Daily Times

Going back 70 years, China had a bleak future.

Ration cards, mass hunger, poverty and political chaos were reigning supreme.

Chinese people were struggling to survive amid fast deteriorating basic facilities, public rights, human capital and employability. In a nutshell, China had hit rock bottom in all spheres of life.

Then, signs of a miracle appeared in 1949. China girded up to rise from ashes when Chairman Mao Zedong stood in Tiananmen Square in Beijing and heralded the beginning of the People’s Republic of China.

Its turnaround from a poor agrarian society into one of the world’s most powerful economies is nothing short of a miracle.

The surge in wages is one of many indicators showing how China is making its best strides as the new world leader in human capital development and labourers’ salaries. China’s average monthly wage (converted into US dollars) in 1990 was $55, compared with $32 in Vietnam and $221 in Mexico. However, in 2018, China’s average monthly wage (at $990) was 316 per cent higher than that in Vietnam ($238) and 158.5 per cent higher than in Mexico ($383). From 2007 to 2018, China’s average monthly wages rose by 263 per cent.

After economic reforms were launched in 1979, China’s real gross domestic product (GDP) grew at an average annual rate of nearly 10 per cent until 2017. According to the World Bank, China has “experienced the fastest sustained expansion by a major economy in history-and has lifted more than 800 million people out of poverty.”

China has emerged as a major global economic power. For example, it ranks first in terms of economic size on a purchasing power parity (PPP) basis, value-added manufacturing, merchandise trade, and foreign exchange reserves.

Beginning in 1979, China launched several economic reforms. The central government initiated price and ownership incentives for farmers, which enabled them to sell a portion of their crops in the free market. In addition, the government established four special economic zones along the coast for the purpose of attracting foreign investment; boosting exports and importing high-technology products to China. Additional reforms followed, albeit, in stages, which sought to decentralise economic policymaking in several sectors, especially trade. Economic control of various enterprises was given to provincial and local governments, which were generally allowed to operate and compete on the principles of the free market rather than the direction and guidance of the state. In addition, citizens were encouraged to start their own businesses.

Additional coastal regions and cities were designated as open cities and development zones, which allowed them to experiment with free-market reforms and offer tax and trade incentives to attract foreign investment. In addition, state price controls were gradually eliminated from a wide range of products. Trade liberalisation was also a major key to China’s economic success.

Chinese success has come with strenuous efforts and tough decisions

This year marks the 70th anniversary of the founding of the People’s Republic of China. In order to have a deeper look, Chinese Consulate, Lahore, in collaboration with a thinktank Understanding China, organised a delegation last month. China Economic Net hosted this delegation.

It proved to be result-oriented as delegates experienced everything through naked eye as they interacted with the public and officials to understand the practical transformation of the Chinese society. Analysing the stepping stone to China’s giant leap forward, there are few things that need improvement.

Most Muslim foreigner, when in China, have to confront three hardships. They entail barriers including language, restricted digital communication like social media networks and food choices. It is hoped that the Chinese government would sort these issues in a befitting manner as soon as possible.

Chinese success has not taken place by luck. It came with strenuous efforts with tough decisions. In order to achieve the objectives set by the 2016-2020 poverty reduction plan, China has increased financial support, allocating RMB 91 billion (USD 13 billion) to poverty alleviation funds for 2019.

Chinese Development Bank has pledged RMB 400 billion (EUR 51 billion) to fund poverty alleviation projects. To rationalise this, President Xi has urged a comprehensive oversight of poverty alleviation funds’ management. In the past five years, more than 60,000 cases of corruption and misconduct in poverty relief efforts have been identified. Last year alone, China’s supreme anti-graft agency, Central Commission for Discipline Inspection (CCDI) announced it had recouped RMB 730 million (USD 112.20 million) in misappropriated poverty alleviation funds. The investigations revealed violations including bribery, fraud, falsification and funds embezzlement.

China’s economy has blossomed over the past seven decades, with gross domestic product rising at an average annual rate of 8.1 per cent, according to a report from the National Bureau of Statistics.

China’s GDP reached RMB 90.03 trillion (about USD 13.14 trillion) in 2018, accounting for 16 per cent of the world’s total GDP. This manifested a glaring contrast to the country’s economy in 1952 when its GDP was only RMB 67.9 billion.

From 1979 to 2018, China’s economy grew by 9.4 per cent annually on average, much higher than the world’s average economic growth of 2.9 per cent. China’s economic growth has put its contribution around 18 per cent to the global economic growth during the period, second only to the US.

Gross national income per person reached USD 9,732 in 2018, higher than that seen in middle-income countries. The report also showed that China’s fiscal strength rose remarkably as foreign exchange reserves increased during the past seven decades.

Fiscal revenues leapt to RMB 18.34 trillion last year, compared with RMB 6.2 billion in 1950 and RMB 113.2 billion in 1978.

Forex reserves reached USD 3.07 trillion at the end of 2018, topping the world for the 13th straight year. By contrast, China’s forex reserves stood at USD 108 million at the end of 1952.

In the last 40 years, China has racked up a long list of remarkable accomplishments. Between 1978 and 2013, the Chinese economy grew by an average rate of 10 per cent a year, producing a tenfold increase in average adult income. All that growth helped some 800 million people lift themselves out of poverty. Along the way, China also reduced its infant mortality rate by 85 per cent and raised life expectancy by 11 years.

The writer is a senior journalist working for Global Times and China Today