The writer is an
economist, anchor,
analyst and the
President of All
Pakistan Private
Schools’ Federation
president@Pakistan
privateschools.com
Chinese adopted the path of Socialism with Chinese characteristics, which brought prosperity to Chinese citizens from 1978 onward. China’s success story exhibits that a blind system both in economy and governance, brought prosperity and development to the country. It demonstrates that neither the pure characteristics of a free market nor socialism are the reason behind Chinese prosperity. Guided state policies by the Chinese Communist Party and the inclusion of free market attributes within the economic system has kept things going for China. Moreover, the stable political system in the One-Party system and its roots spreading to local administrative levels has seen the continuation of policies without any opposition. Inclusive decision-making was key for successful results. There are certain variables that set Pakistan apart from China. The multi-party system, a different ideology and the presence of federating units differentiate the political and societal realities of the two states. The economic structure is also different, as Pakistan is a pure liberal economy as opposed to China’s mixed economy. However, there are lessons that can be learned from Chinese Development and can prove beneficial for Pakistan’s economy and society at large. The success of China’s model teaches us that socioeconomic policies must be developed by consensus without considering political preferences and ideologies. There should be a consensus Economic Agenda of Pakistan and it must be followed by all governments irrespective of their political identification. This will encourage result-oriented policies in the future. Presently China has 34 provincial-level governments, over 300 prefecture-level governments, 3000 county-level governments, and over 40,000 township-level governments. The rise of China as a major political, economic and security player at the global landscape keeps on inviting the interest of the international community in the governance system of China. The state once accused of having extractive political and economic institutions made a place in the international arena due to its unique governance system. governance system is entrenched in guidelines set under the overarching ideology. The ideology of Socialism with Chinese Characteristics entails leading and guiding role of the Communist Party in running the government with the commitment to raise and sustain good living standards of people. Reforms were introduced by the Communist Party to turn the idea into reality. A prominent feature of reforms was that it was a mix of communist and liberal ideas, practices and values. The apex role of the Communist Party is backed by the Constitution of China, thus reducing the role of other parties in governance. This enables the Party to legislate, and introduce major reforms along with electing major officials of the state. It also gives the Party the highest level of decision-making authority; therefore China is also referred to as a Party-State. For a unitary state like China, uniform implementation of policies becomes a complicated task. However, It can be countered by having better communication and implementation of policies through a well-defined system of hierarchies. China has adopted this model by defining role and responsibilities of each tier. China implemented the hybrid model where party and government have their offices running parallel to one another at every administrative level. National People’s Congress (NPC) being the only Legislature in center makes China a unitary state. It is the government equivalent to the Party Congress of CPC and is responsible for legislation, electing the President of State, Prime Minister, Vice Prime Minister and the General Secretary of the Standing Committee of NPC. It has 2,980 members. and meets for two weeks annually. The executive organ State Council is also elected by the members of the NPC and by the members of the NPC, which is led by the Prime Minister. State Council is comprised of ministries, and different departments led by ministers and affiliated administrations. State Council ensures the implementation of all policies in accordance with the vision of SC of Politburo. The affiliated administration is responsible for the implementation of policies at administrative units and at levels. Five administrative levels characterize the governance system of China at province, prefectural, county, township, and village levels. The hierarchical system is based on traditional values giving greater authority and status to higher echelons, as it is always the case in a unitary system.
The Standing Committee of Politburo of the Communist Party of China, is the highest unit of power in all terms, of decision, execution and evaluation. It is comprised of seven members elected from the Politburo. It is the most powerful organ within the party and State. It is vested with power take all types of decisions. It includes the General Secretary of the Communist Party, which is most senior member of Party and enjoys maximum power. The General Secretary of the Communist Party also assumes the crown of Presidentship, Commander in Chief of Military, and head of state. National Party Congress is the last tier of the communist party at the center level, which is composed of all members of the CPC. The One-Party system in China assures the representation of CPC members in national legislature NPC therefore eliminating mismatch between the party policies and governments. Similar to the national level, the hierarchies system is also replicated at the province, prefectural, town and county levels. It is considered fundamental for standardized policy development and implementation of the policies. The leading party authorities below the Center are called Committees. Like Politburo at the Centre; the Provincial Party Committee at Province, at Prefecture- Prefecture Party Committee and so on enjoy supreme power in decision-making and implementation. Besides the fact that China is a unitary state but it also has Local People’s Congresses and local legislatures at every administrative unit. That’s why it is also termed as federation in unitary state.
Since the Party organization and Government hierarchy exist parallel to each other; they form a connection. The economic success of China is greatly attributed to the continuous implementation of the Five-Year Plans which, contains the vision for next five years. The Five-year Plan is set of Economic and Social Policies that are implemented at every administrative unit. The role of Local People’s Congress increased after the reforms in 1979 to decide on the matters related to economic issues of their localities. For the smooth implementation of the policies at the administrative levels; the administrative units have their own Development and Reform Commissions (DRCs) which work with the local governments to draft policies. This led to the emergence of a phenomenon known as federation within unitary state. The reforms proved to be successful as they improved the economic and social conditions at local levels raising the prestige and credibility of the communist party. The economic well-being of the Chinese state owes a lot to reforms initiated in 1978. It became a stepping stone for citizens’ well-being. It also hugely contribute for improving status and economic significance in the international power structure. Socialist system that was not fulfilling the needs of people at grass-root level led to the different peasantry movements which made decision makers to bring changes in the socialist system. Hence term Socialism with Chinese characteristics emerged. The economic reforms initiated in the 1970s were combination of socialist and the market economy characteristics. State maintained its control on most of matters; at the same time provided liberty to market forces. Initial reforms started from the agricultural sector later included modernising industry, opening Chinese economy, inclusion of advanced technologies, and promoting scientific education to meet the requirements of modernisation. Reform were introduced in a sequential manner and still the process if going on In agricultural sector Household farming replaced the collectivised farming. Policy of collectivisation was based on accumulating gains equally among farmers therefore; farmers which worked hard did not get desired shares for their extra effort. The reform enabled the farmers to get fruits for extra labor. However, the state-maintained control over the pricing of major crops. Similarly, the dual pricing system was initiated. It is very interesting and unique system. First government make sure that national basic requirements are met by strict control over prices determined by government. After meeting the national requirements farmers were free to sell the commodities at market prices without any restriction or control of government. It gave incentives to farmers to increase productivity through better management and efforts. It is classical example of market and planned economy merger. On industrial side, State owned Enterprises (SoE), were given autonomy to produce commodity in surplus and keep the generated revenue within the enterprise. Revenue could be utilised for buying advanced machinery for enhancing productivity and giving bonuses to its employees. Rather depending on the finances from state; State owned Enterprises started to invest retained earnings. SoEs also looked for loans from banks and independent sources. Similarly, the intervention of the party personnel in the State-Owned Enterprises was decreased and management was given freedom to run the enterprise.
The government also encouraged the international diaspora to invest back in the country through these enterprises and other sectors. Chinese diaspora was given preferential treatment for encouraging investment in the country. This led to substantial investment from the Chinese across the world and it also paved the way for foreign direct investment (FDI) in the country. Furthermore, Special Economic Zones were created to attract the FDI by providing them with basic facilities and preferential treatment. Reforms introduced in 1993 encouraged further economic liberalization, competition between state-owned and private enterprises, and possible asset sales. The reforms also allowed different firms to use state assets with full authority but retain state ownership of assets by State. Chinese industrial sector turned into a combination of state-owned enterprises and the private sector over the course of time. Now the industry is classified as, State-owned Enterprises, hybrid state-private medium and small firms, and foreign-invested firms and industry. In the late 1990s, China decided to “Go Global” by opening up its policies. To encourage foreign competition in the market, the open-door policy was adopted. Meanwhile, China also joined the World Trade Organization (WTO) in 2001 for further enhance it’s openness. The open-door policy and joining WTO led to the influx of Foreign Direct Investment in the country which employed lot of Chinese labor thus raising the standards of its people. Now China President Xi has given the third principle of “Inadequate and Unbalanced Growth”. He is now focusing to shifting the economy towards concepts of “Eco-Civilization” and making it more environment-friendly. Furthermore, he is also trying to make it more people-oriented and uplift the living standards of people. China is also shifting its focus to the consumer economy to sustain its growth. After these reforms, now China is dreaming of becoming a moderately developed country in 2021 and a developed country in 2049.
For Pakistan, a National Development and Reform Commission must be established for more comprehensive planning and execution. Ministry of Planning Development and Reforms, for Pakistan, must be re-designed, empowered and strengthened. It must assume the status of the brain of the country and provide economic and social development guidance to the state. Pakistan already has a very good institutional arrangement of a planning department and has a planning wing at all levels of governance. Pakistan needs reforms and arrangements accordingly with slight changes in the existing structure. The policymakers must come up with the idea of bringing Global market competition even in the areas involving state enterprises. The private industry setup must be encouraged for healthy competition with the state-owned enterprises which will force them to enhance productivity thus setting up a good platform for the promotion of the exports. The state must allocate key areas for investment which will play a major role in boosting the economy. Investment in technology and service is another avenue that will work to sustain growth. Successful economic reforms are not possible without taking into consideration the world economy and integration at the global level. The government must adopt export-oriented policies to enhance economic relevance at the global level. It will help to improve trade and increase revenue and economic integration. It provides a base for economic growth, and the inclusion of modern scientific technologies to boost efficiency in the export sector. Local government participation must also be enhanced and made compulsory for the development of any policy or plan. Pakistan must develop economic and investment policies with the objective of facilitating the business community and ensuring competitiveness. It must be done in a sequential manner and step by step. Special Economic Zones must be provided with the facility of One Roof Policy for all types of registration, facilities, and service delivery. Moreover, policies must also include environmental compliance as much as possible. Policies must also encourage innovation by adopting new technologies and processes. Pakistan can achieve all this by strengthening the local government system by giving them more authority in planning, execution, and financing. Monitoring and evaluation of all interventions must be made on the basis of pre-identified goals and objectives, with autonomous status and must have authority to make decisions and implantation of these decisions. It will ensure development and progress by strengthening and accountability mechanisms to fight and curb corruption.