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This is Outrageous – But, Quite the Lesson

What we can learn from China, economically.

It might sound outrageous and this is a purely economic perspective, but here it goes: China is growing – no longer solely within the limits of the ‘developing’ label – and there’s quite a lot that the established global centres can learn from this growth.

Reading Aravind Adiga’s The White Tiger a few years ago, I came across a line on equivalence that the protagonist, an Indian entrepreneur with quite a tumultuous ‘success’ story, jots down in his letter to the Chinese Premier: “the future of the world lies with the yellow man and the brown man.” Of course, back in 2008, when the book released, China’s stature as an expanding, stubborn, and penetrative political power hadn’t yet been brought as a ‘concern’ per se to the public eye. Hiccups were there, but the year wasn’t 2020. Elaborations on lessons that can be taken up from the Chinese economic growth would have garnered more embraces back then than today. Nevertheless, it’s worthwhile to see how it has all unfolded. After all, it’s positioned itself where the Soviet Union once was as a contender to the US – a prime difference now is that China does not entirely stick with the model held up by Lenin, Stalin or any of their successors. This is why a perestroika or glasnost wouldn’t interfere with its trajectory and turn it into a jolting dive any time soon.

It’s remarkable how China marked a ceaseless rise in its GDP starting from the 1980s to the 2000s. In less than 30 decades, it had emerged as the ‘next superpower’, aided by the reforms the administration visualized and implemented for the country. Defining its economic slowdowns is quite conflicting when you compare the statistics of any other country’s growth at a given point of time – even when China is going through a relatively slow fiscal year, the growth would still be higher than most countries. There’s a certain bar that it’s built over the years below which a dip is avoided at all times.

Perhaps the most prominent aspect of the Chinese economy has been its balance of industrial boom with agricultural development. The country has also displayed noteworthy management of logistics in trade. It’s easier today to get articles imported from China, owing to the lower costs, than procure it through inter-state movement. The cost is ultimately where China reigns over even internal markets in other countries and ends up exporting more than it imports. So much has the global market’s dependence on China escalated that it’s only now that we’re talking of diversifying our supply chains and sources. If we look at any entrepreneurial field, be it electronics to APIs, Chinese production is on the high and it stands tall over all others with its capacity and delivery. The country is equipped to support all internal demands. If not a stronger form of self-reliance as China exhibits, some element of resilience needs to be present in each economy. Infrastructural pushes with adequate investments, all coupled with modernisation projects add to the overall urge that the country projects to move ahead unstoppably. China’s recent announcement to attain the carbon-neutral goal by 2060 and cut down net emissions is welcome given its

growth. It already has a strong bike-sharing arrangement that has worked much in this direction. Since the US – hopefully with greater vigour and a new administration –  would be looking to work for an economy dependent on renewable energy, it too can think of setting clear deadlines and strictly following methods such as carbon pricing.

The latest World University Rankings show greater Asian presence, particularly that of China. Observers agree that there is a visible renaissance in the field of education in China. The country works on augmenting its spending on education – most recently, it spent 4% of its GDP on the same. Though this is still lesser than the US and some countries in the EU, it can be noted that this is 8% more than the earlier year’s spending. In the US, expenditure on education has been falling. These contrasting trends show us why America still lags when pitted against other countries in the PISA results. The ambition to better the educational system is absent or going through a drastic decline. This isn’t the only arena where China is boosting its expenditure. Its spending on Research and Development went up by 10% this year, in keeping with the demand that has come up in the face of COVID-19. In 2017, the country’s spending accounted for 20% of the world’s R%D expenditure.

Now, there are some other lessons which aren’t direct – you cannot decipher these from mere statistical figures. If China has failed at something economically, it is the distribution of growth. This is essentially a social problem. Given the sheer size of the population and the still persistent poverty, the number of beneficiaries is narrowed. The growth is anything but egalitarian within the country when you look at this aspect. When perusing through the Chinese model of investing in all the right fields – like research, education, and others that holistically push human resources and development together ahead – we also need to be aware of how the flaws in distribution can be erased. The challenge is greater for a country like America that is much more heterogeneous. Several disparities bite at the ends of our society and economy. Sustaining growth will need structural changes that accommodate differences than hand down singular moulds for all.

It’s evident that the American economy is not at its best as Donald Trump claims and defends at every debate and in every interview. Work needs to be done. Holistic growth and equal distribution of its benefits can be ensured if we analyse models such as China’s and fill in the gaps left by its flaws with constructive solutions. Without an error-free implementation of such devised policies, nothing would be possible. We need to go beyond just words and promises – we can also learn a little even from our worst enemies.

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