With about a fifth of the human population and the second largest economy, China surely deserves the attention of the world. The country is a global force regardless of western cynics, in particular, may say to the contrary as they are doing with respect to the meeting of the Chinese National People’s Congress now taking place in Beijing. The 3,000 delegates attending the annual parliamentary session have been described by western pundits as “rubber-stamp”.
Yet, when the meeting winds up on March 17, the leadership changes which began last year will be effectively completed with a new policy focus for the country. President Hu Jintao will hand over the reins of power to Xi Jinping who had taken over the leadership of the Chinese Communist Party at the 18th Congress last year. Premier Wen Jiabao is likely to be replaced by Li Keqiang. This leadership change takes place once in 10 years. So it is clear that new team of emerging leaders are expected go give direction to the development of China in the next few years.
Africa should be active in what we may as well call global China Watch. What happens to the political economy of China is relevant to Africa for obvious reasons. China’s economic intercourse with Africa is becoming more vigorous by the day. The Chinese presence in the extractive industry in various parts of the poor continent is unmistakable. For its industrial growth China is all over the place engaged in extraction of minerals. China imports the largest quantity of oil because of its vast economic activities. Africa is a destination for China’s huge investible capital as well as a market for its huge exports. In Nigeria, the China’s fingerprint is easily detected in virtually every sector - oil and gas, construction, manufacturing, commerce etc.
It is, therefore, important for Nigeria (and indeed Africa) to develop an independent perspective of the Chinese dragon instead of inheriting western prejudices and parroting them in the name of analysis of the international economic system. For instance, in a book published last year and entitled “Why Nations Fail: The Origins of Power, Prosperity, and Poverty”, two American scholars, Daron Acemoglu and James Robinson, described what has taken place as “authoritarian growth” that is unsustainable because of the “non-inclusive political institutions”.
Another perspective is embodied in a new book mentioned elsewhere on this page. In the book, “Financialism: Water From An Empty Well. How the Financial System Drains the Economy”, the authors, Bola Ahmed Tinubu and Brian Browne devote a chapter on China with the following conclusion: “In the end, China’s current success is remarkable and deserved, It is good that such a great nation tastes of modern prosperity. However, its current economic model must have a relatively short lifespan.
This model can never be more than a minority report in the global political economy. By definition, it cannot become prevailing practice without things terminating in ashen disaster”. Well, the jury is still out on the China’s model of development. And forget about Francis Fukuyama’s neo-liberal exuberance, history is not coming to an end soon. Meanwhile, Nigeria and the rest of Africa must read the unprecedented developments in China with their own prism.
No one is, of course, more conscious of the enormous challenges on China’s chosen path of development than the Chinese themselves. The new leader, Xi, is expected to be tough on corruption. He has spoken of the need to clean up the party of corruption, bureaucracy and alienation from the people. As an aside, it is probably worth remarking that China fights corruption like no other nation. Cases of corruption that would, for instance, earn the convict a judicial tap on the wrist in Nigeria will result in death sentence in China.
That only goes to illustrate the magnitude of the problem as perceived by the Chinese state. Pollution remains a big issue for China. Industrial pollutants threaten all the air, soil and water. The new leadership has to find answer to the all-important question: how does China tackle the environmental consequences of its economic activities? In the last 30 years the widely acknowledged wise economic management in China has brought millions out of poverty. Despite this feat, social inequality is at the root of tension in the society. Inequality is, of course, an inevitable concomitant of capitalism. There are immense social issues with labour practices.
From the tone of the 18th party congress last November and the current parliamentary session, it is evident that leadership is conscious of the challenges. It is little surprise that in the “government work report” delivered by the outgoing Premier Wen, the forecast for this year includes an economic growth by 7.5% with inflation expected not to be more than 3.5%
It is expected that at least nine million jobs would be created in towns and cities, so as to keep urban unemployment at not more than 4.6%. About six million houses would be constructed in addition to the over 30 million completed last five years year. It is significant that that in the fiscal policy more budgetary priority is given to social security, healthcare and education.
China is effectively employing market logic in its economic management, but the most populous nation on earth is not leaving the fate of its people to phantom market forces.
China remains a puzzle to western ideologues because it has proved that not every nation will have to act the socio-economic and political script of the west to develop. From all indications, this puzzle may linger far longer than Sinologists in the west are imagining. So the world is watching as China is making progress, thanks to visionary leadership. The lesson from Beijing is that a serious nation must think deeply and choose its path own of development.
Many Sins of the Financial System
In his highly influential writings, the late radical scholar, Professor Claude Ake, stridently made a case for the “political economy approach”. He insisted that discussions of economic problems should not be reduced to mere technical reviews. So it will be thumb-up for this approach of recognising the meeting point between economics and politics as a book embodying alternative perspectives on financial system is presented to the public tomorrow in Lagos.
The book by a Nigerian and an American is entitled “Financialism: Water From An Empty Well. How the Financial system drains the Economy”. One of the authors is former Lagos State governor and leader of the Action Congress of Nigeria, Asiwaju Bola Ahmed Tinubu, and the other is an American, Brian Browne, who was a Consul-General at the United States embassy.
In offering penetrating perspectives on the many sins of the reckless financial system (which they aptly dub “financialism”) the authors have embarked on an intellectually provocative exercise. Yet they make no pretext to being professional economists or academics. Now, you don’t have to agree with there rigorously formulated and lucidly expressed views to acknowledge the deep thinking that went into the writing of the book.
That is the challenge the authors have thrown to public intellectuals, policymakers and political leaders among others in the public sphere. For the avoidance of doubt, the authors want capitalism to work in America, Nigeria and other places; but they make an engaging case of curing the system of the malaise of financialism. Some other critics of the financial crisis call it casino capitalism. It is a squalid economic arrangement in which financial racketeers loot the economy and drains it of the resources direly needed to develop the real economy. The book doubtless has a rich progressive content. Some of the practical ideas canvassed eloquently in it could certainly be useful in formulating the programme of a social democratic party.
The book launch promises to be an intellectual feast and erudite scholar, Professor Eghosa Osaghae is expected to offer a judicious review of the book. Meanwhile, not a few experts and the general readers alike would be interested in further advancing the discussions embodied in Financialism because of the sheer clarity and force of arguments of the authors. The authors interrogate issues as the role of the state in economic management, the locus of the financial system, paradigms of economic development. The arguments, which are supported by practical examples of economic players, are also philosophically anchored. Hence, the authors posit: “We must do all we can to uphold the imperfection of man’s collaborative endeavors against the perfection of his selfish designs”.
In the aftermath of the global financial crisis, which exposed the recklessness of neo-liberal approach to economic management, a number of books have been published in the west. Financialism represents a refreshingly different perspective from a Nigerian and a black American. And this should be welcome by those interested in a deeper understanding of the political economy.