China is still in the process of building a social safety net that is largely undefined and underfunded, and it has no tax on personal capital gains. The closing meeting of the fifth session of the 12th National People's Congress is held at the Great Hall of the People in Beijing . In our work we have come to see that people in both business and politics often cling to three widely shared but essentially false assumptions about modern China. Since China is a communist and one-party state, citizen engagement is lower in comparison to democratic states. Chinas high-speed rail could cover the distance between Boston and Chicago in about four hours, whereas Amtraks fastest service takes 22 hours. American companies will do so only if U.S. tariffs become more penalizing than moving would be. Navigating your companys future in China, Americans Dont Know How Capitalist China Is, Economics and Democracy Are Two Sides of the Same Coin, Authoritarian Political Systems Cant Be Legitimate, The Chinese Live, Work, and Invest Like Westerners, A version of this article appeared in the. The country will need to continue to reform and privatize its state-owned firmsand shift from investment to private consumptionor it will not be able to sustain its growth. For international business management of doing business in a democratic country such as the US, it can be very comfortable for them since most barriers of trade have been removed and the political system is conducive. Weijian Shan understands the delicate U.S.-China dynamic as well as anyone. Which serves U.S. interests better, a free and democratic China, or an authoritarian China that identifies with U.S. leadership? (If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. He believes Chinese people are fixated on. And only the U.S. can threaten Americas economic supremacyby underinvesting in its own infrastructure and by limiting trade. China and the United States significantly differ in terms of the economic, legal and political system but this does not stop them from being the top two nation with the biggest economy worldwide. Our own experiences on the ground in China confirm this. Thats not likely, precisely because in Chinas particular brand of authoritarianism, control is key. This paper will compare two great countries the United States and China by looking in details how and why their legal and political systems differ, explain what determines the level of economic development in each country. 13 Cultural Differences Between the U.S. and China Social Structure Confrontation/Conflict Self Face/Reputation Business Relations Morals Recognition of the Dead Humility Time Sensitivity Respect Multiculturalism Lack of Personal Space Respect for Elders 1. Until Western companies and politicians understand this and revise their views, they will continue to get China wrong. A young student in Nanjing can study propulsion physics at Beijings Tsinghua University thanks to social mobility and the partys significant investment in scientific research. HBR Learnings online leadership training helps you hone your skills with courses like Global Collaboration. (2012). That, perhaps, is why its current president and (more crucially) party general secretary, Xi Jinping, has let it be known that he considers Gorbachev a traitor to the cause for liberalizing as he did, thereby destroying the Communist Partys hold on the USSR. This is a natural outcome of the decline in U.S. strength. Additionally, human development is also key for countries to realize full economic growth. Chinese Foreign Minister Wang Yi made an excellent remark about political systems across the world while speaking with the U.S. Council on Foreign Relations last week. What to Know. Eighty percent of the Senate and House of Representatives are male, while only 20 percent are either women or people of color. According to Hill (2017) "from time to time a nation will adopt a system that will merge collectivism and individualism alongside democracy". But much of the technological progress has come from a highly innovative and well-funded military that has invested heavily in Chinas burgeoning new industries. Is your time best spent reading someone elses essay? The top diplomat also condemned the U.S.'s description of his country as "authoritarian" simply because its democracy is different than America's. How can outside investors ensure that they dont become collateral damage in a bigger political and economic war? The old imperial bureaucracy helps modern Chinese to make the government started on more efficient point to absorb interest than any other countries (King, F. J., The United States and China Fourth Edition, 1979, Either way you slice it, the economies are the two strongest . Borner, S., Brunetti, A., & Weder, B. The Chinese political system is dominated by multiparty cooperation as well as political constitution under the direction of the Communist party of China (CPC), but the USA is governed by the western style of multiparty system. The point is that a China-based supply chain has proved a blessing, not a curse, in this pandemic. He wisely noted that "Democracy is not Coca-Cola, which, with the syrup produced by the United States, tastes the same across the world. When the United States formed its constitution, it specifically dictated the unalienable rights of every person. A command economy is the opposite of a free economy and it is usually dominated by the government which is always controlling major aspects of businesses. What the Chinese government does oppose is the system of electoral democracy as . Obviously the ideology of nationalist identification under the pandemic has greatly roughened the political landscape for China and the U.S. Hence, we need to understand, compare, and learn from leading values in China's political culture. In Canada, it is a . The Chinese government is, however, much easier to decipher since it is a communist one-party state that is also led by elites even though it goes against the very grain of communism. Economic and Political Differences: China VS. United States. The big difference is that in China the party, state, and army is led by one person. The U.S. continues to vilify China, and China does itself no favors with its poor policy on human rights. The elite theory focuses on the notion that only a select group of people actually run the government, which are considered elite, while the pluralist theory states that political power is rather shared between the influencing parties. Even though both countries are different in every way, they are still recognized as each others competition in the International Arena. So a Marxist-Leninist system is concerned not only with economic outcomes but also with gaining and maintaining control over the system itself. China is also Apples biggest market for iPhones: It has about twice as many iPhone users as the United States does. The United States government structure is one of the largest democracies in the world and has been considered by many as one of the perfect democracies which the country and its citizens have prided themselves over. Chinas recent history means that Chinese people and the state approach decisions very differently from Westernersin both the time frames they use and the risks they worry about most. HBR: Chinas economy seems to be the healthiest in the world at the moment. In much Western analysis the verb most commonly attached to Chinas reforms is stalled. The truth is that political reform in China hasnt stalled. Its GDP dropped 6.8% in the first quarter of 2020, but resumed growth from the second quarter onward. Any shift in supply chains will be gradual and partial, because its very costly to move from the most efficient supplier to the second or third best. The . Federal and state governments wrangled and blamed each other over the pandemic response, exposing public discontent with the efficacy and legitimacy of the government, as well as the internal strife in society. It seems that the only country that can stifle Chinas growth is China itselfif it makes major policy mistakes. The Trump administration was determined to damage Chinas economy and businesses. The White Houses China-bashing is more about a fight for self-identification than about exonerating the Trump administration. Doing business in emerging markets. In a speech in 2000 former U.S. President Bill Clinton declared, By joining the WTO, China is not simply agreeing to import more of our products, it is agreeing to import one of democracys most cherished values: economic freedom. Access more than 40 courses trusted by Fortune 500 companies. For instance, a business that wants to invest in China from the US, it must be prepared for more restrictions and should not expect Chines courts to consider the condition that leads to a certain situation since their law does not permit this. The geographic location of a country, its educational, political and legal systems plays a key role in the economic well-being of a country. Familiarity with Leninist doctrine is still important for getting ahead. Exploding unemployment exposed the wide wealth gap in U.S. society. The United States is famous for being ethnically and religiously diverse, but most of the branches of the government are made up of Christian and White males who have come from affluent backgrounds and studied from elite universities such as the Ivy Leagues. Decisionsby both individuals and the stateabout how to invest all serve one purpose: to provide security and stability in an unpredictable world. 10. Business in the United States moves at a different pace from China. A. The differences between people of different cultures far outweigh their similaritiesI believe that differences in people of different cultures far outweigh their similarities.. Weijian Shan was born in China and had his life upended by the Cultural Revolution. For the Chinese, the key to those outcomes is respect for an appropriate hierarchy, itself a means of control. Some of these challenges are brought about by differences in legal, political and economic systems of different countries. At every point since 1949 the Chinese Communist Party has been central to the institutions, society, and daily experiences that shape the Chinese people. Shanghainese are up-to-date on the newest trends, whereas Beijingers prefer Qing Dynasty fashion. In International Business: Competing in the global marketplace (11th ed.). The differences in political beliefs led to the formation of a two-party system in the United States, contrary to George Washington's wishes. As the situation worsened, Trump had to rise and respond, only to find more problems revealing themselves hundreds of thousands of confirmed cases of infections awaiting treatment, medical equipment in short supply, the fatal consequences of the hollowing out U.S. industries. Does that create new investment opportunities? In China, the legal system "is based on civil laws" (Nolan, 2012). Yet they found common ground to work in mutually beneficial ways. Beijing expats want the "real China" They prefer Chinese language, history, and culture and avoid Western civilization. Empowered by Xi to deal with the corruption that had become so prevalent early in that decade, the commission can arrest and hold suspects for several months; its decisions cannot be overturned by any other entity in China, not even the supreme court. There are several major differences: China's system is based on the governance of one political party only (China has 8 other parties that serve in a consultative role). Chinas Good War: How World War II Is Shaping a New Nationalism. The branches of the government are not only responsible for the laws of the land but are also responsible for ensuring free and fair elections and that the citizens of the country that they represent are being heard (USG, 2020). The world will be lifeless and dull if there is only one single model and one single civilization." They dont know how capitalist China is. In the years since, China has become an economic titan, a global leader in technology innovation, and a military superpower, all while tightening its authoritarian system of governmentand reinforcing a belief that the liberal narrative does not apply to China. First, the similarities among both countries institutions would be the hierarchical construction of their judicial system; the separation of three branches of . Only a sudden surge of such events would herald an economic crisis. Corporatism also recognizes only one organization as its sole representative, which can be seen through the CCP (Chan, 1994). There are two political theories that are needed in the discussion, the elite and the pluralist theory. It continues apace. Civic engagement is not just on an individual basis but is also done through the use of groups and communities. That figure is higher than in all Western countries (for example, only 53% of U.S. individual investors trade this frequently); its also even higher than in neighboring Hong Konganother Han Chinese society with a predilection for gambling and a similar, capital-gains-tax-free regime. Chinas rulers, therefore, see foreign engagement as a source less of opportunity than of threat, uncertainty, and even humiliation. For example, over the past 15 years it has built the longest high-speed rail system in the world. Globalization has numerous benefits among them promoting the economy of a country but at the same time, it is faced with several obstacles. China uses its particular authoritarian modeland its presumed legitimacyto build trust with its population in ways that would be considered highly intrusive in a liberal democracy. In 2020, a year of severe difficulties all over the world, there was no significant increase in Chinese corporate defaults. The name of the game in China is scale. (2016). Regardless of who wins, it is unlikely that one of the . A median of 41% across the 14 EU member nations surveyed name China, compared with a median of 39% who say the same about the United States. When we first traveled to China, in the early 1990s, it was very different from what we see today. After observing how other nations are doing well under democracy in the international market, countries with command systems are now doing all they can to change this even if it means giving up some of their traditions. The nationalist identification model that serves the U.S. goal of self-identification. Today its traded on the New York Stock Exchange with a market cap of about $45 billion and has more than 800 million unique active users. Its currency appreciated 6% against the dollar last year. Thus July 2020 polling data from the Ash Center at Harvards Kennedy School of Government revealed 95% satisfaction with the Beijing government among Chinese citizens. In that period there has been ruins of buildings as well as joy of victories, rapid advance in success as well as pride, tortuous ordeals and lesions from mistakes done . Educated in the United States, he worked for the World Bank and J.P. Morgan and taught at the Wharton School. Not blaming China means indirectly acknowledging U.S. shortcomings, which could be explosive in U.S. partisan politics. They dont know how socialist it is, with its Social Security system and its policies to tax the rich by collecting capital gains taxes. In the countryside life retained many of its traditional elements. If China were concerned only with economic outcomes, it would welcome foreign businesses and investors and, provided they helped deliver economic growth, would treat them as equal partners, agnostic as to who owned the IP or the majority stake in a joint venture. The economy has grown 36-fold over the past three decades, chiefly because of market-oriented reforms that have created a vibrant private sector, which now accounts for about two-thirds of Chinas GDP. Wherever PAG operates, we adhere to the same environmental, social, and governance policies. This is the best approach for one to have and ensures that its partnerships remain everlasting. The authors suggest that those assumptions are rooted in three essentially false beliefs about modern China: (1) Economics and democracy are two sides of the same coin; (2) authoritarian political systems cant be legitimate; and (3) the Chinese live, work, and invest like Westerners. What is the political difference between China and the USA? Where can it move its production if the target market is China? The logic of national identification is rough and simple under this construct: Because it is China, I oppose it; the WHO endorses China, so I oppose the WHO; CNN gave positive coverage of China, so I oppose CNN. What are the dangers in Americas continued demonization of China? In fact, the Chinese word for the resolution of a conflict (jiejue) can imply a result in which one side overcomes the other, rather than one in which both sides are content. The economic nationalism model that ultimately serves U.S. economic interests. Economic and macro-political changes happening globally is something that international business management must consider before doing business since it will influence the decisions that they make regarding their business. In this system, the courts depend on the set legal codes by which the juries are only allowed to make their judgment basing on these codes. In conclusion, it is not possible to have a unanimous decision on which political and economic practice is best for the entire universe. While Bidens policy proposals reflect fading U.S. hegemonistic attitudes, Trump is showing Americans the status quo of U.S. power. The Chinese political system is dominated by multiparty cooperation as well as political constitution under the direction of the Communist party of China (CPC), but the USA is governed by the western style of multiparty system. The basic structures of both legal system are extremely similar. Changes that have been reported but not yet acted on by BGN are noted. This shared quest for predictability explains the continuing attractiveness of an authoritarian system in which control is the central tenet. They still blame foreign interference for many of their misfortunes, even if it occurred more than a century ago. In Vietnam, there are three different people. The article reflects the author's views and not necessarily those of CGTN. Sometimes, in fact, it must sacrifice economic benefits for political or military ones. Nobody can take America's newfound domestic support for diversity seriously until it finally starts applying the same principles abroad like China does. The study of geography is centered on the regional system of the human-land relationship, and the core of the study of the geographical system of the human-land relationship is land use change. Bidens proposals have been criticized as new wine in old bottles, and a kind of tinkering; Trump is regarded by Henry Kissinger as marking the end of an old era. Whatever its intentions may be, there's no longer any denying that the Biden administration has double standards towards diversity at home and abroad, which hints at ulterior motives towards one, the other, or perhaps both of these approaches. We have both sat in meetings where business executives, particularly in the technology and pharmaceutical sectors, expressed surprise at Chinas insistence that they transfer ownership of their IP to a Chinese company. Politicians and business leaders continue to misread Chinas strategy and politics. Recognizing that the authoritarian Marxist-Leninist system is accepted in China as not only legitimate but also effective is crucially important if Westerners are to make more-realistic long-term decisions about how to deal with or invest in the country. Seventy years on, many Chinese believe that their political system is now actually more legitimate and effective than the Wests. That Canada has elected communists to office, I suggest is just about as important a disparity as the American gun insanity. The U.S. also repeatedly provoked China using freedom and democracy as a pretext. Get a 100% original essay FROM A CERTIFIED WRITER! Learn how to overcome barriers when working globally. Additionally, before starting a business internationally, it is important to consider additional factors that the law systems of that country do not consider since failure to do so can result in loss of profit. Depending on the conditions surrounding a case, the law system allows special consideration to such as a case. Second, the economic structure is different. The truth, then, is that China is not an authoritarian state seeking to become more liberal but an authoritarian state seeking to become more successfulpolitically as well as economically. For much of its turbulent modern history, China has been under threat from foreign powers, both within Asia (notably Japan) and outside it (the UK and France in the mid 19th century). And with handy apps such as Xuexi Qiangguo (Study the powerful nation and a pun on Study Xi) to teach the basics of thinkers including Marx, Lenin, Mao, and Xi Jinping, political education is now a 21st-century business. But the technology war also hurts U.S. suppliers. Meanwhile, American consumers have paid for the higher tariffs, because the average prices of Chinese exports havent decreased. As the United States is considered a representative republic, citizen engagement is all the more important and starts with providing the citizens of the country, regardless of gender and over the age of 18, the right to vote for their communities in the form of local elections that can elect congresses that represent their towns and constituencies as well in the Presidential election for the various arms of the executive branch. Diversity is naturally occurring, whether it be among ethnicities, religions, governing systems or whatever else. Until Western companies and politicians accept this reality, they will continue to get China wrong. Today he is the CEO of PAG, a $40 billion private equity firm based in Hong Kong. In fact, the pandemic has made the world more dependent on Chinese exports, which grew 21% in November over the previous year. The United States has had the world's largest economy for about 140 years, and it roughly accounts for 22% of global GDP. That history also explains the paradox that the rulers and the ruled in China operate on very different time frames. The founding fathers of USA forecasted their nation to be one that respects and follow basic human rights and Biblical ideas as guidance. However, in recent times China has overtaken the US by at least one measure of total economic strength, which is GDP based on purchasing power parity (PPP). A decade ago its retail-goods market was about $1.8 trillionless than half that of the . You cant become a senior leader in China without having proved your worth as a manager. The top 10 American semiconductor chip makers sell about three times as much in China as in the United States. Springer. Disclaimer: ProEssays.net is a custom writing service that provides online on-demand writing work for assistance purposes. Nevertheless, these changes do not seem to stand any chance of influencing its foreign policymakers, who remain convinced of their system's superiority relative to all others. Globalization. Social Structure In China, the social structure is formal and hierarchical. Hence the old joke that Chinas definition of a win-win scenario is one in which China wins twice. By the 1980s she was in the first generation to go back to university, and even took part in the Tiananmen Square demonstration. As well argue in the following pages, these assumptions reflect gaps in their knowledge about Chinas history, culture, and language that encourage them to draw persuasive but deeply flawed analogies between China and other countries. Countries with command economic systems are now changing their laws to become democratic and allow free-enterprise after realizing benefits it can bring in (Cavusgil, Ghauri & Akcal, 2012). China and the global economy. for only $16.05 $11/page. What are the biggest risks for Chinas economy in the coming years? The task, in both China and the West, is to reduce the gap between the ideal of basic human rights and the reality. The technology war waged by the Trump administration forced China to develop critical technologies, such as semiconductor chips, for which it has relied on U.S. suppliers. A democratic state is supposed to be free and fair, and the President of the country is also chosen by the citizens to lead them through the crisis and to provide them with basic necessities and human rights. A major turning point was the financial crisis of 2008, which in Chinese eyes revealed the hollowness of the Washington consensus that democratization and economic success were linked. One example is the reinvention in the late 2010s of the Central Commission for Discipline Inspection. However, it also highlighted the different ways in which people of color in the USA are suppressed through political representation and voter suppression. After all, if it genuinely believed in the merits of diversity at home, it wouldn't try to snuff out political diversity abroad. This is a belief alien to many Western business executives, especially if theyve had experience with other authoritarian regimes. Examination of School Shootings and Student Safety from International and Non-International Armed Conflict, Comparison Between Democracy Vs. China has stolen American jobs, the thinking goes, so we oppose China. The one long-term asset class in which increasing numbers of Chinese are investedthat is, residential property, ownership of which grew from 14% of 25-to-69-year-olds in 1988 to 93% by 2008is driven also by the need for security: Unlike all other assets, property ensures a roof over ones head if things go wrong, in a system with limited social welfare and a history of sudden policy changes. For example, in making the case for why it should be involved in the UKs 5G infrastructure rollout, Huawei styled itself the John Lewis of China, in reference to the well-known British department store that is regularly ranked as one of the UKs most trusted brands. This paper analyzed the different political structures of both countries and highlighted the stark differences between a democratic state and a communist state, but the analysis also provided one similarity, which was the elitist government structure that existed in both political structures. Canadian jurisdiction is the opposite; if it's not left to the Provinces, it's most likely the responsibility of the federal government. Even in Beijing many people wore Mao suits and cycled everywhere; only senior Chinese Communist Party (CCP) officials used cars. Chinas rapid economic growth is the result of its embrace of a market economy and private enterprise. Its monetary policy is reasonably tight, with the yield on government bonds about 3.5 times that on U.S. Treasuries. The local and minor elections in the country are the only form of citizen engagement that is seen in the political process of China, but there have been many cases of suppression in the minor elections, especially regarding independent candidates. In fact, the pandemic has made the world, Out of the Gobi: My Story of China and America, Money Games: The Inside Story of How American Dealmakers Saved Koreas Most Iconic Bank. A Marxist system is concerned primarily with economic outcomes. People who do take long-term career risks often do so only after fulfilling their primary need for short-term security. There are major differences in the political views of people from different nations.. eligion is another topic that creates differences among cultures.. These are valid points and deserve to be expanded upon in order to enlighten others further. The complete Spotlight package is available in a single reprint. Born in 1955, she experienced as a child the terrible Great Leap Forward famine in which 20 million Chinese starved to death. Beijing expats speak Mandarin better than Shanghai ones. The collapse of the USSR appeared to validate that belief, given that the Soviet regimes inability to deliver meaningful economic growth for its citizens contributed to its collapse: Russias eventual integration into the global economy (perestroika) followed Mikhail Gorbachevs political reforms (glasnost). 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