What Can Pakistan Learn from the Chinese Miracle

The author discusses how in seventy years the People's Republic of China moved to the center of the world stage, became the world's largest economy (by purchasing power parity rating) in 2014 and what lessons does this hold for Pakistan given it was at the same level of development as China in 1949.


When Mao took power in China in 1949, two years after Pakistan’s birth, China was a far
poorer country than Pakistan, with a lower per capita income. Today, China’s growth is an
economic miracle, whereas Pakistan’s economy is burdened by unemployment, inflation, and debt. The country is dependent upon China’s massive support.

After the Korean War, the US considered China an enemy; Pakistan, needing US support against the USSR-India axis, at first did not risk having too close a relationship with China. This changed in 1962 when China defeated India in a short and decisive war, and Pakistan, on the principle that ‘my enemy’s enemy is my friend,’ started to build a special relationship with China.

Zulfikar Ali Bhutto emerged as the leader of the China camp in Pakistan. China became an important supplier of arms to Pakistan, and Pakistan was one of the first countries to support China’s move to replace Taiwan in the UN.

The two critical events that cemented the Pak-China relationship were in 1971 when Pakistan facilitated Kissinger’s secret trip to China that led to the Mao – Nixon meeting in 1972, and 2015 when Xi Jinping visited Pakistan to launch the CPEC, a game-changer for Pakistan.

The Mao-Nixon meeting ended 20 years’ enmity after the Korean War, in which the People’s Republic of China, a year after its birth, had challenged the US, the world’s superpower and victor of the Second World War. Mao had lost his son on the battlefront in Korea.

Read More: Xi vows to expand China economy as US trade war continues

The Mao–Nixon meeting eliminated the Russian threat and changed the world’s history over the next fifty years.By 2012, when Xi Jinping took power, America saw China no longer as an ally but as a challenger whose economy would soon surpass the US and whose influence in Asia and Africa was becoming greater than America’s.

The US, in response, spent over a trillion dollars on building 180 military bases around the east coast of China, a sword of Damocles hanging over the China Seas, which provided the only route for China’s massive imports and exports.

With only one route for entry and exit on its east coast through which 80% of China’s imported crude oil passed, China was highly vulnerable to America’s blockade. Xi’s response was the Belt and Road Initiative (BRI) with its three land routes to Asia and Europe, three corridors connecting China to the Indian Ocean, and three sea routes to increase China’s connectivity to the world secured by the Indian Ocean ports known as the String of Pearls.

read more: Premier Zhou Enlai: Modern China’s founding leader was a Great Friend of Pakistan

Significance of the BRI

The BRI provided solutions to the three great problems that China faced when Xi took control, firstly the potential American blockade on the China Seas to the East of China,
secondly a way to utilize the massive surplus capacity of construction materials and engineering after China’s great infrastructure building spree, and thirdly a way to deploy
China’s huge foreign reserve surpluses without sinking them in low-yield US treasuries that would always be vulnerable to US seizure.

The BRI not only provided a solution to these three problems but also enabled China to replace America as the leader of the developing world. When completed, the China-Pakistan Economic Corridor, one of the three corridors connecting China to the Indian Ocean, will be a game-changer for both China and Pakistan.

For China, it will create an alternative to the sole route through the China Seas, a route that reduces the 12,000-mile journey to China’s east coast to 3,000 miles to Xinjiang. For Pakistan, it has brought in more than $60 billion investment in new infrastructure, electricity, roads, rail, and the port at Gwadar and has boosted both the economic and security relationship of these two countries.

China has now started on a further $60 billion investment program on water infrastructure along the Indus River, starting with the Diamer-Basha Dam, 7500 MW Bunji hydropower project, and reservoir in Gilgit-Baltistan.

Read More: China on path to become largest economy despite the pandemic

China’s growing involvement in the Pakistan economy is turning despair into hope.
In the seventy years after its birth, the People’s Republic of China moved from the Century of Humiliation, the Opium Wars, the Taiping Rebellion, the Boxer Uprising, the Japanese
invasion, and the Civil War between the Kuomintang and Mao’s Communists to the center of the world stage by the twenty-first century.

China eradicated poverty through a GDP growth rate of 9 percent over 40 years, built up a national infrastructure second to none, became the world’s factory and the world’s greatest trading nation, became the world’s largest economy (by Purchasing Power Parity rating) by 2014, emerged as the leader of the nations of Asia and Africa, and challenged the US for the hegemony of the world.

Over the same period, Pakistan has been embroiled in multiple conflicts, lost half its country in the secession of East Pakistan, suffered from poor economic performance resulting in low per capita income, a mountain of debt, high levels of illiteracy, unhealthy population growth, poor governance, and a culture of corruption. Pakistan has paid a heavy price for its involvement in Afghanistan, which resulted in drugs, Kalashnikovs, and terrorism. Today, Pakistan’s economy is in crisis, with GDP contracting by 15 percent in dollar terms in 2020.

Pakistan learning from China

read more: Mao Zedong: From peasant farmer to communist revolutionary who founded China

Chinese leaders and their policies

The People’s Republic of China’s first leader was Mao, who ruled for 30 years and created a strong, stable, and united nation determined to succeed. He was followed by Deng, who
turned around the economy and created the Chinese economic miracle, then by the practical Jiang Zemin, who promoted the private sector with his Three Represents, by the low-key Hu Jintao under whom China saw its highest economic growth, and finally by Xi Jinping, who leads China today and has changed the world with his Belt and Road Initiative.

Pakistan’s founder Jinnah died within a year of Independence, after which Pakistan has had four military rulers and six significant civilian rulers. Of the generals, Ayub Khan left the scene with some sort of respect, but Yahya lived under house imprisonment after his
debacle in East Pakistan, Zia was assassinated, and Musharraf was sentenced in disgrace to live in exile as a fugitive. Of the civilians, three were assassinated (Liaquat, Bhutto,
and Benazir), two were convicted for corruption (Nawaz and Zardari), and Imran Khan, today’s prime minister, criticized for presiding over Pakistan’s worst economic decline.

China’s values and attitudes have propelled its rise. Pakistan’s values and beliefs have held it back. These two nations follow a different political and economic road. While China’s have succeeded, Pakistan’s have not.Politically, Pakistan believes in western parliamentary democracy. Even Pakistan’s military rulers have not been able to discard elections, parliaments, and the Rule of Law.

Read More: Dynamics of the Multifaceted Pakistan-China Relationship

Mao discarded the western election system, separation of powers, and the rule of law, replacing it with the rule of the Communist Party, which had earned its legitimacy through the Long March and maintained it by its economic performance and delivery. Even today, it is the Communist Party that rules China.

Lee Kwan Yew, the founder of Singapore, a very capitalist country, had equal disdain for democracy and said, ‘With few exceptions, democracy has not bought good governance to new developing countries.’ Lee trusted experts; he did not trust public opinion.

The Communist Party, which has given China stability and growth, is based on four pillars – The Organization Department, the Discipline Inspection Commission, the Central Party School, and the Propaganda/Publicity Department. The Party is supreme, above the law, monopolizes power, and follows an internal selection process based on merit rather than popularity.

China’s economy under Mao first followed Russian policies, heavy industry, savings, and StateOwned Enterprises. People were motivated by ideals and passion rather than by material incentives. Growth was satisfactory, but Mao’s mistakes in the Great Leap Forward and the Cultural Revolution carried a high cost.

But, is it fair to call these Mao’s mistakes? Deng later commented, ‘Comrade Mao was overly optimistic at the time of the Great Leap Forward, but the rest of us were overly enthusiastic as well. Comrades Liu, Zhou, and I did not object to it, and Comrade Chen Yun kept silent on the matter.

We must be fair and not give the impression that only one person made mistakes while everyone else was correct.’ Deng turned around the economy with his Socialism with Chinese Characteristics in which it doesn’t matter if it’s a white cat or a black cat. It’s a good cat if it catches the mice.

Deng was practical, open-minded, and believed in experimenting, in crossing the river by feeling the stones. There were setbacks as corruption, crime, and inflation created an outcry that ended in Tiananmen Square, but Deng explained when you open the door, flies will get in.

Read More: Evolving China-Pakistan Relations

Deng’s most important economic reforms were the Household Responsibility System (HRS) that revitalized agriculture, the Town and Village Enterprises (TVE) that created 100 million jobs over 20 years, the Special Economic Zones (SEZ), which took foreign direct investment (FDI) from $2 billion in 1991 to $196 billion in 2016.

In addition, his economic guru Zhu Rongji reformed the SOEs keeping the big, letting go of the small. The Household Responsibility System was a revolutionary policy that privatized agriculture. In Anhui and Sichuan, the two party-chiefs, Wan Li and Zhao Ziyang,
watched peasants farm their small plots without reacting even though this was against the law.

The results spoke loud and clear; private farms were much more productive than collective farms. They informed the Politburo of the results, and within two years, private farms had swept over China.

Two other bold revolutionary policies were the decision to allow internal immigration as 270 million peasants moved to work in the prosperous east coast, the largest human migration in history, and the amazing One Child Policy to tackle population growth. China’s leaders recognized the importance of education, and today China has the highest number of STEM graduates (science, technology, engineering, and mathematics) in the world.

They have always been ready to learn from the experiences of their neighbors. They understood the importance of big business; where Japan had the Keiretsu, Korea had the Chaebols, Singapore its multinationals, China had both the SOEs and the home-grown mega-corporations in the private sector. They were always flexible and never rigid in their policies.

read more: China’s Poverty Alleviation Model: A Miracle to Explore

A time for Pakistan to step-up

Will Pakistan learn from China? Will savings grow from 10 percent up to China’s 45 percent? Will population growth be controlled? Will the private sector be encouraged again after Bhutto’s destruction of the 22 families? Today, Pakistan’s richest people are either the land mafias or partners in government contracts.

Will a formula for good governance be recreated? Will exports grow? Will political stability prevail? For decades, Pakistan has enjoyed the fruits of friendship with both the US and China.

Now that the US has gone to war with China – not a twentieth-century war with bullets and bombs, but a 21st-century war, a trade war, a cyber-war subversion in Xinjiang and Hong Kong, a battle for hegemony – Pakistan will have to take sides. Already the Pak-Iran relationship has started to thaw as America’s influence wanes and China’s bonds with Iran grow.

Changes have taken place in Kashmir, with India removing the special status of Jammu and Kashmir and Pakistan expected to declare Gilgit Baltistan a province. The China-Pakistan relationship creates excellent opportunity, but care must be taken to avoid losing it. The coming years will be a time of change.

Religion plays little part in Chinese politics but a significant role in Pakistani politics. This complicates things, especially since the Prophet created a progressive Islam that took the Muslims to 1000 years of being a world empire, whereas in Pakistan today, religion has been used to create the street power of the illiterate to hold the government to ransom.

In America’s contest with China, will they provoke conflict and incite fundamentalist and sectarian groups to destabilize the state? We must struggle not against each other but against the mistakes that can cost us our future.

Ali Mahmood is an author and businessman. His latest book is Enter the Dragon: The Story of the China Miracle, others include Saints and Sinners: Why Some Countries Grow Rich & Others Do not. Ali Mahmood was educated in the UK and Pakistan with degrees in Politics, Economics, and Law.

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