it, and perhaps even colonizing space as an instrumentally convergent result. But none of that is āstrategy,ā you see.