People who do take long-term career risks often do so only after fulfilling their primary need for short-term security. What are the biggest risks for Chinas economy in the coming years? By comparison, progress on these issues is for Western economies extremely slow. Accept that economic development in China will not inevitably lead to democracy; acknowledge that the Chinese regard their government as both legitimate and effective; and recognize that while Chinese consumers have short-term horizons, their rulers are focused on the countrys long-term security. Yet they found common ground to work in mutually beneficial ways. The Biden administration is expected to restore that policy and to work within the rules of international institutions, which I expect will defuse tensions. A major turning point was the financial crisis of 2008, which in Chinese eyes revealed the hollowness of the Washington consensus that democratization and economic success were linked. They dont know how socialist it is, with its Social Security system and its policies to tax the rich by collecting capital gains taxes. Nations without better access to such facilities depend on their agriculture and natural resources to enhance economic growth. (If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. With its democratic society, the U.S. is unable to prevent financial capitalism from swelling, or to take dramatic action against vested interests to formulate a model under which finance and industry mutually optimize and complement one another. Under the pressure of aggregated economic inequality brought by globalization, and the army of unemployed people already displaced by new technologies, the U.S. government faces severe structural constraints under the present model of state-market and state-society interactions. Chinas leaders argue that its essentially Leninist rule book makes Chinese politics far less arbitrary or nepotistic than those of many other, notably Western, countries (even though the system has its share of back-scratching and opaque decision-making). The U.S., on the other hand, is infamous for its self-deluded belief in so-called "American Exceptionalism," to which end it obsessively seeks to force all others to change their ways in order to replicate its own radically. Born in 1955, she experienced as a child the terrible Great Leap Forward famine in which 20 million Chinese starved to death. Chinas is the only major economy that requires no special approval for foreign direct investments, although some sectors, such as Lived Change media and the internet, are on a negative list that restricts them. PAG invested about $100 million in a digital music business in China a few years back which subsequently merged with a similar business and changed its name to Tencent Music Entertainment. Then, in the 1990s, she took advantage of the new economic freedoms, becoming a 30-something entrepreneur in one of the new Special Economic Zones. Chinas rulers see foreign engagement as a source less of opportunity than of threat, uncertainty, and even humiliation. Accelerate your career with Harvard ManageMentor. He wisely noted that "Democracy is not Coca-Cola, which, with the syrup produced by the United States, tastes the same across the world. In Charting China's Future (pp. It is important to understand the background of the political systems in both China and the United States in order to compare both, especially the theoretical system of governance they follow, whether a pluralist or oligarchical system. The basic structures of both legal system are extremely similar. Its stated purpose was to reduce Americas trade deficit. Trumps trade war was an abject failure. Our own experiences on the ground in China confirm this. However, the beliefs and positions of political parties change over time, so . The Chinese government is, however, much easier to decipher since it is a communist one-party state that is also led by elites even though it goes against the very grain of communism. Responding, however, will only escalate a lose-lose war, and the entire international community will suffer as a result. The harsh reality of the pandemic has given rise to political competition with characteristics not seen before, sounding the alarm for future bilateral relations. Is it that Chinas development doesnt conform with the values of freedom and democracy, or that Chinas growing strength is a threat to U.S. hegemony? First, China and the United States are at different stages of development. The United States takes in with high respect the principles of democracy and individualism. That has political implications, of coursefor example, that the public ownership of assets is necessary to ensure an equal distribution of wealthbut the economic outcomes are the focus. Hence the old joke that Chinas definition of a win-win scenario is one in which China wins twice. The legislative branch is not only responsible for making laws but is also responsible for the hiring of important figures in central agencies such as the FBI, and it even has the authority to declare war. By 2020 she was intent on seeing her seven-year-old grandson and infant granddaughter (a second child had only recently become legal) do well. All these testify to the strength of the Chinese economy. However, as the world is constantly moving towards a market-based system, the country had to switch to this system that allowed it to increase economic and still maintain its communist status. We are using Google Analytics to enhance your experience. Thats not likely, precisely because in Chinas particular brand of authoritarianism, control is key. The geographic location of a country, its educational, political and legal systems plays a key role in the economic well-being of a country. There are two political theories that are needed in the discussion, the elite and the pluralist theory. The U.S. continues to vilify China, and China does itself no favors with its poor policy on human rights. Chinas recent history means that Chinese people and the state approach decisions very differently from Westernersin both the time frames they use and the risks they worry about most. China's political system encourages parties, organizations, and representatives from various circles of Chinese society to discuss basic policy as well as important political, economic, cultural and social issues. But because this is also a Leninist system, those issues are of critical importance to Chinese leaders, who wont change their minds about them, however effective or helpful their foreign partners are economically. From the U.S. perspective, upholding the banner of freedom and democracy no longer matters. China is among the most open markets in the world: It is the largest trading nation and also the largest recipient of foreign direct investment, surpassing the United States in 2020. . The task, in both China and the West, is to reduce the gap between the ideal of basic human rights and the reality. While Bidens policy proposals reflect fading U.S. hegemonistic attitudes, Trump is showing Americans the status quo of U.S. power. But its also conspicuously different: The concept of U.S. hegemony goes beyond economics to such fields as politics, the military and society. Moving from Beijing to Shanghai has made my Mandarin worse. U.S. self-identification has been shaken under these circumstances. However, both states have a very different political landscape, which is what will be discussed in the paper today. -- China's system of political parties is a system of multiparty cooperation and political consultation under the leadership of the Communist Party of China (CPC), not a Western-style multiparty system. The country itself remains so diverse that some minority groups even have their own autonomous administrative divisions which include regions, prefectures and counties. Beijing ICP prepared NO.16065310-3, China vs. America: Political diversity vs. political conformity. These are valid points and deserve to be expanded upon in order to enlighten others further. Eager for experience, she took a job as an investment analyst with a Shanghai-based foreign asset manager, but despite a long-term career plan mapped out by her employer, she left that company for a small short-term pay raise from a competitor. Unlike China, the U.S. spends more than 50% above its annual revenues leading to high deficits. In this system, the courts depend on the set legal codes by which the juries are only allowed to make their judgment basing on these codes. References Borner, S., Brunetti, A., & Weder, B. Why do leaders in the West persist in getting China so wrong? The U.S. also repeatedly provoked China using freedom and democracy as a pretext. Even though China has a one-party state, it, however, has eight independent political parties that are controlled by the CCP (CIA, 2020). That means not that these people are unconcerned with long-term outcomes but, rather, that their risk aversion increases significantly as the time frame lengthens. Looking into the future, the path for China-U.S. cooperation will become more tortuous owing to the nationalist ideological struggle triggered by the coronavirus. The nationalist identification model that serves the U.S. goal of self-identification. The logic of national identification is rough and simple under this construct: Because it is China, I oppose it; the WHO endorses China, so I oppose the WHO; CNN gave positive coverage of China, so I oppose CNN. This package reveals much that may surprise them. Avoid editing or writing from scratch! Western systems are . But because human beings tend to believe that other humans make decisions as they do, this may be the most difficult assumption for Westerners to overcome. The technology war waged by the Trump administration forced China to develop critical technologies, such as semiconductor chips, for which it has relied on U.S. suppliers. When Nixon first visited China, in 1972, the differences between the two countries were vast, in political and economic systems and of course in ideology. I see no systemic risk either in Chinas banking system or in its economy. Sorry, but it's not possible to copy the text due to security reasons. The difference in efficiency between the central and local groups is significant. Decisionsby both individuals and the stateabout how to invest all serve one purpose: to provide security and stability in an unpredictable world. It often compares itself to brands with which Westerners are familiar. A Shanghai journalist is paid by her state-controlled magazine to fly around the world for stories on global lifestyle trends. Depending on the conditions surrounding a case, the law system allows special consideration to such as a case. Both countries have human rights issues, although in different forms. -- The CPC is at the core of the country's leadership and the ruling party, while the non-communist parties are participating parties. But the state-owned sector remains too big and inefficient. Similarities and Differences: US vs. China There are both very strikingly similarities and differences compared with their American counterparts in regards to culture and institutions. By 2008 she was making the most of the rise in disposable incomes by buying new consumer goods that her parents could only have dreamt about. Photo by Charles Clegg [CC BY-SA 2.0] Capitalism's global victory has been achieved through two different types of capitalist systems: the liberal meritocratic capitalism that has developed incrementally in the West, and the state-led authoritarian capitalism that is exemplified by China. 808 certified writers online. Many Westerners assume that China is on the same development trajectory that Japan, Britain, Germany, and France embarked on in the immediate aftermath of World War IIthe only difference being that the Chinese started much later than other Asian economies, such as South Korea and Malaysia, after a 40-year Maoist detour. Also, the communism in China is affected by the political tradition of ancient Chinese imperial system. They make three plausible but false assumptions: Democracy is an inevitable consequence of economic development; authoritarian regimes are never seen as legitimate; and the Chinese think, behave, and invest much like anyone in the West. One thing hasnt changed, though: Many Western politicians and business executives still dont get China. One reason that many people misread Chinas trajectory may be thatparticularly in the English-language promotional materials the Chinese use overseasthe country tends to portray itself as a variation on a liberal state, and therefore more trustworthy. A country that provides its citizen with education produces better minds that can bring in better business ideas to the economy. However, it is important to compare and contrast countries to see which policies are working in the best way and what can be changed. The branches of the government are not only responsible for the laws of the land but are also responsible for ensuring free and fair elections and that the citizens of the country that they represent are being heard (USG, 2020). they are digging deep to create the city's first metro system and doing so in just five years' time . The name of the game in China is scale. Some distinctions between the parties. We have both sat in meetings where business executives, particularly in the technology and pharmaceutical sectors, expressed surprise at Chinas insistence that they transfer ownership of their IP to a Chinese company. Trade wars, nationalism, and the pandemic have led many companies to question their supply chain strategyin particular basing manufacturing in China, thousands of miles from their markets. Even though the laws of the United States provide every individual regardless of creed and color to vote, there have been instances of voter suppression reported, especially in relation to minorities, and this oppression has been systemic and has existed throughout the history of the US. Thats why ordinary Chinese people see Chinese companies such as Alibaba, Huawei, and TikTok as sources of national prideinternational vanguards of Chinese successrather than simply sources of jobs or GDP, as they might be viewed in the West. In contrast, the U.S. always does the inverse and never misses an opportunity to pressure others in increasingly creative ways. But the technology war also hurts U.S. suppliers. Businesspeople and politicians in the West hold outdated beliefs about the second-largest economy in the world. Chinas high-speed rail could cover the distance between Boston and Chicago in about four hours, whereas Amtraks fastest service takes 22 hours. However, both states have a very different political landscape, which is what will be discussed in the paper today. Whatever its intentions may be, there's no longer any denying that the Biden administration has double standards towards diversity at home and abroad, which hints at ulterior motives towards one, the other, or perhaps both of these approaches. Political discourse in China remains anchored in Marxist-Leninist ideas of struggle (douzheng) and contradiction (maodun)both seen as attributes that force a necessary and even healthy confrontation that can help achieve a victorious outcome. Only a sudden surge of such events would herald an economic crisis. Americans Dont Know How Capitalist China Is, A version of this article appeared in the. Chinas history continues to color its view of international relationsand in large part explains its current obsession with the inviolability of its sovereignty. It is, therefore, against nature itself and arguably a violation of international human and legal rights for anyone to attempt to get rid of diversity, which is exactly what the U.S. is trying to do all across the world through its messianic zeal in imposing its political system onto all others. This clear disconnect is attributable to the so-called "culture war" that's spiraled out of control over the past year and has led to profound changes in American society since then. The one long-term asset class in which increasing numbers of Chinese are investedthat is, residential property, ownership of which grew from 14% of 25-to-69-year-olds in 1988 to 93% by 2008is driven also by the need for security: Unlike all other assets, property ensures a roof over ones head if things go wrong, in a system with limited social welfare and a history of sudden policy changes. Does the U.S. even have the power to hurt China economically? Reforming Sino-American Cultural Exchange for the Better. For much of its turbulent modern history, China has been under threat from foreign powers, both within Asia (notably Japan) and outside it (the UK and France in the mid 19th century). Civic engagement ensures that the government is serving the people and not the other way around. Shan: Despite initial blunders, China has handled the coronavirus pandemic well through strict lockdowns and mass testing. Such ideas may appear very different from the outward-facing, Confucian concepts of benevolence and harmony that China presents to its international, English-speaking audience. Nobody can take America's newfound domestic support for diversity seriously until it finally starts applying the same principles abroad like China does. The highest court in China is the Supreme Peoples Court, which includes the Chief Justice and over 340 other judges, including 13 that are considered grand justices. These are the reforms China is makingand they need to be understood on their own terms, not simply as a distorted or deficient version of a liberal model. Lets imagine the personal history of a Chinese woman who is 65 today. In the early 2010s she started moderating her previously outspoken political comments on Weibo as censorship tightened up. And only the U.S. can threaten Americas economic supremacyby underinvesting in its own infrastructure and by limiting trade. In the years since, China has become an economic titan, a global leader in technology innovation, and a military superpower, all while tightening its authoritarian system of governmentand reinforcing a belief that the liberal narrative does not apply to China. The geographic location factor is important since it dictates how well a country can be accessed to do business with and both China and United States have good locations since they are connected to water bodies. Earn badges to share on LinkedIn and your resume. In Canada, it is a . In that period there has been ruins of buildings as well as joy of victories, rapid advance in success as well as pride, tortuous ordeals and lesions from mistakes done . Additionally, human development is also key for countries to realize full economic growth. One reason China can spend so much on infrastructure is that its defense budget, after years of increases, is still only about a quarter that of the United States. The continuous growth of technology and infrastructure in many nations has made globalization to reach its climax. . Today he is the CEO of PAG, a $40 billion private equity firm based in Hong Kong. The commission has succeeded in reducing corruption in large part because it is essentially above the lawsomething unimaginable in a liberal democracy. Even in Beijing many people wore Mao suits and cycled everywhere; only senior Chinese Communist Party (CCP) officials used cars. The complete Spotlight package is available in a single reprint. Is a China-U.S. decoupling a real possibility? And the party has always believed in and emphasized the importance of Chinese history and of Marxist-Leninist thought, with all they imply. The differences in political beliefs led to the formation of a two-party system in the United States, contrary to George Washington's wishes. Collectivism means that the needs of an individual are not emphasized as compared to those of the society and not until recently, most rights of Chinese citizens were not realized. Investors anywhere should invest in a socially responsible way to advance human rights, adhering to a high standard for labor practices, gender equality, investment in human capital, and charitable contributions. The United States and China are different in almost every way in their social norms, administrative policies, economic reforms, and the vastest difference in their political ideology. Does that create new investment opportunities? Chinas Good War: How World War II Is Shaping a New Nationalism. Sage. The benefits are both financial (for example, access to mortgage loans) and social (permission to buy a ticket on one of the new high-speed trains). And what if the market itself is in China? Hence the public debt as a percentage of GDP is higher for the U.S. relative to China and the. Not completely and not without very high costs. The CPC runs the country while the other non communist parties play the role of participatory. No personal data is being tracked. They dont know how capitalist China is. While the U.S. political system is partly inspired by the British example, it differs in many important respects. And with handy apps such as Xuexi Qiangguo (Study the powerful nation and a pun on Study Xi) to teach the basics of thinkers including Marx, Lenin, Mao, and Xi Jinping, political education is now a 21st-century business. 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