Rise of China – Some Lessons for Pakistan

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By

Iqbal Ahmad Khan*

Abstract

(Pakistan shares a common border with China, the rising super power of the 21st century. China is a strategic partner, a friend in times of crises and a corner stone of Pakistan’s foreign policy. Its peaceful rise and phenomenal climb to the status of a global power has riveted the attention of world leaders and scholars to the nature and implications of its arrival on the world stage. Pakistan has every reason to follow closely China’s remarkable ascendency and to learn from its experience and advice. It offers a developmental model which is distinctly different from the Western models which traditionally have been the inspiration for our rulers and planners. Regrettably, thus far, apart from the usual rhetoric there has been little indication that we are prepared to heed their advice or seriously study the policies and strategies behind China’s dramatic rise. It is still not too late to learn.)

In his book on Pakistan’s foreign policy titled, The Myth of Independence, which was published in 1969, Zulfikar Ali Bhutto laid claim (rightly so) in the preface to the formulation and operationalization of the policy of close relations between Pakistan and China. He expounded on the imperative of friendly ties with China on different occasions and considered these indispensible to the interests of Pakistan.1

Earlier, at the beginning of the decade, even though Bhutto was not the foreign minister, he submitted an important note to foreign minister Manzur Qadir, advocating a shift in Pakistan’s official stance regarding the representation of the People’s Republic of China in the United Nations. Pakistan had persistently voted in the United Nations against the immediate representation of China by its legitimate and recognized government. This position was maintained even though it was the People’s Republic of China to which Pakistan had extended diplomatic representation and with whose leadership high-level visits were exchanged. Mr. Bhutto’s note led to a cabinet discussion and eventually to the decision that henceforth Pakistan would support the candidature of the People’s Republic of China as the legitimate representative of the Chinese people in the United Nations.2

This shift in Pakistan’s policy, which went against the wishes of the United States, heralded a new era in Pakistan’s ties with China. With the passage of time the relationship extended into the strategic realm and encompassed defense, security, economic, commercial, cultural and energy fields. Following his assumption of the office of the president of Pakistan in December 1971, China was the first country Mr. Bhutto visited in January 1972. At the banquet held in his honor, Bhutto assured the Chinese leadership that Pakistan had “no intention of being a liability and burden on the People’s Republic of China. We would like to be a source of strength for our mutual relations directed towards the cause of world peace. If today you have to impose certain burdens on our behalf we shall remember them and we shall repay them because we want a relationship based on honor, dignity and self-respect.”3

Just as the father had chosen China as the first country to which he journeyed after taking over the reins of government, so did the daughter Prime Minister Benazir Bhutto make China her first foreign destination. During her stay in Beijing she recalled the historic landmarks in Pakistan- China ties, her own month long stay in China along with her brothers and sister and assured her hosts that Pakistan’s “historic friendship [with China] shall remain a corner-stone of Pakistan’s foreign policy.”4

In China, however, a sea-change had occurred in the two decades separating the visits of father and daughter. The ideology centric, anti- imperialist and revolutionary rhetoric and actions of Chairman Mao Zedong had given way to the pragmatic, realistic economic driven agenda of Chairman Deng Xiaoping. There was a distinct realization within the Chinese leadership that significant economic development and a tangible improvement in the daily lives of its people was an essential pre-requisite for internal social and political stability and for upholding the credibility and legitimacy of the communist party. The image of the party had been badly tarnished among the people as a consequence of the excesses of the Cultural Revolution. Economic strength was indispensible for China to eventually realize its dream and destiny of standing alongside the top countries of the world in influencing and shaping the global political and economic order. The Chinese leadership was fully aware of the linkage between political and military strength and productive capacity. The United States during the second half of the twentieth century was the world’s largest and often the most dynamic economy and hence was able to sustain its global leadership. Similarly, the decline of Great Britain as a global power over the same period was the predictable result of its relatively deteriorating economy.

The signal for the departure from the policies and practices of the Mao era came in December 1978 at the Third Plenum of the Eleventh Central Committee of the Communist Party of China. Prior to the meeting, Chairman Deng Xiaoping delivered a speech in which he stressed the critical importance of economic development and the need to focus all of China’s energies on this sole objective of putting the country on a high and sustained level of economic growth. Ideology was important but would not be allowed to come in the way of economic development. Foreign policy too was to be practiced in a way that would ensure a conducive environment for economic growth. Pragmatism was repeatedly underscored and was illustrated by Deng Xiaoping’s famous words, “It doesn’t matter if it is a black cat or a white cat. As long as it can catch mice, it is a good cat.”

It was with these words that China embarked on its quest for modernization, at the heart of which lay economic reforms. Three decades later, the results of this policy have astounded the world and set China on course to becoming an economic super power with the potential for influencing global developments. The statistics supporting China’s phenomenal growth are simply stunning and have oft been cited, but because of their history making nature bear repetition. Fareed Zakaria in his highly perceptive book The Post-American World lists some of China’s astounding accomplishments. In the past 30 years the Chinese economy has grown in excess of nine per cent a year, the fastest rate for a major economy in recorded history. In that same period, it has moved 400 million people out of poverty, the largest reduction that has taken place anywhere, anytime. The average Chinese income has increased nearly seven fold. The size of the economy has doubled every eight years for three decades. In 1978, the country made 200 air conditioners a year; in 2005, it made 48 million. China today exports in a single day more than it exported in all of 1978. China is the world’s largest producer of coal, steel and cement. It is the biggest cell phone market in the world. In 2005 it had 28 billion square feet of space under construction which is more than five times as much as in America. Its exports to the United States have grown by 1600 per cent over the past fifteen years. It manufactures two-thirds of the world’s photocopiers, microwave ovens, DVD players and shoes. 5

There is no end to these dazzling statistics which mark the rise of China. The important thing for others, particularly for Pakistan to learn was the country’s unquestionable adherence to three conditions that Chairman Deng Xiaoping laid down and ensured their implementation. One was the divorce from ideology. In other words, China would no longer be chained to the communist doctrine. It would truthfully and objectively look at conditions on the ground and where the communist ideology had not produced the desired results would discard it. The approach was to be pragmatic and the yardstick was the welfare of the common man. A non-ideological approach and pragmatism was to be accompanied by a low-key foreign policy whose sole objective was to establish a peaceful environment. Hence the reconciliation with the two largest of China’s neighbors, Russia and India, with both of whom China had fought border wars and still had disputes in particular with India along their over 3000 km long border.

China shared with its friends the recipe for growth that it had prepared for itself in 1978 and which two decades later had proven to be highly successful. In December 1996 President Jiang Zemin paid a state visit to Pakistan and in an address to the Pakistani Senate on 2 December stated that if some issues could not be resolved, then they should be temporarily shelved so that they do not have adverse repercussions on inter-state relations. This advice was repeated by the Chinese president in private as well. The advice flowed from China’s own experience which had led it to the conclusion that in the contemporary world force no longer constituted a viable instrument for resolving disputes.

President Jiang Zemin’s reference was obviously to the Kashmir dispute.  This  was  the  time  when  Jihadi  organizations  such  as  the Jaish-e-Mohammad and Lashkar-e-Tayyaba were actively engaged in militant activity in Indian Held Kashmir. Pakistan regrettably did not heed the advice of her Chinese friends, just as we had disregarded it in 1971 when we were told that the problem in East Pakistan was political in nature and should be resolved politically. On both occasions Pakistan paid a heavy price. In less than three years following President Jiang Zemin’s visit, Pakistan embarked on the Kargil adventure with disastrous consequences. According to former foreign minister Sartaj Aziz, Kargil prepared the ground for a prolonged military takeover in Pakistan in October 1999. It derailed the peace process between India and Pakistan and caused irreparable damage to Pakistan’s principled and legitimate stand on Kashmir in the international arena. 6 Ten years later our flirtation with the obscurantist Taliban, our quest for strategic depth in Afghanistan and inability to rein in the Jihadists, as painfully obvious from the Mumbai attack, has enveloped the entire nation in insurrections, bombings and killings. If only we had heeded China’s advice, made peace on our Western and Eastern borders and concentrated on the economic and social welfare of our people, Pakistan would have been peaceful and stable and a significant contributor to regional peace and prosperity.

China’s transformation from a command economy to a market economy has often led many to the conclusion that large scale privatization with a significant contraction in the role of the state was a part of this transition. Nothing could be further from the truth. It is a fact that over the years a large number of state owned enterprises, particularly those which were heavily subsidized and grossly inefficient were either wound up or sold off. Simultaneously, however, the government focused its attention and resources on hundreds of other state-owned entities and was eminently successful in making them efficient and globally competitive. This was achieved through major restructuring involving massive unpopular cuts in the number of personnel. Martin Jacques the author of When China Rules the World states that as a result, the top 150 state-owned firms, far from being lame ducks, became enormously profitable, the aggregate total of their profits reaching $150 billion in 2007.

In contrast to the approach adopted in most other countries where they have extended various degrees of protection to the state-owned firms and given them quasi-monopoly status, the Chinese government has exposed them to the fiercest competition both domestically as well as internationally. “Of the 12 biggest initial public offerings on the Shanghai Stock Exchange in 2007, all were by state enterprises and together they accounted for 85 per cent of the total capital raised. Some of the largest have foreign stake-holders, which despite tensions has usually helped them to improve their performance. China’s state-owned firms can best be described as hybrids in that they combine the characteristics of both private and state enterprises.”7 Thus unlike Japan or Korea where privately owned companies dominate the economic landscape, in China the leading companies are to be found in the public sector. In the steel industry the leader and the technologically most advanced company is the state-owned Baosteel, just as Chinalco is one of the largest producer of aluminum.

Generally in Pakistan, public sector companies have not performed well. Currently, four major state-owned entities namely Pakistan Steel, Pakistan Railways, Pakistan International Airlines and WAPDA are being singled out as illustrative of the failure of government in properly managing and operating commercial enterprises. As a consequence, the government has had to inject massive funds to keep these companies afloat. These heavy subsidies have contributed to the fiscal deficit and inflation. The state of affairs has led many, including vested interests both in government and in business, to advocate the worn out path of privatization trodden by many countries as the sole way of keeping these companies afloat. Thus far the government has not taken the bait, perhaps because it realizes that privatization is likely to be a recipe for disaster with thousands of laid off workers joining the ranks of the unemployed and the greed of private owners for obscene profits feeding into the inflationary trends and ultimately contributing to social unrest. These are precious national assets can be turned around if only the government would appoint honest and competent technocrats and allow them the necessary independence and space to implement the restructuring required to make them viable. To a certain extent the government would have to swallow the bitter pill of removing incompetent personnel. The Chinese have done this successfully so that now the state at the center and in the provinces plays a critical role in economic rejuvenation.

China’s rapid economic growth whose principal drivers and also the main beneficiaries were the urban centers involved an increasing influx of migrants from the rural to the urban areas. In the Mao era, 20 percent of the population was urban. This has increased to 40 percent today and like all developed countries will become 80-90 percent urban in a few decades. Rather than allow this migration to lead to haphazard growth of urban communities, China, according to the foreign minister of Singapore is embarked on a stupendous effort to build mega-cities each accommodating tens of millions of people, each the population size of a major country. “This means planned urban infrastructure with high-speed intra-city and inter-city rail, huge airports like Beijing’s, forests of skyscrapers, and high tech parks containing universities, research institutes, start-ups and ancillary facilities. In March last year, McKinsey Global Institute recommended 15 ‘super cities’ with average populations of 25 million or 11 ‘city-clusters’ each with combined populations of more than 60 million.”8

There is a major advantage China enjoys over other developing countries when it comes to implementing such gigantic infrastructural projects. In China all the land belongs to the state so that the government does not get bogged down in legalities and countering vested interests in order to acquire the land, as is the case in India and Pakistan. To this add the foresight, commitment, planning and meticulous implementation which routinely characterizes all Chinese initiatives and the projects get completed in half the time that it would take in other countries. In Pakistan the government or a private developer/investor has to face an uphill task in having the ownership of the land checked from multiple governmental departments/agencies and simultaneously to ward off pressures from land grabbers. This is a major obstacle to economic development and investment. The government needs to initiate measures with regard to the proper titling of land. This would involve computerization of land holdings/records at the tehsil, district, provincial and federal levels. The activities of land grabbers or ‘qabza groups’ must also be put down with an iron hand.

In a bid to sustain the focus on the economy, the government subtly but surely initiated a gradual de-politicization of the entire system. The slogan of the Mao era,    ‘politics in command’ characterized by large scale protests and mass movements symbolized by the Cultural Revolution gave way to economy and commerce being the focus of people’s attention. The state and its instrument, the Communist Party, still wield wide-ranging powers and is the final arbiter, but its role in the daily lives of the people has become far less intrusive in contrast to the highly politicized nature of Mao’s state. The result has been as envisioned by the reformists. The people are far less interested in politics and have immersed themselves into all forms of economic activity with the same zeal and enthusiasm as they had previously demonstrated in relation to politics and ideology.

The Communist Party itself has sought to transform itself from a revolutionary organ into an efficient administrator providing a conducive environment for the people to contribute to the growth of trade, industry, manufacturing and business. Preference by the Party is now given to knowledge, technical competence, entrepreneurship and good governance over revolutionary credentials and class background with the result that a technocratic class is gradually replacing radicals and revolutionaries who previously were in control at all levels.  Martin Jacques in his prodigiously researched book When China Rules the World- The End of the Western World and the Birth of a New Global Order, observes that there have been “drastic changes in the social composition of the Party leadership over the last twenty years. Between 1982 and 1997 the proportion of the central committee who were college-educated rose from 55.4 per cent to 92.4 per cent. By 1997 all seven members of the standing committee of the central committee’s political bureau (the top leadership) were college-educated in technical subjects like engineering, geology and physics, while 18 of the 24 political bureau members were also college-educated. The Party has opened its doors to the new private capitalists in an effort to widen its representativeness and embrace the burgeoning private sector.” 9

The change in the nature of the Communist Party and the government to which many are drawn from the party cadre, has doubtlessly given a major fillip to economic growth. On the negative side it has contributed to an exponential growth in corruption as connections and familiarity with procedures and personnel have induced government and party functionaries to indulge in corrupt practices. This is developing into a serious problem and in the long run could undermine the standing and legitimacy of the Party. Notwithstanding the much publicized and high profile campaigns against corruption, the problem is said to exist widely. There is need to set up effective institutions charged with monitoring and countering the rising menace.

The afore-mentioned are merely some of the Chinese policies and practices, which if adopted by Pakistan, could heal the fissures in our body-politic caused by our unrealistic and over-ambitious foreign and security policies and a criminal neglect for the welfare of the masses. It is not that China has discovered utopia. The country has numerous problems; to name only a few widespread corruption, regional disparities, income inequality, environmental pollution and democratization. The important lesson to learn is that China is prepared to face reality and to determinedly confront the challenges in a pragmatic, non-ideological way. This is the fundamental lesson taught by Deng Xiaoping. It does not bury its head ostrich-like in the sand, as has become our wont. Decision making in China is relatively slow as its leaders painstakingly consult all stake holders, but once a decision is taken it is ruthlessly implemented. No bureaucrat, party worker or any vested interest is allowed to stand in the way of its meticulous enforcement. The one child policy, a very difficult and sensitive decision, prevented the addition of 400 million to the country’s population and played a critical role in the economic growth of China. It is this zeal and commitment that Pakistan needs to extricate itself from the quagmire into which it is sinking.

References:

1              Bhutto, Zulfikar Ali; The Myth of Independence.

2              Bhutto, Zufikar Ali; Bilateralism: New Directions.

3              President Zulfikar Ali Bhutto, Speeches and Statements.

4              Prime Minister Benazir Bhutto, Speeches and Statements.

5              Zakaria, Fareed; The Post-American World.

6              Aziz, Sartaj; Between Dreams and Realities; Oxford University Press, Karachi, 2009.

7              Jacques, Martin; When China Rules the World – The End of the Western World and the Birth of a New Global Order.

8              Address by the Foreign Minister of Singapore at the University of Cambridge, 27 March 2009.

9              Jacques, Martin; When China Rules the World – The End of Western World and the Birth of a new Global Order.