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Alex Lo

No one really knows who will ultimately win. Perhaps that’s not even the right question. But it seems clear that China’s operating systems are currently working better than those of the US.
Contrast the Chinese state’s control of the tech and financial sectors with the United States, where the situation is reversed.
In 2007-08, unfettered financial capitalism almost caused the collapse of the US economy and triggered the global financial crisis. Wall Street’s political influence waned as a result, and globalisation stalled.
Instead, Silicon Valley, which previously exerted limited influence, swapped roles with Wall Street – meaning that billionaire tech bros now enjoy disproportionate power over Washington.
Pankaj Mishra, one of India’s finest writers, contrasts China’s treatment of its billionaire class with the US’. “They arrived at, in retrospect, a profound wisdom – that you need to unleash certain entrepreneurial energies,” he said about China in a recent interview with Novara Media.
“At the same time, you need to exert very careful control over this very different system of capitalism. And that you cannot let the capitalists form a kind of unaccountable oligarchy, which is what has happened in many Western European countries, and of course, notoriously, in the United States.”

That’s why “China is a much more coherent nation-state today than just about any nation-state in the world”, he argued.
In contrast, the US’ elite now operates without meaningful accountability. Developments in the American economy “landed us now with this sort of semi-criminal class of oligarchs – completely unaccountable, politically more and more deranged, if you look at people like Elon Musk or Sam Altman”, Mishra said.
This “unaccountable political class” is taken with neo-fascist ideas, which “we see very clearly in the political preferences of America’s business elite, the way they’ve all sort of swung behind [Donald] Trump so quickly – all the tech companies, all the social media companies”.
The Western economies’ ideological obsessions ironically led them here. As Mishra pointed out, “ideological intoxication with neoliberalism, the steady empowerment of a globalised class of transnational businessmen, a kind of financialisation of the economy” took away the West’s traditional advantages, leaving disenfranchised and pauperised populations that are more susceptible to extremist politics than ever.
You cannot let the capitalists form a kind of unaccountable oligarchy, which is what has happened in many Western European countries, and of course, notoriously, in the United States.
Pankaj Mishra
As China pragmatically pushes ahead, the West is looking at “profound inequality, an incredibly angry population, and far-right demagogues who … want to distract people from the overwhelming failure of their economic system and want to blame trans people, want to blame migrants, they want to blame everything except the people who’ve brought us to this sorry mess”.
Meanwhile, David Heacock, founder and CEO of Filterbuy, one of America’s largest air filter manufacturers, explains why having outsourced its industrial capacities, it’s extremely difficult for the US to rebuild them.
“To understand why we’re in this mess, you need to understand a 30-year decision America made, one cheap T-shirt at a time,” he said on his own YouTube channel. “America didn’t lose manufacturing in one big moment. We lost it in a million small ones,” as American companies chased the lowest price.
This worked in the short term, but not any more. “Every time we offshored a product, we didn’t just lose the factory, we lost the engineers who knew how to build the machines, the suppliers who made the parts, and the raw material processors. The whole system went with it,” he said. “And once a system like that dies, it doesn’t just come back overnight. It takes decades or generations to rebuild … This is a story about what happens when an entire country optimises for the next quarter instead of the next 20 years … America forgot how to make its own stuff.”

On the other hand, China strategically builds up its own industrial ecosystems and entire supply chains. “China is a competence factory. American capability has slowly disappeared. Not just the labour, the machinery, the engineering knowledge, the supplier base, all of those things,” he said.
“China’s real advantage isn’t cheap labour … The reason Chinese companies can move that fast isn’t magic. The tooling supplier is already there. The raw material supplier is nearby. The machine shop is just across the street. Everybody is used to moving quickly together. In Shenzhen, every component you could possibly need is within a 50-mile drive.
“In America, your nearest supplier might be in a different state or a different country altogether oftentimes. What scares me is not that China works cheaper. What scares me is that they built a system optimised for industrial learning speed.”
This is what’s keeping American business owners up at night, he said. “Every cycle, [the Chinese] get a little bit better. And those cycles compound … Manufacturing isn’t a factory, it’s a living system, and living systems compound.”


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Why China’s political and industrial systems work better than the US

A giant screen shows news footage of Chinese President Xi Jinping shaking hands with DeepSeek founder Liang Wenfeng during a symposium on private enterprise, at a shopping complex in Beijing on February 17, 2025. China’s treatment of its billionaire class differs from the United States’. Photo: Reuters

Tech billionaire Elon Musk looks around ahead of the US president’s inauguration in the Capitol Rotunda in Washington on January 20, 2025. Photo: AFP

Apple CEO Tim Cook and singer Li Yuchun attend an event marking Apple’s 50th anniversary at the Apple Taikoo Li Chengdu store on March 18 in Chengdu, Sichuan province. Over decades, the US outsourced its industrial capacities, as American companies optimised for the next quarter. Photo: VCG via Getty Images

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A lithograph by James Henry Lynch, originally drawn by Michael Angelo Hayes, depicts the 18th (Royal Irish) Regiment of Foot, at the storming of the forts of Amoy on August 26, 1841, during the First Opium War. Image: Getty Images

A print published in 1857 depicting “The Siege of Mooltan” (Multan) and an elephant being struck by a cannonball. The Siege of Multan was precipitated by a revolt in the city after the East India Company imposed a ruler on the inhabitants, beginning the Second Anglo-Sikh War. Photo: The Print Collector/Print Collector/Getty Images

A painting depicts a scene from the First Opium War between Britain and China. Photo: Shutterstock

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A worker responsible for electrode technology development near a mixing container for battery production at a factory in Bavaria, Germany, on October 26, 2023. Photo: dpa

Employees work on a battery assembly line in Huzhou, Zhejiang province, on April 26. Photo: Reuters

A worker checks LED lights dedicated for export at a factory in Ruichang, Jiangxi province, on January 3, 2024. Photo: AFP

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Illustration: Lau Ka-kuen

Opinion

China Opinion

World Opinion

An Indian writer and an American businessman explain how de-industrialisation and the rise of oligarchs handicapped the US ability to compete


An Indian writer and an American businessman explain how de-industrialisation and the rise of oligarchs handicapped the US ability to compete.


China

China economy

China manufacturing

Global Financial Crisis of 2007-2008

Donald Trump

Sam Altman

Elon Musk

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

As I see it

Why China’s political and industrial systems work better than the US

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}An Indian writer and an American businessman explain how de-industrialisation and the rise of oligarchs handicapped the US ability to compete

An Indian writer and an American businessman explain how de-industrialisation and the rise of oligarchs handicapped the US ability to compete