Where did China get the Money to grow her economy?

By Sam Stewart Mutabazi

 

China recognized earlier on that nothing could get her faster at realizing her development goal than investing in cities and urban infrastructure. Though this would seem like common knowledge, not many countries have executed rapid urban expansion at the rate China did in the last forty years. It worked like magic.  Economists will tell you that human development is best achieved when people live in towns than in villages. It doesn’t matter the levels of initial investment by government in the end it’s worth the effort. China was over zealous. Their plan was grand.  It was unimaginable and possibly intimidating to some leaders.

There is no country in the whole world that ever took a more radical decision than China. Not even United States. Choosing to invest where dividends are not certain is what China did. Pulling people out of villages and building brand new towns was something unheard of. Western governments would at first laugh at China for the “silly mistake” of squandering resources on a venture too expensive and moreover risky. No one imagined that China could be competing with USA in terms of economic muscle during our time. But it did. Analysts are predicting that unless America does something extra ordinary, China will most likely surpass USA economically in the next few decades. If it’s a race, China is running neck to neck with US plus the former is heading to the finishing line with the same energy and speed they started the race with.

As one would expect, China made some mistakes in executing its urbanization agenda. For instance there are several cities that were built without well-thought out long term plans on who would occupy them. These have since become ghost cities. With gigantic high rise buildings and other infrastructure but with very few people living there. Chinese authorities wrongly assumed that when cities are built, people will come flooding to occupy these towns and thus set in motion processes creating a functioning urban area. This was never the case for some cities. In fact there are more than ten big cities that were built to accommodate millions of people but have since remained empty. China is not yet worried though. They know that with time, people will come especially when other towns get filled up. It may take time but it surely will happen. The problem now is about the high maintenance costs of these infrastructure that are hardly bringing in any money. Nevertheless the more booming towns and cities are subsidizing the empty ones. In the long run, both will get the numbers and China will ‘sit back” to enjoy the benefits of working hard for a very long period. Chinas other strategy was to also make some investments abroad in almost all developing countries. There is hardly any developing country in the world without a Chinese debt! In the coming years, China will have a stable economy while earning the interest from the monies it lent out to poor countries.

The magic that China used building cities with a hope of people coming later was a completely new concept alien to most western traditional way of doing things. Europe was used to the model where cities grew organically. Throughout history, there is no city in the world that had ever been built artificially and more so with deliberate government support. It could only happen in China. No country in the world had ever committed so much resources to the development of urban areas like China did. No country has ever grown her economy in so short a time like China did. And no country had ever acted in unison toward achieving a common objective like China did. The Chinese economic performance has been nothing but a miracle engineered by mortal human beings who defied common logic and placed all their focus on bettering the lives of their people.

Why can’t other countries especially in Africa copy the Chinese example and do the same? Because the American and European hegemony would not allow such to happen. It would lead to complete redistribution of wealth and would absolutely leave the economies of West States awkwardly bare.

The knowledge and technical know-how that China used is openly available. However many other countries are cautious at implementing such a policy as it would put them in direct confrontation with the West. Nothing has let down Africa more than lack of infrastructure. Yet nothing will get Africa out of its current underdevelopment state unless it invests in infrastructure. This is the hard reality. Unfortunately most of African leaders are not able to understand this simple reality.

The question they need to ask themselves is this; where did China get the initial resources to invest? It did not get them from the West. They mobilized resources from within. For African countries to continue waiting for America and Britain or France to help them navigate their way to development is very ridiculous. These counties have their own problems. It’s in fact in their best interest that African countries remain poor. The prosperity if African countries is a direct threat to the interests of the Western world. The West mistakenly tolerated China to develop, they will do everything humanly possible to stop African countries to follow the footsteps of China. Problem is that most African governments are not even bothered to defy the West. They would rather not do anything. And indeed nothing they are doing. Africa is poor because of poor leadership. China has progressed because of good leadership.

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