Fact check on the EU, USA and China: The great systemic duel – Where is the best place to live?

The prosperity lie exposed: Why China's healthcare system suddenly overshadows the USA

Rich but sick? Why the American success model is turning into a nightmare for millions of citizens

Which system truly offers people the best life? In the 21st century, three world powers are vying for global dominance and the authority to define the most successful societal model: the USA with its radical capitalism, China with its state-controlled system, and the European Union as a democratic welfare state. This competition is often assessed in politics and the media solely based on gross domestic product or high stock market valuations. But a closer look at the raw facts reveals something astonishing: when quality of life is measured by life expectancy, poverty reduction, security, or education, the narrative of the invincible US superpower crumbles dramatically. At the same time, China is achieving successes in some areas that should worry the West, while the EU, although known for its high level of social security, risks falling behind technologically. This comprehensive and unvarnished fact check decouples political propaganda from lived reality and uses hard data to show the true strengths and fatal weaknesses of the three major global models.

Three world models in an unvarnished fact check – and why the picture painted by politicians has little to do with the reality of millions

The 21st century is characterized by structural competition between three fundamentally different social and economic models. On the one hand, there is the European Union, a supranational alliance of democratic welfare states with a regulated market economy, social security, and a multilateral legal order. On the other hand, there is the United States of America, the prime example of Anglo-American capitalism with a minimal welfare state, a dominant private sector, and a political and cultural self-image as the undisputed world power. And then there is China: an authoritarian one-party state that defines itself as a "socialist market economy" but in reality operates a state-controlled hybrid of capitalism that is historically unprecedented.

These three actors together represent roughly 60 percent of global economic output and stand for radically different answers to the fundamental questions of the modern state: How much freedom, how much equality, how much control? What constitutes prosperity – high stock market values ​​or healthy children? Stability through surveillance or through the rule of law? A data-driven analysis that evaluates all three systems using comparable indicators provides insights that significantly differentiate the prevailing narrative of American superiority and a Chinese miracle performance.

The aim is not to defend any one of the three models. All three exhibit profound strengths and structural weaknesses that must withstand honest scrutiny. What this analysis seeks to achieve is to decouple figures from propaganda – a comparison of real living conditions, measured against those indicators that directly shape people's everyday lives.

Between statistics and reality: What prosperity really means

Before analyzing individual indicators, a methodological caveat is essential. Gross domestic product per capita – the most frequently cited indicator of prosperity in political discourse – is notoriously unreliable for three-way comparisons. In 2024, the US had a nominal GDP per capita of around $80,000, the EU countries an average of around $38,000, and China around $13,300 nominally. However, adjusted for purchasing power parity, the figures converge considerably: China reached $23,846 per capita in 2024. A significant portion of the nominal gap is due to purchasing power and does not reflect real differences in prosperity.

Even more important is the question of who benefits from this economic output. In all three systems, wealth is distributed highly unequally – but the extent and the social consequences of this inequality differ fundamentally. A high GDP that is predominantly accumulated by a small elite hardly improves the lives of the majority of the population – and consequently, it is not reflected in health, safety, or education indicators. It is this discrepancy between aggregate size and distributed reality that structures the following comparison.

Life expectancy and infant mortality: The biometric system check

The simplest and most profound indicator of the quality of a social system is how long its members live and how well the most vulnerable groups are protected. In the EU, life expectancy in 2024 was estimated at 81 to 82 years, with peak values ​​in Southern Europe and Scandinavia. In the US, it fell to a historic low of around 76 to 78 years – a decline unparalleled in the modern history of high-income countries. China recorded a life expectancy of 79 years in 2024 – a remarkable convergence with the US level, even though China's per capita GDP is nominally only a fraction of that of the US.

A similar picture emerges when looking at infant mortality: The EU has around 3.3 deaths per 1,000 live births, while the US has 5.6. China reached a historic low of 4.0 per 1,000 in 2024 – putting it ahead of the US, despite a significantly lower per capita economic output. China's National Health Commission reported that China's average annual reduction rate in infant mortality over the past decade ranked third among the 53 upper-middle-income countries worldwide. These figures are remarkable because they demonstrate that government investment in healthcare and prevention can improve people's biological life chances to a degree that is not automatically achieved by purely market-based systems.

Regarding China, a methodological caveat must be noted: Chinese statistics originate from state sources and are not independently verifiable. However, the consistent improvement over time and the agreement with World Bank and WHO data suggest that the trend is real, even if absolute figures may be understated.

Healthcare as a systemic issue: Who pays and who benefits

The Chinese healthcare system has undergone spectacular expansion over the past two decades. Since 2011, almost the entire population has been covered by one of three public health insurance programs; by 2024, over 1.32 billion people – around 95 percent of the population – were enrolled in basic insurance. This system covers primary and specialist care, inpatient treatment, and prescription medications, but it levies co-payments without annual limits, which can lead to significant financial burdens in cases of serious illness. The qualitative gap between urban and rural healthcare remains substantial: Shanghai and Beijing boast world-class hospitals, while rural areas are characterized by inadequate care and low medical standards.

In the EU, universal health systems—whether the Bismarckian social insurance model (Germany, France) or the tax-funded Beveridge model (Sweden, Denmark)—guarantee universal access to medical care regardless of income level or employment status. According to WHO data, catastrophic healthcare expenditures that push households into existential hardship affect only about 4 percent of the EU population. In the US, however, around 41 percent of adults have taken on debt to pay for medical services—the structural failure of a primarily profit-driven private healthcare system is particularly starkly evident in this figure. Around 28 million Americans were recently without any health insurance, and millions more are de facto underinsured despite having nominal coverage.

The consequences of these systemic differences are directly reflected in biometric indicators. The higher life expectancy in the EU and China compared to the US is not a natural law, but the measurable result of political decisions regarding access to healthcare. This finding is marked by an irony that is politically explosive: China – an authoritarian one-party state with a per capita income that is a fraction of that of the US – protects its citizens medically better than the richest country on earth.

Poverty and Inequality: The Promise and the Reality

No comparison of the three systems is as complex and ideologically charged as that concerning income and wealth distribution. All three systems experience poverty and inequality – but their nature, extent, and dynamics differ fundamentally.

Between 1980 and 2020, China lifted over 800 million people out of extreme poverty, according to the World Bank—a historically unprecedented achievement largely attributable to state-planned industrial policies, massive infrastructure investments, and targeted regional development programs. This poverty reduction was real, statistically verifiable, and transformed the lives of more people than any other economic development of the 20th and early 21st centuries. At the same time, China's economic transformation has generated rapid inequality: the Gini coefficient—a standardized measure of income inequality—officially stood at 0.465 in 2023, significantly exceeding the United Nations Development Programme's warning threshold of 0.4. According to the World Inequality Database, the top one percent of Chinese households held approximately 30 percent of total private wealth in 2024.

In the US, the Gini coefficient for household income is similarly high, at around 0.47. According to Federal Reserve data, the top one percent controls roughly 31 percent of the national wealth. For the bottom 50 percent of the US population, real income has stagnated for decades. Within the EU, Gini coefficients vary considerably: Scandinavian countries like Denmark and Finland have values ​​around 0.28, while Bulgaria and Romania tend to be between 0.35 and 0.38. The EU average is therefore around 0.30, significantly lower than the levels of these two rivals.

The relative poverty rate – measured as the proportion of the population with less than 50 percent of the median income – is around 18 percent in the USA. In the EU, it is around 15 percent; some northern European countries have rates below 8 percent. In China, the relative poverty rate is difficult to measure in the Western sense, as the median income is still significantly below European levels. Absolute poverty – measured against the international benchmark of $5.50 a day at purchasing power parity – still affects around 21.5 percent of the population in China.

National debt: The fiscal foundation of three world powers

Public debt is an indicator where all three systems face significant challenges – albeit of different kinds. In 2024, the US topped the OECD's list of highly indebted countries with a debt-to-GDP ratio of around 126 percent. The US annual budget deficit reached 7.6 percent of GDP in 2023, a level unparalleled among comparable economies. Interest payments in the federal budget are growing faster than any other expenditure category, increasingly restricting fiscal policy options for investment in infrastructure, education, and healthcare.

China presents a particularly complex case from a methodological perspective. The central government's officially reported debt-to-GDP ratio was around 24 percent in 2024 – a figure deliberately kept low. However, if Local Government Financing Vehicles (LGFVs) – shadow financing instruments at the provincial and municipal levels – and other augmented liabilities are included, the IMF estimates the true total debt burden at around 124 percent of GDP. Total non-financial sector debt (including businesses and households) exceeds 312 percent of GDP, according to OMFIF estimates. This debt architecture is structurally fragile: a significant portion of local debt was accumulated during a state-sponsored real estate boom that has been in deep crisis since 2021.

The EU averages a debt-to-GDP ratio of around 81 percent, with considerable variations between debt-heavy Germany (around 62 percent) and the highly indebted Mediterranean countries of Greece (around 160 percent) and Italy (around 137 percent). What structurally distinguishes the EU is the existence of the Stability and Growth Pact, which—although often circumvented—provides a normative framework for fiscal discipline. None of the three major powers has solved its debt problems; however, the US and China, realistically speaking, exhibit the most serious structural risks.

Wealth concentration: When growth becomes a one-way street

In all three systems, wealth has become increasingly concentrated at the top of the distribution over the past three decades. In the US, the top one percent holds around 31 percent of national wealth, while the bottom 50 percent hold only 2.5 percent. In China, according to Thomas Piketty's World Inequality Database, the top one percent held around 30 percent of wealth in 2024; the top decile even 68 percent. For the EU, the figures are considerably lower: the top one percent controls, on average, around 20 to 25 percent of wealth, although here too there are considerable differences within Europe.

The dynamics of wealth concentration are particularly revealing. In China, the wealth share of the top one percent rose from around 6 percent to 30 percent between 1990 and 2024 – a fivefold increase within a single generation. At the same time, belief in social mobility has plummeted: while 62 percent of Chinese people were convinced in 2004 that hard work pays off, this figure had fallen to 28 percent by 2023. The perception that connections and background count for more than merit now shapes the economic sentiment of broad segments of Chinese society.

The structural problem of this concentration is not merely moral in nature, but also impacts macroeconomic stability. Extremely unequal distribution of purchasing power dampens domestic demand – a problem that China is watching with particular concern, especially given its weakening exports and declining real estate market. While EU social welfare systems with their redistribution mechanisms do not completely counteract this concentration trend, they are substantially more effective than the systems in the US and China.

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Access to education: From the promise of equal opportunities to a bitter reckoning

In the EU, higher education is free or symbolically inexpensive for domestic students in the majority of member states. Germany, Austria, Finland, Denmark, Sweden, Greece, and France charge no or minimal tuition fees. Access to tertiary education is structurally more socially inclusive than in the other two systems, although hidden costs such as living expenses, the housing market in university towns, and social background remain de facto barriers.

In the US, students accumulate an average of around $40,000 in student debt. The total amount of outstanding student loans in the US exceeds $1.7 trillion, making it the second largest single item in the American household debt portfolio after mortgage debt. This structural barrier to education reproduces social inequality across generations: those from low-income backgrounds are often deterred from attending university or drop out of their studies.

For a long time, China's education system offered comparatively low university tuition fees. However, since 2023, more than 20 provinces have increased tuition fees by 10 to 54 percent. At the same time, the Ministry of Education reduced the 2025 higher education budget by 4.7 percent to 114 billion yuan – despite a record enrollment of 12.22 million students. Experts warn that rising tuition fees in China are accelerating social stratification, as higher education costs make upward mobility from lower-income backgrounds more difficult. Despite these developments, the level of education costs in China remains far below that in the United States. Graduates of Chinese universities begin their careers with average annual tuition fees of around 5,000 to 8,000 yuan – the equivalent of a few hundred euros.

Crime and incarceration: Different paths to safety

The murder rate is a brutal but precise indicator of social security. In the US, it is around 5 murders per 100,000 inhabitants, and in the EU, around 2 per 100,000. According to official figures, China reports an exceptionally low murder rate of 0.44 per 100,000 for the year 2024. This figure is among the lowest in the world and is supported by data from the Ministry of Public Security. Independent verification is difficult due to China's closed information architecture, but the temporal consistency of the figures and their agreement with UNODC estimates suggest a high degree of plausibility.

The prison population figures offer a revealing comparison. In the EU, an average of around 111 people per 100,000 inhabitants are incarcerated. In China, the officially reported rate is around 119 per 100,000, which is structurally comparable to the EU figure. In the USA, it is 531 per 100,000 – almost five times the European level and the highest level worldwide. The USA incarcerates more people than China in absolute terms, even though the Chinese population is more than four times larger. This finding is not a footnote, but a systemic characteristic of the American model: mass incarceration as a response to social problems that other systems address through prevention, social security, and rehabilitation.

It is important to note that China's low official incarceration and murder rates must be interpreted within the context of a surveillance state that exerts an unparalleled level of control over its population. China maintains the world's most sophisticated mass surveillance system, combining internet monitoring, camera systems with facial recognition, and digital behavioral surveillance. What the EU achieves (or fails to achieve) through preventative measures based on the rule of law and the US through incarceration, China achieves through pervasive state control that structurally undermines fundamental freedoms.

Female labor force participation: An unexpected three-way comparison

The comparison of female labor force participation reveals surprising results. The EU achieves a female labor force participation rate of around 71 percent, while the USA stands at approximately 57 percent – ​​a low figure by international standards, which can be attributed to the lack of structural support through childcare and parental leave. China boasts a female labor force participation rate of around 60 percent – ​​significantly higher than the global average of 51 percent. At the same time, the time series for China shows a long-term decline: from 73 percent in 1990, the rate has fallen continuously, a trend attributed to economic restructuring, changes in fertility policies, and traditional gender roles.

In absolute numbers, around 320 million women were employed in China in 2024, representing 43.4 percent of total employment. According to official data, women held 37.7 percent of board positions in companies. These figures are impressive in their absolute scale, but must be interpreted against the backdrop of significant structural barriers that continue to disadvantage women in China – from discrimination in hiring due to maternity concerns to traditional family obligations that remain structurally unequally distributed among women.

The EU performs best in terms of female labor force participation. This is no coincidence, but the result of decades of political investment in childcare infrastructure, paid parental leave, equality legislation, and targeted labor market policies. The EU model demonstrates that high female labor force participation is not a matter of cultural predisposition, but rather a matter of political framework conditions.

Occupational safety: The forgotten measure of the value of human labor

Workplace mortality is an indicator that receives surprisingly little attention in public debates about economic models, even though it directly reflects the legal and social status of workers. According to ILO data, the rate of fatal workplace accidents in the US is around 3.7 per 100,000 workers. In the EU, it is considerably lower, with rates between 1.1 (Poland, Norway) and 3.5 (some Eastern European countries); the EU average is around 1.6 to 2.0 per 100,000.

In China, a direct comparison figure is difficult to obtain because the calculation is based on different reference values. Chinese authorities reported a total of 13,442 workplace accidents with 12,804 fatalities for the first nine months of 2024 – a year-on-year reduction of 20.8 percent. Based on a working-age population of approximately 800 million, this would result in an extrapolated annual rate of around 2.1 fatalities per 100,000 workers. China thus reported a historic low for 2024. However, the actual figures could be higher due to underreporting – particularly in the informal sector and small-scale mining.

The data clearly shows that the EU, with its strict occupational safety laws, strong trade unions, and rigorous state labor market oversight, offers the best structural protection for workers in the three systems. The US fares worse, although the Occupational Safety and Health Administration (OSHA) formally exists, but is chronically underfunded and limited in its regulatory scope. China occupies a middle ground – showing a significant trend toward improvement, but still facing considerable sectoral risks, particularly in mining and construction.

Technology and Innovation: Where the future is being built

No three-way comparison would be complete without considering the dynamics of innovation, which is increasingly becoming the decisive factor for long-term system strength. The US dominates the development of commercial AI technologies: in 2024, private AI investment in the US reached $109.1 billion – roughly twelve times more than in China, which saw an estimated $9.3 billion in private funding. In 2024, the US launched around 40 significant Large Language Models, China around 15, and Europe only 3. This discrepancy poses a serious strategic challenge to Europe's long-term technological sovereignty.

However, China has responded with massive state-led industrial policy. The state-backed AI fund, announced for 2025 and totaling over 1 trillion yuan (approximately $138 billion), is intended to promote AI, robotics, and semiconductor technologies over five years. China's total AI investment is projected to reach between $84 billion and $98 billion by 2025 – a 48 percent increase compared to 2024. China leads in AI patents, with 38,210 inventions filed between 2014 and 2023, compared to 6,276 in the US. The DeepSeek-R1 model, developed for just $5.6 million, demonstrated to the world in 2025 that China is capable of producing competitive, cutting-edge technology at a fraction of the cost of American technology.

The EU remains structurally weak in cutting-edge innovation – no European AI platform competes globally with US or Chinese systems. The 2024 report on European competitiveness presented by Mario Draghi diagnosed an annual investment deficit of around €800 billion compared to the US and China, which cannot be closed without fundamental reforms to the European capital market structure. Europe's regulatory strength – the AI ​​Act, the GDPR – protects civil rights and sets global standards, but early regulatory density also hinders the speed of innovation.

Demographics: The silent system shock

No strategic challenge will shape the three systems more profoundly in the coming decades than demographics. China is experiencing a demographic crisis of historic proportions: its population shrank by another 3.39 million in 2025, marking the fourth consecutive year of decline, reaching 1.405 billion. The birth rate fell to 5.63 births per 1,000 people – a historic low. According to forecasts by Oxford Economics, China's potential economic growth could fall below 2 percent by the 2050s. The full demographic impact of the former one-child policy is only now becoming apparent.

The US has a demographic buffer thanks to a more open migration system and a comparatively higher birth rate (around 11 births per 1,000 people compared to 5.63 in China). The EU lies between these two extremes: some member states, such as Germany, have birth rates similarly low to Japan's, but the European migration system allows for significant compensatory effects. At the same time, migration in several EU countries leads to political tensions that strain the social foundations of the welfare state.

Political freedom as an immeasurable but central system factor

Any analysis comparing the EU and the US with China without acknowledging the fundamental systemic divergence on issues of political freedom, the rule of law, and human rights would be incomplete. China maintains a comprehensive mass surveillance system, which Human Rights Watch considers the most sophisticated in the world. Censorship, the suppression of political dissidents, the imprisonment of millions of Uyghurs in Xinjiang, and the gradual erosion of Hong Kong's autonomy are documented realities that cannot be mitigated by even the most impressive economic growth.

This systemic deficit cannot be expressed in a GDP figure and does not appear in any social statistics – but it fundamentally shapes the lives of over a billion people. The ability to criticize one's own government, to read a newspaper that reports the truth, to organize politically, or simply to conduct research online without being monitored are fundamental conditions of human dignity. In this respect, the EU and the US, despite all their own democratic shortcomings, fundamentally diverge from China.

The comprehensive comparison overview: Where does each system stand?

A comparative overview reveals significant differences between the EU, the USA, and China. Life expectancy in the EU is approximately 81–82 years, in the USA 76–78 years, and in China around 79 years. Infant mortality is approximately 3.3 per 1,000 live births in the EU, about 5.6 in the USA, and around 4.0 in China. Health insurance coverage is almost universal (~100%) in the EU, around 92% in the USA (with gaps), and about 95% in China. The relative poverty rate (50% median) is approximately 15% in the EU and around 18% in the USA; a direct comparison for China is more difficult. Public debt is approximately 81% of GDP in the EU, about 126% in the USA, and around 124% in China (all augmented figures). The Gini coefficient, a measure of income inequality, averages around 0.30 in the EU, approximately 0.47 in the USA, and about 0.465 in China. The share of wealth owned by the top 1% is roughly 20–25% in the EU, around 31% in the USA, and about 30% in China. The murder rate is about 2 per 100,000 inhabitants in the EU, about 5 in the USA, and approximately 0.44 in China. The incarceration rate is around 111 per 100,000 in the EU, 531 in the USA, and about 119 in China. The female employment rate is about 71% in the EU, around 57% in the USA, and about 60% in China. Fatal workplace accidents occur at a rate of approximately 1.6–2.0 per 100,000 in the EU, around 3.7 in the US, and an estimated 2.1 in China. Regarding private AI investment (2024), there are approximately three noteworthy models in the EU, USD 109.1 billion invested in the US, and around USD 9.3 billion in China. Political freedoms are high in the EU and also high in the US, but very low in China. Demographic dynamics show stagnation in the EU, moderate growth in the US, and a shrinking population in China.

System logics and their limits: Where every model fails

The European model consistently delivers the best results in life expectancy, infant mortality, social security, equality, and female labor force participation – but it falls short in terms of innovation, suffers from structural bureaucracy, and faces long-term challenges from demographic change and demographically driven fiscal burdens. The EU's culture of consensus, its institutionally driven slowness in decision-making, and the regulatory fragmentation of the single market are real weaknesses that, without structural reforms, will further undermine economic competitiveness.

The American model produces spectacular economic excellence in certain sectors—particularly technology, pharmaceuticals, and financial services—and possesses unparalleled military and cultural soft power. But it systematically fails to distribute these benefits to the population as a whole. Poor health indicators, high poverty rates, extreme incarceration rates, lack of educational equity, and fiscal instability are not marginal phenomena but structural features of a system that prioritizes the market over people—and increasingly does so at a societal and economic cost.

The Chinese model has achieved historically unprecedented success in poverty reduction and the development of state infrastructure. Rapid improvements in health indicators and state-driven industrial policy in future technologies demonstrate what a consistent deployment of state resources can achieve. However, this model rests on a foundation of political control that systematically sacrifices individual freedom, diversity of opinion, and political pluralism. It also faces three structural challenges over time: the demographic crisis, the debt burden of the real estate boom, and increasing technological dependence on imported key components such as high-performance semiconductors.

What remains: A sobering conclusion with no winners

Neither the US, the EU, nor China offers a perfect model. But the question of which system performs best in terms of the quality of life for the majority of its population—not just the elite—can be clearly answered based on the data: The EU leads in most dimensions that directly affect daily life. China is showing a surprisingly strong catch-up in health indicators and has lifted countless people out of extreme poverty—but is paying a political price that is not fully reflected in any statistic. The US excels in economic aggregate size and innovation spending, but fails remarkably in translating this strength into universal quality of life.

For European policymakers, this finding means that the EU must defend its structural strengths in social security and quality of life while resolutely addressing its glaring weaknesses in innovation and bureaucratic efficiency. The temptation to imitate the American or even the Chinese model should be thwarted by the figures – because these figures show that neither Washington nor Beijing provides the answer to Europe's future.

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