Magazine article African Business

China: Problems of Success

Magazine article African Business

China: Problems of Success

Article excerpt

Following our extensive coverage of the relationships between Africa and China, we invited Glyn Ford, Labour Euro Member of Parliament for the Southwest of England and Gibraltar, member of the European Parliament International Trade Committee and an expert on China, to offer his analysis of that country as it stands today.

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Since Deng Xiaoping's aphorism "Black cat, white cat, who cares as long as it can catch mice" was burnt into Chinese souls by the successive horrors of the Great Leap Forward, its following famine and the Cultural Revolution's shambolic savagery, for three decades China has seen 10%-plus growth rates.

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While China's population has grown by a third, its economy has grown 13 times meaning GDP per head is up by a factor of 10. The consequence is a cascade of goods from China flooding into the global marketplace gifting enormous gains to people as consumers while menacing their role as producers.

The overall balance of interest is misrepresented by the asymmetrical response. Jobs lost in Europe, US and Africa see demonstrations and demands for quotas, bans and retaliation; while no-one marches to celebrate dramatically cheaper goods in the shops and the extra jobs created by the new spending inspired by the initial savings.

The myth is that Chinese manufacturing is low paid. Compared to the developed world, that may be, but compared to its competition, certainly not. China marries lower pay with technology--not yet the highest--to beat the competition on productivity rather than poverty wages.

The average salary in 2006 at Shanghai's Three Gun textile and clothing company was [euro]2700 ([pounds sterling]1,850), roughly what my father, a skilled toolmaker, earned in the 1970s in Gloucestershire.

China's three problems

China faces enormous problems that Hu Jintao and the leadership of the Communist Party must tackle at the 17th National Congress later this year, but these are problems of economic success not failure.

They are threefold: internal immigration, corruption and pollution. Today mainland China is two countries inside one nation. Hundreds of millions in the predominately urban East have a better standard of living than that of the inhabitants of the two newest EU Member States, Romania and Bulgaria after taking into account comparative purchasing power; yet the rural West is in parts worse than sub-Saharan Africa. The result is a migration on a colossal scale. More than 100m peasants have flooded into the cities looking to escape grinding rural poverty and find the good life.

This places enormous pressure on the urban infrastructure--with overcrowding, soaring property prices and internal migrants outside the safety net of the state in terms of health, education and workplace protection.

All this is leading to increasing unrest throughout China with thousands of civil disturbances occurring as people refuse to bear the unbearable any more in fields, factories and workshops.

The 17th National Congress will have a twin track strategy. First to shift resources from East to West, from Urban to Rural to try to narrow the yawning income gap that is making internal migration so compelling. The aim is also to improve social conditions, reduce or remove education fees and abolish agricultural taxes.

Putting a television in every village was not entirely a success, as it provided the visual confirmation of the better life elsewhere. …

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