Now that CHINA is here!

by Admin (Posted on October 28, 2021October 28, 2021)

By Terence Kalule

Albert O. Hirschman once challenged Professor Nurkse asserting that “underdeveloped economies are called underdeveloped because they face a lack of resources, maybe not natural resources, but resources such as skilled labor and technology.”

China’s history makes her the perfect candidate to win ownership of not only her national success today, but also her global impact in regard to her development. If we may compare the figures, we can see China’s GDP worth 59 billion US dollars in the 1960s, having America’s worth at 543 billion US dollars. Quite a gap!

By 2018, it might not come as a surprise that this gap gets even closer to surpassing, when China’s GDP is worth $13 trillion and that of U.S standing at $20 trillion. With such a fast-rising trend, China is anticipated to be the world’s number 1 economic superpower there’ll be by 2025. This development and more to come, is the result of a China whose growth has been through a furnace literally, melting and remodeling self into the image she is today.

Worth noting is that China’s history is not free from hardships. Like many other developing countries especially from the global south like African countries, China too suffered colonialism and brutal foreign invasion that cost the country tens of thousands of innocent lives as well as the country losing some of her territory to foreign aggressors.
Case in point is the result of foreign invasion that resulted into the so-called Opium War, which China lost to the United Kingdom (UK). Under coercion by UK’s warship, Qing Dynasty agreed to sign the treaty of Nanking thereby ceding her own Island of Hong Kong to the UK.

It is important to observe that the first opium war launched by British against Chinese people was completely uncalled for and is a textbook example of how dangerous imperialism can be! The British waged this war against Chinese people simply because the Chinese had resisted opium trade. The UK interpreted Chinese resistance to partake opium trade as disrespect and encroaching on tenets of free trade. Arguably, this points at capitalists’ voracity and sheer disregard of human dignity when their interests are threatened.

Like African countries that suffered humiliating foreign domination including slave trade, and brutal supersession of struggles for self-rule; China too for long suffered the wrath of foreign invaders. In 20th century, the country braved what some historians described as one of most wanton destruction of humanity in Asia as Japan fought China.

It can be argued that it is China’s history characterized by suffering at hands of foreign invasion that gave birth to the Chinese view that it is only through self-reliance that a country can realize dreams of its people. This idea of self-reliance is what China’s founding father Chairman Mao Zedong encouraged in China!

Mao closed off China from the rest of the world for close to 30 years. During his rule, stock exchanges were banned, diplomatic and economic relations with the capitalist west were put to an end! China was completely self-reliant in terms of finance, food and goods. Everyone shared wealth, and the collective community was represented by the state. China at the time had about 542 million people whose retreat had her rise like a phoenix from the ashes.

However, this did not stop China from supporting struggles against foreign domination especially in Africa. An instance is seen in the 1960s. China put aside more than $400M to support construction of the Tanzania-Zambia Railway line also known as TAZARA. At this time, the rest of the world saw the development as masochistic since at that time, China’s economy was weak that its total GDP was lower compared to that of Sub-Saharan Africa. Indeed, in proceeding years till late 1978, China’s per capita GPD was about $156M while that of Sub-Saharan Africa stood at $490M. With such facts at hand, one can conclude that despite challenges, China has always believed in standing shoulder to shoulder with African countries.

China’s economic game changer came with the country’s open-door policy. The establishment of the Special Economic Zones (SEZs) played a key role and many experts describe it as the engine to China’s economic development. These zones had a special autonomy compared to elsewhere in China. From these zones, factories exported goods to the rest of the world. Importers were able to trade with other countries. One of these zones is famous for possessing the world’s largest toy production facility. China exports 41% of the world’s computers, 34% of all air conditioners & 70% of the world’s cell phones; her economy accounting for 18.6% of the global gross domestic product as of 2018.

The 2008 global financial crisis left no stone unturned. All nations got back to the drawing board to find means of revamping the economy. China’s economy collapsed too when there was a lack of market globally, resorting to targeting domestic consumers to boost production, as well as investing in developing nations in Africa and Asia.

Technologically, “the US has already lost the Artificial Intelligence race”. And this was reason good enough for Nicolas Chaillan, US Pentagon’s first Chief Software Officer, to be angry and later resign from his position recently on October 2; as he couldn’t stand the slow pace of technological transformation in the US military. “Whether it takes a war or not, is kind of anecdotal”. “We have no competing fighting chance against China in 15 to 20 years. Right now, it’s already a done deal”, he said.

Through fore fronting certain sectors in her economy, and putting wellbeing of her citizens first, China has been able to make it this far. This growth, overtime, exhibits the bits in which China mastered the art of prioritization when she rooted her faith deep; in optimizing her natural and human resources, strategically tapping into what the technological milieu had to offer as well as an effective administration of a population so huge.

The Human Development Index (HDI) which emphasizes how people and their capabilities play a role in development assessment of a nation and not economic growth alone; Ranks China in the 85th position out of 189 countries, with 0.761 points as of 2019.
With the 5th industrial revolution so close, one whose partakers must be fluent in technology, after eradicating complete poverty; China is in a promising position to be valedictorian of this class. On February 25 this year, Chinese president Xi Jinping declared “Complete victory in eradicating poverty” in China, which the development UN secretary general described as a big success.

What lessons do Low Middle-Income Countries (LMIC) draw from China’s economic growth, and what opportunities are laid on table for citizens in countries running China-invested projects/partnerships? LMIC with low productivity and low capital accumulation barely stand a chance to escape Nurkse’s vicious cycle of poverty. Chinese investments in these countries therefore partly plays the role of a vent to the portal leading out of this poverty trap.
It’s the time for not only governments of LMIC but also citizens under democratic systems to make hay while the sun shines, taking advantage of and optimizing an overflow of opportunities from these Chinese partnerships, as a short cut to boosting internal development.

Terence Kalule is a research fellow with Development Watch Centre; a Foreign Policy Think Tank, and a health education enthusiast.

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