The China model: Lessons for Africa

The Asian dragon has emerged from typical developing country backwardness to the second largest economy in the world within four decades, regularly posting double-digit economic growth rates.

Of course not all of China’s reforms are applicable to African countries. The specific country conditions are different. Furthermore, within China there is not a consensus over what exactly the Chinese developmental ‘model’ is, except over some of the broad outlines. Nevertheless, African countries can benefit richly from studying some of the key Chinese development approaches.

China has done this by a combination of introducing catalytic new policies and institutions, overhauling the structure of the economy, changing the societal distribution of resources, opening access to land and improving human and physical capital.

China made sustaining high economic growth rates as a core pillar of economic policy. African governing parties and leaders since independence appeared ambivalent – others still do - about pushing all out to raise economic rates.

The question should not be about whether to go for growth, but how to make growth inclusive. Inclusive growth is whether economic growth positively affects the widest number of people in a country, not just small elites.

China focused on building a labour-intensive agricultural sector. In developing countries with mass poverty combined with low skills, sustained agricultural growth has a big potential to reduce poverty.

It dismantled the traditional Chinese feudal system, whereby a few families owned the land and an army of poor peasants worked for them for a pittance. The Chinese government distributed land among all rural peasants.

This was different from many examples of the African land redistribution. For example in Zambabwe, land was taken from white farmers and then mostly given to the elite of ruling Zanu-PF leaders, their families and allies.

But also as important, the Chinese government abolished the power of the traditional chiefs and authorities, who had control over land, patronage and the social values. The Chinese set out a program to equalize the status between traditional leaders and authorities and ordinary peasants, setting new common rules of behavior.

In many post-independence African countries, traditional leaders and authorities retained their power over communal land, their ‘subjects’ and traditional culture. They more often than not abused such powers for their own enrichment, leaving the vast majority of Africans living in rural areas into feudal ‘subjects’, living in abject poverty, as well controlling almost every part of their lives, and even who they should vote for.

In return for having untrammeled feudal power, African traditional chiefs and authorities made sure that their ‘subjects’ voted for the ruling party, repressed and isolated critics of the unequal system, accusing them of wanting to be ‘white’, of ‘rejecting’ their own culture and of being ‘agents’ of the colonial or Western powers.

The Chinese also introduced a greater measure of gender equality – than any African liberation movement - opening up education, skills and labour market opportunities for women.

They introduced industrial policies, which emphasized labour-intensive manufacturing aimed for export and linked to the country’s comparative advantage. This created mass jobs, wealth and slashed poverty. For most of the 50 years following independence, African countries remained stuck in exporting raw materials – which create few jobs and wealth only for a select few - without adding any value to them, or beneficiating or leveraging them to create new industrial sectors.

China put an extraordinary emphasis on developing human capital – quality, technical and research skills – given that they have few natural resources. It introduced nine years compulsory education, as well as rolled out preventative primary healthcare programs.

In fact, the government targeted poor households by providing them with assets (land), education and skills, to help them secure opportunities. Furthermore, it dramatically beefed up tertiary education, introducing a mix of artisan, technical and agricultural training institutions and high quality universities – channeling students according to their aptitudes to these different professional streams.

The country accelerated physical ‘capital’, such as infrastructure across the country – rolling out special programs in historically poor areas - linked to industrialization, human capital development and giving the poor access to markets.

China over time managed to make workers across the economy more productive – whether through new education, skills and health.

The Chinese Communist Party also focused on lifting the widest number of Chinese out of poverty, not one ethnic group, region, or political faction; unlike many African independence government, who in spite of the rhetoric to the contrary, often looked after their ‘own’ ethnic group, region or political constituency.

China introduced a reasonabl sense of meritocracy in its political, economic and social system – not favouring one ethnic group, region or constituency. This unleashed the energy of vast numbers of people, who may have opposed the communist political ideology, but who believed if they worked hard enough they would fairly gain opportunities.

China also effectively used fiscal – using governing spending and taxes and monetary – adjusting the money supply and interest rates - policies to stimulate growth, create jobs and maintain economic stability.

During downturns when demand in the economy was low, the Chinese government actively intervened and increased spending, especially on infrastructure, and reduced taxes. The Chinese have been often accused of keeping the country’s currency artificially low, to help its exporters.

China planned development better: their long-term plans were detailed – typically with specific targets, assigning who is accountable for what, and when, and robust monitoring mechanisms.

China, although led by the Chinese Communist Party, has been more pragmatic, less ideological in learning from other development experiences, whether from Japan, its ancient foe, or the US, its more recent adversary.

Some African governments and leaders were either trying to be more Marxist than the Soviet Union; more Maoist then China; or more neo-liberal than the US under Ronald Reagan or the UK under Margaret Thatcher.

Alternatively, some African countries implemented a hotchpotch of so-called ‘African socialism’, or African ‘communalism’, supposedly the ancient way in which Africans conducted economic transactions. Such efforts not surprisingly mostly failed.

China also policed public corruption, mismanagement and waste better than their African independence movement government peers.

* William Gumede addressed last week’s “BRICS: Inequality and Sustainable Development” Workshop, organized by the UNDP, Beijing Normal University and Action Aid, in Beijing, China. A version of this article first appeared in the African Independent, Johannesburg. Gumede is Chairman of the Democracy Works Foundation. His latest book is South Africa in BRICS - Salvation or Ruination? Tafelberg (http://www.amazon.com/Tafelberg-Short-Africa-Salvation-ruination-ebook/…)

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