This analysis explores contrasting approaches to governance, economic policy, and technological strategy in the United States and China. Drawing on historical, cultural, and institutional contexts, it examines how the U.S.’s minimalist government philosophy prioritizes individual liberty and market-driven innovation, while China’s centralized model emphasizes collective welfare, long-term planning, and strategic coordination. By comparing political structures, industrial policies, and public-private collaborations, this discussion highlights the implications of these divergent systems for global economic competitiveness and technological leadership.
Founding Minimalism: Liberty, Enterprise, and Government Design
In Powerful, Different, Equal (2019), Peter B. Walker argues that the United States deliberately adopted a minimalist approach to government, reflecting the Founding Fathers’ historical experiences and core values. This design was not accidental but a purposeful choice aimed at safeguarding individual liberty and promoting economic opportunity. Early settlers had left Europe to escape oppressive monarchies, rigid class structures, and limited personal freedoms, seeking a society in which both human rights and economic potential could flourish.
Central to this minimalist philosophy was a profound commitment to individual freedom and a robust capitalist economy. The Founding Fathers envisioned a government that would protect fundamental rights—life, liberty, and the pursuit of happiness—while enabling private enterprise to drive economic growth. Rather than managing or directing economic activity, the government’s role was to act as an enabler, providing essential services such as defense, the rule of law, and basic infrastructure, leaving innovation, initiative, and ambition in the hands of individuals and businesses.
Distrust of centralized authority further shaped this governmental model. Having lived under colonial rule, the founders intentionally limited federal power through mechanisms such as the separation of powers, federalism, checks and balances, and short electoral terms. These constraints were designed to prevent the concentration of power and to preserve personal autonomy, reflecting both the lessons of history and the frontier-driven, individualistic culture of the early United States.
While critics today often attribute governmental dysfunction to this minimalist design, Walker emphasizes that it was a deliberate trade-off. By prioritizing personal freedom and economic opportunity over centralized control, the founders created a system that embodied their values and aspirations, establishing a uniquely American balance between liberty, enterprise, and governance.
China’s Centralized Governance: History, Culture, and Stability
Compared to the United States’ minimalist government philosophy, China has historically favored a centralized approach, shaped by deep cultural, philosophical, and historical foundations. Central to this orientation is Confucianism, which for over 2,500 years has promoted the idea that senior figures, including the state, bear a moral duty to guide and protect the people—much like a parent. This paternalistic perspective legitimizes state intervention in both economic and social affairs to promote collective welfare and maintain harmony.
China’s historical experience has further reinforced the need for strong central authority. The nation has endured repeated cycles of fragmentation, foreign invasions, and internal conflict, culminating in the disruptive “Century of Humiliation” between 1839 and 1949. These experiences have instilled a belief that societal stability and unity require a powerful, centralized government. In addition, Chinese culture tends to prioritize the collective over the individual. Unlike the United States, which emphasizes personal freedom and individual rights, Chinese society values family, community, and national well-being, and citizens generally accept centralized governance in exchange for prosperity and security.
Performance-based legitimacy also defines the Chinese model. The government’s authority is reinforced not by electoral processes but by its capacity to deliver tangible results—lifting hundreds of millions out of poverty, sustaining high economic growth, and preserving social order. Centralized control facilitates long-term planning, coordinated policy implementation, and careful economic management. Chinese leaders tend to avoid the volatility of unfettered markets if it threatens social stability, favoring gradual liberalization and state guidance rather than a purely competitive, “survival of the fittest” economic model.
In sum, China’s preference for centralization reflects a civilizational approach rooted in millennia of cultural, philosophical, and historical experience. Strong, responsive, and paternalistic governance is seen not as a temporary political choice but as the most effective path to collective well-being, social harmony, and national stability.
Historical Perspective on Democracy in China
Contrary to the common Western assumption that China is unfamiliar with democratic practices, evidence suggests that ancient Chinese city-states experimented with forms of democratic governance as early as the first millennium B.C.E. However, these early experiments were eventually overtaken by a political evolution that favored centralized, territorial states and ultimately imperial rule, reflecting a more complex social and political order. In this context, the small-scale, autonomous democracy of the city-state became a historical precursor rather than a lasting model, as China’s development moved beyond the localized autonomy typical of primitive democratic systems.
Critics of Western political concepts argue that ideas such as “public trust” and “subsidiarity,” which emphasize citizen participation, local autonomy, and decentralized governance, are rooted in small-scale political systems no longer applicable to China. In Chinese political philosophy, these concepts are tied to the pre-Qin city-state era and are considered ill-suited to the governance needs of a large, unified civilization-state. From this perspective, Western ideals of democracy may be seen as outdated or inappropriate when applied to China’s historical scale and sociopolitical complexity.
China’s political evolution reflects a trajectory from these early democratic forms toward a governance system based on technocratic expertise rather than popular elections. The contemporary model emphasizes leadership by a knowledgeable elite, who are entrusted to understand and act in the public interest, often prioritizing long-term stability, social harmony, and effective administration over direct popular participation. This approach draws on Confucian ideals of wise and benevolent rule, suggesting that governance is most effective when guided by skill, knowledge, and moral responsibility rather than by majority vote.
Ultimately, China’s political history illustrates a transition from localized democratic practices to centralized, expert-led governance, highlighting a distinctive path in which social order and collective well-being are prioritized over conventional notions of individual political freedom. The historical and philosophical context suggests that China’s approach to governance reflects both its scale and its cultural values, offering an alternative understanding of what constitutes effective political organization.
The U.S. Political System’s Fragmentation as a Weakness
China’s approach to science, technology, and economic policy is characterized by a high degree of coordination and strategic focus. Unlike the United States, where policymaking is often fragmented due to political divisions and competing interests, China operates with a clear national goal: to surpass the U.S. in critical technological and industrial sectors. Policymakers systematically analyze global trends in science and technology, then align government resources, state-owned enterprises, private firms, and research institutions toward these objectives. This unified direction ensures efficient allocation of capital and talent, enabling rapid progress in emerging technologies such as artificial intelligence, quantum computing, semiconductors, and biotechnology.
In contrast, the U.S. political system’s fragmentation often hinders long-term strategic planning in science and technology. Intense domestic debates over taxes, regulation, antitrust enforcement, and trade policy frequently result in inconsistent approaches or policy paralysis. Innovation policy in the U.S. has historically been less coherent and strategic compared to countries like China, Germany, or South Korea. This stems in part from a prevailing belief in market self-regulation and a sense of complacency rooted in past technological dominance. While the U.S. possesses substantial innovation assets—world-class universities, leading firms, and research institutions—these are not always coordinated under a unified national strategy, limiting their potential impact on industrial competitiveness.
Science and technology policy in the U.S. also lacks institutional weight in government decision-making. Agencies such as the Office of Science and Technology Policy (OSTP), NSF, DOE, NIST, and DARPA operate in a decentralized manner, without the budgetary authority or political centrality of Cabinet-level departments like Treasury, Defense, or the National Security Council. There is no equivalent to China’s Ministry of Industry and Information Technology (MIIT) or National Development and Reform Commission (NDRC), and most policymakers are not trained in the logic of industrial and technological competitiveness. By contrast, China treats technology policy as a central pillar of national planning, with the Communist Party’s Politburo directly overseeing initiatives like Made in China 2025 initiative, the Strategic Emerging Industries Plan, and domestic-international dual circulation strategy. This top-down approach provides strategic coherence and ensures that science and technology efforts are tightly integrated with broader economic and geopolitical objectives.
The Power of Public-Private Partnerships
History demonstrates that close collaboration between government and industry has been essential to U.S. leadership in strategic technologies. During World War II, the government partnered with private industry to rapidly develop critical innovations such as radar, jet engines, synthetic materials, and nuclear weapons. This partnership allowed for the mobilization of vast resources, mitigation of risk, and the provision of a clear strategic vision, enabling industries to innovate at an unprecedented speed and scale.
The Cold War further underscored the value of such collaboration. Government investment through agencies like the Department of Defense and DARPA fueled breakthroughs in aerospace, computing, and nuclear technology, securing American dominance in critical fields. By coordinating resources and sharing risks with private industry, the U.S. was able to maintain a technological edge that laissez-faire market forces alone could not achieve.
Today, leveraging public-private partnerships remains essential for sustaining a cutting-edge technology ecosystem. Safeguarding research funding, cultivating talent pipelines, and aligning incentives ensures that government and industry work in concert toward shared national objectives rather than at cross-purposes. Ideological battles that reduce complex technological and economic issues to political soundbites risk undermining this coordination, constraining innovation, and weakening America’s global competitiveness. Strategic, coordinated investment—rooted in historical precedent—remains the most effective path to maintaining leadership in critical technologies.
The “Vc Fund” Analogy And China’S Industrial Policy
China’s industrial policy can be understood as a national-scale venture capital (VC) fund. Much like a VC firm that invests in a diversified portfolio of startups, China allocates resources across multiple industries and firms, recognizing that not every investment will succeed. Yet the few that do can transform entire sectors and create new technological frontiers. Unlike private investors constrained by short-term profitability pressures, the Chinese state can sustain loss-making ventures for decades, pursuing long-term strategic goals rather than immediate financial returns. By coordinating policies across production, research and development, and consumption, China systematically nurtures domestic capabilities, builds integrated supply chains, fosters innovation ecosystems, promotes leading firms, and reduces dependence on foreign technology. This approach echoes the old advertising maxim: “Half of it works, but you don’t know which half.” While U.S. and European ventures like Solyndra, A123, and Northvolt faltered, Chinese firms such as LONGi, CATL, and BYD have emerged as global leaders.
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The electric vehicle (EV) battery industry illustrates this strategy. Although the foundational science of modern lithium-ion batteries originated in the U.S., U.K., and Japan during the 1980s and 1990s—with key contributions from Nobel laureates John Goodenough, Stanley Whittingham, and Akira Yoshino—China recognized early the commercial and geopolitical potential of the technology. The state invested heavily in materials processing, battery cell manufacturing, and integration of battery packs into electric vehicles. Chinese firms and researchers built upon the scientific foundation, scaling production aggressively with government support. Today, China dominates the field: 65.5 percent of widely cited technical papers on battery technology come from Chinese researchers, compared with 12 percent from the United States. Both CATL and BYD, the world’s two largest EV battery makers, are Chinese, highlighting the country’s industrial and technological leadership. In contrast, U.S. battery research remains limited, with relatively few professors and graduate programs dedicated to the field, constraining the next generation of domestic experts.
China’s strategic advantage is reinforced by its national infrastructure. A unified electric grid enables coordinated rollout of EV charging stations nationwide, reducing consumer anxiety about range and convenience and accelerating adoption. More than half of new car sales in China are now electric, a world-leading rate, whereas U.S. adoption remains limited due to patchy charging networks. This infrastructure not only supports industrial growth but also aligns with national carbon-reduction goals, demonstrating how industrial policy, technological innovation, and environmental strategy can be mutually reinforcing. Together, these elements illustrate how China’s “mega-VC” approach—tolerant of uncertainty, experimental at scale, and patient in pursuing long-term returns—has reshaped the global EV battery industry.
China’s Strategic Use of Collective Bargaining in Rail and Resources
One of the most striking examples of China exercising collective bargaining power was in its high-speed rail negotiations in the early 2000s. At the time, China’s railways faced a severe capacity bottleneck, and domestic efforts like the “China Star” high-speed train revealed significant technical flaws. Meanwhile, foreign giants such as Germany’s ICE, Japan’s Shinkansen, and France’s Alstom maintained monopolies over critical technologies. Facing prohibitive costs—Germany demanded 350 million RMB per train plus 390 million euros for technology transfer—China refused to remain a “technology beggar.” Instead, it devised a strategic “market-for-technology” approach, leveraging its massive orders and long-term railway plans to extract advanced know-how.
China’s strategy involved careful control of the bidding environment. Only Siemens, Kawasaki Heavy Industries, and Alstom were permitted to participate, and each had to partner with designated state-owned enterprises while transferring full technology rights. By limiting potential partners to just two Chinese companies, CSR and CNR (later merged into CRRC), China created scarcity and internal competition among foreign suppliers. This approach ensured that foreign firms would face pressure to compromise, despite being aware of the trap. Negotiations at the table became a battlefield of psychological tactics: ultimatums, public announcements of alternative deals, and deliberate demonstrations of resolve forced foreign companies to lower costs and transfer technology under favorable terms.
The clever structuring of contracts further reinforced China’s leverage. Clauses such as “Technology Transfer Implementation Evaluation” mandated that payments would only be made once Chinese companies fully mastered the technology—a “learn first, pay later” model. This forced Siemens, for example, to reduce its technology fee from €390 million to €80 million. Over time, CRRC synthesized German, Japanese, and French technologies into fully independent CRH high-speed trains. The results were dramatic: construction costs dropped by 40%, patents skyrocketed from fewer than 1,000 in 2008 to over 21,000 by 2023, and China transformed from a technology apprentice into a global leader in high-speed rail in just 15 years.
Another illustration of China’s growing collective bargaining power is evident in the global resource sector. The formation of the China Mineral Resources Group aimed to consolidate buyer power, compelling multinational mining giants such as BHP, Rio Tinto, and Vale to accept payments in RMB. By leveraging its massive purchasing power to promote RMB settlement in commodity trade, China is gradually challenging the dominance of the U.S. dollar and advancing the internationalization of its currency, demonstrating how strategic collective leverage can reshape global economic structures.
Conclusion: A Call for Course Correction
The United States must move beyond political posturing and adopt a pragmatic, long-term strategy that leverages private-public partnerships—a hybrid system blending capitalism and socialism—as a cornerstone for economic prosperity and global leadership. This requires policies that balance oversight with support for innovation, encourage cross-sector collaboration, and invest robustly in research, development, and workforce development. Fragmentation and factionalism in U.S. politics, however, hinder the implementation of coherent industrial strategies. In contrast, China’s centralized political control enables a unified techno-economic approach closely aligned with national security and global competition objectives. This structural difference underscores the fundamental challenges the U.S. faces in competing economically and technologically on the global stage and highlights the need for coordinated, forward-looking strategies that integrate innovation, investment, and oversight.