Historical comparisons are always risky. This is particularly so when comparing different eras in vastly different countries like the US and China. Similarities can actually obscure more important differences.
Nevertheless, familiar knowledge can help build a framework for understanding. Obviously, present-day China is radically unlike any point in US history. But with that caveat, it bears some striking similarities to one part of our past. Today we’ll look at that period and see what it can tell us about China under Xi Jinping.
As I mentioned last week in Xi’s Changing Plan, China could be an economic partner as well as competitor, cooperating in ways that benefit its own people and the entire world. And while both our economies are bound together, that doesn’t seem to be the Chinese goal anymore, if it ever was. The US side clearly thought China would become more capitalistic and open as it became more prosperous and entrepreneurial.
This has important investment consequences you need to understand. We’ll start with some US history and the see how China’s course may be both similar and sharply different.
The US hasn’t always been the world’s dominant economy. Our first step in that direction may have been after the Civil War in what is now called the “Gilded Age.” Here is how Wikipedia describes that time.