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China: Africa’s economic development model

IF YOU have eyes and you have been to many countries, you would appreciate why Zambia cannot let go of China.
From the United States, European and Asian countries I have travelled to, seven out of 10 electronic gadgets that I have bought are made in China, including the famous brands such as Blackberry and iPhone.
Clothes, furniture and even fish are being imported from China.
Why then would one ignore such a country?
On December 16, 2014, a British Broadcasting Corporation magazine published an article confirming China as the largest economy in the world.
The Chinese economy is now worth US$17.6 trillion, slightly higher than the US$17.4 trillion the International Monetary Fund (IMF) estimates for the US.
The IMF calculated these figures by using Purchasing Power Parity (PPP) which enables you to compare how much you can buy for your money in different countries.
Why use China as an economic model? Nobody foresaw that the “socialist modernisation” that the post-Mao Chinese government launched would in 30 years turn into what scholars today have called China’s great economic transformation.
It does not need President Lungu to convince this nation about the lessons Zambia and other countries can draw from the rise of its economy.
Nevertheless, China still faces a lot challenges such as high poverty levels, fewer people having access to clean drinking water.
This transformation is the story of our time. The struggle of China is an inspiration to many developing countries, including Zambia.
Since the start of its economic reform in 1979, it has maintained a gross domestic product (GDP) growth rate of about nine percent per year.
To appreciate the strides China has made, economic history becomes important.
The reformist leader, Deng Xiaoping, came to power in 1978 and economic reform began in earnest in 1979.
The Chinese government hoped that gradual reform would lead to significant economic growth and better the lives of its citizens.
We see that its prognosis was correct (Morrison, 2006). The first task was to reform the agriculture sector, which was and still remains the back born of the Chinese economy.
The government allowed farmers to keep and sell part of their produce in the private sector.
It also established four special economic zones along the coast to attract foreign investment wishing to take advantage of the lower labour costs in the country.
The aim was to stimulate high technology imports to China and encourage exports.
Today, with the benefit of hindsight, we know that the economic forces that were really transforming the Chinese economy in the first decade of reform were private farming, township and village enterprises, private business in cities and the special economic zones.
All these reforms were not initiated from Beijing. They were marginal players operating outside the boundary of socialism.
The Chinese government was happy to leave marginal forces alone as long as they did not threaten the state sector or challenge the party’s political power.
The first private businesses in Chinese cities were started by people who did not have a job in the state sector.
Most were city youths recently returned from the countryside. During Mao’s era, 20 million middle school graduates in cities were sent to the countryside partly because the government could not create enough jobs.
After the demise of Chairman Mao, they came back, but found no jobs in the state sector.
Young, jobless, and restless, they put pressure on their government to create incentives for private businesses and it opened the door for self-employment. Private shops started to emerge in cities and quickly ended state monopoly of the urban economy.
Self-employment is key to national development as the government may not create enough jobs for every Zambian.
The government needs to come up with deliberate policies that would encourage self-employment, which must be embraced by all Zambians.
I wish I could highlight all the main factors that led to the Chinese economic turnaround but not in this column. Please, take note that China has strict regulations for foreign investors and it does not apply them selectively.
Let me end with a quote from Dennninghaus (2009:8): “China is an impressive example of a developing country with a difficult past, catapulting itself amongst the ranks of the biggest economies in the world in an extremely short period of time.”
The author is a PhD student in China.