China Rules How China became a superpower Imagine you have to make a bet. There are two 18-year-olds, one in China, the other in the United States, both poor and short on prospects. You have to pick the one with the better chance at upward mobility. Which would you choose? Not long ago, the answer might have seemed simple. The “American Dream,” after all, had long promised a pathway to a better life for anyone who worked hard. But the answer today is startling: China has risen so quickly that your chances of improving your station in life there vastly exceed those in the United States. China The richest grew much richer +1500% +1000% Income growth 1980-2014 +500% Incomes for the poorest Chinese grew United States +200% Incomes for the poorest Americans fell +100% 0% 20th 40th 60th 80th 100th 5th Poorer Income percentile Richer Income growth 1980-2014 China The richest in China grew much richer +1500% +1000% Incomes for the poorest Chinese grew +500% U.S. +200% +100% 0% 20th 40th 60th 80th 100th 5th Poorer Income percentile Richer Source: World Inequality Database

China is still much poorer over all than the United States. But the Chinese have taken a commanding lead in that most intangible but valuable of economic indicators: optimism.

In a country still haunted by the Cultural Revolution, where politics are tightly circumscribed by an authoritarian state, the Chinese are now among the most optimistic people in the world — much more so than Americans and Europeans, according to public opinion surveys.

What has changed?

Most of all, an economic expansion without precedent in modern history.

Eight hundred million people have risen out of poverty. That’s two and a half times the population of the United States. 1.2 billion people 1.0 Not in poverty 0.8 0.6 0.4 In poverty 0.2 2015 1990 1995 2000 2005 2010 1.2 billion people Not in poverty 0.6 In poverty 0.2 1990 2002 2015 Source: The World Bank. People in poverty live at or below $1.90 a day.

Not only are incomes drastically rising within families, but sons are outearning their fathers. That means expectations are rising, too, especially among China’s growing middle class.

Life expectancy has also soared. Chinese men born in 2013 are expected to live more than seven years longer than those born in 1990; women are expected to live nearly 10 years longer.

“It feels like there are no limits to how far you can go,” said Wu Haifeng, 37, a financial analyst who was born to a family of corn farmers in northern China and now earns more than $78,000 a year. “It feels like China will always be strong.”

China used to make up much of the world’s poor. Now it makes up much of the world’s middle class. Source: World Inequality Database

There are risks, of course, and no guarantees that China’s rise will continue indefinitely.

A prolonged economic slump could inflict major damage. And experts warn that China could fall into the middle-income trap — in which growth and earnings plateau — if it fails to address high corporate debt levels or doesn’t do more to encourage innovation. Demography is also a ticking bomb: China is racing to get rich before it gets old.

Yet for now, the economic arc seems ever upward.

Like the United States, China still has a yawning gap between the rich and the poor — and the poorest Chinese are far poorer, with nearly 500 million people, or about 40 percent of the population, living on less than $5.50 a day, according to the World Bank.

But by some measures Chinese society has about the same level of inequality as the United States. Here are the world’s major countries ordered by inequality and income mobility. Finland More mobile Denmark 20% Norway Germany Canada How much a child’s income is determined by their parents’ Sweden Netherlands Japan 40% Spain China Italy United Kingdom United States 60% Brazil South Africa India 80% Egypt More equal 60 50 40 30 100% Level of inequality (Gini coefficient) Finland More mobile Norway 20% How much a child’s income is determined by their parents’ Sweden Japan China 40% United States 60% South Africa India 80% circles scaled by population More Equal Egypt 60 50 40 30 Level of inequality (Gini) Source: The World Bank, Fair Progress, Economic Mobility Across Generations Around the World ; World Development Indicators

Today, the economic output per capita in China is $12,000, compared with $3,500 a decade ago. The number is far higher in the United States, $53,000.

Yet few analysts doubt where the bigger increases will come. Here’s how modern China’s per-capita G.D.P. growth compares so far: United States $50k per capita G.D.P. $40k Japan South Korea $30k $20k China $10k 0 20 40 60 80 100 120 140 160 Number of years since each country reached China’s per-capita G.D.P. in 1993 United States $50k per capita G.D.P. $40k South Korea Japan $30k $20k China $10k 0 40 80 120 160 Number of years since each country reached China’s per-capita G.D.P. in 1993 In 2011 U.S. dollars. | Source: Maddison Project.

China’s progress is especially remarkable given how the government has used social engineering to restrict where people live and how many children they have. Loosening those constraints could accelerate income growth.

This is why many people now talk about “the Chinese Dream.”

Xu Liya, 49, once tilled wheat fields in Zhejiang, a rural province along China’s east coast. Her family ate meat only once a week, and each night she crammed into a bedroom with seven relatives.

Then she attended university on a scholarship and started a clothing store. Now she owns two cars and an apartment valued at more than $300,000. Her daughter attends college in Beijing.

“Poverty and corruption have hurt average people in China for too long,” she said. “While today’s society isn’t perfect, poor people have the resources to compete with rich people, too.”