The US and China: Not Number One

Trustee Chair in Chinese Business and Economics  >  Trustee China Hand

by Shining Tan, Michael Zhang, Qihan Zou, and Scott Kennedy

Beyond Power
Scott Kennedy

It is almost universally believed that the United States and China are locked in a strategic competition of epic proportions. This “clash of systems” is wide-ranging, covering economics, security, and politics. One mistaken assumption found in much of the analysis and commentary is that the US and China are competing to be #1. That may be the case when the competition is narrowly framed around issues of power, for example, for economic scale, location in global supply chains, technological innovation, military sophistication, and force projection capabilities. These are metrics in which the US and China perform well or are improving quickly.

But in many areas of social significance, both the US and China are not number one. Far from it, the two often find themselves way down the list when compared to other countries. It is critical that we not lose sight of the fact that in many areas of life – from governance to healthcare to crime to the environment – the two countries have a lot of catching up to do.

Figure 1 (scroll down & PDF) is our attempt to collect as many cross-national indicators as possible to show where the US and China are doing well – and where they are not. One can quibble with the specific components included in our list, but not with the ultimate conclusion: the US and China are far from number-one in many aspects that are critically important to successful, well functioning societies.

There are several reasons why it is important for the United States and China to not place other goals beneath the pursuit of power. First, as important as power is, it is far from everything. Many of the typical kinds of power metrics do not easily translate into tangible benefits for ordinary citizens. To oversimplify, you can’t eat a nuclear weapon. A strong military deters aggression from others, but much more is needed once a society is made safe from external threats. It is critical that as a society we set goals to achieve a high quality of life, and that means targeting areas that do not easily translate into metrics of power.

Happiness is not the be all end all of life, but it’s not irrelevant either. And on this score the US and China do not fare particularly well, ranking 18 and 94, respectively, far behind Finland. The US ranks higher than China on metrics of democracy and freedom, but even there the US is far from preeminent, something we’ve witnessed in vivid terms the last few years.

Second, if Americans and Chinese only focus on being better than the other country, then that would mean still being ranked behind many other countries in a wide range of categories. The US having wider broadband access than China is less impressive when one realizes that at least 20 other countries outperform America.

Third, progress in some areas is largely a zero-sum competition, but in most areas one’s own performance benefits from the high performance of others. Where things are more clearly defined as positive-sum, improving life in the US in many respects depends on improving the situation in China, not to mention in many other countries. That certainly appears to be the case in issue areas that depend heavily on the provision of public goods, such as public health and the environment.

And finally, soft power actually accrues to those countries who do well in those areas outside the confines of hard power. As Joseph Nye writes in his latest book, The Future of Power, the ability to bring others to your side – to be your trusted ally, partner or customer, is shaped by a country’s attractiveness. Better American performance on metrics concerning governance, health, tolerance, and the environment will raise its soft power, and in turn, provide a foundation for strengthening its hard power. So the US can become even more powerful precisely by not focusing on power, or at least by not making it the be all end all.

Below we elaborate on three areas where the United States and China are lagging and could do much better.

Technology Innovation and Diffusion
Shining Tan

The United States and China have become global competitors when it comes to technological innovation. The two countries sit at the forefront of cyber power and supercomputer technology, and they file the highest volume of patent applications annually. But despite their leadership in many areas of technology, comprehensive innovation rankings expose weaknesses in vital areas, revealing the Achilles’ heel of both countries' innovation capacity.

The 2020 Global Innovation Index (GII), which is maintained by the World Intellectual Property Organization (WIPO), ranks the United States as the third most innovative country, behind only Switzerland and Sweden. Meanwhile at 14th place, China is the only middle-income economy to break into the top 30. However, their strong overall scores mask weaknesses in specific sub-sectors. For the United States, education (45) and ecological sustainability (59) are major vulnerabilities to America’s innovation prowess. China also suffers from poor performance in tertiary education (83) and environmental sustainability (54), but the dismal condition of its regulatory environment (102) serves as an even greater hurdle for the country to become a top global innovator.

The IMD World Digital Competitiveness Ranking this year shows a similar pattern. The United States has held the top position in this index for three consecutive years (2018-2020). China has risen rapidly, advancing from 30th in 2018 to 22nd in 2019 and to 16th this year. But taking a closer look, the United States still underperforms in employee training programs (40), STEM education (54), and immigration laws (63). Meanwhile, China is still a laggard in intellectual property rights protection (42), financial services for technology development (43), public expenditure on education (51), and internet penetration (56).

Much of the technology and innovation strength of the two stems from the sheer scale of their economies. But smaller competitors, such as Switzerland, have remained just as relevant by being efficient and inclusive. Despite fierce competition in the information and communications technology (ICT) sector, internet penetration in the United States and China remains at 87.3 percent and 54.3 percent (ranking 31 and 54, respectively), whereas smaller countries like Iceland, Qatar, and South Korea have reached 95 percent or higher. Both the United States and China must address these weaknesses – education and ecological sustainability in both countries and the regulatory environment most urgently for China – if they intend to strengthen their innovation leadership.

Social Stratification
Michael Zhang

Despite the United States and China’s high-powered economies and military strength, both countries lag globally when it pertains to key social indicators and metrics. According to the 2016 World Bank’s poverty headcount ratio at $5.50 per day, the United States and China ranked 21st and 53rd, respectively. Although the Xi administration recently claimed victory on eliminating poverty, China’s self-defined poverty line of $2.20 per day is too low and masks the reality of continued extensive poverty and rising inequality.

The Gini coefficient, one of the most widely used metrics of inequality, shows that in 2019 the United States (0.481) and China (0.465) both still have highly unequal income distributions in absolute terms and relative to other countries. By contrast, the World Bank estimates in 2017 that Slovenia has the world’s lowest Gini coefficient, at 0.242. Similarly, according to the World Inequality Database (WID), the per-tax national income of the top 10 percent in China and the United States is 41 percent and 45 percent, ranking 65th and 91st, respectively, indicating a very unequal distribution of wealth.

Inequality was far lower in China in the late 1970s, but then soared following the launch of the “reform and opening” policies. Marketization succeeded in delivering decades of high overall growth, but a number of factors – among them corruption, credit policies favoring a shift of wealth from households to companies, privatization of SOEs, and an insufficient availability of welfare services – have raised inequality far higher than would otherwise be the case. It likely resulted in the share of public wealth (as a portion of national wealth) to drop from about 70 percent in 1978 to 35 percent by 2015.

Meanwhile, trends in the United States are similarly concerning. The bottom 50 percent of wage earners experienced a collapse in their share of the nation’s wealth between 1978 and 2015, from 20 percent to 12 percent of total income, while the top one-percent’s income share rose from 11 percent to 20 percent. Inequality was exacerbated by educational and wage policy failures, resulting in insufficient support for the underprivileged. In addition to this, as in China, the United States lacks a well-funded welfare state when compared with other advanced industrialized economies.

Health
Qihan Zou

The Covid-19 pandemic has exposed the weaknesses in the provision of public health in both the United States and China. Even though the US had the highest ranking in the 2019 Global Health Security Index, it still has struggled mightily at responding to the pandemic, with currently over 200,000 new cases per day. The total number of cases in China has been far lower, but there was significant mismanagement in late 2019 and early 2020, and China’s fatality rate of 5 percent per case ranks 10th worst globally, much higher than the 1.9 percent in the United States and the world average of 2.3 percent. To improve pandemic preparedness, the two countries should invest more in healthcare infrastructure, both physical and institutional, and provide greater leadership for international collaboration.

Aside from pandemic preparedness, neither country ranks well in life expectancy. According to the UN’s 2019 Human Development Report, Americans have an average life expectancy of 78.9 years, whereas for mainland Chinese the figure is 76.7 years, ranking 37 and 62, respectively, and far behind Hong Kong at 84.7 years. One reason may be lifestyle-related diseases in both countries. In 2016, over two-thirds of Americans were considered overweight and 36.2 percent obese, significantly higher than in any other developed country. In China, the most common cause of death for the past three decades has been stroke, commonly associated with unhealthy diets and smoking. With nearly two million stroke-related deaths per year, China has the highest level of stroke risk, at 39.3 percent, of any country in the world.

Another key indicator of a strong public health sector is their citizens’ access to quality healthcare, and both China and the United States struggle in this regard. In the 2016 Healthcare Quality Index (HAQ), researchers studied 32 causes from which death should not occur when citizens have sufficient access to healthcare. On a scale of 0-100, the United States scored 88.7 and China scored 77.9, ranking 29 and 48, respectively. Subnational levels of healthcare access and quality in China show wide variation, with HAQ performance ranging from 91.5 in Beijing to below 50 in some western provinces. Similar disparities are seen in the United States, albeit with smaller gaps: the top decile of 2016 HAQ Index performance (above 90) is found only in some parts of New England, Minnesota, and Washington state. The results emphasize the need to improve healthcare access and quality throughout localities in both countries.

 

United States

China

Ranked #1

Data Provider

Rank

Score

Rank

Score

Performer

Score

General Income and Performance
Gross National Income Per
Capita (US$)
7 65,760 71 10,410 Switzerland 85,500 World Bank
Labor Productivity (GDP,
US$ per hour of work)
6 65.51 58 10.68 Ireland 99.13 Our World in
Data
Pre-tax National Income of the Top 10% Population (%) 91 45.4 65 41.4 Czech Republic 28 World Inequality
Database
Poverty (% of population living
on less than $5.50 a day)
26 2 72 23.9 Switzerland 0 World Bank
Global Competitiveness Index 2 83.7 28 73.9 Singapore 84.8 World Economic Forum
Commercial Wealth
Number of Billionaires 1 607 2 389 United
States
607 Forbes
Top 500 Global Brands: Number
of Brands
1 205 2 70 United
States
205 Brand Finance
Fortune Global 500: Number of
Companies
2 121 1 124 China 124 Fortune
Fortune Global 500: Total Revenue (trillion US$) 1 9.81 2 8.29 United States 9.81 Fortune
Fortune Global 500: Total Profit
(billion US$)
1 848 2 442 United
States
848 Fortune
Innovation
Global Innovation Index 3 60.56 14 53.28 Switzerland 66.08 WIPO
Resident Patent Applications per Million Population 6 869 4 890 South Korea 3,319 WIPO
Resident Patent Applications per US$100 Billion GDP 6 1,389 2 6,409 South Korea 7,779 WIPO
Patent Applications Worldwide (thousand) 2 521 1 1,328 China 1,328 WIPO
R&D Spending (% of GDP) 9 2.84 13 2.19 Israel 4.95 World Bank
Digital Technology
World Digital Competitiveness 1 100 22 84.292 United States 100 Institute for Management
Development
National Cyber Power Index 1 50.24 2 41.47 United
States
50.24 Harvard
Individuals Using the Internet
(% of population)
30 87.3 114 54.3 Liechtenstei
n
99.5 World Bank
Fixed Broadband Subscriptions (% of population) 22 34.7 30 31.3 Gibraltar 56.3 World Bank
Top 500 Supercomputer: Number of computers 2 113 1 212 China 212 Top500 Project
Top 500 Supercomputer:
Aggregate Performance (petaflops)
1 668.7 3 564.0 United States 668.7 Top500 Project
Society
Happiness Index 18 6.94 94 5.124 Finland 7.809 UN
Sustainable Development Solutions
Network
Social Progress Index 18 86.43 86 63.72 Demark 90.57 Deloitte
Global Religiosity index 34 60 57 14 Ghana 96 WIN-Gallup International
Number of Top-100 Ranked Universities 1 37 5 6 United States 37 THE World University
Rankings
Philanthropy (World Giving Index, percentage score) 1 58 126 16 United States 58 Charities Aids Foundation
Tolerance (Inclusiveness Index) 68 44.38 91 36.57 Netherlands 100 UC Berkeley
Good Country Index 40 40 61 61 Finland 1 Simon Anholt
Democracy and Freedom
EIU Democracy Index 25 7.96 153 2.26 Norway 9.87 The Economist
Freedom House Global Freedom 52 86 192 10 Finland, Norway, and Sweden 100 Freedom House
Freedom House Internet Freedom 5 77 65 10 Iceland 95 Freedom House
Human Freedom 15 8.46 126 6.17 New Zealand 8.88 CATO
Personal Freedom 22 78.71 159 19.97 Norway 94.56 Legatum Institute
World Press Freedom Index 45 23.85 177 78.48 Norway 7.84 Reporters
Without Borders
VAP Turnout (% of voting-age population that actually voted) 150 47.15 - - Vietnam 99% International Institute for Democracy and Electoral
Assistance
Governance
Government Effectiveness 34 91.35 158 71.63 Singapore 100 Worldwide Governance Indicators
(WGI)
Rule of Law 22 89.9 115 45.19 Finland 100 WGI
Political Stability 90 57.62 131 38.1 Greenland 100 WGI
Corruption Perceptions Index 23 69 80 41 Denmark; New
Zealand
87 Transparency International
Violence and Crime
Estimate of Civilian Firearms
(per 100 persons)
1 120.5 139 3.6 Taiwan 0 Small Arms
Survey
Firearm Deaths (per 100,000 population) 20 10.6 - 0.2 Singapore 0.1 Institute for Health Metrics and Evaluation
Crime Rate (per 100,000 population) 50 47.7 101 31.18 Qatar 11.9 Numbeo
Incarceration (per 100,000 population) 1 639 129 121 San Marino 6 World Prison Brief
Environment
Environmental Performance Index 24 69.3 120 37.3 Denmark 82.5 Yale
Biodiversity Index 11 0.42 4 0.55 Brazil 0.85 Mongabay
Climate Change Performance
Index
61 18.6 30 48.16 Sweden 75.77 German watch
Carbon emissions (metric gigatons of CO2) 2 5.41 1 10.06 China 10.06 Union of
Concerned Scientists
Carbon Emissions Per Capita (metric tons of CO2) 12 15.5 41 7.18 Congo 0.03 World Bank
Nitrous Oxide Emissions (thousand metric tons of NO2) 2 288,878 1 587,166 Andorra 0.02 World Bank
Health
Healthcare Access and Quality Index 29 89 48 78 Iceland 97 Lancet
Global Health Security Index 1 83.5 51 48.2 United States 83.5 Nuclear Threat Initiative and
JHU
Life Expectancy at Birth (years) 37 78.9 62 76.7 Hong Kong 84.7 UNDP
Healthcare Expenditure as % of
GDP
1 17 42 5 United
States
17 OECD
Hospital Beds (number per
1,000 inhabitants)
29 2.87 17 4.31 Japan 12.98 OECD
Obesity Rate, % 12 36.2 169 6.2 Vietnam 2.1 WHO
Clean Water Access (Population with access to safely managed drinking water, %) 23 99 - 93 Greece 1 WHO and UNICEF
Infant Mortality Rate 48 5.6 60 6.8 San Marino 1.5 World Bank
Immunization of Measles (% of children ages 12-23 months) 57 90 1 99 China and other 19 countries 99 WHO and UNICEF
Median Age 52 38.3 51 38.4 Japan 48.4 UN
COVID: Total Confirmed Cases
(thousand)
1 16,717 75 94.5 Antigua and
Barbuda
0.148 JHU
COVID: Total Deaths (thousand) 1 303.8 40 4.8 Brunei 3 JHU
COVID: Deaths (per 100,000
population)
12 92.85 165 0.34 Taiwan 0.03 JHU
COVID: Case-Fatality Rate (%) 80 1.8% 10 5.0% Singapore 0% JHU
Military
Nuclear Weapons (warheads) 2 5,800 3 320 Russia 6,375 Arms Control Association
Military Expenditure ($ Millions) 1 605,803 2 227,829 United States 605,803 World Bank
Military Expenditure (% of GDP) 22 3.1 40 1.9 Saudi
Arabia
10.3 World Bank
Armed Forces Personnel
(Million)
5 1.359 2 2.695 India 3.031 World Bank
Armed Forces Personnel (% of total labor force) 73 0.08 118 0.03 North Korea 9 World Bank
Military Strength (Power Index) 1 0.0606 3 0.0691 United States 0.0606 Global Fire Power

 

Shining Tan is a research associate in the Trustee Chair in Chinese Business and Economics at CSIS. Michael Zhang and Qihan Zou are research interns with the program. Scott Kennedy is senior adviser and Trustee Chair in Chinese Business and Economics at CSIS.

This blogpost is made possible by general support to CSIS.

Related Trustee Chair Activity

Report: Perfecting China, Inc.: The 13th Five-Year Plan, May 23, 2016.
 
Critical Questions: “China’s Fifth Plenum: Reading the Initial Tea Leaves,” October 30, 2020.
 
Event: “Doubling Down on China, Inc.: An Initial Analysis of China’s 14th Five-Year Plan,” November 12, 2020.


                                                                   

Image
Scott Kennedy
Senior Adviser and Trustee Chair in Chinese Business and Economics