After ten days in China, a few observations.
The wealth gap is doing a lot of work. The delta between rich and poor is enormous, which lets China employ a vast number of cheap service workers and laborers. The result is a very high level of comfort in the cities, excellent conditions for doing business, and highly attractive tourism.
More importantly, it enables unbelievably fast infrastructure buildout. Crews working construction sites 24/7. Being in a 350kmh train, arriving in huge, perfect, super new train stations in multi-million people cities I had never even heard of, and then driving past huge empty apartment block areas felt slightly unreal.
There are estimates of tens of millions of empty apartments, enough to house more people than live in Germany. It nearly triggered a financial crisis, and things still aren't fully stable, but it shows how far the buildout has run.
Decades of European and American outsourcing seem to have produced ever better-developed networks of factories and supply chains. On this foundation, a lot of China's wealth and power is built.
Recipe for success. No worker unions and fast replacement. Strategic development zones: build the basic infrastructure, then sell off to developers, with regulation that enables and enforces deadlines. Basic infrastructure first: workers, energy, market access. Competition between districts and companies. Science documentaries playing on the trains.
The land-finance point seems important too. Local governments fund a huge part of development by turning land into revenue. In 2019, land sales and land-backed financing were apparently 38% of local government revenue. So some of the empty apartment blocks are not just random overbuilding, but part of the fiscal machine itself: build infrastructure, sell land, attract developers, raise GDP, repeat.
Also: China lifted close to 800 million people out of extreme poverty. Not 1.4 billion, but still probably the largest poverty reduction story in history.
What surprised me. Low English skills. A high appreciation for European manufacturing and luxury brands. An aging population. How is that the outcome of deliberate social engineering? The Shenzhen electronics market was crazy: components, repairs, drones, sensors, screens, tiny parts, people who know exactly where to get anything. Hardware there does not feel like an abstract industry. It feels like a physical ecosystem.
BYD's Yangwang brand has an EV that can jump, and a track-focused U9 version that reached basically 500kmh. Xiaomi built an EV as a consumer-electronics company while Apple gave up on the car. Unitree is maybe not "better" than Boston Dynamics in every technical dimension, but it seems much cheaper, faster, and much more plugged into the Chinese hardware ecosystem. Shenzhen has an entrepreneurial buzz comparable to SF, but with better access to robotics components and electronics manufacturing than anywhere else.
Challenges. Youth unemployment. Surveillance that limits perceived freedom and pushes rebellion underground. I don't think that's a sustainable state of existence, though this may be my libertarian bias. Power conflicts between the party and companies (Jack Ma, real-estate executives). Access to global capital markets, where Taiwan is the perfect point of leverage.
And demographics: China is getting old very quickly. The 2025 population sample has 22.86% of people above 60. That seems like a huge problem for the cheap-labor advantage, consumption, pensions, and the whole development model.
So what? The thing I keep returning to is that China's edge is less about any single technology than about a system tuned for execution speed: cheap labor, infrastructure, manufacturing depth, local government incentives, and competition all pointed at shipping physical things fast.
The open question is how durable that is once the cheap-labor delta narrows, the population ages, the property machine slows down, and the political-economic frictions compound.
