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5 November 2021

The U.S. Is Competing With the Wrong China

Howard W. French

A graphic illustration of China’s prowess in building its national high-speed passenger rail network caused a minor sensation as it made the rounds on Twitter last week.

Like a colorful time-lapse photograph, only employing bar graphs instead of, say, plant life, it showed a lively dance of nations contending for leadership in the rollout of high-speed rail, beginning in 1976. In the early years, Japan and France jousted for the crown, looking almost unassailable, only to be matched and then passed by Germany and Spain. Only well into the display, starting in 2003, did a new contender appear and then, in a blink, not just take over the lead, but completely dominate the field.

As most everyone who saw this graphic had to know, China, which has been building infrastructure at a world historic pace since late in the last century, was destined to come out as the leader in the end. That, in fact, is part of what made this display so powerful. How long could the predestined champion wait before beginning its efforts, only to crush the competition?

In reality, though, the scale of China’s achievements in infrastructure are a distraction from more fundamental competitive challenges facing many Western countries, and particularly the United States. History teaches us that no one leads in hard infrastructure forever, and in fact, as wondrous as China’s advances in this area are, they do not fully compensate for the fact that China came extremely late to this game. It developed good rail, road and other modern elements of a national physical network only 50 years to a century after such things took root in the West. Think of the subways of London and New York, which have been rolling since 1890 and 1904, respectively, or the interstate highway system launched by the Eisenhower administration 65 years ago. China was nowhere to be found in this arena back then, and it is still, in a real sense, playing catch-up.

As he struggled to win congressional approval for his twin infrastructure and social spending proposals over the past several months, U.S. President Joe Biden has tried to use China as a motivator to rally his Democratic Party coalition behind the idea of building big, new physical things: roads, bridges, tunnels, airports and, yes, railways. But as much as the United States needs a refresh in these areas, the country is not as badly served in physical infrastructure as the untrained observer might assume. I’m not sure that I agree, but it is worth noting that some studies say that, overall, its connective tissue is still superior to China’s, especially when measured on a per capita basis. If anything, others argue, China may be overinvesting in this area.

Far more than physical infrastructure, what will shape the United States’ prospects over the decades ahead is its will to reinvest in its own population.

China’s big advantage, and where the United States should be focusing much more, lies somewhere else and is similarly recent: the investments it is making in the education and training of the population itself. As it grapples with the imminent aging of its population and demographic decline on a globally unprecedented scale, China is making huge investments in upgrading its human resources, aiming to improve what it calls the suzhi—a difficult to translate term that may be rendered here as overall education—of its population. This is precisely the area where the Biden agenda ran into the most difficulty, and not only from the predictable opposition of the Republican Party, but from so-called moderate elements in the Democratic Party itself.

Far more than physical infrastructure, what will shape the prospects of the United States, a country riven by deep racial and class divides, over the decades ahead is its ability or, even more, its will to marshal the resources necessary to continually reinvest in its own population, including more immigrant newcomers.

Competition with China need not be the central obsession when it comes to confronting this reality. Something far more basic is at stake: the United States’ continued prosperity overall, from the ability to continue funding the retirement of its older people and sustaining its middle class, to narrowing American society’s gaping inequality and sharing ever more widely the fruits of national renewal.

In light of this, the successful torpedoing of elements of Biden’s Built Back Better program by the Democratic Party’s moderates does not bode well for the future. As has been widely noted, this will leave the United States as the only economically advanced nation in the world without substantial, mandatory paid parental leave, which is hardly a way to boost gender equality or workforce participation. Another rejected item, the Biden plan to make community college free for millions of people, was also a costly mistake. Opponents like Sens. Joe Manchin and Kyrsten Sinema, both Democrats, perceive this issue through a musty, 20th-century ideological lens. They seem to be preoccupied with the idea that if the state expands the slate of public goods that it furnishes any further, poor and working-class people will lose all motivation to strive. Their persistence with nonsense of this kind comes at a time when the government should be doing everything in its power to enable an ever-larger portion of the population to enjoy higher-wage, high value-added employment.

Here, looking at China is actually quite useful, not in the old, Cold War sort of way—heavily focused, as it was, on national security competition—but rather as an experiment in trying to steadily improve the overall productivity and output of the average worker. The United States may still have a preponderance of the world’s leading universities, but the country’s higher education sector has become far too expensive for the children of working- and even middle-class families to afford it. China, by contrast, has been focused on expanding access to college, in part by ensuring affordability. Even for the best schools, tuitions cost about $2,000 per year, with similarly reasonable boarding fees. Investments like these, far more than the much more famous hard infrastructure rollout, are what have allowed China to play catch-up to the West so effectively, and Beijing’s focus on heavy social investment shows no signs of waning.

The United States is unlikely to ever be able to compete on a straight-cost basis with China in higher education. But the Biden junior college initiative was an underrated smart step in the right direction. More than 60 percent of Chinese high school graduates go on to attend college, compared to 20 percent in 1980. This has famously boosted things like the number of trained engineers and registered patents, but the benefits to society surely go far beyond such measurements, as the government knows. The American infrastructure that is sagging the most is human, not physical, and until the country’s political class overcomes its old ideological biases, the country’s competitive prospects will suffer.

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