In 1933, America was in crisis. The economy had collapsed, unemployment and poverty were rampant. The existing political elites were sitting idly by and waiting for the markets to sort everything out, but no market rally materialized. One man saw what was necessary; that man was FDR. The words he spoke upon his inauguration still ring true for any who wish to stop decline in America: “Restoration calls… not for changes in ethics alone. This Nation asks for action, and action now.” America today finds itself in a similar (if less dramatic) position: wages are stagnating, life expectancy is tanking, inequality and unemployment is skyrocketing and our global economic hegemony is under threat. If the US does not take action now to stop this decline it will find itself in the dustbin of history. Luckily, the US has a model for this just across the Pacific. The People’s Republic China has been consistently improving living standards for its people and growing its economy since the 1980s. It is clearly a nation on the rise. While some may point to its still increasing cost of living and less than perfect private sector, China’s economic system is both more humane and more efficient than the American economic system.

The differences between the Chinese economy and the American economy can be understood best by looking at their history. The modern Chinese economy began in the 1970s following the death of Mao Tse Tung, Mao had favored an almost totally state owned and planned economy that, partly out of diplomatic isolation, had very little foreign investment. In 1978, the Communist party of China (CPC) began a process of “reform and opening up”. This process introduced market elements into the Chinese economy with the two most crucial being the legalization of private enterprises and the opening of special (deregulated) economic zones or SEZs. SEZs also allowed large amounts of foreign investment which allowed China to build up its previously lagging industrial and agricultural economies (Moody). These reforms led to a rapid growth in their economy surpassing Japan to become the second largest economy in 2010 (Moore). China has kept several key parts of its older planned economic system including government control of essential services, government direction of economic growth through 5 year plans, and the partial control of large companies by the Communist party of China (CPC) and the All-China Federation of Trade Unions (ACFTU).(Khoo) In essence, the state still directs the path of the Chinese economy. The US has had a much different history of economic development as it never had a state run economy or a political party dictating how the economy should be run. The US began economic reforms in a different direction in the 1980s moving away from government intervention and large state welfare programs and towards an economic strategy based in supply side economics (also referred to as trickle down economics or Reaganomics) which involved an expansion of free trade, deregulation of and large scale tax cuts for the wealthiest in the country, which the government hoped would be invested back into the economy.(Amadeo) To some extent, this did seem to work. Some later presidents would move away from this trend, (most recently Obama with the ACA and Trump with his Chinese trade war) the base of the current US economic strategy can still be found in the conservative reforms of the 1980s.(Griswold) The main difference between America’s economic system and China’s economic system therefore can be placed with how the government interacts with the economy. In the US, the government encourages the private sector indirectly, but in China, the government acts as the director of the economy, deciding how large sections are run.

The Chinese economy is clearly more humane and efficient than the American economy. One major reason for this is the fact that in China the government acts on the side of the working class and takes a hostile position to the super rich. In China, the accruing of wealth is handled very differently than in other countries. According to the Atlantic, when a person becomes wealthy, the government goes over all aspects of their wealth. If the government finds discrepancies, (whether that is corruption or other misconduct), they punish accordingly. This process creates an unofficial wealth cap since when the rich get too wealthy, the government either imprisons them for crimes they’ve committed or stops giving them aid and subsidies forcing them to spend some of their wealth to keep their enterprises afloat (Chao). This means that the profits generated by society can’t be hoarded and that the government isn’t afraid to punish those who step out of line just because they’re “job creators.” This clearly shows that the Chinese government is not on the side of the rich by any means. According to Workers World, labor unions in China have been able to gain massive concessions since 1995 when China guaranteed the right to collective bargaining. Wages have increased at a steady average rate of 12% a year in manufacturing jobs since 2001(Griswold). When all this evidence is taken together one must reach the conclusion that while the Chinese economy has grown, so too has the benefis its workers receive. From its decisive actions in support of workers to its thorough suspicion of billionaires the Chinese government has shown that it’s economic system clearly is run for the benefit of the working class. The American economy on the other hand has not.

For the past five decades, the United States economy has been proving itself inhumane and inefficient in the ways China’s has proved itself efficient and humane. Namely, while the United States has been increasingly struggling to meet the basic material needs of its citizens, the People’s Republic of China has been meeting its citizen’s basic material needs at an ever increasing rate. While wages steadily grew in China, they stagnated in the US. While life expectancy increased in China, it decreased in the United States. While productivity increases in the US were funneled into the hands of the few wealthy elites (Lawrence), in China they caused an increase in overall prosperity (Griswold). In contrast to capitalist countries where it is broadly accepted that the purpose of a business is to make money, in China, the state controlled half of the economy follows a five year plan that focuses on ensuring the welfare of the country and long term economic development. According to the Trotskyist Platform, “China’s state-owned enterprises operate not merely to maximise profits but to attain broader social goals — these include maximising employment, developing poorer parts of the country, providing goods and services of vital importance to the community…” These state owned enterprises also have high safety standards which gives China its outstandingly low workplace accident death rate of 1.07 in 100,000 workers dying, for reference the death rate in America is 3.5 according to the Bureau of Labor Statistics (Trotskyist platform). This clearly indicates that the economic output of China is being focused on the people as a whole and specifically on improving their lives. In the United States, the economy has seen a very different trend with stagnating wages and increasing inequality. This stagnation comes despite the consistently increasing productivity and GDP (Lawrence). This points to an economy that doesn’t reward general productivity with general welfare. The American economy fails to distribute the benefits growth of its economy in an even manner across its society, while China makes sure that the betterment of human lives comes before the profits of the few.

All the previous arguments notwithstanding, there are still valid criticisms to be leveled with the Chinese economy. Foremost, among these is the contradictory relationship between the government and the market elements of the economy which causes difficulties for both workers and bosses alike. To show how the conflicts between how the government is run and how the private economy is run affect workers, many point to the cost of living in major Chinese cities. According to the Atlantic, “with sky-high housing prices, few Chinese (sic) can afford to buy a home with their salary alone” (Chao). While this is true, one should also be keeping in mind the consistent wage increases for chinese workers and the high cost of living in many American cities. This is not a uniquely Chinese problem, and they still handle it better. While this is true, one should also be keeping in mind the consistent wage increases for chinese workers and the high cost of living in many American cities. This is not a uniquely Chinese problem, and they still handle it better than in the American economy (Chao). Another problem people point to in criticizing the Chinese economy is the disparity in safety standards between the private and public sectors. The private sector is much worse in terms of safety standards than the public sector with more accidents, deaths and cases of inhumane working conditions (Trotskyist Platform). The state sector only makes up one half of the Chinese economy and while the state influences the rest; this still means that half of all workers are not getting the best possible protections (Khoo). Again, however, this problem is not a uniquely Chinese problem, and the overall safety standards in the Chinese economy remain far better than in the United States according to the bureau of labor statistics deaths from workplace accidents are nearly three times as high in the United States per 100,000 workers (Trotskyist Platform). Every criticism made of the Chinese economy can largely be made of the American economy as well. The Chinese model remains the best economic model for moving America forward and reforming the economy.

When considering all the factors, the Chinese economy is without a doubt more humane and efficient than the American economy. Whether it’s the strict standards of workplace safety, the ever increasing standard of living or the steadily growing wages, the Chinese economy has proven itself to be the most efficient of the two at meeting the basic human needs of its citizens. If America continues on its current path of stagnating wages and a government unable or unwilling to take the firm directing role the Chinese government does, it will soon be completely overtaken by China. Now is the time for action, not tomorrow, not 4 years from now, not 20 years from now, the time is now to stop this decline.

Works Cited

“Address to the First Session of the 12th National People’s Congress (2013).” The Governance of China, by Jinping Xi, vol. 1, Foreign Languages Press, 2018, pp. 40–46

Amadeo, Kimberly. “How President Reagan Ended the 1980s Recession.” The Balance, The Balance, 8 Jan. 2020, www.thebalance.com/president-ronald-reagan-s-economic-policies-3305568.

Chao, Rebecca. “Why Do Chinese Billionaires Keep Ending Up in Prison?” The Atlantic, Atlantic Media Company, 29 Jan. 2013, https://www.theatlantic.com/international/archive/2013/01/why-do-chinese-billionaires-keep-ending-up-in-prison/272633/

Griswold, Deirdre. “China, Rising Wages and Worker Militancy.” Workers World, 22 July 2015, www.workers.org/2015/07/21101/#.WXOlQtPytsM.

Khan, Razib. “The Coming End of 150 Years of the USA as the Largest Economy.” Gene Expression, 10 July 2018, www.gnxp.com/WordPress/2018/07/10/the-coming-end-of-150-years-of-the-usa-as-the-largest-economy/

Moore, Malcolm. “China Is the World’s Second Largest Economy.” The Telegraph, Telegraph Media Group, 14 Feb. 2011, www.telegraph.co.uk/finance/economics/8322550/China-is-the-worlds-second-largest-economy.html.

Moody, Andrew. “How China Opened Its Doors to World.” How China Opened Its Doors to World — Chinadaily.com.cn, 18 Dec. 2018, www.chinadaily.com.cn/a/201812/18/WS5c184b26a3107d4c3a00159c.html.

Khoo, H. “The Class Nature of the Chinese State A Critique of ‘China’s Long March to Capitalism’.” The Class Nature of the Chinese State A Critique of “China’s Long March to Capitalism”., 26 Nov. 2009, chinareporting.blogspot.com/2009/11/class-nature-of-chinese-state-critique_26.html

Miles, Tom. “China Overtakes U.S. for Healthy Lifespan: WHO Data.” Reuters, Thomson Reuters, 30 May 2018, www.reuters.com/article/us-health-lifespan/china-overtakes-u-s-for-healthy-lifespan-who-data-idUSKCN1IV15L.

Mishel, Lawrence. “Wage Stagnation in Nine Charts.” Economic Policy Institute, 2015, www.epi.org/publication/charting-wage-stagnation/.

“Workplace Safety Now Better In China Than In Australia.” Trotskyist Platform, 7 Mar. 2017, www.trotskyistplatform.com/workplace-safety-now-better-in-china-than-in-australia/. Bureau of Labor Statistics. “National Census of Fatal Occupational Injuries in 2018”. USDL-19–2194 https://www.bls.gov/news.release/pdf/cfoi.pdf