Forty-year Ef­forts Pay Off

Eco­nomic de­vel­op­ment is not a sprint, but a marathon. Only long-term sus­tain­able eco­nomic poli­cies with avail­able mid- course cor­rec­tion could yield the re­sults that China has been reap­ing all th­ese years.

China Pictorial (English) - - Contents - Text by Wali Zahid

Back in 2013, I was con­duct­ing a train­ing mod­ule on avi­a­tion lead­er­ship for a newly re­cruited, smart group of of­fi­cers with Pakistan’s Civil Avi­a­tion Author­ity (CAA) at their res­i­den­tial cam­pus in the city of Hyderabad. I pre­sented them the case of the Com­mer­cial Air­craft Cor­po­ra­tion of China (COMAC), com­mis­sioned to man­u­fac­ture Chi­nese pas­sen­ger planes to com­pete with the 100-year- old Boe­ing and Air­bus. I asked if this ca­pa­bil­ity was achiev­able in five to ten years. Most shook their heads, ar­gu­ing it was im­pos­si­ble. One said it would take a mir­a­cle. I said the mir­a­cle would hap­pen, and in­deed it did. In May 2017, COMAC’S C919 com­pleted its maiden flight.

This is just one story of China’s 40-year re­form and open­ing up. Pick any area—from tech­nol­ogy and ed­u­ca­tion to cul­ture— and China has sur­prised the world. And es­pe­cially in poverty re­duc­tion and eco­nomic de­vel­op­ment, China’s mir­a­cles have been un­par­al­leled.

Lift­ing more than 700 mil­lion out of poverty in four decades was once un­think­able in the eyes of many global econ­o­mists, but China changed the game. In 2018, only about 30 mil­lion peo­ple in China were cat­e­go­rized as poor.

In 1978 when the re­form and open­ing up be­gan, China’s share in the world econ­omy mea­sured merely 1.8 per­cent be­fore its econ­omy took off with the in­tro­duc­tion of four Spe­cial Eco­nomic Zones (SEZS). By 2017, the fig­ure had risen to 15 per­cent of the global econ­omy, and China had be­come the world’s sec­ond-largest econ­omy.

China beat all other coun­tries by achiev­ing the max­i­mum growth in

a 40-year pe­riod. Per capita in­come in the coun­try has in­creased from US$155 in 1978 to nearly US$9,000 in 2018. In 2017, China’s for­eign trade vol­ume ex­ceeded US$ 4 tril­lion, 200 times the size of 1978. Since 2006, China has held the world’s largest for­eign ex­change re­serves, which stood at US$3.14 tril­lion at the end of 2017. In 1978, China’s for­eign ex­change re­serves had been a measly US$167 mil­lion.

Ac­cord­ing to the 2018 Forbes rank­ing of the world’s big­gest pub­lic com­pa­nies, five of the top 10 are Chi­nese with In­dus­trial and Com­mer­cial Bank of China Ltd. at the top, with a mar­ket value of US$311 bil­lion. Tech firms like Alibaba and Ten­cent also rank among the world’s largest con­glom­er­ates. Fur­ther­more, half of the world’s top 20 con­tainer ports are lo­cated in China. Shang­hai is the world’s busiest con­tainer port, mov­ing about 40 mil­lion TEUS in 2017. Chi­nese tourists are al­ready the world’s largest group of out­bound tourists. In 2016, they spent over US$260 bil­lion, 21 per­cent of the world mar­ket, ac­cord­ing to the United Na­tions World Tourism Or­ga­ni­za­tion.

China’s eco­nomic rise has brought yuan into the IMF’S Spe­cial Draw­ing Rights (SDR) bas­ket as the fifth global cur­rency. Af­ter un­prece­dented eco­nomic de­vel­op­ment, China could carry out re­forms of the global fi­nan­cial sys­tem cur­rently led by the World Bank and the IMF. The Asian In­fra­struc­ture In­vest­ment Bank and the BRICS New De­vel­op­ment Bank are ex­am­ples of ini­tia­tives that sig­naled to the world that rather than re­main a by­stander, China seeks to play a more ac­tive role in global eco­nomic gov­er­nance.

The Belt and Road Ini­tia­tive, in­tro­duced in 2013 to con­nect Asia, Africa and Europe, has en­hanced con­nec­tiv­ity through in­fra­struc­ture projects. It is a land­mark ini­tia­tive.

Other coun­tries in the world can learn a great deal from China. For in­stance, coun­tries such as In­dia and Pakistan, with large per­cent­ages of pop­u­la­tion still below the poverty line, can learn from China’s anti-poverty mech­a­nisms to bet­ter serve their peo­ple. They can learn how to in­crease pro­duc­tiv­ity and ef­fi­ciency and cre­ate job op­por­tu­ni­ties for a mas­sive semi-skilled and semi-lit­er­ate work­force. They can learn from China’s com­mit­ment to im­prov­ing the busi­ness cli­mate for small and medium en­ter­prises, which could serve as the back­bone for eco­nomic growth.

Cre­at­ing an ex­port- driven econ­omy through SEZS mod­eled af­ter Shen­zhen and with ini­tia­tives sim­i­lar to the “Made in China 2025” plan could help such coun­tries pay off global debt, in­crease for­eign ex­change re­serves and im­prove their trade bal­ance with other coun­tries.

By cre­at­ing sus­tain­able GDP growth, they can be­come more at­trac­tive to for­eign di­rect in­vest­ment ( FDI) in­flows. Since its re­form and open­ing up in 1978, China has re­ceived more than US$2 tril­lion worth of FDI.

In agri­cul­ture, China’s ac­com­plish­ments are wor­thy of repli­ca­tion in many African and Asian coun­tries. Agri­cul­tural yields can be in­creased, and loss and waste can be re­duced. China has shown that mod­ern ru­ral agri­cul­ture can be in­tro­duced and sus­tained.

Above all, eco­nomic de­vel­op­ment is not a sprint but a marathon. Only long-term sus­tain­able eco­nomic poli­cies with avail­able mid­course cor­rec­tion could yield the re­sults that China has been reap­ing all th­ese years.

In Novem­ber 2018, the first China In­ter­na­tional Im­port Expo was held in Shang­hai. With a new spot­light on im­ports to China, this de­vel­op­ment could serve as an in­di­ca­tor to the rest of the world that they can con­fi­dently pro­duce goods and ser­vices tar­get­ing Chi­nese con­sumers, es­pe­cially the ris­ing mid­dle-in­come group.

With China’s stronger de­sire to work with other coun­tries as part­ners and stake­hold­ers, every coun­try can ben­e­fit from China’s eco­nomic rise. Win-win dy­nam­ics like th­ese are pre­cisely what the world needs.

The au­thor is pres­i­dent of the In­sti­tute of Me­dia and Com­mu­ni­ca­tions in Pakistan and a long­time China watcher. An award-win­ning jour­nal­ist, he formerly worked for The News, Pakistan’s most widely read daily news­pa­per.

Novem­ber 13, 2004: Gwadar Port in south­ern Pakistan is un­der con­struc­tion. The fol­low­ing day, Chi­nese and Pak­istani of­fi­cials and work­ers cel­e­brated the ar­rival of ships for har­bor op­er­a­tion and other equip­ment pro­vided by China, which sig­naled com­ple­tion of Phase I of the Gwadar Port project. Xin­hua

The Chi­nese part of the Karako­ram High­way opened on Oc­to­ber 1, 1988. The 415-kilo­me­ter road con­nects Kash­gar and Khun­jerab pass in Xin­jiang Uygur Au­ton­o­mous Re­gion. This photo shows a Pak­istani car­a­van at the China- Pakistan bor­der wait­ing to pick up pas­sen­gers. Xin­hua

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