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China’s Economic Journey

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China’s economic journey from state-led industrialisation to international markets is an outcome of a capitalist development strategy. Initially, China tried to attract the foreign investment by inviting companies’ in the Special Economic Zones (SEZs). The SEZs in coastal areas of China gave an opportunity for the local companies to improve, and match up with the international standards. This competition opened the doors for Chinese industry to outside markets, it also provided a base to link with international markets. This, in fact, was China’s first step towards globalisation. Since then, China’s economic profile has risen globally, and China through trading ties has attained the membership of World Trade Organisation (WTO) and BRICS (Brazil, Russia, India, China and South Africa). 

Seeing China’s regional and global outlooks, the common denominator is trade linkages and regionalism. Within the Asia Pacific region, China has an active participation in Asia Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN) and Regional Comprehensive Economic Partnership (RCEP). Likewise, in neighbouring South Asia, China has trading ties with India (despite the border dispute along the Himalayas). China has also invested US$ 49 million in Afghanistan’s oil production sector. These developments indicate that China’s preferred foreign policy engagement is economic development. This aspect of socio-economic development was highlighted during the 3rd Belt and Road Forum-BRF (held in Beijing, October 2023); the Forum announced that the BRI projects have generated 420,000 jobs, and around 40 million people have been lifted out of poverty. The China-Pakistan Economic Corridor (CPEC) is another development initiative; the corridor will act as a pivot in connecting South, East and Central Asia. 

BRI’s wide scope and acceptability in developing world is primarily linked with the initiative’s economic dividends. For instance, BRI projects in Africa like the Mombasa-Nairobi Standard Gauge Railway’ (Kenya) and the Port of Bagamoyo (Tanzanai) will strengthen the prospects of connectivity and trade. China has also made investments in Africa’s mineral sector. The recently concluded 9th Forum on China-Africa Cooperation (4-6 September 2024) in Beijing has announced US$ 50 billion in financial support for Africa. The Forum was attended by 50 leaders from Africa. China also plans to launch 30 clean energy projects in Africa. 

The perception that China’s BRI is a geopolitical endeavour aimed at expanding China’s influence globally? Seeing China’s entry into the WTO, it was the China-West trade cooperation that was instrumental in paving the way for China’s WTO membership. Thus, economic interest was the decisive factor in integration of Chinese economy with global economy. Thereby, political gains that China will accrue through BRI cannot be denied altogether. However, BRI’s outreach to world regions, in particular the developing world signify that the countries orientation towards economic engagement is gradually becoming an international norm. Here the point that needs deliberation is that the developing world is faced with the challenges of poverty and energy shortages. Due to the poor economic conditions, the developing countries are also more vulnerable to extremist tendencies. To counter these challenges, the foremost requirement is economic stability. The advantage of BRI to developing countries is that the initiative offers flow of investments, infrastructure development and connectivity through rail, road and sea links. The intra and inter-regional trade, alongwith technological exchange between developing and developed countries, in fact is an opportunity for the weak economies to progress. 

China’s projects in Africa have proven the fact that economic progress is not entirely reliant on a conducive environment. Africa is rich in natural resources but the continent accounts for only 2.7 per cent of global GDP. Despite the challenging environment of Africa, China has stepped up economic activities in the region. In Guinea, China is building a 600 kilometres iron ore rail line to the coast despite the coup in the country. Likewise, China plans to build a 2,000 kilometres oil pipeline between Niger and Benin despite the coup in Niger. These projects promote the narrative of collective progress, that is why BRI is an attraction for the developing regions.

Note: This article appeared in The Scoop, dated 13 September 2024.
Disclaimer: The views expressed in the article are of the author and do not necessarily represent Institute’s policy.

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