What the U.S. Can Learn From China

China could become a new financial role model for the U.S.

by Published: Feb 10, 2010

China has been in the news a lot lately.

The mas­sively pop­u­lated coun­try was the cen­ter of the recent con­tro­versy over Gmail accounts being hacked, as well as a sta­ple of many recent columns by Thomas Friedman in the New York Times.

What comes to mind for the aver­age per­son, includ­ing me, when think­ing about China? Communism, rice-based diets and over­crowded cities are the asso­ci­a­tions some may have. However, this is a very over­sim­pli­fied and dis­torted view of China, who has had seri­ous recent eco­nomic growth and seems to be much more sta­ble than the Western world.

While China has boomed in recent decades, there are still seri­ous prob­lems. As Thomas Friedman points out in his recent best­seller “Hot, Flat, and Crowded,” China was very much affected by the reces­sion that took place in America.

The rea­son why so many Chinese cit­i­zens work in fac­to­ries pro­duc­ing the every­day ran­dom “lux­u­ries” that Americans use is because Americans buy these prod­ucts. Because a major­ity of our nation needed to cut back on spend­ing dur­ing the recent reces­sion, the goods that were being bought from the Chinese were no longer seen as neces­si­ties. Factories and plants closed and an extremely large num­ber of Chinese peo­ple were sud­denly unem­ployed. Poverty and unem­ploy­ment are still very big prob­lems in China.

Troubles aside, the Chinese are tak­ing impor­tant steps to ensure they don’t have an eco­nomic col­lapse akin to what we have seen in the U.S. China is keep­ing their infla­tion and growth in check. They real­ize that too much growth in too short of time can­not sus­tain itself. This is the wall Americans ran into.

For decades, Americans have lived beyond their means. We were the fastest grow­ing coun­try and as Friedman says, it was unreg­u­lated growth and was bound to fal­ter given the way Americans were act­ing and spending.

Dr. Randy Groves, a Ferris pro­fes­sor of human­i­ties, recently gave a lec­ture on China and the Silk Road. He gave a his­tory of the Silk Road and the goods that were sold on it, and how they trav­eled across the coun­try and the con­ti­nent. A ques­tion came up, “What is the Silk Road used for today?” The answer: tourism. It is now a his­tor­i­cal site for trav­el­ers to see how the Chinese used to do trading.

China is no longer the coun­try of the Silk Road. They are a glob­al­ized, technology-driven soci­ety. iPhones, lap­tops and many of the other lux­u­ries we have here are com­mon­place in China. They are also becom­ing more and more cap­i­tal­is­tic. They still pos­sess a more author­i­tar­ian gov­ern­ment than us, but they have moved to an eco­nomic model sim­i­lar to ours, only they are keep­ing theirs in check.

In a short and enjoy­able book on China titled “China’s New Culture of Cool,” the authors show how the youth of China espe­cially are becom­ing more inde­pen­dent and free-spirited than their ances­tors. In a way, they are becom­ing more Americanized. Friedman has also pointed out how more of the world is act­ing like Americans. But if they are tak­ing away the good aspects from us and leav­ing the bad, there is cause for concern.

In good part, it is the greed and purely indi­vid­u­al­is­tic atti­tude of Americans that caused the Great Recession of 2008. When talk­ing to a friend recently about the health­care debate, he became very frus­trated about the fact that Americans want every­thing and aren’t ready to sac­ri­fice any­thing. If we want a uni­ver­sal health care sys­tem, a change of men­tal­ity will be in order, as well as cer­tain sac­ri­fices. If we want a sta­ble econ­omy, we have to stop behav­ing so irre­spon­si­bly and think before we act.

If we want to return as the lead­ing global super­power, we need to take a les­son from the Chinese. This does not mean we need to become an author­i­tar­ian soci­ety, it sim­ply means we need to be more respon­si­ble and more cautious.