On the trail of China’s rise to the top, and the lessons for Africa

The lady behind the passport control desk at Shanghai airport addressed me as ‘Sir’ about five times as she asked the standard airport control questions.

She was so polite that I thought she was specially trained to do exactly that to visitors, that the ‘sir-ing’ was part of her job. But I quickly learned that it was not, and that such politeness is part of the Chinese way of making strangers feel as comfortable and as welcome as possible.

Whether you are doing business or not, the Chinese have a way of making you the centre of interest. It is in their blood, and they do it so well that first-time visitors used to the Western detachment in relationships are taken aback by what seems to be excessive welcoming rituals and politeness. Hosts get really bothered that the visitor is not comfortable. And this is infused in business, where honesty threads their interactions.

“I was astonished at first,” says John Githere, a businessman who visits China regularly. “They bought me so many gifts that I had to throw away some at the airport to avoid luggage surcharges. Every time I go to Guangzhou, my contact arranges everything and calls often just to make sure everything is okay.”

It contrasts with Western cities, where hostility towards foreigners is apparent. If you are from Africa, your skin colour sells you from a kilometre away.

The slavery and colonial histories that tie Europeans, Arabs and Africans still linger in modern interactions between these three races, so if you are a legal black immigrant or native in Europe, you are more likely to be asked by police to prove your papers than an illegal Asian.

As a result, Africa seems to have been waiting for alternative trade and development partnerships. And that alternative came in the form of the Chinese, whose personal touch in first-time contacts is regarded as good for business because Africans are likely to do business with people who show them some level of respect.

Therefore, this, together with the frustration that comes with ‘tied aid’ from Western institutions, has seen much of Africa open up to the East.

At an annual growth rate of more than nine per cent, China’s economic development has been spectacular. And, despite rising criticism of her appetite for African resources, the dragon’s march in Africa seems unstoppable.

By 2013 Chinese total investment in Africa had overtaken that of both the US and the EU. And the Asian giant is not slowing down at all, which is why analysts project that its economic influence in the world will surpass that of the US within the next decade.
Humming and ticking

From afar, China’s ascent to the top seems complex and rather surprising, especially because the country was a Third World nation just a little bit over two decades ago. But the real answer as to why the dragon is rising lies, not in the air-conditioned boardrooms of Beijing, but its villages.

On the face, any hamlet you visit may seem deserted, but behind the façade of silence is the humming and ticking of small-scale industries. Children are in school. The youth are in the factories and grown-ups are in the farms. Most of these small-scale factories are family owned, supplying most of the goods that saturate Nairobi’s and other capitals’ boutiques and consumer goods stores.

There are signs of opulence and this newfound wealth everywhere you turn. Gates, fence posts and window frames in a typical rural village in eastern China are made from stainless steel. Streets and walk-paths are cobbled. Beyond the rice paddies, on an elevated concrete structure, something shaped like a long white eel emerges from a couple of hills and whizzes out of sight.

“It’s the high-speed train from Beijing to Shanghai,” says my host, Professor Huang of Nanjing University. And then we turn our attention back to the fields, and I quickly note that most tasks here are mechanised through stool-sized hand-pushed tractors that do virtually everything, from pumping water to tilling land.

“Both large- and small-scale production will never increase if governments don’t step in to implement policies and strategies that will assist farmers to produce and market their products,” comments Prof Huang. That’s where Africa’s is failing, I tell myself. Yet, to bring African agriculture to industrial level, The Food and Agricultural Organisation says that the continent requires about 300 million tractors and small-scale agricultural machines.

But, how did China climb to the top so fast? First, the most important thing is that there were no blueprints or grandiose masterplans that Beijing followed on the way to the top. Economic reforms were piecemeal and largely through trial and error. What worked at the local level was replicated nationally. The easier agriculture reforms came first, followed by more complex institutional ones.

Importantly, economic reforms were supported by a visionary leadership without a zero-sum mentality, and leaders did not feel threatened by the reforms. As the people sensed the confidence in their leaders and tasted the fruits, they gladly supported them. But in Kenya and many African countries, the difficult political economy of vested interests hinders growth and distributional goals.

Secondly, although underestimated, China greatly tapped the financial and technical capital from the diaspora. Repatriations have been responsible for more than 50 per cent of the dragon’s foreign direct investment. To harness the diaspora’s potential, the country started Special Processing Zones along the coast, off Taiwan and Hong Kong, where many Chinese had migrated.

Special laws like reduced land use fee and simplified licensing procedures were introduced to give privileges to the diaspora wishing to invest. And there was a domino effect as the products hit international markets.

The large, untapped potential for African diaspora remittances, especially for long-term savings and capital development, needs appropriate institutions and databases of professional networks for channelling remittances, which could be used as start-up capital for small-scale industries.

Thirdly, the real miracle is how the agricultural sector reforms triggered the realignment of labour and investment, quickly revitalising rural industry and enterprise. A vibrant agricultural sector acted as a catalyst for economic growth and structural transformation. Land reforms increased private rights.

Kenya, it turns out, is in an ideal position for such reforms because of its advanced agricultural sector, with potential for growth and non-farm expansion. What is lacking is a pin to unlatch rural entrepreneurship and industry that in China crucially provided capital for growth.
Food secure

Thanks to farmer-friendly policies like subsidies, technology, institutional reforms, and agricultural pricing policy, China is now food secure. The country produces 6.4 tonnes of rice per hectare, compared to two in Africa. It feeds more than 20 per cent of the world’s population with 10 per cent arable land compared to 16 per cent in Africa, a net food importer.

Sixty per cent of China’s land is under irrigation, compared to Africa’s less than 10 per cent. And, to achieve the 95 per cent grain self-sufficiency, the country keeps imports under five per cent of domestic grain production.

Fourthly, China has salient lessons in port and transit corridor management. China’s ports are world class and reforms here involve the private sector and strategic alliances with foreign port management firms. Although Kenya is trying, vested interests may kill such initiatives as we are already seeing in Mombasa. Yet port efficiency is so vital for national development. While the global average cost of cargo clearance is 12 per cent of imported goods, it is 20 per cent in Africa.

Fifthly, in China’s reforms, decentralisation cascaded down responsibility to manage health, education and some vital services to the local level. The effect has had a strong impetus for the market economy. The danger in Kenya is that decentralisation may mean the transfer of authority without responsibility.

Certainly these lessons are neither exhaustive nor transferable wholesale to Africa. Rather, they point to what any government could do to achieve sustained economic growth if there is determination and leadership to do so, a cause for which Africa has no option.

Of course no country is perfect. The very opening up of the dragon’s economy is inviting the usual vices. Corruption is rising, but what we are seeing is largely a big economic wave, which will be followed by a cultural tsunami.

I don’t understand Mandarin, but by merely following the scenes in Chinese TV programmes, films and cartoons, I perceived a huge cultural wave gathering. Once these are translated into English — and you can be sure they are doing it — we shall never know what hit us!

Dr Mbataru teaches at Kenyatta University’s School of Agriculture.