In 2023 China exported about 4.9 million cars and passed Japan as the biggest car exporter in the world. Japan had held that spot since 2017. A year later Chinese shipyards built more than half of the world's commercial tonnage. The United States built around 0.1 percent.
That same year most of what I read about China was about its decline. Slowing growth, a property crash, young people leaving. All real. Dan Wang wrote about all of it in his 2023 letter, and he has spent more time on the ground there than almost anyone I read.
But his conclusion was not "China is fading." It was closer to: China has serious problems and is still an industrial power, and America is telling itself comfortable stories so it does not have to deal with the second part.
Two kinds of country
In his 2025 book Breakneck, Wang puts it more sharply. China is run by engineers. America is run by lawyers.
An engineering state builds. Bridges, dams, rail lines, whole cities, sometimes too many and sometimes at a terrible human cost. A lawyerly society protects. It slows things down, gives everyone a veto, and is very good at stopping bad projects and very bad at finishing good ones.
Neither is a model. But if I have to pick which failure I would rather fix, I pick the lawyerly one. You can loosen a process. It is much harder to rebuild a skill your country forgot.
Germany is drifting toward the lawyer side faster than I would like. I see it in small rooms more than in big headlines. A company that could save real time with a tool it already understands, and the first question is not what it could build but what could go wrong. Then the next question, and the one after that. Enterprise decisions that should take two weeks take eight months. No single person is blocking anything. The veto is spread so thin that nobody feels they are using it.
What capacity actually is
I used to think of capacity as a stock. Factories, machines, square metres. Something a country has.
I now think it is closer to a habit. Something a country does.
The knowledge of how a line actually runs, the tolerances that matter, the fix for the thing that breaks every Thursday, none of that is in the manual. It lives in people who do it every day. When a factory closes, the knowledge does not move to the cloud. It retires.
And a habit compounds the way habits do. The country that builds a hundred of something learns faster than the one that builds three. China has had more repetitions than anyone in batteries, solar, cars and ships for about fifteen years now, and you can see it in the prices. Once the suppliers, the machine shops and the trained people sit within a few hours of each other, the next product is easier to start there than anywhere else.
Which means you cannot buy capacity back quickly. You can buy the machines. You cannot buy the repetitions.
Where narrative comes in
Narrative is what a society says about itself between the things it does. It is not useless. It raises money, it recruits people, it gives a direction. This post is narrative.
The danger is when the story starts to stand in for the habit. "Our engineering is the best" was true because people kept engineering. Say it long enough without the practice behind it and it turns into a memory that sounds like a fact.
I do not think this is a China story, really. It is a question every country, company and person can ask about themselves. What do we still do every day, and what do we only still say?
I am not sure what the honest answer is for Europe. I think it is less than we believe. I would like to be wrong about that.
Sources: Dan Wang, 2023 letter; Dan Wang, Breakneck (2025). Car exports: CAAM and JAMA figures via AP. Shipbuilding: CSIS.