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China’s economic miracle: Myths, realities

China is a land of mind-boggling superlatives. Within a week of my arrival here, the country showcased the world’s fastest bullet train, the world’s largest merchant ship, the world’s largest radio telescope, and unveiled plans to build a manned station in outer space.

From Brezhnev Malaba in Shanghai, China

Remember, China is still technically classified as a “developing nation”. I have no doubt that, in the next two decades, it will not only attain “developed nation” status, but also take its rightful place in the top rungs of the planet’s geopolitical totem pole.

I have travelled the world and there are very few places which make me gasp in wonderment. Let us face it, most nations are utterly mediocre, unremarkable and predictable. Only a few can truly take your breath away; the United Arab Emirates (UAE), the United States, Germany, India and Libya under Muammar Gadaffi easily come to mind.

But nothing could ever prepare me for the huge surprise that lay in wait as I ventured out to the Far East on my first trip to China, a country that nobody on the face of the earth can afford to ignore these days.

Shanghai, the nation’s commercial capital and its largest city, is a glittering metropolis boasting some of the world’s tallest buildings. Only Chicago has more skyscrapers above 150 metres tall. The Shanghai Tower, a gleaming spiral that stands 128 floors and 632 metres, is the second tallest building on the planet, surpassed only by Dubai’s 828-metre-tall Burj Khalifa.

This sprawling city on China’s central coast has 24 million inhabitants. You meet people from every corner of the world, making it the country’s most cosmopolitan area. It also means that language is less of a headache here than in other parts of the country where curious children rub the skin of African visitors to check whether the dark melanin wears off like a layer of brown mud.

Shanghai offers an irresistible blend of Eastern and Western architecture, mouth-watering cuisine, a robust international financial district, fantastic shopping malls, superb tourist attractions and the tantalising allure of a vast melting pot.

Traffic congestion and smog are a constant menace — a reminder that China is, in many ways, a victim of its own success. But locals walk with a spring in the step and a glint in the eye as they reap the benefits of China’s unprecedented pace of economic prosperity.

This is no paradise, though. To be sure, poverty is still a problem for President Xi Jinping’s government. I was hassled by street beggars who, mistaking me for an American tourist (as I later discovered), thrust their begging bowls in my face as I went about my business. Rapid urbanisation has left many families behind, in the economic sense, and the authorities are having to offer subsidised housing and factory jobs on a massive scale to bring them in from the cold.

A primary school teacher in a rural region narrated how urbanisation has seen almost every family in his village abandoning rural life and relocating to the cities. He is left with only two students but, to its credit, the government continues funding the school.

The frenetic pace at which China’s economy is growing has led to some unintended consequences. Although poverty is declining, in terms of the sheer number of people who are being catapulted from subsistence farming to the middle class, the gap between the rich and the poor is widening.

On a visit this week to the city of Hangzhou, the capital of Zhejiang province in the south-east, I witnessed a road traffic accident. A man driving a latest BMW 7 Series sedan hit a scooter, sending the biker crashing on the tarmac. Within seconds, a dozen scooter riders had gathered at the scene, no doubt salivating at the prospect of a class war between the haves and the have-nots. The BMW chap stepped out of his car, reached into his pocket, fished out a crisp 100 yuan note (about US$15), and offered it to the scooter rider, who was still on the ground. The scooter rider wasted no time in accepting the money. In the blink of an eye, the motorist went back into his metallic black luxury car and drove off.

There is a myth that all people in “socialist” China are equal? Think again. To the toiling factory worker, the 100 yuan windfall was too good to resist, even though he sustained injury. To the well-heeled motorist, the rich pickings of the “China miracle” enabled him to buy his way out of trouble. The ceremony of innocence is a convenient façade. Capitalism is real.

The world’s factory

China’s amazing story of transformation is not all about the construction of glittering skyscrapers. After all, some economists have spoken about the “skyscraper curse”, a simple observation that a city or country’s boom in the construction of high-rise buildings is almost always followed by a spectacular crash of the economy. This, they say, has been witnessed in such places as Malaysia, UAE and New York City.

With that in mind, I visited Yiwu, a thriving commercial city in eastern China. It is not difficult to understand why the metropolis is dubbed “the world capital of small commodities”. In 2016, Yiwu’s e-commerce transactions totalled US$26,5 billion, thanks to a network of 255 000 online shops.

You may not realise it, but a lot of the goods you use are actually made in China. And there is a 60% likelihood that the trinkets are coming from Yiwu, whose population of 1,2 million people makes it a small town by Chinese standards. In September, traders are already selling Christmas decorations, fire crackers and toys. Africans are spending millions of dollars on shiny pieces of tinsel. The city has massive shopping malls, warehouses, factories, and other infrastructure.

Goods sold range from toothpicks to travel bags and everything in between. Exports from Yiwu, ferried largely by rail, reached US$18 billion last year. The Chinese government has earmarked US$1,5 billion for Yiwu’s infrastructure development fund to finance a railway logistics facility, road transport centre and a free trade zone for small commodities.

Tens of thousands of traders from Africa are flocking to Yiwu. They scout for products, place bulk orders, haggle over prices with suppliers, seal the deal and fly back home. When I asked a Cameroonian businessman why he was importing trinkets from China instead of advocating the construction of factories in his home country, he had a straightforward answer: “Chinese companies sell goods at an affordable price, because they manage to produce at low cost.

Can African companies sell us goods at such good prices? I don’t think so. That’s why we come to China.”

But with success comes many challenges. Of late, the authorities in the capital Beijing have begun speaking out against “fake goods” or counterfeit products.

This week, state media reported that a newly-founded shoe-manufacturing company in China, New Boom, has been fined US$1,5 million by a court of law after churning out fake sneakers mimicking the products of a leading sportswear firm, New Balance.
Bullet train marvel

On September 21, China showcased its engineering prowess by increasing the maximum speed of bullet trains on the Beijing-Shanghai line to 350 kilometres per hour, unveiling the fastest train in the world. The train, named Fuxing (meaning “regeneration” in Mandarin), which previously sped at 300 kilometres per hour, has now cut the 1 318-kilometre journey to four hours and 28 minutes, saving travellers almost an hour.

Although a high-speed crash in 2011 claimed the lives of 40 people, engineers say they are confident of improved safety this time round. A total of 14 daily trains are servicing the Beijing-Shanghai route at the higher speed this week. The first Fuxing bullet train departed the capital Beijing at 9am, reaching Shanghai on schedule.

“These trains are so popular that the tickets for today (Thursday) already sold out a week ago,” Huang Xin, an official with the China Railway Corporation, was quoted as saying.

The carriages are comfortable, ultra-modern and come with free wi-fi internet and USB slots for charging cellphones and other gadgets. An immense source of national pride in China, the bullet train network, at 22 000 kilometres, is the world’s longest high-speed railway.

“It is important to remember that China had no bullet train 10 years ago,” says Zhang Genfu, a leading intellectual at Zhejiang Normal University in eastern China.

So advanced are China’s trains that the Asian giant now exports them to Russia and Indonesia.

However, analysts say the development of the bullet train has not been smooth sailing.

The project, which has cost US$360 billion so far, has been mired in controversy amid allegations of corruption and mismanagement.

The most high profile case was that of former railway minister Liu Zhijun, who was slapped with a suspended death sentence in 2013 for taking bribes amounting to US$10,6 million. In the end he got life imprisonment.

President Robert Mugabe’s government, despite repeatedly claiming that China and Zimbabwe are “all-weather friends”, has failed dismally in tackling the scourge of corruption. Inevitably, corruption-induced turmoil is now posing an existential threat to the republic.

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