Invest Like the Best with Patrick O'Shaughnessy
Dan Wang - The US vs China In The 21st Century - [Invest Like the Best, EP.444]
16 Oct 2025
My guest today is Dan Wang. Dan is a technology analyst and author who spent six years living in China studying its manufacturing ecosystem and tech development, best known for his new book Breakneck. Dan offers the most nuanced framework I've encountered for understanding US-China competition. We explore a critical asymmetry: it's far harder for the US to rebuild manufacturing capacity than for China to improve scientific research, with profound implications for AI, national security, and investment returns. For investors, Dan explains the "ByteDance problem"—why exceptional Chinese companies trade at massive discounts due to Communist Party unpredictability and geopolitical risks. He argues China is a "high agency" society that executes relentlessly while America deliberates endlessly, yet also reveals the societal cost. We discuss innovation, state capacity, and investing across both superpowers. Please enjoy my conversation with Dan Wang. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Ramp. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to Ramp.com/invest to sign up for free and get a $250 welcome bonus. – This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Head to ridgelineapps.com to learn more about the platform. – This episode is brought to you by AlphaSense. AlphaSense has completely transformed the research process with cutting-edge AI technology and a vast collection of top-tier, reliable business content. Invest Like the Best listeners can get a free trial now at Alpha-Sense.com/Invest and experience firsthand how AlphaSense and Tegus help you make smarter decisions faster. ----- Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Welcome to Invest Like the Best (00:05:55) China's Engineering State and Social Engineering (00:12:15) US-China Competition: Innovation and Manufacturing (00:19:41) The Future of US and China: Technological and Economic Perspectives (00:25:22) Cultural and Work Ethic Comparisons (00:39:09) Investing in China: Opportunities and Risks (00:44:43) Future Equilibrium States Between US and China (00:48:32) China's High Agency and Infrastructure (00:49:58) Lawyerly Tendencies in US Society (00:53:41) Comparing US and Chinese Societal Structures (00:57:59) China's Historical Lessons and Future Prospects (01:10:39) AI and Technological Competition (01:15:30) Vertical Integration in Chinese Companies (01:26:39) The Kindest Thing
Chapter 1: What is the main topic discussed in this episode?
The best operators have a relentless focus on leverage, finding ways to multiply their impact rather than just working harder. But here's what I see happening in finance teams everywhere. Brilliant people getting buried in expense management busywork. If you think about it, you become a finance leader because you love strategic work.
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Chapter 2: What insights does Dan Wang provide about China's engineering state?
But instead, you're chasing receipts and categorizing transactions. It's the opposite of leverage. This is exactly why I'm so bullish on what the team at Ramp has built. Kareem and Eric understood that every minute spent on manual expense management is a minute stolen from high leverage work. So they automated all of it.
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Chapter 3: How does the U.S.-China competition impact innovation and manufacturing?
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Chapter 4: What cultural differences exist between American and Chinese work ethics?
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Chapter 5: What are the risks and opportunities for investing in China?
Instantly compare insights across experts and analyze quarter over quarter trends in sentiment and key performance indicators. For investors trying to stay ahead of the fast moving markets, it's already table stakes. Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best.
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My guest today is Dan Wong.
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Chapter 6: What does Dan Wang mean by China's 'high agency' society?
Dan is a technology analyst and author who spent six years living in China studying its manufacturing ecosystem and tech development, best known for his new book, Breakneck. Dan offers the most nuanced framework I've encountered for understanding U.S.-China competition. We explore a critical asymmetry. It's far harder for the U.S.
to rebuild manufacturing capacity than for China to improve scientific research, with profound implications for AI, national security, and investment returns. For investors, Dan explains the ByteDance problem, why exceptional Chinese companies trade at massive discounts due to Communist Party unpredictability and geopolitical risks.
He argues China is a high-agency society that executes relentlessly while America deliberates endlessly. We discuss innovation, state capacity, and investing across both superpowers. Please enjoy my great conversation with Dan Wong.
What was the title of your book before Breakneck? We had a series of titles, and the one that I thought that would make the most sense was Move Fast and Break People, China's Quest to Engineer the Future. Publisher did not like that one? Too much like Facebook, they thought. They were right. And I think breakneck is a nice, snappy title. I love that it mostly has a positive connotation.
We made the vaccines at breakneck speed. We built the bridges at breakneck speed. Yeah, look at that coil of violence inside the title. I think this one worked. What about breaking people is relevant, though?
I think the part of China that I object to the most is that, for the most part, physical dynamism in building a lot of new things, bridges, subways, highways, new homes, hyperscalers, whatever else.
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Chapter 7: How does AI influence technological competition between the U.S. and China?
Some problems there, but mostly pretty positive. The fundamental problem with China is that they're not just physical engineers. They're also social engineers. And they treat society as if it were just another building material. And I object strongly to their practices around ethno-religious minorities in Tibet as well as Xinjiang.
I object strongly to the one-child policy, and I thought that the zero-COVID policy was also a disaster. I think the issue is that when you feel the need to run roughshod over people, whether that's to build a giant dam like the Three Gorges Dam, which displaced around a million people, Or if it is to build a really great train track.
Or if it is to stop overpopulation as they imagined it throughout the 1980s. They barely hesitate to do what are some pretty brutal measures.
Can you teach us the origins of that aspect of their society?
So China's a country I call the engineering state because they want to engineer the physical environment, the economy, the people as well. And I want to be just pretty playful with this framework, that they're a country of engineers.
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Chapter 8: What are the implications of the ByteDance problem for investors?
In part, the roots are from the fact that in recent years, if you take a look at the most senior leadership, the entirety of the standing committee of the Politburo had degrees in engineering. And I also draw this back to slightly older roots.
If we take a look at the Chinese emperors way back in the past, let's say 1500 years, two of China's biggest projects include the Great Wall, as well as the Grand Canal. So a fortification system in the first case, and then a big water management system in the second case. That is a country that has built a lot of big projects in the past.
A lot of the emperors barely hesitated to completely reorder a peasant's relationship to our land. And throughout Chinese history, they've really moved a lot of people around to settle the frontiers here or defeat the nomadic tribes over there. And so that's kind of my playful framework for saying that China is really ruled by this engineering mindset that really wants to build.
They're often very liberal-minded about governing society as if people were just a series of chess pieces to be moved around. And that extends from the imperial times all the way to the modern day.
What do you think the greatest aspect of the U.S. system is that you have the hardest time imagining getting truly adopted in China? Pluralism.
I spent six years living in China. I moved to China at the start of 2017 to be a technology analyst at an economic investment research firm called GovCal Dragonomics. At the time that I moved there, at the start of 2017, Trump had just taken office. I remember watching these... strange confirmation hearings for his cabinet officials right when I left.
And I lived through this period when Trump launched a trade war that quickly morphed into a tech war. And I wrote a lot of research notes about what exactly was happening to companies like Huawei and other sanctioned entities. And throughout this time, I was open to the idea.
I didn't necessarily believe it, but I was open to the idea that we're at the start of something like an Asian century in which China and India were going to become much bigger powers. By the time that I'd left in 2023, when I returned to the U.S. to be a fellow not too far away from here at the Yale Law School's Paul Tai China Center in Connecticut,
I thought that the experiences that I lived through, some incredible technological successes, along with worsening repression, along with a worsening geopolitical environment for China, along with the centerpiece of zero COVID, all three years of which I was there,
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