Recently, I came across some texts and comments discussing the problems of the Chinese government, political, and economic systems. This is a vast topic, difficult to address comprehensively, so I will focus on analyzing specific issues.
In terms of government management, when it comes to operational efficiency, despite China’s bloated institutions, its government efficiency still surpasses that of the U.S. government.
Data illustrates this: China’s overt fiscal revenue is approximately 18 trillion RMB (about 2.8 trillion USD), accounting for 15% of its GDP. In contrast, the combined fiscal revenue of U.S. governments at all levels exceeds 10 trillion USD, representing 33% of its GDP.
In other words, the proportion of total societal taxation in the U.S. is more than double that of China (note that this refers to the proportion, not the total amount, making it more comparable).
In the U.S., nearly 20 million people receive government salaries, accounting for 1/9 of the total employed population (i.e., one in every 9 employed individuals works for the government). This ratio is roughly equivalent to that in China.
Thus, in terms of bloated government institutions, the U.S. and China are comparable.
Since the proportions of government employees to the total employed population are similar in both countries, the proportions of government revenue to the national GDP should also be similar in both countries.
This raises a question: Why does the U.S. government revenue account for more than twice the proportion of GDP compared to that of China? Where does the excess money in the US go? Or alternatively, how does China manage with so much less in its government fiscal revenue?
Several factors explain this.
First, the aforementioned data only reflects overt taxation. In reality, China’s economy and society bear many hidden and less visible forms of taxation. Although precise estimates are lacking, if corruption costs are factored in, China’s total tax burden may be comparable to that of the U.S., roughly one-third of GDP.
The largest portion of China’s hidden taxation is corruption.
Given that China’s overt taxation is only 15% of GDP, this implies that the “cost of corruption” accounts for as high as 18% of GDP.
Second, in the U.S., apart from paying government employee salaries, the majority of tax revenue is allocated to personal social welfare programs. In contrast, in China, government revenue (including both overt and hidden sources), beyond paying salaries, is primarily directed toward two areas: (1) government reinvestment (infrastructure and strategic industry support), and (2) covering the losses due to corruption. Note that this presents a contradiction—one aspect is positive, the other negative.
Let’s address the latter first: corruption, which is generally harmful and offers no apparent benefits. This point is straightforward and requires no further elaboration.
Now, consider the former: government reinvestment. Over the past 40 years, this has brought tremendous benefits to China, particularly in infrastructure development, which is undeniable. However, an overemphasis on national development and international competitiveness has unfortunately trapped China’s economy in the constraints of an “investment-driven model.” This model fails to effectively foster a genuine middle class and boost domestic consumer spending.
After 40 years, however, the positive effects of this approach have significantly diminished, and its benefits to the future lives of ordinary Chinese are far less than they were over the past 40 years.
This is an inevitable outcome of economic principles. Western economists like Michael Pettis have provided profoundly insightful analyses on this, but regrettably, Chinese society, from top government officials to the academic economic community, has not fully recognized this. They assumed that infrastructure development and exports alone could sustain indefinite economic growth.
“国富民强” (wealthy nation, prosperous people) is a beautiful dream, but it requires not only sound institutions but also strong moral capital of society as a whole. A society where the government and business owners are excessively greedy will inevitably exploit the middle and lower classes, resulting at best in a “strong nation, poor people” scenario rather than a truly prosperous nation and people.
In contrast, over the past 250 years, American society has developed relatively evenly. Despite significant wealth disparities, it has built a robust middle class. This is not only tied to the U.S. political system but, more importantly, to the foundation of its Christian culture, which emphasizes love, respect for humanity, and individual value. This cultural backdrop is the fundamental basis for creating a strong middle class.
However, on the flip side, in recent years, the enormous investments in personal social welfare by the current U.S. government have not truly yielded significant societal benefits.
Looking back at U.S. history, its institutional superiority once far surpassed other nations, which is a fact.
However, this superiority has been rapidly declining since the 1990s due to the degradation of American culture.
This cultural decline is evident in two ways:
First, Americans have become increasingly selfish (not necessarily more selfish than people in other countries, but noticeably more so compared to their predecessors);
Second, the arrogance and corruption of the American elite have grown excessively.
This is corruption with its own characteristics. It is not merely institutional, but a corruption of human nature.
For example, over the past many years, the United States has wasted more than $1 trillion annually on ineffective personal welfare programs, and during the pandemic, this figure even exceeded $5 trillion in a single year. While these funds were not embezzled by corrupt officials, they were squandered amid the selfishness, indulgence, and arrogance of Americans.
Instead of benefiting society and the economy, this waste has accelerated the decline of American social and cultural values.
Thus, determining which country’s political system is superior is far from a simple matter. Different societies and systems do have relative strengths and weaknesses. However, America’s founding fathers, such as Washington and Franklin, clearly understood that a political system is merely the fruit of the tree of humanity, and the root of healthy humanity lies in faith—not just any faith, but faith in the true God who is the Creator and the Savior of the world, with its core at seeking “the Way, the Truth, and the Life.”
May all who seek the true faith—the Way, the Truth, and the Life—whether American, Chinese, or from any corner of the world, awaken quickly.
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