AFTER its opening up in the 1970s, China’s rapid growth into the second-largest economy in the world, with growing global economic and political influence today, makes China not only one of the most influential countries in today’s international politics and economics but also an inspiration to the developing world.
In just more than four decades, China’s economic miracle, anchored on China’s reform and opening-up, has made China the largest trading country in the world. It is the second-biggest investment source, and its GDP growth in terms of purchasing power parity (PPP) equivalence has been thus far the largest in the world for over a decade now. It is the world’s second-largest economy and the largest and strongest in the Global South.
Indeed, in a world dominated by a Western economic paradigm of capitalism, and political ideology of liberal democracy, which in many ways have been imposed on the Global South, and is priced as the path toward modernization and economic development for many countries across continents, China made headway toward modernization and economic development traversing a different path, deviating from the Western-centric prototype and concept of development, ending up not a mirror image of the West. China pursued a development and modernization trajectory based on its own historical grounding and experience, unique internal conditions and realities, and cultural and civilizational foundations.
China’s experience toward rapid economic growth and prosperity is not only an inspiration for countries in the developing world, but offers an alternative path toward economic progress, development and modernization for the Global South vis-à-vis the Western-centric model of development that is exemplified by the “dependence trap,” where the Global South is the development aid recipients, and the North, composed of few affluent countries (former colonial masters), is the provider of development aid with prescribed structural conditionalities and packages intended to underwrite structural reforms, continuing inequalities and inequities, fortified by asymmetries in wealth, power and resources, which fundamentally reflect the unequal divide between the North and South.
In many ways, China’s experience of development and modernization is unique to itself and was never an attempt to copy and imitate the West. Nevertheless, like many developing countries in Asia, Latin America and Africa, China, in a similar manner, experienced and lived through the bitter pill of imperialism and the blow blunder of colonization. It suffered a “century of humiliation” or “hundred years of national humiliation,” which refers to the period of intervention and subjugation of the Qing dynasty and the Republic of China by Western powers and Japan from 1839 to 1949. Obviously, the Global South and China have a shared and common experience of colonialism and imperialism, bringing them closer as partners in pursuing a development and modernization path more reflective of the Global South’s respective spirits, outlooks, conditions, realities, perspectives and historical experience.
Triumph over poverty
Nevertheless, one of the things that are worth mentioning and quite critical for the Global South to take note of and learn lessons from aside from the remarkable economic accomplishments and triumphs of China, is its achievement in lifting around 770 million Chinese from poverty. This for me is one of China’s most essential and extraordinary success stories in the 21st century that inspires the countries of the Global South.
China has defeated extreme poverty within its borders with a precise and targeted poverty alleviation program and strategy. It has scored a complete victory in its fight against poverty. In just eight years, this number has been reduced to zero. This accounts for over 70 percent of global poverty reduction and has met its poverty eradication target set out by the 2030 United Nations Agenda for Sustainable Development, 10 years ahead of schedule.
Indeed, China’s experience in poverty reduction is the most telling evidence of its progress in human rights. It is indeed the most telling story and the manifestation of inclusiveness in China’s path toward modernization and development, which means shared prosperity for all by exerting efforts to narrow the gap between the poor and wealthy and between rural and urban communities. China’s experience in combating poverty is human history’s most extraordinary anti-poverty story. With the highest number of people moving out of poverty, China was also the first developing country to realize the UN MDG/SDG for poverty reduction. This is unprecedented.
Moreover, amid all the remarkable achievements of China’s opening-up and reform, one crucial question that needs to be asked is how China did it, how China changed and transitioned from decades of economic stagnation and setbacks and from a poor society to the No. 2 economy in the world today.
Driving force of rapid growth
Several factors can account for and to a large extent, possibly explain China’s economic miracle. But before anything else, it is important to look at and analyze how the Chinese characterize “economic reforms and opening-up.”
China’s economic reform means improving the economy’s efficiency and promoting economic resources flowing to the more efficient sectors of the economy. Whereas opening up means making full use of the “backward advantage,” taking part in the international division of labor, and making full use of foreign direct investment (FDI), technologies and management expertise. A backward advantage for a developing country means and indicates that any developing economy of the Global South can take advantage of the technology/industry gap vis-à-vis that of developed economies of the First World by implementing and employing a new technology or venturing into an industry that is new to its economy but mature in the developed country.
Some of the factors that could account for China’s economic miracle include China’s highest investment ratio in the world with a high savings rate and high FDI inflow, structural upgrading, factors of production such as labor, land and capital moving from low productivity sectors to high-performing and productive economic sectors, industries and services that China has comparative and competitive advantages, the population bonus, particularly a high ratio of labor with high literacy and competitiveness due to massive investment in human capital.
Most importantly, it is noteworthy to mention and emphasize the role of the state in China’s path to modernization and development. While the market is the mechanism behind incentivizing firms and the efficient allocation of resources such as land, labor and capital, one can see that in China’s economic miracle, the state (i.e., national and local governments) is responsible. It plays a critical role in institutionalizing the necessary legal and social framework for maintaining fair market competition, providing public goods and services, redistributing income, addressing and correcting market externalities, and stabilizing the economy.
Moreover, the level of development and modernization that China and the Chinese people are experiencing now will not be possible and could not be possibly achieved in such a short period of over only four decades if not as well because of some key political and decisive factors which include: a) the decisiveness and strong political will of the Chinese government and its leaders in governance; b) China’s unified and cohesive coordination between the central government, provinces, cities, and counties as the country pursues economic development and progress; and c) the cohesiveness of Chinese society and unity in spirit and vision for China among and between the people and its government.
This is not an exhaustive list of factors that could explain the entirety of China’s economic miracle, but these factors at least give a glimpse of how and why China is where it is today — an economic powerhouse of the world. In the same manner, these are crucial lessons for countries in the developing world pursuing more inclusive development and economic progress.
In retrospect, China’s path to development and modernization can’t be copied precisely because it is unique to China. However, it serves as an inspiration and a guide for the developing world. I believe that countries of the developing world can pick up lessons and best practices and learn from China’s experience toward economic progress and development. I also think that countries in the Global South, like the Philippines, can be inspired by the Chinese experience of development and modernization rooted in one’s country’s historical experience without losing one’s independence, sovereignty, identity, culture, distinct values and traditions.
Source: The Manila Times