What the U.S. Can Learn from China: An Open-Minded Guide to Treating Our Greatest Competitor as Our Greatest Teacher

by Ann Lee, Ian Bremmer Narrated by Denise Washington Blomberg

Overview

DEMOS Senior Fellow and self proclaimed "Tiger Mother of the U.S. economy" Ann Lee has a message for her fellow Americans: stop whining about China and start learning from them instead. She focuses on what Chinese success can teach us in several broad areas: education policy, economic policy and financial markets, foreign policy, strategic planning, and the benefits of a meritocratic political system.

Editorial Reviews

From the Publisher

Ann Lee’s What the U.S. Can Learn from China is a rare achievement in today’s examinations of U.S.-China relations: it supplements an already sophisticated analysis with a deep cultural understanding that is richly valuable and laudably objective. Ann’s ability to ask the tough questions helps Americans to understand China better and China to see itself clearer.”
—Nancy Yao Maasbach, Executive Director, Yale-China Association

“This book sparkles on literally every page with surprising insights and crucial information that everybody in America—and China—simply must become acquainted with or be reminded of. Whether it be about education, culture, politics and economics, or business, Ms. Lee has much, much more to teach both Americans and Chinese than any of us knew that we had yet to learn.”
—Robert Hockett, Professor of Financial and International Economic Law, Cornell University

“It is no secret that China has become a convenient scapegoat for America’s troubles even as its success is envied. This book has a lofty goal: to reduce the potential for international conflict by increasing Westerners’ understanding of that success. Ann Lee’s well-written analysis shows that China’s success is not merely based on a modern mercantilist policy but rather is due to adoption of best practices from the West—from building social safety nets to conducting business according to international standards. What is most interesting is Lee’s main thesis: America needs to look to China to save itself, by reimporting the lessons the West has forgotten. This is a serious book that should be read as an antidote to all the China-bashing myths circulating in America.”
—L. Randall Wray, Professor of Economics, University of Missouri–Kansas City, and Senior Scholar, Levy Economics Institute

“There are so many insecurities we all share about China; this book brilliantly quantifies and identifies many of them. The author’s perspective is one of the most interesting and unique. This makes the book an extremely compelling read. The message is loud and clear: Americans ignore China at their peril. This book answers so many questions we’re unfortunately afraid to ask.”
—Lawrence G. McDonald, Senior Director, Credit Sales and Trading, Newedge USA, LLC

“Ann Lee shows us how the United States can also learn much from the country that will soon have the world’s largest economy. Professor Lee foresaw the ‘Great Recession’ two years before it happened; we should all listen to her now as she describes how China and the United States can work together to shape a safer and more prosperous world.”
—Charlie Kolb, President, Committee for Economic Development, and former Deputy Undersecretary, U.S. Department of Education

“The author makes sensible points about all the topics covered and has interesting points of view about so many issues. A wide-sweeping book that makes engaging reading.”
—William Lewis, Founding Director, McKinsey Global Institute

“A refreshing departure from the unilateral perspective hobbling geopolitical debate. Even those who see major flaws in China’s system will find themselves agreeing with many of Ann Lee’s provocative prescriptions.”
—Joseph Menn, U.S. correspondent, Financial Times, and author of Fatal System Error

“Ann Lee takes issue with those who see China’s rise only as a threat to America and not also as an opportunity. By looking at some of the root policies and attitudes behind China’s recent success, she shows how lessons from China can bring Americans full circle, back to the values and aspirations that made the United States a great country in the first place. Her book adds much-needed nuance to the debates over China’s role in the global economy and as a rising world power.”
—Michele Wucker, President, World Policy Institute

“Misconceptions abound about China and how it works today. Ann Lee’s book takes a fresh and controversial look at the Chinese system and its strengths.”
—Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School

Product Details

BN ID:	2940190853346
Publisher:	Ascent Audio
Publication date:	01/09/2012
Edition description:	Unabridged

Read an Excerpt

INTRODUCTION

A New Year’s Resolution

Never doubt that a small group of thoughtful,
committed citizens can change the world, indeed it is the only thing that ever has. —MARGARET MEAD

AS INDIVIDUALS, WE ARE NOT QUITE SATISFIED with ourselves most of the time. We are keenly aware of our shortcomings and try to make resolutions to correct them. Whether it is to lose weight, quit smoking, or address some other personal issue, we know we will fail unless we work hard to achieve our goals, stay focused, and remain committed to success for however long it takes to materialize.

As a nation, we have had a similar process. Throughout history, various constituencies that were not content with the status quo have coalesced to create political movements to change national policy. When the United States had to resolve an internal contradiction between the Constitutional rights of life, liberty, and the pursuit of happiness and the institution of slavery, abolitionists in the 19th century were prepared to fight to their death for what they believed. Similarly, the women’s suffrage movement in the early 20th century lasted almost two decades before the right to vote was granted to women.

Today, the United States faces another moment of discontent. What some labeled malaise under the Carter years—the slow erosion of the American Dream for most citizens—culminated into a financial crisis of global proportions in 2008.

This crisis in turn has morphed not only into a domestic economic crisis with government adding trillions of dollars to its debt and persistent high unemployment, but also into crises of governance and of confidence. Americans are frustrated by the state of current political dysfunction and have palpable anxiety that it cannot be fixed. The clear mandate Obama had with his 2008 election landslide was challenged two years into his presidency after the Congressional elections when Republicans took over majority leadership in the House. Americans have begun to suspect that neither party can deliver on their promises to represent their interests and have made their displeasure known through Gallup polls, Tea Parties, and even renouncements of U.S. citizenship.

While a great polarization of interests does divide the country, I believe it is less about Republicans versus Democrats and more about the haves versus the have-nots. The haves want to continue outsourcing labor to developing countries and see booming financial markets through continued lax financial regulation while the have-nots want a job with a decent wage and a future where their children have a fair chance at improving their lives. How these disparate priorities get resolved will have profound implications for growth and movement in the American domestic economy. Feelings of apprehension and uncertainty over these outcomes underscore the common worry that the nation may not maintain its competitive edge.

These worries couldn’t come at a worse time; America has been suffering from the worst economic situation since the Great Depression while elsewhere around the globe, more people are demanding a share of the economic prosperity that America has enjoyed for decades.6 Understandably, many Americans feel threatened by all this new competition from the developing world. On one side, China, boasting a population of over a billion low-wage workers, has absorbed most of the dirty manufacturing jobs that have long left America. India also has absorbed many American jobs, but mostly in the service sector like customer-service call centers, computer software programming, and even legal work where Indians can perform the same services as skilled Americans but at a fraction of the cost. Job insecurity has gripped most working Americans, and their fear has spawned anti-China rhetoric and anti-immigration legislation.7

China has become a convenient scapegoat for American economic problems. American ethnic prejudice, as documented in Iris Chang’s book, The Chinese in America: A Narrative History, combined with envy for China’s recent successes—such as the resumption of strong economic growth shortly after the 2008 financial crisis—and a perceived lack of democracy make China an easy target. I use perceived because I explain in chapter 3 that the current set of Chinese leaders formulate policies with the greater public interest in mind. China bashing has become almost a contact sport on television with both left- and right-wing commentators trying to outbash each other with China aspersions. Even Michael Lewis, author of The Big Short, satirically noted this phenomenon in his opinion piece titled “All You Need to Know about Why Things Fell Apart.”8 Such negative rhetoric fuels more complaining and misunderstanding rather than productive problem solving.

Unlike foreign channels such as the British Broadcasting Corporation (BBC), American mainstream media mostly air American-centric views without devoting equal time to thoughtful discussions from foreign perspectives, perspectives that might shed light on subjects less familiar to Americans. But Americans are capable of inspired action that rises above media tirades. Throughout history, Americans have consistently united to meet challenges at the darkest hours—working collectively on the war effort during World War II and turning out in droves to volunteer aid after 9/11. More recently, the television show 60 Minutes reported that in 2011 American families welcomed newly homeless neighbors into their homes, while foreclosures swept the country.

Today, Americans may face one of the most challenging tests of will. The challenge is not as simple and straightforward as facing an enemy like the Soviet Union during the Cold War. Rather, the challenge to America is how our nation will coexist in a world of rising powers and diminishing natural resources, both of which may threaten our chosen way of life. As developing nations around the world continue their unrelenting drive to improve their economic fortunes, can the United States blaze a trail that will lead to peaceful and sustainable outcomes? Some, myself included, worry that the West, particularly America, will fall behind in an increasingly competitive and unpredictable future. President Obama has called China’s economic and technological rise the new Sputnik moment, and former Speaker of the House Newt Gingrich articulated that technological supremacy by China would amount to a “potentially catastrophic threat” to Americans.9 These worries have begun to generate some innovative policy proposals such as those announced by the Department of Energy to invest in clean energy research, but action has not been as forthcoming, and much more needs to be done. The problems will require practical solutions, metaphysical reflections on America’s evolving identity, and national resolve for meeting these challenges.

At a minimum, America must become more competitive than in the recent past across the board. With more challengers, supremacy will be a more difficult position to defend. Though America’s military is second to none, it would be unwise to unduly rely on it to maintain America’s superpower status. Rather, America must strengthen its diverse portfolio of capabilities, because even with its military force, it is impossible to control everything everywhere all the time; nor should it try.

America is arguably at an inflection point in its role as a global empire.10 The financial crisis has uncovered weaknesses in our financial system and regulatory oversight that were formerly thought of as strengths, and its reputation internationally as a land of opportunity is being questioned more aggressively. At the same time, the consensus for a march forward is hard to find. Although America remains the most powerful nation in the world, as of the start of the 21st century, America also risks losing its position through arrogance and inertia. It is in America’s interest to be open and eager about learning new ways of doing things, if these new policies, methodologies, and frameworks can help our democracy function better in a world that is vastly different from the one when the Founding Fathers were alive. By borrowing ideas from the Chinese, America has the greatest chance of fulfilling its resolution to be the best it can be and of remaining a powerful and noble nation.

An enduring maxim throughout history is the wisdom of learning from the competition. The best U.S. corporations evolve and survive when competition forces them to win in a new environment. Similarly, governments also rise to prominence or fall from legitimacy depending on how leaders respond to the winds of change. The logical place to start then is to understand the strategies of the strongest competitor and then to customize those ideas to fit one’s unique makeup and situation.

Like Olympians who must train long and hard for the gold medal, America must work on improving itself in the following ways:

• rebuild trust

• regain lost credibility

• restore integrity

• revive education

• rewrite poor legislation

• reinvest in infrastructure

• remove negativity

• remain focused on competitiveness

• realize the unlocked potential within many Americans

In short, America should be compelled to reinvent itself within the context of a quickly changing, globally competitive landscape. Such advice may be difficult to hear, but the longer Americans remain complacent about their position in the world, their extravagant spending habits, and even their moral authority, the greater the chance that America will be caught by surprise in the defensive position.

If there is a parallel in history for today’s relationship between America and the rest of the world, it is found in the fate of the 15th-century Spaniards whose wealth and power were bankrolled by the Italian Medici bankers. Spain began building its empire with the New World and expanded to almost every continent through conquest. Unprecedented in its reach and power during its time, the Spanish Empire was known as “the empire on which the sun never set” hundreds of years before England made such a claim. However the empire met an untimely end due to inflation from debasing its currency, dependency on foreign sources for manufactured goods, and stretched military resources from multiple wars. During the 17th century, Spain became stagnant while other countries reformed their governments and ascended to power. By the 19th century, anticolonial uprisings put an end to Spanish territories. The similarities to the current U.S. empire are uncanny.

Though the United States does not engage in colonialism per se, the practice of foreign “aid” and arms sales to unpopular dictatorships that oppress the local population in the name of U.S. interests resembles colonialism in substance if not in form. U.S. inflation from currency debasement has been steady since the 1970s. A home that cost $25,000 in 1970 now easily costs $250,000 or more. The same is true of most commodities, ranging from gasoline to food. While official reports of inflation appear subdued, it is well known among many in the financial community that actual inflation rates are much higher. The items that make up the Consumer Price Index (CPI) are continuously modified with substitutions and alterations to calculations. These changes reduce the reported level of inflation in the economy. Had the items that make up the CPI remained the same, official inflation rates would actually be higher and perhaps more reflective of the declining standard of living experienced by many Americans. If the United States fails to resolutely deal with its shortcomings, the world may watch us repeat Spain’s history.

In this book, I hope to show that an answer to America’s challenge may come from understanding the Chinese and borrowing some of their ideas for governance that can be reformulated to fit American democracy and culture. Obviously China has its own deficiencies, particularly in the area of human rights, which are almost inconceivable to condone. China will never become great if it also doesn’t continually evolve its policies and improve its government regulations. But setting aside common Western concerns for a moment, since this book is not about human rights or China’s other inadequacies, I believe that sharing some of China’s best practices and principles could prove beneficial for sustainable economic growth and development around the world. Often, nations in the West have overlooked these practices because they assume that China stands for values that are polar opposites from their own. However, in many cases, that is not true.

Implementing some of the ideas presented in this book will largely depend on politicians and policymakers. But the way to reach those people running the country is through grassroots campaigns that spread awareness and get them to take these ideas seriously. Public pressure is predominantly the impetus for progressive change in everything from social justice and economic opportunity to environmental protection. It is a phenomenon that has happened throughout history and throughout the world. The end of slavery and the end of apartheid are testaments to the power of minority activists who raise the conscience of societies.

The bottom line is that the world needs global leadership to cooperate on the most serious worldwide issues now more than ever in recent history. That will be difficult to accomplish unless the world’s powerful countries can see eye to eye and honor their commitments equally.

Throughout the book, I use the terms the United States and America interchangeably. When I use these terms, I am referring to the citizen-based style of government that I know my audience and nation want. Some progressives may argue that the current U.S. government is no longer the citizen-based style it was designed to be and that the current political system is a different animal. That distinction is not made here, but it’s also not lost on me.

My book is certainly not a cure-all for the contemporary ills of America since there is far too much information to cover between these two large civilizations. But it will highlight some crucial points that the West ought to consider when discussing how we shape our collective future. My assertions about the United States are not meant as a comprehensive historical account but are based more on my contemporary observations that our country’s original principles seem to have changed or gotten lost. America is undoubtedly still a great nation, but it needs to return to an older version of itself in some ways. In recent years, China has demonstrated things such as economic dynamism and a reform orientation that America once demonstrated in spades as an emerging nation. If Americans can critically appraise ourselves while objectively evaluating other nations, we can once again remind ourselves of what we once were and rediscover the course of where we must go.

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