HONG KONG – November was a month of major leadership changes around the world, including Xi Jinping’s confirmation as China’s top official and US President Barack Obama’s re-election. The changes highlighted the sharp differences between the two countries’ political systems. Yet the two countries share similar national development goals:increasing their citizens’ prosperity, narrowing social inequities, and addressing environmental sustainability.
The fact is that rapid social, technological, and environmental change is challenging both the Western and Chinese models of governance and development, with both requiring significant reform. And both countries’ leaders must deliver reforms within a limited tenure, with limited resources, and within a global context of trade rivalry and interdependence.
In the United States, where markets, the judiciary, and regulation are highly developed, the imperative is not institutional reform, but policy reform – addressing the weak fiscal position, income and wealth inequities, unemployment, health care, and deteriorating physical infrastructure.
For China, the issue largely concerns the design and implementation of the next stage of institutional reforms to sustain economic growth and efficiency, reduce social inequality, remove market distortions, address environmental deterioration, and combat corruption. As China becomes a more urban and elderly middle-income society, the challenge for the new leadership is not only to meet the population’s need for employment, health care, and social security, but also to improve governance and state effectiveness by establishing checks and balances on political power.