Publications
Partners
His famous analogy would be applied rigorously over the next few decades to enable China to adopt a prudent set of new initiatives that would emphasise positive growth benefits, innovative best practice and real results rather than be narrowly constrained by the often-confining labels of capitalist, socialist or communist text-book policies. And the rest is history.
By cherry-picking effective policies and through ruthless (and autocratic) means of implementation, the Chinese are now on the cusp of being the world’s second great super-power alongside the United States in the looming multi-lateral global environment of the future.
So, it was with interest that having achieved such success from shifting the gears of ideology, how would the country confront its next few decades? Indeed, as the Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee that ended last week showed, another gear-shift to even greater ideological plurality may be imminent.
Clearly, why shift a model that is still
producing growth rates well in excess of 7% per annum? So, with an embrace
(albeit still tightly controlled by the CPC) of the free market, China decided
to boldly go where no Marxist or Socialist regime has ever been before.
The CPC language was more market-friendly
than ever. The market’s decisive role in allocating resources was touted as a
core component of future growth.
Critically, the CPC stated: “China has to
follow the basic law of the market economy and work on the problems of an
underdeveloped market system, excessive government intervention and weak
supervision of the market”.
China’s strategic shift clearly resonates
with the on-going domestic debate here in South Africa over the role of the
state. Within the ANC alliance, ideological factionalism has plagued policy
development leading to broad policy paralysis as moderates battle the
unionists/workerists and communists to gain the upper hand in economic
decision-making.
The broader policy malaise has caused big
business to question the government’s intentions over the last few weeks and heap
considerable criticism on its lack of policy initiative in building confidence
within the private sector in particular.
Now, while many of the left of the ANC
alliance would like to see a greater role for the state through the enhancement
of State Owned Enterprises (SOE’s), the Chinese have figured precisely the
opposite.
In a document released following the latest
plenary, the CPC indicated a dramatic shift to allow private firms to enter
some of the protected SOE sectors and even encourage them to take part in
reforming the state-owned firms. Significantly the prices of electricity and
fuels would be decided largely by the markets while residence registration and
land reforms would encourage greater competition.
Clearly, the CPC wishes to move China
towards a more consumption and service-oriented economy and it knows that only
a greater role for the private sector will accomplish this.
So, within the CPC there seems to be a
commitment to reform existing inefficiencies through greater market
participation and access - especially
since any future flagging GDP growth for a country of over a billion could
result in an increase in social unrest.
But, don’t assume it will be an easy task.
Just as in South Africa where the National Development Plan (NDP) is an
important break from the past, vested interests and ideological competitors can
still put a spanner in the works.
As necessary as it is for China (and South
Africa), allowing and actively encouraging market forces to compete with the
state can destabilise the cohesiveness of the ruling party (CPC or ANC)
especially where a strong ideological ethos is present. South Africa certainly
has seen this with Numsa’s objection to much of the NDP.
But what drives the Chinese provides an
important lesson for the ANC alliance. China (like South Africa) is facing
lower growth rates. And, like SA, they face a much more competitive global
environment in which the migration of capital and much coveted Foreign Direct
Investment is fickle. Coupled with a much more demanding citizenry than ever
before, critical economic change is urgently needed.
Deng Xiaoping also said, “Poverty is not
socialism. To be rich is glorious”. The Chinese look as though they could give
South Africa a lesson or two in how to put aside ideological constraints and
move towards a results-driven approach not hamstrung by myopic limitations.
*Daniel Silke is director of the Political Futures Consultancy and is a
noted keynote speaker and commentator. Views expressed are his own.
Follow him on Twitter at @DanielSilke or visit his website.
