In 1960, China Was Poorer Than Most African Countries. But Here Is China Bankrolling Africa.
At the September 2018 Forum on China-Africa Cooperation, China pledged US$60 billion aid package to Africa. The figure includes project financing, investment, grants, concessional loans, and credit lines. This aid package tells two stories — China’s extraordinary social and economic development and Africa’s stagnation. The irony is that China was poorer than most African countries in 1960.
China was poorer than most African countries in 1960
Back in 1960 — fifty-eight years ago — China was poorer than most African countries.
Table 1 — Per capita income comparison between China and African countries (1960 and 2017)
As shown in Table 1, per capita income in China in 1960 was US$89. Congo, Cote d’Ivoire, Ghana, Kenya, Liberia, Nigeria, Senegal, and South Africa were all richer than China.
China of the 1950s, the 1960s, and 1970s was a disaster
The failed Great Leap Forward together with environmental disasters induced the Great Chinese Famine that resulted in the death of tens of millions of people. The Great Chinese Famine began in 1958 and lasted until late 1961. This was followed by the 1960s-1970s cultural revolution that plunged the country into further crisis.
Deng Xiaoping and his four modernizations
My favorite quote from Deng Xiaoping is this — “Keep a cool head and maintain a low profile. Never take the lead, but aim to do something big.” Do something big he did with his “four modernizations.”
Deng Xiaoping launched his four modernization in 1978. These were industry, agriculture, technology and defence. Deng’s strategy soon inspired far-reaching market-economy reforms that subsequently turned China into the world’s second largest economy with a GDP of US$12 trillion. That is how China lifted 800 million people out of poverty.
What of Africa — where is it headed?
China’s rags-to-riches story reminds us that through a determination, commitment, courage, and hard work, a country can achieve extraordinary success. With a GDP of US$1.5 trillion, Sub-Saharan Africa has yet to begin its own journey. The region remains the poorest in the world, with 430 million people living in extreme poverty, out of a population of one billion. Undertaking a socioeconomic transformation similar to China’s — as opposed to merely receiving aid from China — is the question of our time.