Feature Article of Monday, 5 November 2012

Columnist: Sakyi, Kwesi Atta

Can Ghana Learn Lessons from China?

By Kwesi Atta Sakyi 31st October 2012

China, with an estimated population of 1.6 billion, is the ascending
economic giant and cynosure of all global eyes. Chinese manufactured
goods have permeated every part of the world. Made in China is now a
brand to be associated with quality and affordability. Of note are
Chinese electronic goods such as laptops, cameras, camcorders,
tablets, cell phones of all super brands such as Toshiba, HP, Sony,
Panasonic, Lenovo, Canon, among others. The Chinese have become so
much sought after that many colleges and schools around the world have
started offering basic courses in Chinese languages such as Mandarin.
The Chinese themselves are also aware of their global reach and
importance, and they are voraciously learning English. Chinese
students have also invaded most of the prestigious universities around
the world to gain more knowledge. They have the brains, the money and
steeled nerves to make it to the top, especially in mathematics,
engineering, ICT, physical sciences, among others. China’s land mass
is about 9.6 million square kilometres, or 40 times the area of Ghana,
and their population of 1.5 million is about 60 times that of Ghana.

. The Chinese model of economic growth has remained an enigma and
perhaps hard to replicate, especially regarding their sheer
mammoth-size population and large market. To imitate China is to have
their huge size population and perhaps their peculiar cultural
characteristics. We have had the Asian Tigers and the other Asian
growth models, but nothing is as enigmatic as China’s. We in Ghana, a
tiny West African country with only 24 million people, cannot mimic
China. However, there is always room to improve on our learning curve
and borrow a leaf from the Chinese model. The Chinese have graduated
from a very troubled and harrowing past. Up to 1978, there was the
centrally–planned commandist economy, driven by communist
apparatchiki. In the 60s, we had Premier Chou-en-lai and we had
Chairman Mao Tse Dung. The Chinese crafted an inward-looking closed
economy, with a monolithic state apparatus that led to an autarky
situation or no-trade situation. Since 1978, China has reformed and
liberalised. Yet they are accused of state capitalism and deliberately
maintaining a low exchange rate of their local currency, the yuan or
remimbi in order to gain comparative advantage on the global market in
terms of having relatively low prices for their quality but very cheap

The Chinese crafted a pro-communist ideology and their foreign policy
had strong undertones of anti-imperialism. China offered help
militarily and otherwise to many non-independent countries in Africa,
particularly Tanzania, Zambia, Ghana, among others. I remember in the
mid 60s, when I went to teacher training college in Ghana, I bought
some top quality white polyster long and short-sleeved shirts called
‘Dadi’ shirts. They are the best shirts I ever saw and wore in my
life. That was from 1966 to 1970. Who says Chinese goods have been
inferior all along? How about in 1280, Marco Polo’s account of high
civilization in the court of Kublai Khan? After 1978, China started
unfreezing her centralist orientation, embracing liberalism or free
market principles.

The Chinese still maintain their strong age-long traditions but at the
same time, they are willing to imbibe the best from other cultures
such as western technology, capitalism and science. That is cultural
diffusion and acculturation. China is one country where Christianity
failed to make inroads. Under communism, religion was banned because,
according to Chairman Mao, it was the opium of the masses, as it
made them sedated and comatose. I have never been to China but I have
come across some Chinese and taught some of their students. The
Chinese are very down-to-earth, pragmatic and highly industrious
people. They are frugal as they do not waste money. Like the early
Pilgrim Fathers in the USA, who embraced the Protestant ethic of
saving, the Chinese save a lot and work hard to accummulate capital.
This is exactly what the Japanese also did to break through. To do
this, you need self discipline and to be focused on your economic
goals. No matter what you earn, you must always save say 20%.

This is seed capital for future wealth. Many people aver that the
secret of the stupendous growth of China is because of availability of
cheap state capital and state incentives given through most of the
banks, which are state-owned. But who, in the first place, put the
savings in those banks? The Chinese people! We Ghanaians, with our
extended families and dependency syndrome, cannot save. We rather
invest in social relationships. Perhaps, we have to tone down on our
external families and concentrate on our nuclear families. The
Chinese invested heavily in human capital, science and innovation, as
well as social and public infrastructure such as irrigation canals,
dams, power stations, roads and bridges, railways and schools. The 3
Gorges Dam on the Yangtze River is classified as one of the largest
civil engineering and multi-purpose project ever undertaken by man on
the face of the earth. The majority of the Chinese are still rural,
as they farm the family lands to feed themselves and even export.
They have got their equation right because there is a strong agrarian
base to ensure food security. Rural youth do not desert the land for
the urban areas. Thanks to government incentives and humongous support
to agriculture. Exports of Chinese silk, tea and rice is world famous.

Government incentives are given to rural farmers who are organized
into cooperatives. Chinese in the Diaspora send lots of investment
capital home to establish firms. Our Ghanaians in the Diaspora need
to do the same. Our rural youth must stay on their farms and come up
with innovative farming ideas to boost production. Our value and
supply chains need vertical integration to avoid bottlenecks in
production, storage, transport, distribution and marketing. We need a
well articulated agriculture programme in Ghana as the backdrop for
our industrial take off, as increased productivity in agriculture will
provide the capital, raw materials and market for the industries.
Hence, the primacy of agriculture in the development calculus.

Our Produce Buying Agencies need to be properly equipped and organized
and incentivised. I think our rural banks’ concept needs to be
empowered by the Bank of Ghana so as to let them behave like the
State-owned banks in China, which offer soft credit lines to emerging
start-ups and entrepreneurs. Each Ghanaian family should register a
company or family business. I salute the Kwahus, Ashantis and
Akwapims who are enterprising in our retail sector in Ghana. The
other tribes can follow their lead. We need to carry out reforms in
land tenure to make it easy for Ghanaian investors to acquire land for
business. Our chiefs should sell land to only serious investors and
desist from selling land to quacks and land speculators. The law on
land needs to be beefed up. In the 60s, there was an indigenous
company which made the waves and it is still going strong. This is
Mechanical Lloyd Ltd, late Robert Darko’s, which deals in heavy
earth-moving machinery. When growing up in Winneba, there were a few
local businessmen or contractors. I will not like to mention names
here. They were notorious for buying expensive cars to show off and
they took to having many wives, concubines and girlfriends.

You cannot mix business with pleasure in a frivolous way. Business
requires discipline. I think Ghanaians can learn from the Chinese. I
have seen Chinese who save money by walking long distances, thus
saving bus or taxi fares. They drink water instead of buying
expensive fizzy drinks. The Chinese are now so rich that they are
buying landed properties in Canada, US, Switzerland and everywhere.
Other successful Ghanaian businesses include Nkulenu Industries, Paa
Kwesi Nduom, Azumah Banda, among others. Instead of our wasteful
pastime of divisive politics in Ghana, let us concentrate on building
our businesses by synchronizing our efforts in partnership synergies.

The story of Lenovo in China is very moving. The promoter started his
business even when China did not allow private enterprise. He was
tenacious and adamant, and he networked with people outside.
Eventually, he broke through and took over IBM. It is said that where
there is a will, there is a way. China has become a most preferred
investment paradise because of highly skilled cheap labour, good
government investment policies, quality infrastructure, food
security, state-sponsored capitalism, a budding middle income class of
entrepreneurs, dynamic culture, discipline, high proclivity for
saving, Foreign Direct Investment from global MNC giants such as
Microsoft, Toshiba, Canon, Airbus, VW, Toyota, among others.

The Chinese now own assets worth trillions of dollars all over the
world, especially in the UK, Germany and USA. Chinese capital
deepening tactics, aggressive and meticulous planning and their robust
culture, have paid dividends in producing GDP growth rates, ranging
from 9% to 12%. The Chinese are unafraid to try new ideas, despite
having a strong traditional culture. Ghanaians can learn a lot from
the Chinese. We must cement our bilateral ties with China and learn
from their example of hard work, discipline and huge appetite to
acquire technical knowledge. I hope that whoever wins the December
2012 elections will not water down our foreign policy towards China,
but will take the fraternal bond of friendship to a higher height.

Contact: kwesiattasakyi449@gmail.com