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Is China's success a wake up call for the United States?

Americans have long assumed that in spite its faults the United States has the best overall system in the world. The success of China has cast doubt on that premise. Like it or not, we are in a serious competition with China. What is at stake is the role of the US Dollar as the dominant reserve currency. Power shifted from the British Empire to the United States when the Dollar beat the Pound Sterling. The Chinese Yuan is not yet even a secondary reserve currency but expect that to change.

How should we respond the Chinese competition? Should we view this as a matter of survival and prepare for the inevitable fight, or should we take this opportunity to learn from the Chinese to improve our system?

The first challenge is the Global Climate Change crisis. The world is looking for a country to provide leadership to solve this crisis. If China acts and we continue to be politically deadlocked, China will win the competition for international prestige. The world would be more willing to accept the Yuan over the Dollar.

  • Jul 2 2013: China has an advantage in the sense that it has cheap labor and lots of people who are willing to work for soooo little. I was told overtime pay doesn't exist. No such thing as vacation benefits. No specified hours of work in a week. Not even sure if they have some form of social security. The only real success of china i believe is cheap labor and this is the driving force for what i believe is their success. Nations from the west treat workers differently and therefore labor is expensive.
    China's growth to me is some kind of illusion for now because they havn't really took a step into inovating products by themselves... more of copying items and selling them cheap. I've seen quite a lot of people from China in our malls looking at our handicrafts... why? they will send the items back to china and copy them. My friend used to create native handicrafts for sale... he mentioned that when a Chinese (from China ) client asks for a sample,.. expect them not to buy any item at all and you can look for your sample flooding the market cheaply afterwards.. China's success is mass production and cheap goods/labor. This is of course temporary. The Japanese used to be like that but they quickly started producing high quality and innovative items. China will probably soon be something like Japan. I do not think there is anything for the west to learn from China. China is actually the one learning from the west.
    • Jul 2 2013: Would you change your mind when China puts a man on the moon.
      • Jul 3 2013: No. Putting a man on the moon is something other countries have done. It is however by no means a small feat and if China does that i would applaud them. But for me its nothing big in terms of innovation. I understand you have a certain fascination for China and its development. For my country however we don't like China.. unlike other superpowers that supported weaker nations, China is bullying its way into getting what it wants. To me it is a bad sign.. It has supported Syria and some African dictator countries just to get what it wants from those parts of the world. China still needs to learn more about its role in developing the nations of the world. Its not just about money money and earning more money. They have to learn to use all that money to better themselves and other people. They recently complained that other Asian countries investing in Australia and the US did not meet any restrictions. But chinese companies are having problems getting in, not because other countries don't like them but because they don't have a good record in handling business and honesty. Profit is their most prized mentality and they put it before its own people. China is importing toxic materials into my country as toys. These children's toys are laced with extreme amounts of lead. I suppose the manufacturers know lead is toxic but why keep exporting these products into countries they know have weak legislation controls over these products? they know its harmful yet profit is their aim. A single bad apple reflects a problem with the overall chinese mentality. Not all of them of course but it shows there is a quality and hidden social problem with their system. You can read more on the book "poorly made in china" by Paul Midler and I understand perfectly what he means.
        China as it grown rich however will probably soon change and I really hope they do.. I hope they realize soon the world needs them as a rich country to spur developments in other that need it badly.
        • Jul 15 2013: Do you think supporting the opposition is much more honourable than supporting the " dictator"?
          Whether you support which side(by selling weapons or giving funds), it will only make the civil war worse and endless. How many people died because of that war? It is a disaster, and both sides should be responsible for this. And the war end? You might look at the domestic conflict in Iraq.
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    Jul 2 2013: China's short-term success will not continue until it's people receive civil and economic freedoms like we do in the West. The US should instead look toward India for it's real competition over the coming century.
    • Jul 2 2013: After China passes the US in GDP, its main competition may come from India. India has a younger population and will pass China in total population. The US will have an aging population, much like Japan is now. It will be more important than ever for the US to preserve the Dollar as the premier reserve currency.
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      Jul 4 2013: I think China & India both are poised to explode (in a positive way) with unlimited economic development. Neither nation has the science/research infrastructure that develops new science & brings new products to market. Right now, both nations are still sources of 'cheap labor' for the industrialized west.

      India is the world's largest democracy. So there's my bias. But corporate billionaires LOVE China because of the business climate the Communist government has built there. There is a published 5-year plan. Things happen on-schedule and as-planned in China. That's really good for business.
      • Jul 4 2013: I think India will eventually pass China, not because it is a democracy but simply because it will have more people and a younger population. By this measure the US should stay in third place, simply because it has the third largest population. If you count the European Union as a single country, it will probably place ahead of the US, pushing the US down to fourth. However, even in fourth place, the US Dollar could remain the worlds reserve currency simply due to inertia, unless it does something stupid like ignoring Climate Change.
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    Jul 2 2013: China is doing better but in what sense? China has the most pollution and continued low wage sweatshops...maybe that's why? If it wasn't for all the cost externalities that the Chinese government and corporations buddies used, their GDP and GNP would not rise as rapidly. Not to mention the US is solely dependant on cheap labor from china.

    In other words, the higher the GDP growth in a country, the higher the necessity in that country. Just look at the over all health and environment in china, it speaks for itself (their pollution can be seen from space). So no, the "success" china has had is not a sign of them being better in overall standard of living and quality of health, but its a sign of economic growth, which does not have any ties with a well being of a country, only in efficient money transaction and "cost externalities". Which have detrimental consequences to overall health and environment.
    • Jul 2 2013: The Chinese are using the polluting factories to build wind turbines and solar panels. They at least show some long term planning.
  • Jul 30 2013: I just wanted to add that "superpower" is not the end of stair in worlds rule. The paradigm of Byzantine (or east Roman if you like) empire draws the distinction between superpower and ecumenical empire. Both US and China missιng it.
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    Jul 28 2013: China is still in the cheap-labor stage that brought Japan success in the 50s-60s, and Taiwan after that. But that's a short-lived pleasure. As the living standards and wages rise, cheap manufacturing will move elsewhere. This is already in progress. India and Central America come to mind, and then Africa. This will be a sea change for China, and it will be interesting to see how she tackles it.

    I wouldn't be surprised to see both of the behemoths India and China experiencing disruptive social unrest, perhaps even revolution and fractionation, in the next few decades. They're both probably unmanageable by democratic means. In both countries the leaders' fondness for atom bombs and other military hardware evidently trumps their interest in providing clean drinking water for the people. Priorities with social consequences.
  • Jul 16 2013: I am glad that someone thinks that there is something to learn from China's success. The book "China's Megatrends" by John Naisbitt, documents the principles of China's enlightened leadership.
  • Jul 15 2013: USA's status nowadays reminds me of the glory of Roman and British empire. Both of them had once successed , but unaviodably, they had collapsed. So do the USA. But I do not believe there will be any new superpower. The world was changed. Nowadays world has been connected so tightly that many local power like EU,Rossia, India and China, are not inferior in their power.

    China is different from countries like British or USA in so many aspects. That differences causes the praise and also doubt. Honestly speaking, China is just developing so quickly, it is far away from USA's achievement. But it is not the reason to ignore it, and simply categorize its "parvenu" to some "so that it what" . Any achievement is not easy, there must be something deep for us to learn.
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      Jul 28 2013: Don't know where you get the idea that the US is near collapse. Check the tech innovations (Apple, Microsoft, Google,YouTube, eBay, Yahoo, PayPal, Intel, etc, etc.), the universities, the Nobel prizes, NASA space exploration, GPS (you're using US satellites). The country is technologically vibrant, not just in the past, but right now and probably well into the future.
      • Jul 29 2013: I think I must agree with you that right now and probably in the future the US will still be the model in many areas. But my point is,even this flourish will go on to the future, but it cannot last forever.
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          Jul 29 2013: I will agree with you that nothing lasts forever. No one can know the future. I'm sure that the potential for innovation and improvement exists in all nations, and that exciting developments lie ahead. I hope that these will be used for the good of all, and that we learn to safeguard our environment - otherwise our innovations won't mean much.
  • Jul 13 2013: I was referring to China's transition to an economy based on its domestic market. They certainly have the numbers and as their income rises there will be more local demand.
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    • Jul 9 2013: Your link says that China's 2014 anticipated growth rate was downgraded from 7.3% to 7.1%. That is still a fantastic growth rate.
    • Jul 11 2013: For the world to take Chine seriously, it will have to demonstrate that its banking system has the means to stimulate growth. Expect China's domestic market to play a greater roll.
    • Jul 13 2013: You find interesting articles. This article seems to support the idea the China will have to depend on its domestic market. It seems that China is at a crossroads but there is no compelling reason to believe that China will fail.
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        Jul 13 2013: When you say "fail" are you referring to China's advantage in global manufacturing competition?Communism has always failed when it comes to promoting commerce and consumerism among the governed masses. I think the new Chinese version of Marxism/Capitalism retains the original control mechanism of keeping the masses at a subsistence level lest they become difficult to control. China must let the people earn enough to buy the things they are manufacturing. Once the wages begin to climb China will lose it's competitive edge in the global market, and India will take over as low-bid supplier to the World. I find that scenario somewhat compelling.
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    Jul 4 2013: we must also observe that india is working hard to copy the silly things the US and the EU did. india is not successful because their strategy is better, but because the state is not enough powerful to screw it up. but as the economy grows, so grows the state, and they will eventually ruin the free market just as the western nations did and do. let's hope it is not the path they will walk.
  • Jul 4 2013: I know that Western countries despise Chinese. As a Chinese ,I want to say is that China has its own history, their government is developed in a specific historical stage. There are many different cultures between China and Western, but I think let the people live a happy life is a good government.I do not understand why you Westerner so like politics.China is still a poor country. But for one who is still famine, what are the ability to engage in political.Who tell me why???
    • Jul 4 2013: Let me elaborate on the topic of famine. Perhaps the real turning point in China's rise is the Nixon visit, when the Chinese were able to import Haber-Bosch technologies to make synthetic fertilizer. Now China has so much food that it is exporting it to the US.
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      Jul 4 2013: Westerners do not despise those who are Chinese. China, as you say, has contributed substantially to civilization. Kiuds learn about this in school even when they are very young.
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    Jul 3 2013: If it is we are sleeping though the alarm along with many other things
    • Jul 3 2013: Your comment about "sleeping" reminds me of a quote which I believe was attributed to Napoleon.
      "Let China sleep, when she awakens the world will tremble."
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        Jul 3 2013: In the beginning days of civilization China was the clear leader in technology and many other things.

        Then they decided to "wall" themselves off from the benefits of comparative advantage, they have had a long nap.

        I don't know if they will return to that state though because of demographics, private property, becoming consumers, they have built their economy on exports the only way for it to be sustainable is on their own consumption.
  • Jul 2 2013: according to your review,I find a big difference between Chinese and Americans.
    When we Chinese face problems,We think solutions,deal with problems.what we want is clear____make life better by solving problems.
    While Americans just want competence itself,you do not know what is hidden behind.So you regard the whole world as enemy.Monitor the whole world,even your friends...
    Should i say more of that?I think the answer is obvious.Why not change your position and angle?
    • Jul 2 2013: The problem is not that the US sees that world as an enemy, it's that Americans see each other as enemies. The competition that made America great has turned toxic.
      • Jul 2 2013: Ya... competition is a good way to do thing excellent,but as an old Chinese saying goes:Think about the origin while drinking.A good behavior can be evil without a good target.We human should not be driven by a behavior or something man-made.All what we want is happiness.Not science itself,not religion,not revolution.SO...things are simple,do not twisted.