Since China is a communist and one-party state, citizen engagement is lower in comparison to democratic states. What are the biggest risks for Chinas economy in the coming years? 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. Learn how to overcome barriers when working globally. Additionally, human development is also key for countries to realize full economic growth. What has caused the frequent conflicts between the two countries? 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. Does that create new investment opportunities? And when Xi announced, in 2017, that the three critical battles for Chinas development would fall in the areas of reducing financial risk, addressing pollution, and alleviating poverty, he also made it clear that the objective of these reforms was to solidify the system rather than to change it. It often compares itself to brands with which Westerners are familiar. Both countries have a Judicial, Executive, and Legislative branch. Furthermore, it is important for nations to be flexible when it comes to global market system and change laws when necessary in order to attract investment and grow the economy like China did. Chinas history continues to color its view of international relationsand in large part explains its current obsession with the inviolability of its sovereignty. He was born in China, and his life was upended during the Cultural Revolution, when he was sent off to do farm labor in the Gobi Desert. Chinas saving rate will drop significantly as its population ages, and investment will slow. For example, over the past 15 years it has built the longest high-speed rail system in the world. The Communist Party of China (CPC) harbors no supremacist beliefs and doesn't plan to export its governing model abroad. Nolan, P. (2012). Unlike China, the U.S. spends more than 50% above its annual revenues leading to high deficits. This suggests that something distinctive to mainland China influences this behavior: long-term unpredictability thats sufficiently recent to have been experienced by or passed on to those now buying stocks. People who do take long-term career risks often do so only after fulfilling their primary need for short-term security. The differences between people of different cultures far outweigh their similaritiesI believe that differences in people of different cultures far outweigh their similarities.. One reason that many people misread Chinas trajectory may be thatparticularly in the English-language promotional materials the Chinese use overseasthe country tends to portray itself as a variation on a liberal state, and therefore more trustworthy. This is the logical extension of China-U.S. competition from the perspective of U.S. economic nationalism. Its GDP dropped 6.8% in the first quarter of 2020, but resumed growth from the second quarter onward. It is important to understand the background of the. It will take years if not decades for China to catch up in some areas, at great cost. Even though China has a one-party state, it, however, has eight independent political parties that are controlled by the CCP (CIA, 2020). 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. Now CEO of the Hong Kongbased $40 billion private-equity firm PAG, Shan spoke with HBR Editor in Chief Adi Ignatius about the economic prospects for China and the United States. Its monetary policy is reasonably tight, with the yield on government bonds about 3.5 times that on U.S. Treasuries. However, both states have a very different political landscape, which is what will be discussed in the paper today. The basic structures of both legal system are extremely similar. Chinas rapid economic growth is the result of its embrace of a market economy and private enterprise. Not completely and not without very high costs. Chinas leaders argue that its essentially Leninist rule book makes Chinese politics far less arbitrary or nepotistic than those of many other, notably Western, countries (even though the system has its share of back-scratching and opaque decision-making). 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. But its also conspicuously different: The concept of U.S. hegemony goes beyond economics to such fields as politics, the military and society. Sometimes, in fact, it must sacrifice economic benefits for political or military ones. Hence the old joke that Chinas definition of a win-win scenario is one in which China wins twice. In the countryside life retained many of its traditional elements. 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. Wherever PAG operates, we adhere to the same environmental, social, and governance policies. There are, however, other forms of citizen engagement at a more local level when electing a township government, which can be done through public recommendation or public nomination ( (Cheng), 2011). That means that despite the trade war, the technology war, and the capital warthe U.S. governments restricting American investment in ChinaChinas GDP will most likely be 10% bigger in 2022 than it was in 2019, whereas the U.S. economy probably will only recover to 2019 levels by 2022, according to the International Monetary Fund. Is it that Chinas development doesnt conform with the values of freedom and democracy, or that Chinas growing strength is a threat to U.S. hegemony? If the U.S. abandons the one-China policy and supports Taiwans independence, conflict will be inevitable, with unimaginable consequences for the world market. Democracy has since then been core in the entire political system (Borner, Brunetti & Weder, 2016). The benefits are both financial (for example, access to mortgage loans) and social (permission to buy a ticket on one of the new high-speed trains). Solinger, D. J. According to Hill (2017) "from time to time a nation will adopt a system that will merge collectivism and individualism alongside democracy". A cleaner in Chongqing now owns several apartments because the CCP reformed property laws. The well-being and economic development is another key branch of a political system that affects business operations (Solinger, 2016). Given the unique features of China's political and economic system, the government can directly affect the carbon market . As the author Yuval Noah Harari has pointed out, liberalism has had few competitors since the end of the Cold War, when both fascism and communism appeared defeated. The executive branch of the government focuses on enforcing the laws and policies and includes major political figures such as the President and the Cabinet. But the state-owned sector remains too big and inefficient. 808 certified writers online. China's lead over the U.S. is especially clear in Germany, the Netherlands, the Czech Republic and France, where people are at least 10 percentage points more likely to see China as the leading economy. Moving from Beijing to Shanghai has made my Mandarin worse. By 2008 she was making the most of the rise in disposable incomes by buying new consumer goods that her parents could only have dreamt about. The President and the National Peoples Congress, which is the main body of the country, are all elected by the Peoples Congress. The complete Spotlight package is available in a single reprint. They still blame foreign interference for many of their misfortunes, even if it occurred more than a century ago. China's political system encourages parties, organizations, and representatives from various circles of Chinese society to discuss basic policy as well as important political, economic, cultural and social issues. A Chinese professor who has lived in both the US and China believes there is a core cultural difference leading to the country's diverging paths. 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. Hence the public debt as a percentage of GDP is higher for the U.S. relative to China and the. From the U.S. perspective, upholding the banner of freedom and democracy no longer matters. U.S. self-identification has been shaken under these circumstances. From the depth of their hearts, Americans confront the reality that the beacon of freedom has to learn from the authoritarian government of communist China in some respects. Familiarity with Leninist doctrine is still important for getting ahead. At 22,000 miles, it is twice as long as the rest of the worlds combined. This, of course, mirrors the role of U.S. defense and intelligence spending in the development of Silicon Valley. 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. This shapes the way they make long-term commitments, especially those that entail short-term trade-offs or losses. 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. That Canada has elected communists to office, I suggest is just about as important a disparity as the American gun insanity. Citizen engagement is a necessary facet of not just American politics but also a democratic state. Unfortunately, you cant copy samples. The continuous growth of technology and infrastructure in many nations has made globalization to reach its climax. You cant become a senior leader in China without having proved your worth as a manager. In International Business: Competing in the global marketplace (11th ed.). The legal system of a country plays a key role in terms of its marketing and investment opportunities. The top 10 American semiconductor chip makers sell about three times as much in China as in the United States. 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. 55-64). Despite the new Democratic government's support of domestic diversity, it continues hostile Trump-era policies intended to pressure China, Russia and others into conforming with the U.S.'s political demands. This suggests some obvious hypocrisy on the part of the Biden administration and perhaps even a lack of sincerity with respect to the domestic causes that it supports. But in China the consumer applications have come faster, making more obvious the link between government investment and products and services that benefit individuals. China is also often at pains to suggest to foreign governments or investors that it is similar to the West in many aspectsconsumer lifestyles, leisure travel, and a high demand for tertiary education. It is unbelievable that the western countries face a serious competition from these nations due to the political stability found in the two countries. ChatGPT has become a sensation since its public release in November, with its ability to produce plausible responses to text prompts, including requests to write essays. The United States has had the world's largest economy for about 140 years, and it roughly accounts for 22% of global GDP. Weijian Shan was born in China and had his life upended by the Cultural Revolution. The United States has a democratic system, but in countries . All these testify to the strength of the Chinese economy. Entry to the CCP and to a university involves compulsory courses in Marxist-Leninist thought, which has also become part of popular culture, as evidenced by the 2018 TV talk show Marx Got It Right. 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. Policy makers, in contrast, looking for ways to gain more control and sovereignty over the future, now play a much longer game than the West does. Springer. When individuals have the powerto realize their dreams, they will demand a greater say.. This shared quest for predictability explains the continuing attractiveness of an authoritarian system in which control is the central tenet. Earn badges to share on LinkedIn and your resume. (If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. The critical distinction is that the Chinese system is not only Marxist, its Marxist-Leninist. Losing the China market will be costly for American tech companies and deprive them of funds for further R&D. Decisionsby both individuals and the stateabout how to invest all serve one purpose: to provide security and stability in an unpredictable world. Time is money, in other words. The geographic location of a country, its educational, political and legal systems plays a key role in the economic well-being of a country. 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. Canadian jurisdiction is the opposite; if it's not left to the Provinces, it's most likely the responsibility of the federal government. -- China's system of political parties is a system of multiparty cooperation and political consultation under the leadership of the Communist Party of China (CPC), not a Western-style multiparty system. A decade ago its retail-goods market was about $1.8 trillionless than half that of the United States. What the Chinese government does oppose is the system of electoral democracy as . Economic and Political Differences: China VS. United States. China, if it doesnt respond to U.S. nationalist challenges, will face soaring nationalist pressures at home. Meanwhile, American consumers have paid for the higher tariffs, because the average prices of Chinese exports havent decreased. The Trump administration was determined to damage Chinas economy and businesses. For example, weve interviewed couples in which the wife jumps into the sea of starting her own businessbecoming one of Chinas many female entrepreneursbecause her husbands stable but lower-paid state-sector job will provide the family with security. Trumps trade war was an abject failure. By comparison, progress on these issues is for Western economies extremely slow. ), Copyright 2020 CGTN. When we first traveled to China, in the early 1990s, it was very different from what we see today. Although murdering babies and elderly with medical sanctions in multiple too left . The Communist Party of China does not give the citizens any chance to question the existing and it has total control of everything going on in the state (Solinger, 2016). 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. In fact, the pandemic has made the world more dependent on Chinese exports, which grew 21% in November over the previous year. Yet they found common ground to work in mutually beneficial ways. There are major differences in the political views of people from different nations.. eligion is another topic that creates differences among cultures.. But surely gun shops being essential service during a huge medical virus shutdown is the height of insanity at this moment on this planet. And believing that Chinas economic growth would have to be built on the same foundations as those in the West, many failed to envisage the Chinese states continuing role as investor, regulator, and intellectual property owner. While the U.S. political system is partly inspired by the British example, it differs in many important respects. 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. This is a belief alien to many Western business executives, especially if theyve had experience with other authoritarian regimes. 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. In terms of political system, China is unique to all other countries in the world since up to date it is still run by a Communist party (Nolan, 2012). 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. A Leninist approach to selecting future leaders is also a way the CCP has maintained its legitimacy, because to many ordinary Chinese, this approach produces relatively competent leaders: They are chosen by the CCP and progress through the system by successfully running first a town and then a province; only after that do they serve on the Politburo. If a business is successful, its usually open to taking outside capital so that it can quickly expand nationwide. The Peoples Republic of China is still one of the few countries in the world that follow the communist government structure and is led by a one-party system. 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). (2016). Americans focus on speed and efficiency and will hurry to get things done quickly. Cavusgil, S. T., Ghauri, P. N., & Akcal, A. Sorry, but it's not possible to copy the text due to security reasons. 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 . We are using Google Analytics to enhance your experience. Also, the communism in China is affected by the political tradition of ancient Chinese imperial system. But it wont back off from its territorial claims, all of which predate the Peoples Republic of China. Western systems are . Our firm, PAG, invests throughout Asia and occasionally beyond. This clear disconnect is attributable to the so-called "culture war" that's spiraled out of control over the past year and has led to profound changes in American society since then. And the narrative has had some powerful supporters. Are you seeing a significant shift in supply chains out of China? Doing business in emerging markets. (b) The national average SP of CO2 is 266.8 US dollars per ton, which is much higher than the carbon price in the emission trading system. References Borner, S., Brunetti, A., & Weder, B. Many in the West accept the version of China that it has presented to the world: The period of reform and opening begun in 1978 by Deng Xiaoping, which stressed the need to avoid the radical and often violent politics of the Cultural Revolution, means that ideology in China no longer matters. This is a natural outcome of the decline in U.S. strength. Seventy years on, many Chinese believe that their political system is now actually more legitimate and effective than the Wests. But at every point since 1949 the Chinese Communist Partycentral to the institutions, society, and daily experiences that shape all Chinese peoplehas stressed the importance of Chinese history and of Marxist-Leninist doctrine. The resulting victory, which for decades the CCP spun as its solo vanquishing of an external enemy, was reinforced by defeat of an internal one (Chiang Kai-shek in 1949), establishing the legitimacy of the party and its authoritarian system. Learn how to overcome barriers when working globally. for only $16.05 $11/page. In contrast, the U.S. always does the inverse and never misses an opportunity to pressure others in increasingly creative ways. Part of the systems legitimacy in the eyes of the Chinese is, again, rooted in history: China has often had to fight off invaders and, as is rarely acknowledged in the West, fought essentially alone against Japan from 1937 until 1941, when the U.S. entered World War II. Nations without better access to such facilities depend on their agriculture and natural resources to enhance economic growth. Many people have wrongly assumed that political freedom would follow new economic freedoms in China and that its economic growth would have to be built on the same foundations as in the West. Springer. Majority of China's production companies are owned and managed by the government. Weijian Shan understands the delicate U.S.-China dynamic as well as anyone. The Stages of Strategic Crime Analysis Report. Even though both countries are different in every way, they are still recognized as each others competition in the International Arena. Also, while its relatively easy to shift the sourcing of a low-value-added product from China to Vietnam or Mexico, how can you move an entire supply chain with many indigenous players? Hire a professional with VAST experience! 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. The point is that a China-based supply chain has proved a blessing, not a curse, in this pandemic. However, the beliefs and positions of political parties change over time, so . Lets imagine the personal history of a Chinese woman who is 65 today. The civil law system only allows the judge to make his or her judgment basing on the law and should not consider other factors surrounding the business. There are other courts in the land such as High Courts and District and County Peoples Courts and Special Courts for military and forestry issues. According to Nolan (2012) "as for the number of democrat countries, 123 of the 196 countries are exercising democracy as compared to only 69 countries in 1987" (p. 101). The paper also highlighted citizen engagement in both countries, either through direct elections in the USA or through the CCP controlled nominations in China. On the foreign front, China never tried to pressure anyone to conform to its domestic political system but instead not only respects, but celebrates, their differences. China is bordered by several countries and lies on the coastline of the Pacific Ocean. He wisely noted that "Democracy is not Coca-Cola, which, with the syrup produced by the United States, tastes the same across the world. Second quarter onward supports Taiwans independence, conflict will be discussed in the entire system! 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