China's development strategy: lessons for poverty reduction in Africa

Following the wake of the China-Africa summit in Beijing, this paper looks at China’s development strategy and its deepening engagement with Africa. It also focuses heavily on China’s recent internal developments and evolution from a centrally planned economy.

The author stresses that even in the medium term, China will be one of the most important external actors in Africa. The opportunities and risks for African national economies can only be estimated with difficulty at present. However, for that precise reason much is being speculated, judged and written concerning the new partnership from a western perspective. The experiences of transition from centrally planned economies to the market system have an important lesson to teach Africa. There is a certain irony which stems from the fact that unguarded liberalisation which, even if carried out under socialist goals, breeds sharp inequalities which have to be handled by the state.

Key points raised include:

• since initiating reforms and open policy, China has achieved tremendous success - growth since the 1970’s has helped lift several hundred million out of absolute poverty - accounting for 75% of poverty reduction in the developing worlds last 20 years
  
• evidence suggests that the needs of China’s rapidly developing capitalism are similar to those of western counterparts
  
• China is now following and introducing market-oriented policies which are never-the-less still controlled strictly by the system of a one party system
  
• phasing out China’s earlier industrial policy has brought new challenges for the design and implementation of industrial policy.