How China Went From Economic Superstar to Faltering Giant
About this episode
Dan Wang, a China analyst who writes annual letters from China, explains how the narrative on the country flipped: from economic superstar in 2020–21 to faltering giant by 2022. In 2020, China's manufacturing prowess and COVID response inspired envy; by 2022, three shocks changed the story — zero-COVID lockdowns, Xi Jinping's centralization of power and tech crackdowns, and a bursting real estate bubble. Wang argues China's problem is sometimes too much state capacity: a government strong enough to crush entire sectors (online education, Ant Financial) or lock down cities can overshoot catastrophically, terrifying entrepreneurs, foreign businesses, and young people. Klein and Wang debate industrial policy through solar panels — a Chinese success built on state subsidies — and the harder question of semiconductors, where US export controls aim to freeze China's progress. Wang worries about decoupling: the US approach may accelerate China's self-reliance while sacrificing the mutual benefits of interdependence.