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Chinese model of economy good for Africa

Updated: 2012-10-05 11:12
( Xinhua)

ACCRA - A Ghanaian academic and policy analyst proposes that African governments take a cue from China's modern development history to boost growth in their own economies.

Lloyd Amoah, an assistant professor at Ashesi University College, said that it would take the type of creative interaction between the state and market economy, which China's evolution has witnessed since 1978, for African countries to accelerate the development of their economies.

Amoah traced the history of China's development from the days of then Chinese leader Deng Xiaoping, when the country adopted a policy of opening up its economy to foreign investments.

"It was linked to the increased awareness among the Chinese leaders and their political elite that although putting the state as the main entity for development in the economy was profitable, there was the need to shift to market as an important partner in development," Amoah said in a telephone interview.

He cited the examples of financial crises in the United States and the European countries to vindicate the Chinese model, where their people held an "evangelical" belief that the market economy was the way forward.

"It is important to strike a balance between the state and market economies, especially with the recent recession, which started with the American sub-prime crisis and banking sector crisis and resulted in the global financial crisis," Amoah said.

Between the 1980s and 1990s, African countries, including Ghana, undertook economic reforms under the direction of the World Bank, the International Monetary Fund (IMF) and bilateral partners from the European countries to revive their ailing and collapsed economies.

The market economy was prescribed in a wholesale manner to the African countries as a way to deal with the debt crisis, weak manufacturing bases, and other economic woes that had plagued the continent.

But Amoah believed "the Chinese model teaches us that the market and state can coexist and work together for development."

That, Amoah believed, was only possible with strategic vision as the Chinese had demonstrated. At the beginning of the Chinese evolution, critical investment came from their compatriots, he explained.

"With this strategic maneuver, the returns on the investments became obvious at once," he said. Then other global manufacturing giants identified China as their next investment destination.

The second lesson African countries could learn from the Chinese model, he said, was the ability of their leaders to read the global economy and adjust to the new trends.

"By the turn of the 21st century, China started reconfiguring its economy from manufacturing-based to more high-end technological approaches, including nano-technology and Information and Communication Technology (ICT)," Amoah said.

"Moreover, the Chinese leaders demonstrate independence. They are able to think for themselves after observing what others are doing," he said.

Amoah explained that the Chinese did not just follow the global trends and models, but learned from the best practices around the world and created what suited their own situation. He added that the African countries needed that kind of visionary alertness demonstrated by the Chinese.

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