The latest economic report cards have shown improvements in both the US’ and China’s economies. The similarity ends there however, as these quantitative increases have very different qualitative implications for their respective countries.
It comes as no surprise to most that China’s economy maintained its near double digit rise posting a 9.6 percent gain in its Gross Domestic Product (GDP) during the third quarter of 2010. This is a cause for jubilation for China as it implies an economic growth that is well on track, both fast enough to keep its economy’s momentum and slow enough for the quality of the growth to be assured.
In a stark contrast, Washington posted a measly 2.0 growth in the US’ GDP, the growth rate that Hugh Johnson, chief investment officer at Hugh Johnson Advisors in Albany, New York described as an “anemic pace”. This most recent economic expansion is not enough to compensate for the 9.6 percent unemployment rate that the US is currently struggling with.
The scenario above is much more than the transient figures of quarterly or annual economic performance; among other things, it is about competent and credible leadership.
The Chinese government which is heavily criticized (sometimes too heavily and unfairly) as being authoritarian has been increasingly overachieving in a great number of fields over the last couple of decades.
Since the late 1970’s China has been raising its over 1.3 billion people out of poverty with its near double digit economic growth, a feat so impressive that it had caught the attention and envy of countries around the world. Not to rest on its laurels however, China did not stop overachieving as it delivered economic assistance to the US and to Europe in their direst moments effectively saving the world from a financial disaster.
Once largely considered a communist devil and the Sick Man of the East, China’s leadership is increasingly proving its mettle through its solid performance.
The once revered and infallible “Uncle Sam” on the other hand, is starting to be viewed as “Senile Grandpa Sam” after a decade of blunders beginning with the War on Iraq, and most recently for nearly plunging the world into economic disarray with its infantile “devil may care” lifestyle.
Grandpa Sam’s increasing and unceasing problem solving method which can be more than adequately summed up as childish trash talking and finger pointing is inflicting unprecedented damage to its own credibility.
At the end of the day, credibility gives the power to get things done their way. China’s increasingly time and adversity validated performance is revealing the light at the end of the tunnel while the whispers questioning the value of the American way and the allure of the American Dream grow ever louder.