Culture and China’s Economic Development

This study examines the economic implications of long-standing Confucian values and the principles of socialism with Chinese characteristics for China's economic development, particularly in the context of growing tensions between the United States and China. By incorporating an individual's propensity for cooperation and its influence on subjective value formation, together with an internal welfare adjustment mechanism inspired by prospect theory, the proposed model provides a framework for explaining the cyclical dynamics of cooperative behaviors. This analysis suggests that trade alone is not sufficient to bridge cultural differences between nations. Greater mutual understanding and appreciation of diverse cultural traditions may instead be fostered through educational and cultural exchanges, including international tourism. The study also advocates a prudent industrial policy that balances economic development with social welfare, thereby helping to ensure that the benefits of economic growth ultimately contribute to the well-being of the broader population.