It appears that many people now believe that a place like China, which dictates the economy from the top down, provides better economic results than the free market in the United States, and that the Chinese are somehow doing better than us. This is absolutely not true. The top-down decisions arising a non-free market economy show China making egregious mistakes. But the reason why China — given the detriment of a non-free market economy — appears that they are doing better to some people is really quite basic. It’s not smart centralized planning or lower wages and costs in China but rather, the actual ability of a business to conduct day-to-day activities unburdened by the government at all levels. China does not hamper their every move or require horrific environmental or other useless regulatory burdens.
We are part of a global economy now, but foreign countries such as China have always been more user-friendly than our own. We overburden our businesses with convoluted tax codes, unnecessary paperwork, and regulatory holdups. The host of local, state, and federal regulations becomes a cost of every product we make and every service we sell.
I have a close relative who is an owner and executive of a substantial manufacturing operation in China precisely because of its business-friendly environment. I’ve heard from him many times that he went into business, not to comply with government diktats, but to make things. Here, we face climate regulations, environmental restrictions, unnecessary specialty licenses, partisan individuals not allowing projects, and so much more that the Chinese do not have to deal with. Simply put, expensive and complex regulations have rendered the United States less globally competitive. Without major changes, we are destined to decline while China rises.