Xi Jinping’s Plan to Save China Through Science

Does China have a plan to save its wobbly economy?

In last week’s issue of Foreign Policy I argue that it does—but not the sort of plan most Western economists are comfortable with. Western analysts blame slowing growth on a variety of factors: a communist bureaucracy paralyzed by purges and confused by an unfavorable economic environment; ‘animal spirits’ that never recovered after being caged by zero-COVID; a property bubble too large to pop; and most importantly of all, policies that favor state investment in a country where savings rates are too high and consumption rates too low. The question was posed time and again: how will the PRC surmount these problems?

Beijing answered this question conclusively during the Two Sessions held this March. Li Qiang’s Government Work Report makes clear the government’s priorities for the economy—and everything else. As I summarize in Foreign Policy:

Ahead of “expanding domestic demand” [the top-priority goal endorsed by the 2023 report], the new report prioritizes two other goals. First, the Chinese government must “strive to modernize the industrial system and develop new quality productive forces at a faster pace.” Second, it must “invigorate China through science and education and consolidate the foundations for high-quality development.”

Put in blunter language: The central task of the Chinese state is to build an industrial and scientific system capable of pushing humanity to new technological frontiers.1

My essay, written with Nancy Yu, attempts to explain why the Politburo believes that science and technology are the answer to China’s problems. Techno-industrial policy is not the default response to housing bubbles, debt burdens, and low consumption rates. The critics are incredulous. To them this solution seems a bit like using a wrench or hammer to cook an egg: no matter how good of a wrench one has, it simply is not the tool for the problem at hand.

I am not entirely satisfied with their response. China’s leadership is not stupid. If the conclusions of the western economists are so evidently true, why does the Politburo and its advisors not grasp something so obvious?

That is the question this essay attempts to answer. There is a logic behind Chinese techno-nationalism. This logic can be traced by triangulating state policies against statements by Chinese leaders and the broader ideas informing Chinese public debate. “To understand the Politburo’s plans,” we write,

one must first understand the historical narrative that informs them. This narrative is downstream from several sources: the historical materialism of Karl Marx; attempts by early 20th-century “New Culture” intellectuals to explain why China had fallen victim to imperialism; triumphal propaganda accounts of China’s modern rise; and a close study of Western scholarship on the rise and fall of great powers.

Endorsed by President Xi Jinping and popular among Chinese policy elites, this set of ideas argues that there are hinge points to human history. In these rare moments, the Chinese leadership believes, emerging technologies can topple an existing economic order. Grand changes mean grand opportunities: The British Empire and the United States rose to global hegemony because each pioneered a global techno-economic revolution. Now the past repeats. Humanity again finds itself on the precipice of scientific upheaval. The foundations of global economic growth are about to be transformed—and Xi is determined that China will lead this transformation.2

Long terms readers will remember my essay “Has Technological Progress Stalled?” In that essay I outlined the basic narrative most historians of industry use to make sense of the last few centuries: the advent of steam power marks a dramatic transition point in human history. This is the beginning of the “growth revolution.” Historians call the adoption of steam power and the beginnings of modern industry the “first industrial revolution.” A second revolution in industry occurs at the close of the 19^th century, as a new suite of technical advances (electrification, steel beams, large scale chemical production, fossil fuel use, diesel engines, etc.) reshapes human life. Some enterprising scholars add a third industrial revolution to this story. In everyday speech this is usually called the “digital revolution.” It marks the integration of information technologies like the computer and the internet into the global economy.

Three industrial revolutions. Once a century in each of the last three, a set of technical advances has transformed the basic facts of human civilization. Or so the story goes. I express some doubts about this formula in “Has Technological Progress Stalled?”. But those doubts are mine. The Politburo does not express these doubts. They have a set propaganda slogan (tifa) to describe historical transition points like these: each was a “new round in techno-scientific revolution and industrial transformation.” In Beijing’s view, each round of techno-scientific revolution does not just change the world economy, but also the global political order. To return to our Foreign Policy piece:

 Xi explained the logic behind [all this] to a gathering of Chinese scientists held [in 2016]. He presented technological strength as a choice that begins with a moment of historical recognition. There are points in history when “major technological breakthroughs” promise to “greatly enhance humanity’s ability to understand and utilize nature” as well as to increase “societal productivity.” Xi argued that “historical experience shows that [these] technological revolutions profoundly change the global development pattern.” Some states “seize” this “rare opportunity.” Others do not. Those who recognize the revolution before them and actively take advantage of it “rapidly increase their economic strength, scientific and technological strength, and defense capabilities, thereby quickly enhancing their composite national strength.”

For Xi, as for most Chinese, the Qing dynasty is the paradigmatic example of a great power that refused to see the revolution unfolding before it. “Due to various domestic and foreign reasons, our country has missed technological revolution time and again,” Xi said in 2016. The result was what Chinese nationalists call the “century of national humiliation,” a period when China was victimized by imperial powers and fractured by contesting warlords. By failing to seize the opportunities presented by emerging technologies, China was “transformed from a world power into a semi-colonial, semi-feudal country subject to bullying.”

If the Qing dynasty stands in for any powerful state that falls behind in the technological race, the United States is a living symbol of technological potential. Ever since Chinese leader Deng Xiaoping formally identified the United States as the benchmark for China’s modernization, Chinese thinkers have seen it as the embodiment of scientific strength. Wang Huning, the fourth-ranking member of the Politburo Standing Committee and Xi’s favored court intellectual, made this point repeatedly in his 1991 book, America Against America. Shocked by the “awe-inspiring material civilization” he found in the United States, Wang insists that “if the Americans are to be overtaken, one thing must be done: surpass them in science and technology.”3

This is the broader context for China’s techno-nationalist drive. The drive is premised on three ideas.

The first is that technological and scientific power is the most critical element of national strength and economic growth.

The second is that advances in technological and scientific power are not isochronal. Advances occur in sudden leaps and bounds; disproportionate power and wealth go to those who successfully leap first.

The final idea, and perhaps the most important, is that we are in the opening stages of the next round of techno-scientific revolution right now.   

This is not all about AI. Chinese intellectuals have been pining for advanced technology to “save China” since the 1920s. Since the 1980s they have conceptualized this in terms of joining or leading the latest wave of technological change.4 Xi Jinping’s discussions of the issue are quite clearly influenced by Klaus Schwab’s predictions of a “fourth industrial revolution.” Both Schwab’s projections and Xi’s initial formulations predate ChatGPT-mania by half a decade. When the Chinese high leadership talks about the coming round of techno-scientific revolution, they mention AI, but only in the context of a long list of promising technologies. These include materials science, genetics and plant breeding, neuroscience, quantum computing, green energy, and aerospace engineering. In Xi’s rhetoric none of these are privileged over the others.

If 2024 is the year that the Chinese state goes all-in on techno-nationalism this might have less to do with assessments of novel technologies that have emerged since the 2020s began and more to do with novel assessments of China’s economic and geopolitical position. The escalating Sino-American tech war has dramatically raised the policy salience of science and technology in Beijing policy circles. This occurs at a moment when the limits of China’s aging economic model can no longer be ignored. If there was ever a time that China needed a new round of techno-scientific revolution, that time is now.

Perhaps fortune smiles on their needs. Perhaps a new round of technological upheaval is actually just around the corner. There are reasons to think this strategy might work. As Yu and I note:

Much of Chinese policy over the last few years—from the decision to elevate industrial technocrats to positions of high leadership in the party to the 14th Five-Year-Plan’s commitment to construct a “whole-of-nation system” for technological innovation—only makes sense in light of this larger narrative. Already, these efforts have borne some fruit: China is now the world leader in electric vehicle sales. Huawei’s industrial chain is building advanced chips. Bloomberg Economics estimates that by 2026, the high-tech sector’s contribution to the Chinese economy could outpace real estate’s. If forecasts about the explosive growth potential of AI are remotely accurate, it is plausible that advancing technology might just provide China with the alternate growth engine it needs.5

However, this strategy is a gamble—much more of a gamble than Chinese commentators usually allow. Here is how we conclude our piece:

The Chinese strategy rests on two bets: first, that the world truly is on the cusp of an economic transition comparable to the Industrial Revolution in scale, and second, that if this new technological revolution occurs, China will lead it. Neither bet is certain.

Here, the fate of the Soviet Union and the Eastern Bloc should stand as a warning to Beijing. This is not the first time a communist regime hoped that investments in new technologies and industrial processes might reverse slowing growth. The communist parties of Europe made a similar set of bets in the mid-20th century. The Soviet Union hoped to lead the computer revolution; the Eastern Bloc as a whole aimed to become the world’s greatest high-end manufacturing hub. These bets did not pay off. New industries were not successfully developed, new technologies did not successfully diffuse, and new products were not price competitive with their counterparts in East Asia or the West. Soon, the bills came due. By the 1980s, one communist regime after another was forced first into austerity and then to outright collapse.

In the CCP’s telling, the fall of the Soviet Union is part of a very different narrative—a story about the perilous threat posed by internal corruption, liberal ideology, and foreign subversion. Chinese propagandists have little to say about economies that floundered because their leaders put too much hope in technology’s latest wave. The story of the “new round of techno-scientific revolution” is not a story about those who floundered. It is a story about those who won. Time will tell which story the Chinese leadership should have been paying most attention to.6

This ending, while rhetorically nice, is a bit weaselly. I weasel due to personal uncertainty. My assessment of the Chinese plan rests partially on my assessment of the economic impact of AI. I have some doubts. In my essay on technological progress I argue that the third industrial revolution—the digital revolution—has been far less transformative than is usually supposed. Here is how I describe the sort of technological change that deserves a revolutionary appellate:

Double-digit GDP growth means transforming the physical basis of an entire society. It means mud to concrete. Wood to steel. Sweat to dynamos. Shovels to dynamite. Wicks to lightbulbs. Carts to cars to areoplanes.

A future boom will not come from improvements in organization and information. It will be from inventing new materials to build from, new ways to move what we build, or new sources of energy to power our building. This is my yardstick for evaluating the “revolutionary” potential of new technologies.7

In my mind the only route by which AI could lead to an industrial revolution-sized disruption is if it unlocks advances in more fundamental industries, such as energy or materials science. Imagine a future where we replace the steel in our skyscrapers with synthetic spider silk—that is the sort of transformation that might justify comparisons to the industrial revolution. AI might open the door to this sort of future, but this is not what most people who make predictions about AI’s economic potential like to talk about.  

The Chinese plan might work. It might flop. Either way it will take some time. This is perhaps the most important conclusion I did not include, for reasons of space and focus, in the Foreign Policy essay.

One of the great problems in US-China relations is the matter of the timelines. What is the timeline for potential military conflict? Will the Chinese be ready to push the button, as some suggest, by 2027? Or does the United States have a longer timeline to prepare to deter potential conflict? The matter of the timelines has immense importance: to a great extent your answer to whether the Navy can afford to cut ships now to purchase better ones later, or whether the United States can afford to focus on the defense of Ukraine, turns on your assessment of Chinese timelines.

One of the sources that we discuss extensively in our Foreign Policy piece is a CST translation of a chapter from National Security and the Rise and Fall of Great Powers. This book, written by MSS analysts at CICIR, attempts to discern whether there are any universal laws behind the rise and fall of great powers. Their answer accords with the general thrust of what I have said above: great powers rise because they master new technologies. Countries that pioneer a scientific revolution end up the hegemonic powers of their time.

As my CST team writes in the introduction to that translation, there is a lot missing from this narrative. The chapter has

no general discussion of military strategy and military technology; the trade-offs between force structure, readiness, and weapons development; or even the necessary balance between guns and butter. The rise and fall of great powers is not presented as a story of summits, alliances, security compacts, and international organizations, nor one of conquest and colonies. There is no mention of taxation, national debt, monetary policy, fiscal policy, or economic troubles—like financial crises or hyperinflation—that are not directly related to total factor productivity. Nor is there, outside of a few oblique references in the section lauding Xi-style centralized leadership, any mention of corruption, social cohesion, ethnic tensions, inter-elite conflict, or civil war. This chapter is likewise completely silent on the problems posed by espionage, psychological warfare, sabotage, or ideological subversion.8

I find this remarkable. What are the conclusions of a team of analysts affiliated with China’s premier intelligence agency attempting to summarize the consensus views of their class on the sources of national power for a book with the words “national security” in its title? That national power is a function of total factor productivity! Their presentation privileges technology over both military strategy and diplomatic acumen.

CICIR does not speak for the Chinese system as a whole. It certainly is not difficult to find Chinese treatises on more traditional nat-sec concerns. However, if the rationale that the CICIR authors lay out for seizing the commanding heights of science and technology mirrors the concerns of the officials who made “modernize the industrial system” and “invigorate China through science” the leading tasks of the Chinese government, then my assessment of Party timelines shifts. Technological dominance will not be had by 2027. China will not know if it is leading the newest round of techno-scientific revolution for years. Their plan succeeds most readily if those are years of peace.

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Your support makes this blog possible. To get updates on new posts published at the Scholar’s Stage, you can join the Scholar’s Stage Substack mailing list, follow my twitter feed, or support my writing through Patreon. If you found this post worth reading, you might find some of my other essays on science, technology, and Chinese life worth reading. In addition to the pieces written linked to above, check out “American Nightmares: Wang Huning and Alexis de Tocqueville’s Dark Visions of the Future,” “Wang Huning and the Eternal Return to 1975,” “Watch Xi Jinping Slowly Strangle the Dengist Paradigm,” and “Mr. Science, Meet Mr. Stability,” “Xi Jinping’s War on Spontaneous Order.”

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