Free-market types tend to argue that China has prospered because, since the late 1970s, it has abandoned or relaxed the state controls with which Mao Zedong once throttled it. By this argument, China is like a spring which was trodden down for decades and from which the boot has been removed, allowing it to bounce back to its natural shape.
Others take the opposite view. Dirigistes insist that the secret of China’s success is that its state is still highly interventionist. South Africa’s president, Jacob Zuma, inclines to this view. He and his circle are convinced the “market fundamentalism” was the cause of the global financial crisis, and have started looking to China for an alternative. Top members of the African National Congress (South Africa’s ruling party) have been making study trips to Beijing to observe how things work there.
Late last year, Mr Zuma’s government unveiled a plan called the “New Growth Path”. Some of its suggestions, such as a freeze on private-sector wages, sound impractical. And although the details of how it will be implemented are as clear as lumpy sorghum beer, the overall thrust alarms South African business folk. Mr. Zuma wants a “developmental state”, with substantially more government intrusion in the economy.
Why, asks a South African businessman, did Mr. Zuma not look to India for an example of how a poor country can grow fast? Culturally, South Africa has much more in common with India than with China. But the ANC rather likes the idea of extending its power over private business and the allocation of capital, he fears. And this will end in tears, he predicts, for a simple reason. China, for all its flaws, has a reasonably competent bureaucracy to implement the central government’s plans. South Africa conspicuously does not.
Armenian girl wrote:
Jan 29th 2011 12:21 GMT
Why, asks a South African businessman, did Mr Zuma not look to India for an example of how a poor country can grow fast?
Because India's growth model is top heavy and ultimately unsustainable. A nation of 1 billion can not industrialize on the backs of IT out sourcing alone. What India has is a small English speaking middle that is all roaring thunder and a massive peasant under class that have yet to taste the fruit of urbanization and industrialization. At India's current trajectory, increasing urban slums competing for limited resource will cause intensification of communal violence.
South Africa, having its own problems with rich poor divide and urban poverty should not look to India for inspiration.
country road wrote:
Jan 29th 2011 5:17 GMT
And this will end in tears, he predicts, for a simple reason. China, for all its flaws, has a reasonably competent bureaucracy to implement the central government’s plans. South Africa conspicuously does not.
——A wonderful insight! South Africa should go their own way, not Chinese,
not Indian. South Africa has more Strengths than China in economic development.
——It is an open secret in “China’s success” that everybody work hard all day and all night. Diligent, frugal and save a lot of money, then lend to American. American repay his debt by papers named “US dollar”.
——BTW, Chinese are comparative unity and dedication, and I rather doubt if South Africa can do it. this is the biggest variable for South Africa.
Jan 29th 2011 5:02 GMT
With Hu's blessing to broaden the geographical reach, South Africa is now a full fledged member of the BRICS to the dismay of its bigger economic rivals like South Korea, Turkey and Indonesia.