Philip Kotler

Philip Kotler is widely acknowledged as the father of modern marketing and the world’s foremost expert on strategic marketing. He was voted the first Leader in Marketing Thought by the American Marketing Association and named The Founder of Modern Marketing Management in the Handbook of Management Thinking.


China vs. the U.S.: Competing Visions



            China and the U.S. provide quite different visions of how to serve their citizens and how to help the rest of the world.


            China is an authoritarian state run by one political party, China’s Communist Party (CCP). China spends most of its energy in producing Chinese goods, jobs and skilled workers.  It is seen as the world’s factory supplying not only its own citizens’ needs with goods but also supplying much of the world‘s needed goods.  By 2030, it is estimated that China’s GDP will exceed that of the U.S.  In purchasing power terms, China already exceeds the U.S.


            China has done an impressive job reducing poverty in China.  China has lifted 800 million people out of poverty. According to the World Bank, more than half the Chinese population is considered middle-class.  China utilizes the latest science, technologies and equipment to efficiently produce its outputs.  Although China describes its system as Chinese socialism, it is essentially using capitalism to grow its economy.


            In its economic growth, China has created 626 billionaires who run its industries. The U.S. has 724 billionaires.  These two countries have almost half of the 2,755 billionaires in the top 70 countries.  The Asia-Pacific region alone has 1,149 billionaires.


            Income inequality is very high in China.  About 600 million people live on the equivalent of about $150 a month.


            The latest view is that President Xi Jinping may try to tax the super-rich deeply and redistribute the wealth more evenly among the 1.4 billion Chinese citizens.  The drive would be to “regulate excessively high incomes” and “encourage high-income people and enterprises to return more to society.”  The CCP has pushed Chinese high tech companies to put more cash into social programs.  One of China’s major tech firms, Tencent, has pledged $15 billion for initiatives covering the environment, education, rural reform and technological assistance for senior citizens. Alibaba, another Chinese tech giant, pledged a similar amount.


            Xi’s slogan is to create “common prosperity.”  One reason is that Chinese growth is slowing and the Communist party needs to offer a new goal, that of more equality.  According to Cao Xinyin, a 19 year old university student: “Common prosperity means that everybody can live a high-quality life…People will live a healthier life, be better behaved, have a happier mood and will be more likely to pursue and realize their dreams.”


            China’s government is eager to portray itself as a forward-thinking government that cares about its citizens.  Further, Xi wants to show that China is eager to help other countries improve their wealth and well-being.  Xi’s government, in wanting the world to look more favorably on China’s political legitimacy, launched its Belt and Road Initiative (BRI) in 2013 to help developing countries achieve higher levels of economic success.  BRI aims to connect China to Asia, Europe, the Middle East, and Africa. It is a new version of China’s historical Silk Road.  Today China aims to improve infrastructure, digitalization and health in other countries. At the same time, this gives China a chance to improve its image and power abroad and also place its excess labor force elsewhere.


            China is using the same model of its own economic development to expand its influence abroad.  China will provide other countries with new railroads and bridges, fiber-optic cables and 5G networks, and ports. The BRI now includes more than 60 countries and is supported by more than $200 billion in Chinese investment. Pakistan and Greece are among the countries that have welcomed the new roads, railroads and ports built by BRI.


            In the past, developing countries would have gone through a laborious and political process with the World Bank and the Asian Development Bank to obtain this development investment. China, in contrast, offers a one-stop shop. China provides financing and the labor and materials for its projects.  China doesn’t spend money on making environmental and social impact studies or investments.  China benefits by creating jobs abroad for its excess working population. By BRI, China has created its own international system for spreading its influence to the rest of the world.


            Xi see BRI as a conduit through which China can transmit its political and cultural values.  China is helping some country leaders by supplying surveillance technologies to monitor and track political opposition figures. Many countries are supplied with thousands of hours of Chinese programming filled with martial arts films, stories about life in China, and documentaries showing Japanese atrocities in World War II.


            Some BRI benefits have backfired, leaving some countries with high levels of debt, environmental pollution, corruption and poor labor practices, causing some popular protests in host countries. Complaints about Chinese labor replacing local labor, pollution and corruption have been reported.  Some countries have cancelled projects outright saying that the costs would exceed the benefits.


            China has been reducing its BRI investments since 2016. China has not realized some of its expected political benefits.  Among the top ten countries receiving BRI investments, these countries did not support China on critical issues such as Hong Kong and the South China Sea issue. Furthermore BRI has led Japan and other countries to offer infrastructure financing and support with higher standards and more benefits for local workforces.  China also was disappointed that its Confucius Institutes abroad to teach Chinese language and culture in universities did not attract enough use.  English, not Chinese, still remains the most popular language to study in Asia.


            Many countries did not like China’s reliance on coercion to advance its interests.  China threatened to cut off supplies of personal protective equipment (PPE) to countries that criticized China.  When Australia called for an investigation into the origins of the Covid virus in China, China slapped restrictions and tariffs on some of Australia’s most popular exports.  China threatened the international airline, retail, film, and hotel industries with financial repercussions if they did not recognize Chinese claims regarding Hong Kong, the South China Sea, and Taiwan in their published material. Chinese TV announced, “We believe that any remarks that challenge national sovereignty and social stability are not within the scope of freedom of speech.”  China was signaling that it had the right to control the speech of any individual anywhere in the world. Soon after, China expelled several Wall Street Journal reporters who published an opinion piece with the title describing China as the “Sick Man of Asia.”


            Many multinational corporations succumb to Chinese pressure and adjust their business practice. While airlines dropped Taiwan from their websites, they still identify it separately and quote ticket prices in Taiwan’s currency instead of in yuan. The Philippines and South Korea, among others, resisted changing their policies on the South China Sea and they partnered with the U.S. THAAD missile system.


How Should the U.S. Deal with China?

            Overall, China has become a superpower through an assortment of achievements, including becoming the world’s economic factory, drastically reducing Chinese poverty and building up its middle class and superrich, and offering financial and infrastructure help to other countries seeking to develop.  China deserves credit for its economic imagination in helping its people and the people of other countries.


            Before the 1990s, there was only one superpower, the U.S.  Now there are two.  We can hope that they both compete fairly and cooperate on issues common to both of them, such as the pandemic, climate change and pollution.  The last superpower that the U.S. faced was the Soviet Union and the battle took place around the world in both superpowers proselyting on the respective virtues and vices of these two combatants.  The U.S.’s goal was containment, keeping as many countries as possible supporting the U.S. or at least not succumbing and supporting the Soviet Union.  Containment worked in that the Soviet Union eventually failed because its economic system could not generate sufficient income.  The world saw it as a battle between a free market economic system and a Communist command system lacing in entrepreneurship and capital.


            China is a completely different type of superpower than the defeated Soviet Union.  First, it has a much larger population than the Soviet Union.  Second, it uses capitalistic principles in running its economic system.  Third, many countries are fully dependent on Chinese trade for many of their goods and services.  Fourth, many countries view China as a source of investment capital in upgrading their infrastructure.  China will not fold up like the Soviet Union.  It will be around forever.


            Moreover, China presents several “hot spot” positions that need eventual solution or resolution.  The hot spots are Taiwan, the South Asia, the South China Sea, the East China Sea, the Taiwan Strait, and the Korean Peninsula.  From China’s point of view, they see Taiwan as belonging to them.  China wants much of South Asia to support its policies.  China wants navigational control of the South China and East China Seas.  China sees South Korea as a U.S. ally and a source of continuous tension with North Korea.  The worry is that any hot spot could accidentally lead to a gunfire incident and start a war between China and the U.S.


            China sees the U.S. doing its best to surround China to keep China from expanding its territories or influence.  Japan, South Korea, and the Philippines are U.S. allies. The U.S. now is doing its best to revive Obama’s Trans-Pacific Partnership trade agreement with 11 other countries in the Asia-Pacific, including Canada and Mexico to work together on economic progress.  The original aim was that the U.S. would eliminate over 18,000 taxes various countries put on Made-in-America products.


            This helps explain China’s increased investment in military strength including running a hypersonic missile test.  This is China’s answer to how seriously it regards the threats coming from the U.S. and its allies.  China hears talks by some U.S. Congressmen on putting more money in our military to show our seriousness about containing or deterring China.


            The best course of action is to stabilize today’s political boundaries and issues.  Let the two superpowers display their different models to the world.  The U.S. represents a country that believes in democratically elected governments, respect for human rights, and a high level of business and personal freedom.  China represents a country under authoritarian rule with its leaders believing in benign service to its citizens and hoping to reduce inequality at home and hoping to assist other countries in their development.


            The U.S. today presents a confusing picture to other countries.  These countries admire the history and founding of the U.S. and its great leaders and innovators but also sense a recent decline in U.S. values and vitality.  The U.S. policy is divided between the Democrat’s liberal majority and the Republicans, many of whom still think that Trump was cheated out of a second Presidential term.  As a result, many challenges face the U.S. on abortion, gun control, drugs, Covid policy, and climate change policy in a no-action legislature.  President Biden’s push to improve hard and soft infrastructure to build a better America is being blocked politically by a rising inflation, leaving Biden with a current low rating of 41 percent.


Some Specific U.S. Policies Needed

            The U.S. has lacked the imagination that China has shown in uplifting so many from poverty, becoming the world’s leading factory for manufacturing goods, and offered the brilliant Belt and Road Initiative to assist other countries in their development.  It is not enough for the U.S. to coast on having a democratic government, more human rights, and more freedom.  The U.S. has to put forth more initiatives to impress other countries that the U.S. is a creative thought leader with actions that promise to improve lives around the world.


  1. Do more to raise the standard of living of more Americans. Other countries wonder why a country as rich as the U.S. has so many persons unable to earn enough without resorting to borrowing and so many to retire without adequate reserves.  The Chinese are now pressuring more wealthy companies and citizens to share more of their wealth.  Meanwhile, the U.S. continues to only tax the wealthy 37 percent in the top bracket while completely avoiding a wealth tax to redistribute more wealth and well-being to more Americans.  American capitalism must be run to create more “common prosperity” for Americans.


  1. Do more to assist developing countries in improving their infrastructure and livelihood. The Chinese BRI initiative was an exciting idea but its execution was marred by low standards of quality and social impact, corruption, and favoring Chinese workers over local workers.  The U.S. needs to work with the World Bank and other International Associations to deliver better investment opportunities to developing countries.  Richer countries means more international trade and dollars for both the U.S. and China.


  1. Approach China for an agreed-upon plan for both countries to demilitarize. By this, both countries would be saying that spending money to build for a possible war is likely to increase the chance of a war.  War would rob both countries of the chance of improving the lives of their citizens.  Build weapons of education and health, not weapons of war


  1. Approach China to work together on a program for climate change and decarbonization. The U.S. and China are the world’s leading polluting countries. Both must move more quickly away from fossil fuels to renewable sources of energy (solar, wind, water, geothermal).  By working together, they both become winners in the eyes of other countries.


  1. Approach China to work together on population and immigration policy. China has already taken steps to control the growth of its population with the former one child policy. In 2010, however, China changed its policy to allow two children. In 2021, the Chinese Communist Party is now urging its party members to have three children. In the U.S., pregnant mothers can decide on whether to abort (Roe vs. Wade) but this policy is being fought by Republicans who want to abolish women’s abortion rights. The result will be a lot more children in the U.S. with single mothers or families unable to raise children with a good education and health.  Beyond this, how should China and the U.S. respond to the increased waves of Africans and Middle Easterners fleeing from a heating existence to migrate to cooler parts of the world?


  1. Approach China to prepare joint plans on improving disease control through better personal protection methods and vaccine development. Health status must be improved throughout the world.  Bill Gates showed how mosquito control and better sanitation can save people’s lives.  China and the U.S. need to develop further campaigns to reduce the spread of diseases.


  1. Approach China with an initiative to respect all individuals and groups regardless of religion, race, gender or ethnicity. Work with China to push for these rights around the world.


  1. Approach China to work more closely with the United Nations and its 17 Sustainable Development Goals. All seventeen SDGs will improve the health and welfare of all people in the world and should get the full support of China and the U.S.  Another initiative would be to improve the U.N.’s military capacity to handle and resolve the small wars that keep occurring and damaging the lives of so many people.

            The idea is that the U.S. needs to press for policies to improve the lives of people in all countries.  Each policy needs considerable work down to the details. By the U.S. promoting these ideas and getting meetings going, there is some hope for preserving peace.