Lessons from China for Africa
China has been the most successful developing country in this modern era of globalization. Since initiating economic reform after 1978, its economy has expanded at a steady rate over 8 percent per capita, fueling historically unprecedented poverty...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/02/9032996/lessons-china-africa http://hdl.handle.net/10986/6581 |
| Summary: | China has been the most successful
developing country in this modern era of globalization.
Since initiating economic reform after 1978, its economy has
expanded at a steady rate over 8 percent per capita, fueling
historically unprecedented poverty reduction (the poverty
rate declined from over 60 percent to 7 percent in 2007).
Other developing countries struggling to grow and reduce
poverty are naturally interested in what has been the source
of this impressive growth and what, if any, lessons they can
take from China. This paper focuses on four features of
modern China that have changed significantly between the
pre-reform period and today. The Chinese themselves call
their reform program Gai Ge Kai Feng, "change the
system, open the door." "Change the system"
means altering incentives and ownership, that is, shifting
the economy from near total state ownership to one in which
private enterprise is dominant. "Open the door"
means exactly what it says, liberalizing trade and direct
investment. A third lesson is the development of
high-quality infrastructure: China's good roads,
reliable power, world-class ports, and excellent cell phone
coverage throughout the country are apparent to any visitor.
What is less well known is that most of this infrastructure
has been developed through a policy of "cost
recovery" that prices infrastructure services at levels
sufficient to finance the capital cost as well as operations
and maintenance. A fourth important lesson is China's
careful attention to agriculture and rural development,
complemented by rural-urban migration. |
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