Modern China is 70 years old. The country has remained an enigma to policy analysts, economists and political scientists. To unveil this enigma, you need to visit China and delve into her history with patience and objectivity.
How are policies in a country of 1.4 billion people cascaded to the grassroots? How do you create uniformity in such a huge country? This can be explained by a simple fact: China is not just a country, it’s a civilisation dating back thousands of years, to quote Francis Fukuyama. The historical anchor gives the country an identity we miss in most developing countries. The African country that closely mimics China is Egypt.
We can ask loudly why West African nations have not leveraged on their ancient kingdoms like Songhai, Ghana and Mali. What of great Zimbabwe?
Inspired by her history, and achievements, China is self confident. Our history should not be muted or revised. It should be a source of national inspiration. Think of Mau Mau and conducting two elections peacefully.
How did a country that settled its turbulent history only 14 years before Kenya’s independence become the world’s second largest economic power in a generation?
This question is important because the history of economic thought and conventional wisdom seem to suggest the Western economic model is superior to any other. Yet, China never embraced the Western model after the end of the Cold War. Lots of Eastern European and African countries did that in a short period of time. Remember ‘Soko Huru’?
There were no swarms of Western advisers in China as in Russia after the end of the Soviet Union. We have been told the market, the invisible hand by Adam Smith, is superior to the visible hand, read state. China showed opposite can be true.
Few economists would be bold enough to contradict their intellectual grandparent, Adam Smith and his contemporaries. But if you read his other less read book, “The theory of moral sentiments”, you will notice he probably foresaw the extremes of capitalism and laid foundation of behavioural economics.
The Chinese confidence not to embrace Western ideas with open arms, unlike us or Russians after end of Cold War, stems from past encounter with westerners. Remember the opium wars? Interestingly, we have had our encounters with the West – colonialism – which undermined our self confidence. Did we really recover it after independence like Americans did?
The large Chinese population is a big market which made investors salivate and forget about the Chinese political system. These investors catalysed technology transfer, which helped China leapfrog into modernity. Nobel laureate Robert Solow and others have shown the importance of technology in economic growth.
A visit to China convinced me that beyond historical anchor, Chinese growth was driven by Western and Eastern investors, from Americans to Japanese. The only people who failed to ride on Chinese economic growth after it opened in 1978, you guessed right, are Africans. We were probably still seeing communism, the rest of the world saw a market!
How much technology do investors in Kenya transfer? By making joint ventures a condition for investing, China fastened technology transfer. The trade disputes between the US and China have origins in this transfer. We can’t discount the fact that lots of Chinese students studied in the West, which further helped technology transfer. They love STEM (science, technology, engineering and mathematics), we love social sciences.
Chinese got the technology they needed and the evidence started emerging. Do you recall any Chinese-made phone when Airtel (Kencell) and Safaricom started operating in Kenya in 1997? Why did Chinese demand joint ventures so successfully? They have the market and for a long time cheap labour. Ever heard of workers going on strike in China, like in Kenya?
China has control over other less publicised resources. Think of Chinese control over rare earth metals used in strategic industries such as electronics, aerospace and nuclear engineering. China’s economic growth was unprecedented, and left Western experts agape.
The biggest paradox is why the growth did not lead to democracy, but this is not hard to explain. For a country that was poor, prosperity means less affinity for democracy. They can see fruits of the current political system. Who are more conscious of politics? The affluent or the poor? Do you find the affluent in political rallies or demonstrations?
Some could quickly suggest the demonstrations in Hong Kong show how this affluent region is now seeking democracy. Dig deeper and it’s those in the lower echelons of the society demanding democracy, after China tried to seek more control over this special administrative region, which was ceded from Britain in 1999.
Political scientists are yet to explain how to run such a huge country. How do you balance so many interests? The easier answer is repression. But it’s more complicated that. Links to the past and fast economic growth have kept the population busy. Singapore’s growth followed a similar route. If Kanu’s unchallenged power was used to push our economic agenda, making growth reach, say, 10 per cent every year I bet the party would still be in power.
We may not answer all the questions about the socio-economic transformation of China in 70 years. But we could learn a lesson or two from her growth. The biggest lesson is how leadership, not that famed invisible hand of the market, can also lead to economic growth.
Two, is the importance of national confidence. When Kibaki restored our confidence, the economic growth rate accelerated. You recall “Najivunia Kuwa Mkenya” campaign? And, three, economic growth and transformation is possible in a generation.
Finally, there is no need of fearing China, let us just learn from her bold national transformation agenda.