Foreign Policy Blogs

American Dynamism Vs. Chinese Statism

One does not have to look hard to find publications or experts pronouncing or describing an America in decline. They have now become ubiquitous and in many circles pass for the conventional wisdom of the day. In a similar vein, it is not that hard to find arguments that other countries, particularly China, have a more efficient, productive economy and government. Living in California, I’ve heard many unfavorable comparisons to our attempt at building a high speed train to China’s already extensive train network. While, I understand the United States faces deep fiscal issues; and our current political class appears incapable or unwilling (both?) to tackle them, I am still an optimist about my country. After all, the US is not alone in facing headwinds to a prosperous future. We cannot judge ourselves accurately without looking more closely at our peers, with China being the most obvious target. Analyst Ian Bremmer makes a strong attempt at this and finds that China’s very system has plenty of warts:

China has indeed grown by leaps and bounds over the past decade. That’s a huge credit to a country that has modernized and industrialized on a previously unseen scale. And because of its 1.3 billion citizens, China has quite a bit of growth (read: catching up) still to come. China’s style of governance leaves the country light on regulation. However, it’s also light on rule of law, transparency, freedom of speech and several other key features that make the U.S. economy go ’round. Just because the Chinese government can move a village and build a road without holding a single hearing doesn’t mean the free market has taken hold. Indeed, it shows the opposite: China’s economy is largely state-planned, state-owned and state-run. The government uses capitalism only as a tool to reach its ends, not as a true expression of a free market.

Bremmer is right. China can indeed get many things done, but all of these accomplishments come from a centrally planned government, not a dynamic society or economy. The human race has yet to create an omnipotent, all-wise group of men and women that can lead a society to ever growing levels of prosperity. Economic growth cannot just be planned, as the market contains too many forces coming from too many different directions. The Chinese have opened up portions of their economy to the ‘animal spirits’ of capitalism, but as Bremmer points out, this is not really as it seems. There is no such thing a free market in modern China:

where the Chinese government compromises the free market, it does so to fulfill its own desires of effective control over the entire country. It’s capitalism of the state, by the state and for the state, where the state is the principal economic actor. That’s in marked contrast to where the U.S. compromises on “pure” capitalism, adding things like the social safety net, worker safety, product safety, health insurance and retirement planning.

One of the major problems China has had with its economic model is that at nearly any time, the majority owner of most of its economy — the state — can jump into an enterprise and distort it for its own purposes. It can cook the books, it can pull out profits, it can hide losses, it can launder money and it can even shut down a company altogether.

The United States has its challenges. At times, I have strong feelings of doubt that we can get ourselves back on track. Back to being a nation built on rugged individualism that produces dynamic outcomes. It is impossible for me to imagine an Apple being created in Beijing, but I would not be surprised to see a similar story (Pomegranate?) arise in the US. American culture isn’t without flaws and embarrassments, but no other on earth has proven to be so productive and resolute. It just keeps on ticking and with it American power and influence.

 

Author

Patrick Frost
Patrick Frost

Patrick Frost recently graduated from New York University's Masters Program in Political Science - International Relations. His MA thesis analyzed the capabilities and objectives of the Shanghai Cooperation Organization in Central Asia and beyond and explored how these affected U.S. interests and policy.

Areas of Focus:
Eurasia, American Foreign Policy, Ideology, SCO

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