Analysis: KUMBUKILANI PHIRI
NEXT week, African leaders will converge in Beijing to attend the ‘Forum On China-Africa Cooperation (FOCAC)’.
This is an official forum between the Peoples Republic of China and all States in Africa (with the exception of Eswatini).
During this period when Africa and China look to strengthen their relationship, I thought of sharing information about the key policies that have shaped the emergency of China on the international scene and how some of these policies are affecting our lives today.
Over the past years, one of the most asked questions about China is how the country has managed to develop within such a short period of time. Many developing countries would like to replicate the China strategy to their development strategy, therefore, the curiosity to understand how China played the trick.
As I write, I am mindful that the development of China has been as a result of many policies and factors, and it cannot be claimed to have been a straight line. Some of the factors leading to what China is today are intrinsic to their history and culture while others have been made possible by other external factors.
The Open Door Policy
China’s Open Door policy describes the economic policy initiated by Deng Xiaoping in 1978 after the death of Chairman Mao who had ruled China from 1949-1976. This policy opened up China for investment from foreign businesses that wanted to invest in the country. It is believed that later the policy set into motion the economic transformation of modern China.
To understand the open-door policy, we need to know what happened before it was introduced. In 1949 when the Communist Party of China (CPC) won the civil war over the Nationalists, China became a communist state and isolated itself from the outside world, except for the USSR and North Korea. Therefore, when Deng Xiaoping came into power after the death of Chairman Mao, he argued that if China was to prosper, there was need to engage with the foreign countries, therefore, he called for a shift from Chairman Mao’s class struggle to economic development.
The Go-Out Policy
The Go-Out Policy (also referred to as the Going Global Strategy) was an effort initiated in 1999 by the Chinese government to promote Chinese investments abroad.
It is believed that following the Open Door Policy many foreign businesses moved into China and invested heavily.
Chinese businessmen benefited through the government policy which encouraged foreign businesses to localise their businesses by partnering with the locals.
Therefore, the country amassed huge amounts of foreign reserves, thus putting upward pressure on the foreign exchange rate of Renminbi, the Chinese currency. As a result, In order to deflate that demand, the PRC had to seek to employ its foreign reserves by acquiring assets overseas. The other reason for the Go Out Policy was that, the PRC was opening up the domestic market in mainland China as a result of its open door policy, which was further accelerated by its commitments when entering the World Trade Organization.
Therefore, the PRC foresaw that world class competitors were competing for business in the Chinese market, and so the PRC needed to equip its domestic firms and their management with international experience so that they can take the competition to the home markets of the foreign nations and so that they can compete better at mainland China’s own domestic market.
This policy saw many Chinese firms go abroad. Africa saw its own fair share of Chinese companies and goods knocking at their door steps.
The Belt and Road Initiative
The Belt and Road Initiative was unveiled by President Xi Jinping in late 2013. It is estimated that the Belt and Road Initiative is one of the largest infrastructure and investment projects in history.
The Belt and Road Initiative addresses an “infrastructure gap” and thus has potential to accelerate economic growth across the world.
Although only a few African countries like Egypt and Kenya were officially named in the Belt and Road Initiative, many other African countries continue to benefit.
Many scholars have argued that the Belt and Road Initiative will still be beneficial to Africa in that once the infrastructure gap is closed up in Africa, the combination of the Chinese capital, technology, market, enterprises, talents, rich experience in development and African abundant resources, the great market potential will have a great chance to create another miracle of development for Africa.
With so much dependence on natural resources, many African countries economies have been poorly developed and underutilisation.
Meanwhile, China through platforms like the Forum on China- Africa Co-operation (FOCAC), Go-Out Policy, the Belt and Road Initiative and many other mechanisms, shows its strong willingness to share its experience and attain common development with other nations including Africa.
In summary, we can see that clear and distinct policies have contributed to shaping China into an international powerhouse that we have come to know within such a short space of time.
The miracle transformation of China in just 30 years from an inward-looking agricultural country to a global manufacturing powerhouse, as well as becoming the first country to achieve the millennium development goal by lifting 800 million people out of poverty have placed China as an ideal model for other countries and Africa to learn from.
China has always worked on a clear agenda backed with a clearly outline policy from the time it opened up to the world. This is what has been lacking in many African countries.
African countries have a lot to learn from China in terms of policy formulation. Trade competition between countries is becoming very fierce and African countries should learn to be more proactive instead of being reactive in terms of their foreign and economic policies.
As our leaders go to Beijing to attend the FOCAC, we can only wish them the best of luck to make sure that they represent our interests as a people.
The author is a Lusaka-based entrepreneur.
Analysis: KUMBUKILANI PHIRI