The Platform State: Angela Zhang and Alex Yang on How China Really Governs Its Economy

**Kaiser Kuo** (0:09)
Welcome to this special edition of the Sinica Podcast, a weekly discussion of current affairs in China. In this program, we look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what's happening in China's politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China. I'm Kaiser Guo coming to you this week, and that's what makes this a special edition from Dalian, from the Davos On Air booth at the World Economic Forum's Annual Meeting of the New Champions 2026 For over 20 years now, I have had the privilege of working as an official writer for the World Economic Forum, and this year they've asked some podcasters to team up with them, to bring shows to you under both the Davos On Air banner and under the banner of our own podcast. I am delighted to be able to do this with Sinica. Sinica, of course, is supported this year by the Center for East Asian Studies at the University of Wisconsin-Madison, a National Resource Center for the Study of East Asia.
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When this year's two sessions wrapped up in Beijing, and the 15th five-year plan was formalized, to the surprise of basically no one, the Chinese leadership had placed at the center of China's economic future, the familiar new quality productive forces. Things like, of course, AI, quantum computing, biotech, clean energy, drones, and other components of the so-called low-altitude economy, 6G telephony. The easy read was one that we so often hear from the punditry in the West, especially this is a command economy, picking champions and winners and directing investment and other resources from the top down. But that read keeps colliding with an awkward fact.
In most of the sectors where China now leads EVs, batteries, solar, increasingly in AI, the dominant firms are actually private. Margins, despite all the help from the government, are razor thin. Competition is so brutal that the government often has to step in to cool things down. So what exactly is the state doing if it's not central planning as we once understood it? My guests today have a really striking answer. They tell us we should think of the Chinese state less as a planner and more as a platform company, like Nvidia or Apple, that builds the architecture, that sets the standards, and governs the ecosystem within, which fiercely competitive firms then allow to fight it out.
Value doesn't show up as firm profit. It accrues instead at the system level in lower costs, integrated supply chains, and faster learning. They call it the platform state, and they break its playbook into a handful of deliberate moves, growing markets, governing them, and guarding them. So growing, governing, and guarding. The payoff, they argue, could decide who wins, not the race to build the smartest model necessarily, but the race to put AI to work across an entire economy. I find it a really compelling mental model that I suspect is going to catch on. You'll remember you heard about it here first. It's sure to generate a lot of debates and some pushback too, but it's a terrific idea. I am joined today in Dalian by the two people behind this argument. Angela Zhang is Professor of Law at the University of Southern California, previously seven years at University of Hong Kong, and she's the author of High Wire, How China Regulates Big Tech and Governs Its Economy and Chinese Antitrust Exceptionalism. Her recent work includes a paper arguing that law is a sixth layer of China's AI stack. I've been following her work for years, but only just met her actually earlier this year in Hong Kong, where she until recently lived at an AI governance conference there that we both attended. Angela, great to see you here in Dalian, and a warm welcome at last to Sinica.

**Angela Huyue Zhang** (4:43)
I'm so happy and delighted to be here. I'm a big fan of your show, Kaiser.

**Kaiser Kuo** (4:47)
Thank you so much. That's very kind of you. Also here in Dalian with us is Alex Yang, Professor of Management Science and Operations at London Business School, where he studies platforms, not surprisingly, supply chains and operations strategy. What I find irresistible about this collaboration is that they arrive at the same thesis from opposite ends of the economy or the Academy, really. One from law and regulation, and the other from operations and platform economics. They're also, I should mention, not meeting here for the first time, their husband and wife, a household that apparently argues about Chinese industrial policy over dinner.