What Chinese model, President Zardari?
Speaking at the China Pavilion of the Shanghai Expo President Zardari said what has pretty much become a cliché:
“Pakistan can learn a lot from the Chinese model of economic development.”
I assume President Zardari is aware of an ideologically circumscribed, intellectually coherent set of policies or strategic decisions which together make up a ‘China model.’
The Chinese think tanks, scholars, diplomats, entrepreneurs, and journalists that I frequently meet seem to have divergent and pragmatic view of what constitutes this Chinese model, and how it differs from the previously worshiped ‘Asian model’ or ‘Japanese model.’
Does President Zardari want to learn from Chinese experience of lifting approximately 300 million out of poverty? This would of course be a noble endeavor. But it will be terrible if our President thinks of the ‘Chinese model’ as economic freedom but political repression.
I am sure he meant something – maybe he characterised the Chinese model as export-oriented growth? But wait, wasn’t that the Asian development model? Our leaders used to lecture us on how we should be following that model of growth until it fell apart.
Maybe President Zardari finds China's success in selective industrial policy? But that would make it a Japanese model, wouldn’t it?
I wish I could pick my phone, call him and ask:
“Mr. President, please tell me if you are absolutely convinced that China is really a success story? Please, tell me if China’s growth was planned, intentional and by design? Please tell me if China’s footstep can be copied in Pakistan?”
I know our president is so witty, he may have responded with a popular Chinese idiom: “A bird does not sing because it has an answer. It sings because it has a song.”
And, I respect that. There is no consensus on ‘Chinese model’ – economists, policy makers and entrepreneurs have their guesses. China has been pragmatic in seeking opportunities and fostering innovation from the bottom up. The hallmark of China's success has been it’s refusal to espouse any complete scheme of change. This has defined China's development style ever since the policy of reform was initiated in 1978.
The majority of reforms in China have resulted from a process of experimentation, usually on a limited jurisdictional scale. China has 32 provinces. The bankruptcy law, for example, was tested out in one province and then it was rolled out to the rest of the country. Similarly, the special economic zones in four provinces were an important precursor to a whole raft of market-oriented reforms that followed.
In addition to the top-down experimentation, there have been plenty of bottom-up innovation and grassroots efforts. In fact, most rural reforms in China were driven from the bottom up. The disbanding of the communes, for example, was initiated when a commune decided to break ranks with party orthodoxy and decided to sell their surplus food on the market. This was a reaction to a desperate situation and it spread. Within the space of a few years, almost the whole country had followed suit. These things were allowed by the state; they were not designed by the state.
But the wisdom of the Chinese government was to step back to observe changes and to make room for good practices to spread.
Following the flow can be a good practice but not an economic model – at least not one taught in text books.
And, that brings me to second key ingredient of a model – “success.” It is true that China has lifted nearly 300 million people out of poverty but growth has been polarizing. China's Gini coefficient (It is commonly used as a measure of inequality of income or wealth), has in a few years already surpassed that of the United States, which is rather interesting for a communist country. The fruits of growth have been largely shared, but there are also a lot of massive swaths of the population who are excluded from this growth. There has been massive dislocation that has resulted from this growth, too. Unprecedented scale of urbanisation; from about 20 per cent just a few years ago to nearly 50 per cent today—the largest movement of people from the countryside to cities ever seen in the history of humanity.
Maybe President Zardari finds success in China but for many, the jury is still out. However, all agree that China’s progress has been significant. Pakistan can learn plenty from China's bottom up approach. It is high time that Islamabad allows provinces to make key strategic decisions and be around to cheer their progress.
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