Article written

  • on 31.08.2010
  • at 06:28 PM
  • by Staff

What We Should Really be Learning from China and India 0

President Jacob Zuma’s trip to China happens in the context of China having just overtaken Japan as the second largest economy in the world. By 2030 it may well be the largest.

This trip also follows Zuma’s very recent trip, with an entourage of officials and businessmen, to India. Both countries are held as examples by the government worthy of emulating their growth and development strategies.

This is reinforced by the fact that our own planning commission has drawn from both Chinese and Indian planning systems.

Despite, these changes the trip also highlights the glaring dearth of understanding in South Africa of both China and India’s economic history and the interesting development paths they have pursued in the last six decades since independence.

There is a lot to learn of what to do and what not to do that holds great relevance for the ANC’s National General Council (NGC).

At the end of September the ANC discusses a range of economic policy positions at its NGC based on a rather tatty discussion document that doesn’t really draw insights from these two countries experiences.

In the meantime, Minister Pravin Gordhan announced that if South Africa is to meet all its development needs it must aim for an economic growth rate of 7% per annum, in an effort to bring us closer to the achievements India and China have been able to demonstrate in the last two decades.

This is a huge ask from our incomparable economy that appears to be struggling to get out of the starting blocks following two years of slump in growth and the global recession.

Both India and China’s success of late in terms of economic growth, technological innovation and their ability to lift millions of people out of poverty has been met with awe. And, no doubt South Africa’s new 7% per GDP target hopes to match their success in high growth rates.

This being said, both countries don’t exist in sublime peace between the ‘haves and have nots’. There is still a great deal of social unrest and inequality.

Yet, we cannot ignore the achievements and what influenced them.

So, what can we learn from India and China’s economy that is somewhat a mirror reflection of our own?

Not too long ago, following India’s independence and China’s peasant revolution, India and China threw off their colonial shackles, but sat straddled with the misery of poverty and under-development — primarily rural based and where the mass of the population lived.  It was a deep hole these countries were deemed unable to crawl out of.

At a very superficial level, conditions in China and India after independence didn’t look far off from where South Africa is today. China and India, though, are very different from each other in many ways. Just like South Africa is neither China nor India.

South Africa’s similarity in political economy, though, is closer to India than it is to China. China was mired in revolutionary ideology and extreme levels of poverty that swept across the country amongst much of its peasantry.

The Chinese revolution too was far more pernicious against private capital and the landed class, especially in the coastal regions. The propertied class and owners of capital were hounded out, ending up either in Taiwan or Hong Kong.

Prior to the Maoist revolution, 40% of China’s economy was foreign dominated. This extended to natural resources and a landlord class that had strong ties with foreign interests and classes.

By the time of the revolution Mao had transformed the entire Chinese rural economy against the hold of the landed aristocracy. Between 1955-1957 about 750,000 agricultural collectives were established and private property rights were abolished.

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By Saliem Fakir – Sacsis

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