IF sometime in the mid-90s one had said that the People’s Republic of China would be the world’s second biggest economy he would likely have been met with a cynical chuckle from the black suits in the finance capitals of the world in Wall Street or London.
Sure the most populated nation on earth was already growing at more or less double figures but no one could foresee their now astonishing success near the summit of “league of nations” in economic output as measured by the GDP.
Decades earlier Japan had been the miracle of development and served as a blueprint for many developing countries aspiring for greater prosperity.
And even though the Japanese economy had cooled down considerably, Japan not China was still the name on lips of the black suits at Goldman Sachs, JP Morgan and many of the top investment banks.
Without a doubt the Chinese have never doubted their own capacity for greatness as a nation and have always felt it their destiny to return to the glory days of ancient China where they were the Mecca of science and technology. The country that brought us gunpowder, paper and printing has begun to finally live up to its potential.
This sleeping giant has finally awoken from its slumber and has at last claimed its rightful place in the global economic sphere.
The numbers are startling: China has foreign currency reserves nearing US$3 trillion (about M21 trillion) and specifically the value of the US treasury bonds owned by China are around US$1 trillion.
The China story is one of the greatest of the 21st century in human development.
What is still even more amazing is the fact that the rate of growth still hovers around double digit mark.
Even more so, the dexterity of the Chinese economy was well seen during the 2009/2010 period when the world economy was entangled in a recession while China’s economy continued to grow at rates above five percent.
Analysts and statisticians have extrapolated that at current growth rates the Chinese economy can be expected to be the biggest in the world in 15-20 years time.
Now that statement suddenly does not seem startling anymore.
Lesotho has always had large numbers of Chinese nationals since independence in the 60s and the number has grown almost exponentially in recent times.
This has also meant that Chinese involvement in the Lesotho economy has increased at a rapid rate.
The virtually monopolistic ownership of the textile firms that export overseas is well documented.
The Chinese government has also moved in to build various architectural landmarks including the recently revamped national library, the new office building for the Ministry of Health, and the magnificent edifice that is the national parliament.
There have even been rumours that there is a proposed blueprint for a China-town within the capital city, Maseru.
People of Chinese origin wereere is estimated to be over 5 000 people of Chinese origin in Lesotho as of 2010.
In recent times similar Chinese presence in countries such as Zambia and the DRC has been witnessed.
This has led to many questioning China’s motives and the strategic and economic implications of an increase in Chinese dominance on the continent.
Many cynics have seen the move of China into Africa as a scramble for resources as it seeks to supply the rapidly increasing appetites of its fast-increasing middle class. Is this perhaps a form of neo-colonialism?
The jury is still out on that.
What is crystal clear however that capitalism is as the dominant economic game in the world requires players that are self-reliant and surely the time for Africa to play third-fiddle to the rest of the world is over.
The leaders of countries like Lesotho need to be conscious of the fact that aid-based economic growth is not sustainable and will never bring any meaningful prosperity to the people. Human capital investment will be crucial, meaning African countries have to develop the necessary skill and aptitude within their respective populations which will enable them to add value on the vast amount of resources at their disposal.
The mathematics is easy in this regard.
Let’s make an easy example with gold. The raw gold priced on many international markets makes its way out of Africa in its most basic form, which also its cheapest state. It is exported to international markets who then add value to it through their highly trained labour and it is bought back in Africa as necklaces, rings trinkets, charms and other forms of jewelry at a premium.
It is then easy to see that if Africans developed their capacity to add value to their own resources, the economic benefits could be exponential.
Capitalism as it’s practised across most of the civilised world is not strictly a zero sum game and hence there are mutual benefits to be had with China increasing its footprint in Lesotho and the rest of the African continent.
But at the same time elements of a zero sum game are still very much inherent in this system and our leaders in both government and business need to take decisions that will ensure the benefit of the greatest number of Basotho now and in future.
