Since Deng Xiaoping’s administration launched its Reform and Opening Up policies in the late 1970s, China has integrated hundreds of millions of its citizens into the global economy, resulting in poverty alleviation on an unprecedented scale. This is in no small part due to sustained investment in both physical and social infrastructure. By focusing on upgrading its water, energy, transport and telecommunications systems, China has shown an intrinsic understanding of an indispensable developmental building block.
Expanding on its domestic successes, China has since been replicating this approach in the developing world, filling a public good vacuum that global development institutions, namely the International Monetary Fund (IMF) and the World Bank, have not tackled with the necessary intensity. In the process, China has been underwriting global poverty reduction in steel and cement; gaining not only access to the developing world’s resources and markets, but also stronger partnerships on many levels. Two regions – Central Asia and especially Sub-Saharan Africa (SSA) – stand out for the breadth and depth of Chinese involvement. Is China helping to pave their path to modernity?
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China’s modern leaders took note of the role that large infrastructure projects played in the development of the world’s two largest economic hubs, the United States and Europe. Investing as much as 9 percent of GDP in infrastructure in the 1990s and 2000s, China laid the foundations for its current success. At its peak, in the years between 2001 and 2006, more was spent on roads, tracks, airports and other fixed assets than had been spent in the previous fifty years put together. Nearly every corner of the country is being linked, regardless of soil, latitude or climate conditions; high-speed train lines already connect most of the major urban hubs and highways will connect more than 90 percent of cities with a population of more than 200,000 by the end of 2015. In that same year, China’s total highway length is expected to surpass that of the U.S. As of this year, China’s mobile phone users reached a staggering 1.11 billion; and it has achieved an Internet penetration rate of 42.1%, giving it the world’s largest online population. Allocation of public resources to infrastructure has allowed China to maximize and exploit its competitive advantages and has made it a magnet for foreign enterprises and investors. Infrastructure both embodies and catalyzes development.
China’s social infrastructure, its hospitals and schools, are not too far behind. Although significant deficiencies persist, both the health and education systems have made great strides despite the challenges of managing such a vast population. Life expectancies have risen steadily over the past thirty years, while maternal and infant mortality have plummeted. The country’s top universities are pumping out graduates with the knowledge and attitudes necessary to compete on the global stage, and are increasingly attracting top foreign talent as well. According to a McKinsey study, by 2030, China will account for 30% of the world’s new college‐educated workers. With the Chinese government spending over US$250 billion a year on education, it would not be surprising to see Tsinghua, Peking or Fudan universities begin to challenge the best of the West over the next few decades. Thanks to their lower fees as well as grants and scholarships from the Chinese government, many of these schools’ international students are from developing nations. Upon visiting six African nations on his first international trip as China’s president, Xi Jinping announced 18,000 new scholarships for African students to study in Chinese universities over the next three years. Many of the recipients will return home with honed skills and fresh ideas on how to jumpstart their countries’ economies. Increasingly, they will arrive to find their governments on honeymoon with Beijing – not Washington.