In November 2020 Chinas trade surplus with the U.S. was 70% greater than it had been in January 2017, when Donald Trump took office. 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. The primary contrast between China and the U.S. is that the former supports political diversity while the latter aggressively imposes its envisioned political conformity upon all others. Diversity is naturally occurring, whether it be among ethnicities, religions, governing systems or whatever else. The only obligation they have is to follow the law that in most cases is straightforward. Its GDP dropped 6.8% in the first quarter of 2020, but resumed growth from the second quarter onward. The name of the game in China is scale. In contrast, the U.S. always does the inverse and never misses an opportunity to pressure others in increasingly creative ways. Additionally, human development is also key for countries to realize full economic growth. What is the political difference between China and the USA? Investors have always been enticed by Chinas vast market. Seventy years on, many Chinese believe that their political system is now actually more legitimate and effective than the Wests. There are two political theories that are needed in the discussion, the elite and the pluralist theory. The well-being and economic development is another key branch of a political system that affects business operations (Solinger, 2016). But surely gun shops being essential service during a huge medical virus shutdown is the height of insanity at this moment on this planet. 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? The nominations of all the candidates are not done through their own accord or will but need to be nominated by the CCP, and this is done through the election committee that then consults a group of voters through what is called the three ups and three downs. But the technology war also hurts U.S. suppliers. (2012). Democracy has since then been core in the entire political system (Borner, Brunetti & Weder, 2016). Avoid editing or writing from scratch! Obviously, as an economy develops and new problems emerge, all social systems need certain reforms. Therefore, a country's political system can be assessed effectively by using aspects such as collectivism or individualism and totalitarianism or democracy. Accelerate your career with Harvard ManageMentor. Weijian Shan was born in China and had his life upended by the Cultural Revolution. Mandarin. Some manufacturing has been relocated away from China since the trade war with the U.S. began in 2018, but that hasnt made a dent in either Chinas exports or Americas trade deficit. But defaults and bankruptcies are common in a market economy. The legal system of a country plays a key role in terms of its marketing and investment opportunities. The political system of China has been operational since its establishment for 50 years. HBR Learnings online leadership training helps you hone your skills with courses like Global Collaboration. Chinas high-speed rail could cover the distance between Boston and Chicago in about four hours, whereas Amtraks fastest service takes 22 hours. In China, the legal system "is based on civil laws" (Nolan, 2012). 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. 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. What are the biggest risks for Chinas economy in the coming years? (2016). Access more than 40 courses trusted by Fortune 500 companies. When Nixon first visited China, in 1972, the differences between the two countries were vast, in political and economic systems and of course in ideology. China has been shifting away from an investment-driven growth model to one led by private consumption. 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. (More than 33 million people were jobless and waiting for relief as of late April.) Social Structure In China, the social structure is formal and hierarchical. There are two political theories that are needed in the discussion, the elite and the pluralist theory. However, there are usually lawful ways to get around that. Chinas saving rate will drop significantly as its population ages, and investment will slow. Depending on the conditions surrounding a case, the law system allows special consideration to such as a case. 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. 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. Those with low social-credit scores may find themselves prevented from buying an airline ticket or getting a date on an app. Eligible voters are chosen through a register for rural and urban voters to make the process easier, and smaller elections have a number of 200 to 300 voters while the larger level can have up to 1000 voters. Trade wars, nationalism, and the pandemic have led many companies to question their supply chain strategyin particular basing manufacturing in China, thousands of miles from their markets. For international business management of doing business in a country like China, it can sometimes get hard since it is not possible to function liberally as in a democratic nation. Beijing expats speak Mandarin better than Shanghai ones. When life is (or has been within living memory) unpredictable, people tend to apply a higher discount rate to potential long-term outcomes than to short-term onesand a rate materially higher than the one applied by people living in more-stable societies. This shared quest for predictability explains the continuing attractiveness of an authoritarian system in which control is the central tenet. For example, a 2015 survey found that 81% of them trade at least once a month, even though frequent trading is invariably a way to destroy rather than create long-term fund value. Even though both countries are different in every way, they are still recognized as each others competition in the International Arena. 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). It is also the duty of the representative republic to inform its citizens of their rights, and the candidacy for the elections needs to be transparent since city council members to local judges to mayors, and state legislators are all appointed through voting in the United States. Nolan, P. (2012). Hence the old joke that Chinas definition of a win-win scenario is one in which China wins twice. For any deep analysis of the ideological aspects of the China-U.S. rivalry to be complete, two questions need to be answered: What political interests do the ideologies serve, and in what forms are they presented? Second, the economic structure is different. Amid the unprecedented challenge of COVID-19, clear differences have emerged between the Chinese and American responses. The differences in the political orders of China and the United States are "irreconcilable", making it difficult to keep relations between the two countries on a stable track, a leading. For example, over the past 15 years it has built the longest high-speed rail system in the world. Until Western companies and politicians understand this and revise their views, they will continue to get China wrong. Our firm, PAG, invests throughout Asia and occasionally beyond. 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. Would you like to get this essay by email? Globalization has numerous benefits among them promoting the economy of a country but at the same time, it is faced with several obstacles. Although many in the West may believe that China sees only opportunity in its 21st-century global plans, its motivation is very different. 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. 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. Unlike China, the U.S. spends more than 50% above its annual revenues leading to high deficits. China has stolen American jobs, the thinking goes, so we oppose China. 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. In conclusion, it is not possible to have a unanimous decision on which political and economic practice is best for the entire universe. Much of Donald Trumps rhetoric and his actions on China were meant to deflect attention from his leadership failures at home, such as neglecting his duty to protect the public from the coronavirus. 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 a democratic system, but in countries . 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