Economic Recovery & Reconstruction Lessons From Communist Party of China – By China Dodovu
For more than 100 years, the CPC has combined the universal truths of Marxism-Leninism with practical situation of the Chinese revolution and construction. In the new era of reform and opening up, the CPC has pioneered a socialist system with Chinese characteristics. This is a fundamental achievement of its many generations after some painstaking efforts of collective leadership, numerous trials and tenacious efforts.
By China Dodovu
As result of a decade-long economic stagnation, South Africa is currently facing an unprecedented economic and financial crisis. The collapse of the United States housing market in 2006 and the ensuing financial crisis that wrecked havoc around the world are the main contributors to this crisis.
The discovery of the COVID-19 pandemic at the end 2019 has exacerbated the crisis. It became a world shattering problem with far reaching consequences for humankind. It continues to take the lives of people and disrupts their daily activities; creates chaos in the financial markets and economies and exposes the competencies of governments to deal with disasters.
The economic crisis facing South Africa is not unique as many other countries across the globe have faced similar crises or even the worst crises which strained them from addressing historical imbalances, unemployment and poverty challenges that had devastating consequences for humankind.
As a governing party in South Africa, ANC can learn from other countries on how they have responded to their economic crises and extricated themselves from the quagmire. Inhibited them from stimulating their economies and from achieving equitable and inclusive growth. The contribution on this paper focuses on the Communist Party of China (CPC) on how it positively turned around China economically since it came to power in 1949, and the lessons that the ANC can draw from its experience.
THE FOUNDING OF CPC AND ITS ASCENSION TO POWER
The CPC is a Marxist political party which was founded on 23 July 1921. It is the vanguard of the working class and the leading core of the Chinese people. The CPC has travelled glorious path of struggle for the liberation of China, its economic prosperity and its progressive cause for humankind.
Its formation came after the victory of the October Socialist Revolution in the Soviet Union led by Vladimir Lenin in 1917. Its ideology of Marxism spread to China where some intellectuals believed that Marxism was the true way of guiding the Chinese revolution to victory.
Since 1921, the CPC has led the Chinese people through hard and tortuous struggles to gain the great victory of their new democratic revolution and socialist transformation and construction over the years.
- Firstly, during the Anti-Japanese War (1937-45) where a national liberation war ensued leading to China gaining complete victory during its struggle against foreign aggressors in 100 years.
- Secondly, between 1946-49 where a costly full-scale civil war between the CPC and the Kuomintang (KMT) broke out immediately following World War II. The civil war was preceded by on and off conflicts since the 1920’s.
On October 1, 1949, Chinese Communist leader Mao Zedong and the CPC declared the founding of the People’s Republic of China.
LAND ISSUE AND PRICE STABILITY
When the CPC took power in 1949 after the wars had ended, it inherited many problems mostly accumulated during the wars. Destitution, the broken economy and social ills had comparatively become more complex and difficult issues to resolve.
The Japanese invasion and the KMT government’s rule had financially and economically collapsed China. In fact, its economy was in a state of extreme backwardness with acute shortage of agricultural products, and agriculture was at hand cultivation levels. Transport was primitive, relying on animal-drawn vehicles and wooden sailboats. Posts and telecommunications technology were operated manually.
The CPC had no previous experience of dealing with economic problems, particularly in big cities where prices were soaring and needed urgent stabilisation. With its Marxist ideology, most people expressed doubts about its ability to manage the economy. They believed it had scored full marks militarily, 80% politically, but believed it would get zero economically.
After 1949, the CPC prioritised the resolution of the land issue which was an old problem. “Land to the tiller” had been a cry for over 2000 years in successive peasant revolts. The CPC had to prioritise this age-old problem.
ADMITTING THE MISTAKES COMMITTED
On its road to socialism, the CPC made glaring mistakes specifically with regard to the Cultural Revolution and the Great Leap Forward.
From 1966, the CPC launched a decade-long Cultural Revolution to purge political opponents, ruined people’s lives and made education of a whole generation to suffer.
The Cultural Revolution was a catastrophe. Politically, a friend was confused with a foe, and people were unjustly and falsely charged or sentenced. Economically, it denounced the doctrine of the unique importance of the productive forces. Culturally, it caused a hundred flowers to wither, and education, science and technology suffered heavy losses.
The aim of the Great Leap Forward, was to quickly change the backward nature of China and to make it a great power and catch up with the developed countries. When it was launched, no serious investigation, research or even a pilot study was done on its realistic implementation.
The program disrupted the economy, wasted a lot of resources, resulted in enormous damage to production, increased social hardships where the people did not have enough to eat.
The CPC admitted mistakes of the Cultural Revolution and the Great Leap Forward. It made no attempts to cover them up but openly admitted, reflected on and corrected its mistakes, and learned from them.
During difficult periods for the national economy, the CPC stuck with the masses and did not conceal the damage caused by the disasters but told them the truth. Upholding the truth and correcting mistakes became its working attitude, method and creed hence it still enjoys the support of the people.
REFORM AND OPENING UP
In 1978, the CPC adopted the Reform and Opening Up policy as its basic national policy. By this policy, it had summarised historical lessons, rectified previous errors, selected the principles of opening up to the outside world, changing the mindset and embracing reform and innovation.
China’s destiny had began. The policy marked the beginning of earthshaking changes that have swept China since then. The reform began successfully in rural areas. It was thereafter launched in the rest of the country with state-owned enterprises as priority.
Reform was underpinned by stability and anti-corruption efforts. The CPC asserted that reform was the driving force, development was the objective and stability was the condition; and the three had to be unified organically. Also, its top leaders saw the existence and spread of corruption and privilege within its ranks as a factor that could lead to its destruction. It had to decisively deal with it.
THE SECOND LARGEST ECONOMY
China is now the world’s second-largest economy behind the United States. Since 1978, its GDP growth has averaged almost 12% a year. Its economy grew by 13% in 2021 but in the first quarter of 2022, it rose modestly to 4,8% as the country suffered an economic slowdown amid coronavirus outbreaks and a major real-estate crisis.
As an upper-middle-income country, China has lifted more than 800 million people out of poverty and is able to feed its 1,3 billion people. The issue of food security with the increase of its grain production is key to its mission. Also, there have been significant improvements in access to health, education and other welfare services.
SOCIALISM WITH CHINESE CHARACTERISTICS
For more than 100 years, the CPC has combined the universal truths of Marxism-Leninism with practical situation of the Chinese revolution and construction. In the new era of reform and opening up, the CPC has pioneered a socialist system with Chinese characteristics. This is a fundamental achievement of its many generations after some painstaking efforts of collective leadership, numerous trials and tenacious efforts.
Socialism with Chinese characteristics consists of a path, theory and system. The path is a way to reach the goal, the theory offers the guide to action and the system provides a fundamental guarantee. This ideology also means an in-depth understanding of the basic foundation which is socialism; the overall plan to achieve economic, political, social, ecological and cultural progress; and to achieve the main mandate of building it.
ONE COUNTRY, TWO SYSTEMS
The “one country, two systems” policy means there is only but one China and under this premise, the mainland adheres to the socialism with Chinese characteristics system while Hong Kong and Macau may retain their capitalist systems over a long time to come.
This became applicable after Hong Kong in 1997 and Macau in 1999 became the Special Administrative Regions of China, and the principle, each of the two regions could continue to have their own independent governmental system: legal, economic and financial affairs, including trade relations with foreign countries.
CURRENT REALITIES OF SA’S ECONOMY
As an upper-middle-income economy, South Africa is the most industrialized, technologically advanced, and diversified economy in Africa and ranked third in terms of size.
The economy is in crisis because of a decade-long economic stagnation and its inability to address the fundamental problems of unemployment, poverty and inequalities.
Currently, real GDP growth is at 1%, a rate that is far below to address its growing socio-economic needs. Higher interest rates, increasing inflation, high unemployment, ongoing ESKOM power cuts, corruption together with high debt levels and limited fiscal space continue to turmoil the economy.
These problems happen against a backdrop of an unstable global growth environment and the possibility of new variants of the coronavirus emerging. These are some of the downside risks to South Africa’s economic outlook.
Despite adopting the Economic Recovery and Reconstruction Plan which is underpinned by a faster pace of economic reforms to boost competition and productivity, the pace of these reforms is very slow.
Operation Vulindlela – a joint initiative by the Presidency and National Treasury set up to fast-track economic reforms across sectors such as electricity, transport and telecommunications, is yet to yield positive results because of its slowness.
LESSONS FROM THE CHINESE ECONOMIC REJUVENATION
For over 100 years, the CPC has continuously strengthened itself by summing up experience, correcting its own mistakes and establishing a socialist market economic system with Chinese characteristics.
Since it came to power in 1994, the ANC has made major economic mistakes that it needs to admit and correct. Among the key mistakes are the key economic policies it has adopted over time and its inability to radically transform the economy to favour the historically disadvantaged persons.
The ANC also lacked an appetite to address the land issue to reverse the dispossession of the indigenous people. It has failed to unleash a large-scale redistribution of land to contribute to the transformation of the economy.
Just like what the CPC did, the ANC needs to urgently accelerate structural reforms, infrastructure investment and fiscal consolidation to realise higher growth.
To achieve higher trajectories of economic growth, the ANC needs to pay attention to skilled human resources, physical capital infrastructure, natural resources usage as well as research and technology.
Like in China, the ANC needs to focus on improving the efficiency of economic growth, encourage innovation, lay a solid foundation for future development and realise sustainable and healthy economic development with social stability and harmony.
Land redistribution is key to economic growth. The ANC needs to consolidate the position of agriculture as the foundation of the economy: increasing support for agriculture, improving policies that benefit farmers, accelerate its modernised operations and ensure the supply of important agricultural products.
The stability within the ANC as a governing party is a prerequisite and guarantee for economic growth in South Africa. The painful lessons of its factional battles and disunity has made people realise that once political stability and unity is lost, South Africa will remain unstable and the economy will be thrown in turmoil. If stability cannot be achieved, the people’s lives will certainly deteriorate, inevitably leading to social instability and political unrests.
The events at the Zondo Commission have shown that the greatest threat to the ANC comes from corruption, which will destroy the party itself. If corruption goes unpunished, especially among its ranks, the ANC runs the risk of achieving its strategic objectives. The ANC must attach greater importance to the threats posed by corruption which is a virus infecting its body. Signs are already showing that corruption will wreck it and cause it to lose political power.
CONCLUSION
Today, because of the work of the CPC, the attention that China is attracting is growing worldwide. The world wants to know what changes are in progress in China and what impact they will have on the rest of the world.
It is important for the ANC to learn from CPC by correcting its own mistakes in its mission to create a united, nonracial and prosperous society in South Africa.
Given the history of the ANC which is similar to that of the CPC, it must take to the heart the lessons from the CPC in order to achieve its strategic objectives.
In this contribution I argue that urgent reforms is needed in South Africa to address its economic challenges. This should be underpinned by proactive fiscal and prudent monetary policies. In other words, efficient, high quality and sustainable growth is required as a matter of urgency and taking lesson from the CPC is vitally important.
