Comparing the Economies and Cultures of United States and China

Abstract

The economy of China and its culture has varying similarities and differences to that of the United States. China has leaped from poverty due to the effective market reforms introduced in 1978 that has eliminated the weaknesses its economy had, particularly compared to that of the United States. The economic intervention of the Chinese state made its economy grow at a high rate, a trend that if maintained will see it surpass the economy of the United States. This has made many people believe that state-led capitalism of the People’s Republic of China as being superior to the free-market capitalism of the United States. The culture of the United States is strikingly different to that of China in various ways considering that the Chinese culture is ancient, while that of the United States can be traced to the late 15^th century when Christopher Columbus discovered America. Part of the economic progress of both the United States and the People’s Republic of China is attributed to their rich cultural diversity that is believed to have positive impacts to their respective economies. This paper therefore seeks to compare the economies and cultures of the United States and that of the People’s Republic of China to improve the understanding of these societies.

 

 

 

 

Economy

The economy of the United States of America is completely different to that of the People’s Republic of China. The United States has a free market capitalist economy while China has a state-led capitalist economy. The United States capitalist economy allows private individuals and business firm to carry out production and exchange of goods and services in a competitive market influenced by forces of demand and supply. The economic system of China has evolved from communism to a state-led capitalism where the government controls the production and exchange of goods and services and other economic activities within the economy. The free market economy of the United States is highly dependent on the creativity and innovations of individuals for prosperity, while the growth of the Chinese economy is carefully directed by the national government.

Individuals and private businesses in the United States fight for the market share fiercely through competition in the various sectors of the economy with the government having very little intervention. A firm’s competitive advantage and continued existence in the market is determined by its innovativeness. Contrary to the United States, the Chinese market is dominated by state-owned enterprises, particularly in the critical sectors such as banking, transportation, telecommunication, and energy. These state-owned enterprises often receive great subsidies from the government with the aim of preventing competition. State-owned enterprises in China are usually favored by the government. The Chinese government has placed trade barriers that have restricted foreign investors thereby unfairly disadvantaging foreign competitors. The United States government has often encouraged competition in its economy since it believes that competition increases innovations and quality of goods produced and services offered (Baumol 295-299).

The cost of production in China is cheaper compared to that of the United States. The artificial undervaluing of the Chinese currency (Yuan) by the Chinese government is often seen as the cause of its low production costs. The undervaluing of the Yuan against the dollar has made Chinese exports to be cheaper compared to those from the United States in the global competitive economy. The low cost of production in China has succeeded in attracting investments from multinational corporations, including those from the United States to make them competitive in the global market. The opening up of factories by the United States’ corporations in China has reduced unemployment rates in China to a low of 4.1 percent in 2011(Worldbank.org). The export of cheap product into the United States from China has hurt the domestic United States manufactures and further depressed its unemployment rate to 8.9 percent in 2011 as compared to 5.8 in 2008. The United States deficit with China has continued to increase over the years due to the undervaluation of the Yuan. In 2010, China’s goods exports to the United States were valued at $229.2 billion, while exports of goods from the United States to China were $58.8 billion, making the United States deficit in goods to be $173.4 billion (Zhou 631). Zhou further states that this United States trade deficit with China causes the United States to lose 2.4 million jobs to China (631). Despite China has a lower unemployment rate than the United States, the average income of an American was higher than that of a Chinese due to the low wage rates paid in the Chinese labor market. The Gross National Income (GNI) per capita of the United States in 2012 was $50,000, while that of China was $5,740.

The Gross Domestic Product (GDP) of the United States is greater than that of China in 2012 at $15.68 trillion and $8.227 trillion respectively (Worldbank.org). China had a higher GDP annual growth rate of 8 percent in 2012 as compared to that of the United States at 2 percent during the same period. The United States and China also greatly differ in terms of natural economic resources that drive their economies. China is the world’s second largest oil importer after the United States. Despite the United States being the worlds’ leading oil importer, it has massive oil reserves most of which have not been exploited yet. The little oil reserves in China are incapable of sustaining its internal demands, which made it to adopt an importation driven oil-plan. China is also the worlds’ leading importer of coal, soybean, and iron ore. The United States has massive oil fields, but obtains most of its industrial energy from nuclear power plants. It also exports most of its agricultural produce since its land is more fertile as compared that of China. This makes China to be more dependent on foreign markets and supplies than the United States.  The growth of the United States and the Chinese economies can both be attributed to their shifts from agriculture to manufacturing and services based economies. China has started to develop its indigenous economy by beginning to build an economy that relies on innovation rather than imitation (Zhou 632). The economic system of China is therefore seen as being in an evolutionary process from a pure socialist economy to an increasingly capitalist economy. Its current state-led economy combines aspects of both socialist economy and the capitalist economy, making it a hybrid capitalist economy. The competitiveness of the state-owned enterprises and other private businesses is a characteristic of a capitalist economy. China has embraced aspects of its traditional economic by centrally controlling the entire economic system. These two countries consider their respective economic systems as being superior. While the United States attributes its massive industrial and technological developments in the 19^th and 20^th centuries to its free-market capitalism, China attributes its economic development and ability to withstand the 2008 global financial crisis to its state-led capitalism. Despite China being the second largest economy in the world, it will take time take time to catch up with that of the United States.

Culture

There exist significant differences between the Chinese culture and that of the United States. The Chinese culture can be traced to thousands of years ago before the invention of fire, the wheel, and domestication. Contrary to the Chinese culture, the American culture can only be traced to back to the late 15^th century when Christopher Columbus discovered America. The Chinese therefore have a rich cultural history compared to the United States, whose population is largely comprised of persons of European origin. Archaeological evidence indicates that the invention of writing in the Chinese civilization took place around 1700 BC where symbols were carved on oracle bones and tortoise shells. The Chinese language is tonal and comprised of characters, while that of the United States is based on Western symbols and the alphabet (Gu 34-35).

The religious beliefs of the Chinese differ greatly from that the United States inhabitants. Confucianism, Taoism, and Buddhism are the major religions in China; and they greatly influence each other because they have many common concepts (J. Fowler and M. Fowler 2). Confucianism is viewed to be more of a school of philosophy rather than a religion, and it mainly serves as a basis for social and interpersonal relationships; and it advocates for respect in the family and compassion in the government administration. Taoism religion puts emphasis on humans’ relationship with nature. Buddhism is the most practiced and influential religion in China, while Christianity and Islam are minority religions. Contrary to China, Christianity is the prevalent religion in the United, but religion is generally losing its influence since more Americans are becoming atheists.  The religious history of China is ancient while that of the United States began slightly more than a century before its independence from Britain since it was introduced by immigrants from Europe.

The family structure of the Chinese is similar to that of the United States since they are both patriarchal in nature. Traditionally, the Chinese have been valuing their families more than their individual well-being and personal rights. Contrary to the Chinese society, the United States society promotes individualism, where individual well-being is valued more than the family well-being. It is common to find extended families in China, where at least two generations live together, contrary to the United States where nuclear and single parent families dominate. The Chinese society is also hierarchical as compared to that of the United States. The Chinese people highly respect their elders to the extent that they address them by title and last name. Most decisions are made by the eldest males, while the females assume subordinate roles to men. Older Chinese women have significant power thereby making them the major decision-makers in matters related to the household and family. The authority of the Chinese children over their siblings increases with age, thereby granting more authority to the older children. Conversely, the United States lacks a formalized hierarchical structure in the community and social relationships. The males and females in the United States perform almost similar roles as there is little gender differentiation and preference. The Chinese therefore have a high power distance as compared to the Americans. Gender inequality is more prevalent in a China as compared to the United States. The Chinese traditionally value sons than daughters since sons are considered as a future investment. The reason is that daughters will finally join their husband’s family in the future. The equality is prevalent in the United States since both males and females are considered as equals.

The Chinese have a deep traditional health beliefs and practices than those held by the inhabitants of the United States. The indigenous approach to health and sickness of the Chinese is focuses on the balance between an individual’s body, mind, and the spirit (Center for Disease Control and Prevention 18). The contrasting aspects of the mind, body, and spirit are complementary and therefore coexist; and their imbalance is believed to cause illness. The Chinese use specific foods and herbs to treat illness before seeking western treatment (qtd. in Center for Disease Control and Prevention 19). The United States society does not have strong beliefs in traditional health beliefs and practices like their Chinese counterparts. Americans are therefore likely to seek treatment in modern health institutions having well trained medical personnel who apply modern treatment techniques that are science-based.

The Chinese have a very different perception of time as compared to the Americans. The American culture perceives time as being linear and structured, with time moving on one plane and in one direction, hence the need for it to be scheduled, managed, organized, and accounted for. The Chinese view time as being non-linear, and consisting of numerous events that occur at the same time with many people. This makes the Chinese have less focus on time precision and its accounting as compared to their relationships and cultural traditions. The Chinese therefore perceive time in relation to the past, the present, and the future. This is the reason why the Chinese have national traditional festivals and calendars such as the year of the snake, dragon, and rabbit, a kind of culture that is absent in the United States.

The Chinese are more conservative as compared to the Americans. The conservativeness of the Chinese people is largely expressed through their traditional health beliefs and practices that are still widely practiced in the current times. Their use of pictographs and characters in writings is still widely used in the present times as it was many centuries ago. The Chinese writings and language have not undergone any significant changes over the centuries. They are still practicing the ancient religious beliefs such as Buddhism and Taoism. Contrary to the Chinese, the United States has a more liberal culture that easily adopts new changes and ideologies. The decline of religious influence in the United States and the increase in Atheism best illustrates their liberal ideologies (Laderman and Leon 509). The United States also has very few if any traditional celebrations similar to those celebrated in the Chinese lunar calendar such as the year of the snake that results to the largest population movements across the world as the Chinese people join their families for its celebrations.

Conclusion

It is evident that the economies and cultures of the United States and the People’s Republic of China have several similarities and differences. The United States and China have the largest closely competing economies in the world, each having a different economic system that it considers superior to the other. The massive industrial and technological advancement of the United States in the 19^th and 20^th century is attributed to its superior capitalist market economic system. China considers its state-led capitalist economy superior due to its sustained economic growth since 1978; and its ability to withstand the 2008 global financial crisis that adversely affected the world’s economies, including that of the United States. The economic growth of China in the near and far future will depend on its international bilateral agreements on the supply of raw materials since its natural resources cannot meet its internal demand to continue sustaining its economic growth. Contrary to China, the United States has massive natural resources such as coal, oil, and iron ore deposits, which it can utilize to sustain its economy in the future. The culture of the Chinese is quite different from that of the United States because the Chinese culture dates back to the ancient times, centuries before the establishment of the United States. The Chinese culture is more traditional as compared to that of the United States whose society is more liberal. The Chinese are more conservative since they still believe in the traditional health practices such as using herbs as medicine as compared to the United States, which lacks a well-defined culture due to its recent history, liberal ideologies, and ethnic diversity. The economies and cultures of the United States and the People’s Republic of China are greatly influenced by their different economic and cultural histories, experiences, and societal obligations.

Comparing the Economies and Cultures of United States and China

Abstract

The economy of China and its culture has varying similarities and differences to that of the United States. China has leaped from poverty due to the effective market reforms introduced in 1978 that has eliminated the weaknesses its economy had, particularly compared to that of the United States. The economic intervention of the Chinese state made its economy grow at a high rate, a trend that if maintained will see it surpass the economy of the United States. This has made many people believe that state-led capitalism of the People’s Republic of China as being superior to the free-market capitalism of the United States. The culture of the United States is strikingly different to that of China in various ways considering that the Chinese culture is ancient, while that of the United States can be traced to the late 15^th century when Christopher Columbus discovered America. Part of the economic progress of both the United States and the People’s Republic of China is attributed to their rich cultural diversity that is believed to have positive impacts to their respective economies. This paper therefore seeks to compare the economies and cultures of the United States and that of the People’s Republic of China to improve the understanding of these societies.

 

 

 

 

Economy

The economy of the United States of America is completely different to that of the People’s Republic of China. The United States has a free market capitalist economy while China has a state-led capitalist economy. The United States capitalist economy allows private individuals and business firm to carry out production and exchange of goods and services in a competitive market influenced by forces of demand and supply. The economic system of China has evolved from communism to a state-led capitalism where the government controls the production and exchange of goods and services and other economic activities within the economy. The free market economy of the United States is highly dependent on the creativity and innovations of individuals for prosperity, while the growth of the Chinese economy is carefully directed by the national government.

Individuals and private businesses in the United States fight for the market share fiercely through competition in the various sectors of the economy with the government having very little intervention. A firm’s competitive advantage and continued existence in the market is determined by its innovativeness. Contrary to the United States, the Chinese market is dominated by state-owned enterprises, particularly in the critical sectors such as banking, transportation, telecommunication, and energy. These state-owned enterprises often receive great subsidies from the government with the aim of preventing competition. State-owned enterprises in China are usually favored by the government. The Chinese government has placed trade barriers that have restricted foreign investors thereby unfairly disadvantaging foreign competitors. The United States government has often encouraged competition in its economy since it believes that competition increases innovations and quality of goods produced and services offered (Baumol 295-299).

The cost of production in China is cheaper compared to that of the United States. The artificial undervaluing of the Chinese currency (Yuan) by the Chinese government is often seen as the cause of its low production costs. The undervaluing of the Yuan against the dollar has made Chinese exports to be cheaper compared to those from the United States in the global competitive economy. The low cost of production in China has succeeded in attracting investments from multinational corporations, including those from the United States to make them competitive in the global market. The opening up of factories by the United States’ corporations in China has reduced unemployment rates in China to a low of 4.1 percent in 2011(Worldbank.org). The export of cheap product into the United States from China has hurt the domestic United States manufactures and further depressed its unemployment rate to 8.9 percent in 2011 as compared to 5.8 in 2008. The United States deficit with China has continued to increase over the years due to the undervaluation of the Yuan. In 2010, China’s goods exports to the United States were valued at $229.2 billion, while exports of goods from the United States to China were $58.8 billion, making the United States deficit in goods to be $173.4 billion (Zhou 631). Zhou further states that this United States trade deficit with China causes the United States to lose 2.4 million jobs to China (631). Despite China has a lower unemployment rate than the United States, the average income of an American was higher than that of a Chinese due to the low wage rates paid in the Chinese labor market. The Gross National Income (GNI) per capita of the United States in 2012 was $50,000, while that of China was $5,740.

The Gross Domestic Product (GDP) of the United States is greater than that of China in 2012 at $15.68 trillion and $8.227 trillion respectively (Worldbank.org). China had a higher GDP annual growth rate of 8 percent in 2012 as compared to that of the United States at 2 percent during the same period. The United States and China also greatly differ in terms of natural economic resources that drive their economies. China is the world’s second largest oil importer after the United States. Despite the United States being the worlds’ leading oil importer, it has massive oil reserves most of which have not been exploited yet. The little oil reserves in China are incapable of sustaining its internal demands, which made it to adopt an importation driven oil-plan. China is also the worlds’ leading importer of coal, soybean, and iron ore. The United States has massive oil fields, but obtains most of its industrial energy from nuclear power plants. It also exports most of its agricultural produce since its land is more fertile as compared that of China. This makes China to be more dependent on foreign markets and supplies than the United States.  The growth of the United States and the Chinese economies can both be attributed to their shifts from agriculture to manufacturing and services based economies. China has started to develop its indigenous economy by beginning to build an economy that relies on innovation rather than imitation (Zhou 632). The economic system of China is therefore seen as being in an evolutionary process from a pure socialist economy to an increasingly capitalist economy. Its current state-led economy combines aspects of both socialist economy and the capitalist economy, making it a hybrid capitalist economy. The competitiveness of the state-owned enterprises and other private businesses is a characteristic of a capitalist economy. China has embraced aspects of its traditional economic by centrally controlling the entire economic system. These two countries consider their respective economic systems as being superior. While the United States attributes its massive industrial and technological developments in the 19^th and 20^th centuries to its free-market capitalism, China attributes its economic development and ability to withstand the 2008 global financial crisis to its state-led capitalism. Despite China being the second largest economy in the world, it will take time take time to catch up with that of the United States.

Culture

There exist significant differences between the Chinese culture and that of the United States. The Chinese culture can be traced to thousands of years ago before the invention of fire, the wheel, and domestication. Contrary to the Chinese culture, the American culture can only be traced to back to the late 15^th century when Christopher Columbus discovered America. The Chinese therefore have a rich cultural history compared to the United States, whose population is largely comprised of persons of European origin. Archaeological evidence indicates that the invention of writing in the Chinese civilization took place around 1700 BC where symbols were carved on oracle bones and tortoise shells. The Chinese language is tonal and comprised of characters, while that of the United States is based on Western symbols and the alphabet (Gu 34-35).

The religious beliefs of the Chinese differ greatly from that the United States inhabitants. Confucianism, Taoism, and Buddhism are the major religions in China; and they greatly influence each other because they have many common concepts (J. Fowler and M. Fowler 2). Confucianism is viewed to be more of a school of philosophy rather than a religion, and it mainly serves as a basis for social and interpersonal relationships; and it advocates for respect in the family and compassion in the government administration. Taoism religion puts emphasis on humans’ relationship with nature. Buddhism is the most practiced and influential religion in China, while Christianity and Islam are minority religions. Contrary to China, Christianity is the prevalent religion in the United, but religion is generally losing its influence since more Americans are becoming atheists.  The religious history of China is ancient while that of the United States began slightly more than a century before its independence from Britain since it was introduced by immigrants from Europe.

The family structure of the Chinese is similar to that of the United States since they are both patriarchal in nature. Traditionally, the Chinese have been valuing their families more than their individual well-being and personal rights. Contrary to the Chinese society, the United States society promotes individualism, where individual well-being is valued more than the family well-being. It is common to find extended families in China, where at least two generations live together, contrary to the United States where nuclear and single parent families dominate. The Chinese society is also hierarchical as compared to that of the United States. The Chinese people highly respect their elders to the extent that they address them by title and last name. Most decisions are made by the eldest males, while the females assume subordinate roles to men. Older Chinese women have significant power thereby making them the major decision-makers in matters related to the household and family. The authority of the Chinese children over their siblings increases with age, thereby granting more authority to the older children. Conversely, the United States lacks a formalized hierarchical structure in the community and social relationships. The males and females in the United States perform almost similar roles as there is little gender differentiation and preference. The Chinese therefore have a high power distance as compared to the Americans. Gender inequality is more prevalent in a China as compared to the United States. The Chinese traditionally value sons than daughters since sons are considered as a future investment. The reason is that daughters will finally join their husband’s family in the future. The equality is prevalent in the United States since both males and females are considered as equals.

The Chinese have a deep traditional health beliefs and practices than those held by the inhabitants of the United States. The indigenous approach to health and sickness of the Chinese is focuses on the balance between an individual’s body, mind, and the spirit (Center for Disease Control and Prevention 18). The contrasting aspects of the mind, body, and spirit are complementary and therefore coexist; and their imbalance is believed to cause illness. The Chinese use specific foods and herbs to treat illness before seeking western treatment (qtd. in Center for Disease Control and Prevention 19). The United States society does not have strong beliefs in traditional health beliefs and practices like their Chinese counterparts. Americans are therefore likely to seek treatment in modern health institutions having well trained medical personnel who apply modern treatment techniques that are science-based.

The Chinese have a very different perception of time as compared to the Americans. The American culture perceives time as being linear and structured, with time moving on one plane and in one direction, hence the need for it to be scheduled, managed, organized, and accounted for. The Chinese view time as being non-linear, and consisting of numerous events that occur at the same time with many people. This makes the Chinese have less focus on time precision and its accounting as compared to their relationships and cultural traditions. The Chinese therefore perceive time in relation to the past, the present, and the future. This is the reason why the Chinese have national traditional festivals and calendars such as the year of the snake, dragon, and rabbit, a kind of culture that is absent in the United States.

The Chinese are more conservative as compared to the Americans. The conservativeness of the Chinese people is largely expressed through their traditional health beliefs and practices that are still widely practiced in the current times. Their use of pictographs and characters in writings is still widely used in the present times as it was many centuries ago. The Chinese writings and language have not undergone any significant changes over the centuries. They are still practicing the ancient religious beliefs such as Buddhism and Taoism. Contrary to the Chinese, the United States has a more liberal culture that easily adopts new changes and ideologies. The decline of religious influence in the United States and the increase in Atheism best illustrates their liberal ideologies (Laderman and Leon 509). The United States also has very few if any traditional celebrations similar to those celebrated in the Chinese lunar calendar such as the year of the snake that results to the largest population movements across the world as the Chinese people join their families for its celebrations.

Conclusion

It is evident that the economies and cultures of the United States and the People’s Republic of China have several similarities and differences. The United States and China have the largest closely competing economies in the world, each having a different economic system that it considers superior to the other. The massive industrial and technological advancement of the United States in the 19^th and 20^th century is attributed to its superior capitalist market economic system. China considers its state-led capitalist economy superior due to its sustained economic growth since 1978; and its ability to withstand the 2008 global financial crisis that adversely affected the world’s economies, including that of the United States. The economic growth of China in the near and far future will depend on its international bilateral agreements on the supply of raw materials since its natural resources cannot meet its internal demand to continue sustaining its economic growth. Contrary to China, the United States has massive natural resources such as coal, oil, and iron ore deposits, which it can utilize to sustain its economy in the future. The culture of the Chinese is quite different from that of the United States because the Chinese culture dates back to the ancient times, centuries before the establishment of the United States. The Chinese culture is more traditional as compared to that of the United States whose society is more liberal. The Chinese are more conservative since they still believe in the traditional health practices such as using herbs as medicine as compared to the United States, which lacks a well-defined culture due to its recent history, liberal ideologies, and ethnic diversity. The economies and cultures of the United States and the People’s Republic of China are greatly influenced by their different economic and cultural histories, experiences, and societal obligations.