Rethinking China: their numbers, our values

Shortly after coming into office, President Obama declared that U.S.-China relations would “shape the 21st century.” We have all heard the story: In the span of only three decades, hundreds of millions of Chinese have been lifted out of poverty, and in the coming decades we should expect hundreds of millions of more to join them. China’s resurgence is truly monumental. That it will one day surpass the United States and once again assume its historical place as the world’s greatest power is almost a foregone conclusion.

It shouldn’t be. Every great power seeks a challenger, and the United States has had several. First it was the Soviet Union and more recently Japan. Both showed great promise but in the end the long-term economic or military viability of their challenges was not as great as had been imagined In the late 1980s, it was fully expected that Japan would surpass the United States in total output by 2010, but in that year Japan relinquished its second-place status for third, not first. It was ousted by China—is the United States next?

Possibly. When we look at the numbers it even seems likely. China is not Japan: it has ten times as many people as its island neighbor, roughly 1.3 billion to 130 million. So, despite having nearly equivalent GDPs, Chinese workers are one-tenth as productive as Japanese workers. When you compare Chinese and American workers you find that Chinese workers only need to be one-fourth as productive as their American counterparts to one day reach equivalency with the United States. Playing the numbers game seems to favor China.

But are we looking at the right numbers? The answer is probably not. GDP is a fine measure of economic growth and gravitas, but it fails to capture quality of life. For that, we need to look at GDP-per-capita: the level of output “per-head.” The United States has a GDP-per-capita of $47,400 compared to China’s $7,400—more than six times greater. If, as is predicted, China surpasses the United States in total output by 2030, given current estimates, each American will still have nearly four times as many dollars to spend as their Chinese counterparts. China’s “win” will be something of a Pyrrhic victory, with the cost being a shock to the Chinese political order.

It is not surprising that we put so much stock in numbers, especially when comparing China and the United States. Beyond GDP and GDP-per-capita, we are often interested in jobs created and jobs lost, exchange rates and tax rates, tariffs and test scores. These have been the cause of a great deal of angst in the United States: Most Americans have come to believe that we don’t stack up with the Chinese. President Obama expressed as much in his State of the Union address, calling China’s challenge “our generation’s Sputnik moment” and highlighting the need for major investments in green technology and education, investments that will help the U.S. in “winning the future.”

Contrary to the beliefs of many politicians, though, the United States and China are not two titans engaged in a great battle for future dominance. The 21st century should not be all about the United States versus China as the 20th was about the United States versus the Soviet Union. The United States does need to take its domestic problems seriously, something that will not be easy given its political climate. But it should relieve itself of the notion that those problems are due to China’s rise—they are merely highlighted by it. Next to platinum, even gold seems ordinary. If we choose to let this kind of Cold War thinking guide our future, then it is already lost.

Instead, we should look to build upon the greatest product to come out of the Cold War—a liberal democratic order that promotes values that Americans and billions of others have come to treasure. China is at a stage in its development where numbers trump values, where human rights are offered up on the altar of industrial development and economic growth. This will not always be the case.

“The last 30 years of China was about economic reform,” said Zhang Xin, the chief executive of Beijing’s largest real estate developer, SOHO China, in a January 26 DealBook blog post about the World Economic Forum. “The next 30 years will have to be about social reform.”