Eddie Cross
The country was almost completely isolated internationally, desperately poor and rural and when things went wrong they did so on a massive scale, one year tens of millions died of starvation. Then came the Red Revolution where Mau called on the young people of China to crush all “revisionists”. The terror of those days came out of that vast country in stories that almost defied imagination.
Then in the mid-seventies, President Nixon took steps to normalise relations with China, it was one of his most important initiatives. George Bush followed and found Mau unable to recognise him or remember who he was talking to. He signalled back to Washington that Mau would not live much longer. While Mau was alive, the hero of the “long march to freedom” was still in total control. He died in September 1976.
The Red Army, probably the most important institution in China and unique in the sense that it had been relatively unaffected by the madness of the last years of the Mau regime. It stepped into the ring and held the reins of power and maintained stability. Deng Xiaoping was in Prison when Mau died, he was taken out by the Army who had prevented a coup by Mau’s widow and was installed as the supreme leader of the People’s Revolutionary Party (PRC).
Deng is most famous for his parables “it does not matter what colour your cat is, can it catch mice” and “when you walk across a river and cannot see the bottom, feel your way with your toes”. Sounds almost childish, but this pragmatic approach to national affairs transformed China into what is today; the second largest economy in the world and arguably the industrial capital of the globe. It is now nearly 50 years since Deng came to power. He ran China for only 11 years but his influence has remained extremely important until today.
The Chinese story has been astonishing. Their economic growth unparalleled – double digit for decade after decade. They have lifted over a billion people out of abject poverty into relative prosperity and middle income status. They have built an economy that is very difficult to compete with and now range the world looking for raw materials and opportunities. What lessons can we draw from this phenomenal performance?
In my view the first lesson is the use of merit. China is not a democracy, the dominance of the PRC is unchallenged and even Mau is revered, but every leader in the vast Central Committee and in the top six, has come up through the ranks based on his or her performance. No free lunches. You have to start at the bottom and work your way up, you have to compete for opportunity. They look upon the rather chaotic way in which democracies elect leadership and hold the view, probably about right, that many leaders in the rest of the world would never succeed in China. They think our system of leadership selection is much less effective.
The second lesson is pragmatism. They have taken on board the mistakes of their past, they know that decisions based on ideology have little place in the real world. They have retained their control over economic activity but allow enterprise and initiative. The emphasis is on systems and ideas that work. They copy what is good and excellent in the west, they send their children to study abroad, there are more students of English in China than in the rest of the world. Why? Because English is the language of science, the language of trade, of aviation and business. No point in trying to make the world learn Mandarin, like the French; keep the world guessing what you are saying and converse in English.
The third lesson is that they respect the family. It is very tough to get a divorce in China and all social structures, including housing, encourage the family in Community. None of the nonsense we are seeing in the west, gender is not an issue, men are men and women are women, marriage is a union between a man and his wife. Children are revered and coveted and given every opportunity to compete with the support of their parents. The Woke culture sweeping the western World is totally alien to Chinese society. Respect for elders, maintaining Chinese culture and tradition are all foundational.
Perhaps the fourth lesson they can teach us is their complete intolerance for corruption in any form. I am informed that executions for corruptions in China since the time of Deng Xiaoping run to more than 250 000. They not only treat corruption as a very serious crime, but say you have to prove you are not guilty of corruption. Then punishment is very public, remember the arrest of a top official in the Politburo in a meeting in Beijing and his removal from the meeting watched by the whole leadership and recorded on television. He was executed three days later. At Village level, an official found guilty of corruption is shackled and paraded on the streets before public execution. They understand that if they allowed corruption to thrive in China it would eat the very vitals of their society.
The next lesson, one that African States need to observe and follow, is fiscal and monetary discipline. Unlike the rest of the Chinese system, the rulers of China have pursued a totally orthodox system of fiscal and monetary management. Their Central Bank has a global reputation for sound policies and discipline. The Yuan is accepted across the globe as a currency and it has been stable for a very long time. In fiscal matters, China pays its bills, it does not run a major fiscal deficit and there seems to be considerable discipline and control on how and where they spend their tax revenues.
The next few lessons from China relate to how they have managed their economy. Early on, the Deng regime recognised the need for more security and freedom for their small farmers who, in his era, were over 70 per cent of the Chinese population and a major part of the wider economy. The result has been that China no longer experiences food shortages and the farm sector of the Chinese State has been transformed. An important feature of these reforms has been the partial democratisation of leadership in rural villages.
In the industrial space, the Chinese have adopted a collective approach to financing industrial and urban development. Chinese companies, state owned and managed and the new private sector, have been able to secure whatever funding they needed at low interest rates for approved enterprise. The Chinese industrial revolution started with Companies copying what successful western corporates were doing. They invested in their human resources, sent hundreds of thousands of students abroad and quickly established technical institutions capable of modifying and improving imported technologies. The result, a globally competitive industrial sector which dominates many markets.
Finally, but not by any means the least important, was their approach to infrastructure and services. They built power stations, railways, highways, ports and developed water and sanitation systems. They built Cities before they were needed and constantly kept ahead of demand. The result, Chinese firms have the lowest costs of bridging for both imports and exports and for this reason they are able to keep costs down in China while reaching markets around the world with products at competitive prices.
What a story, and all in my lifetime and in front of the watching world. Let’s not forget the role of the USA in all of this, they opened the door to China in the Nixon Presidency, their policies of globalisation (now championed by China) gave the emerging economies in the East access to global markets and financial resources. The financial surpluses of the West, accumulated over hundreds of years, financed the Eastern Tiger Economies. In a very real sense, The USA created the new and modern China.
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