Chinese students outperform American students in many international competitions in mathematics and the natural sciences. Does this superiority of Chinese students over American students also apply in other domains? Our previous research has shown that compared with their American counterparts, Chinese students' artwork is perceived as less creative by both Chinese and American judges. In a new study, we find that Chinese students' creativity is increased when given direct instructions to be creative or guidance on how to be creative. Three different factors are posited to be responsible for the discrepancy in rated creativity between Chinese and American students, namely, social values, school pedagogic practices, and educational testing systems. This article argues that high-stakes standardized tests could impair the development of students' creativity. Although there is a general tendency for school educators in both China and the United States to overemphasize analytical skills at the expense of the development of creative abilities, in general, the tendency for the Chinese to do so is stronger than it is for the American. Suggestions are proposed to educators on how to foster students' creativity. Furthermore, the article suggests that school and national leaders in the United States and China, as well as elsewhere, should learn from one another's educational successes, while maintaining their unique cultural and educational characteristics. © 2003 Wiley Periodicals, Inc. Psychol Schs 40: 103–114, 2003.