China’s Reform and Opening up

Zhang Ming

Chinese Ambassador to Kenya

Dear Prof. Mugenda, Vice Chancellor of Kenyatta University

Lecturers and students

Ladies and Gentlemen:

I enjoy coming to your university and giving public lectures, because your belief of “ELIMU NI UNGUWU” make me believe that the more I join your “ELIMU” endeavor, the more “UNGUWU” I get from you.

I was born in Henan province of central China in 1957. 2 months after birth, unfortunately, I caught TB, but fortunately, I survived to address you today. My son is 21 years old. When I mentioned TB, he even asked me what TB is. I was shocked at first, but later realized that he and his generation lived in times of few TB cases in China.

When I was 3 or 4 years old, about half of Chinese people were facing severe famine. I, just like my fellow countrymen, suffered from the bitterness of hunger and malnutrition. I tried to tell my son, when he was 6 years old, that I had no meat, no fruits, no vegetables and little maize to eat at his age. He looked at me and raised a question, which made me crazy: well, you could have eaten chocolate!

At the age of 7, I went to school. My classroom was, in fact, a hut of wood and iron sheet. It was too hot in the summer and chilly in the winter. When I came to Kenya two and half years before, I found girls and boys in Mecedo School in Mathera community were still in the same class-hut. So I tried to help them build a new school building. But my son could not imagine this and usually came back and complained to me that the internet connection in his dormitory was not fast enough.

When I was 9 yrs old in 1966, started the disastrous “Cultural Revolution”, the whole society went out of order. In 1975, I graduated from high school, instead of continuing my education in higher education, I was sent to a village to work in the fields together with local peasants for almost 3 years. During the period, the life was difficult, the work was very hard, but I learnt a lot about the essences of my beloved country and resilient people.

In 1978, at the end of the “Cultural Revolution” and the start of the reform and opening up policy, China restored the university entrance examination system which was suspended for 10 years. Passing the examination I was lucky enough to be enrolled in Beijing Foreign Studies University, and then joined the diplomatic services.

Ladies and Gentlemen:

You may think that this Chinese version of “Father and Son” is only something like “the fairy tale of Cinderella” that belongs exclusively to the literature, or lucky ones, however, the fact is that this is a typical Chinese story experienced by every ordinary Chinese family.

These changes are brought by a policy called “Reform and Opening Up” adopted 30 years ago. 30 years ago, China made two important decisions: First, we decided to reform our planned economy and transform it into a market economy. Second, we decided to open up our country to the rest of the world.

China’s reform began in the rural areas. It, then, spread from the countryside to cities and from the economic sector to the political, cultural, social and all other fields. What started as a small stream grew into an unstoppable mighty current. The opening-up endeavor started with the establishment of Shenzhen and three other Special Economic Zones and expanded to cities along the coast, rivers and border areas and eventually became an all-directional and multi-tiered opening-up.

After 30 years of expedition, this policy is paid off: China’s economy has developed from the verge of collapse to becoming the world’s third largest in 2008. Per capital GDP has grown from only 149 USD in 1978 to 3266 USD in 2008. The international trade volume has risen from 20.6 billion USD to 2.56 trillion USD in 2008 and ranks the third in the world. The number of people living in absolute poverty has been brought down from 250 million out of 1 Billion to 15 million out of 1.32 Billion. The average life-expectancy of Chinese population of 1.3 Billion has increased from 35 in 1949 when the PR China was established to 71 for male and 74 for female today. Every child in China enjoys the free nine-year compulsory education. Every Chinese patient, in the rural areas or urban areas, is covered by the cooperative medical care system mainly financed by the government. Most villages, even in the remote and mountainous areas, are linked to the rest of the country with tarmac roads, telephone and electronic cables. 95% goods in the markets are priced freely according to the demand and supply. The private economy contributes 60％in the GDP growth.

Of particular notes is the unprecedented expansion of people’s freedom- freedom of thought, freedom of expression, freedom of movement, and freedom to pursue a brighter future. The government’s work is being made more transparent and accountable, with greater checks and balances.

The Chinese leadership has also been proven more caring, more reliable, and more efficient. With this leadership, we could not prevent a devastating earthquake such as the one occurred in May last year from taking place, but we could carry out an efficient rescue, overcome the huge difficulties and achieve the resettlement of millions of people into new temporary shelters within 2-3 months and into their new houses with 3 years. With this leadership, we might not be able to prevent our agriculture from being affected by the natural disasters, but we are able to let no single citizen to suffer from famine. With this leadership, we’ve not yet got rid of poverty in China, but we’ve reduced the people who live under the line of poverty from 25% of the total population to 1.3%. With this leadership, we may not be able to clear up corruption, but we’ve been fighting against it firmly, efficiently and unremittingly. I want to share with you a secret that, even with this leadership, we failed to match up to Kenyan athletes’ excellent performance in Beijing Olympic Games, but we successfully provided such a splendid Olympic Games so that the world witnessed the Kenyan Glory in Beijing.

In all, we have found a new development mode: We put economic development at the center of our policies while carry out political system reform properly and gradually. We let the market to play the fundamental role of resources allocation while attach equal importance to national regulation and adjustment on the macro-economy. We will stick to the basic system that strategic industries are own by the state while encourage economies of different ownership to thrive together.

Lessons and experiences we gain from this journey are that there is no quick fix, such as “Shock Therapy”, for challenges. What can lead us to real fix is a stable, gradual and responsible approach. There is no authoritative text book for real change. What can lead us to real change is a path suitable to our own historical background, cultural tradition, social and economic condition. There is no the best mode of development for human being to achieve. What we can find is the most suitable one. There is no road that can please the whole world. What matters most is whether it is working and supported by the people.

According to a survey publicized by the Pew Research Center in US on July 22nd, 2008, 86% of the Chinese people are satisfied with the direction of their country, ranking 1st among the 24 countries in which the Center conducted the same survey.

Ladies and Gentlemen:

Indeed, much has been achieved in the past 30 years. However, China is still a developing country. A great deal still needs to be done. The enormous changes of the past 30 years have also brought with it a whole new set of challenges. There is a 15 million newly-born population every year, requiring food, clothing, housing facilities, education, medical services and so on. There are 15 million newcomers to the labor market every year requiring decent jobs. There are still 15 million of our fathers, mothers, brothers and sisters living in absolute poverty, who we can not leave behind. We also need to address the problem of imbalances, protect our environment, use our energy more efficiently, and rebuild our social values, and so on.

In addition to these, we are now also facing the current financial crisis. It brought severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and greater downward pressure on economic growth.

Is China prepared for this unprecedented crisis? On January 19^th this year, there was an article in the Newsweek titled Why China Works which pointed out that China was prepared for it and would be the only major economy that was likely to show significant growth in the following years.

Reform and opening up policy we have been carrying on for many years laid a good material, technological and institutional foundation: China's economy is in good shape on the whole. We managed to maintain steady and relatively fast economic growth in 2008 despite two unexpected massive natural disasters. Our GDP grew by 9 percent. The Consumer Price Index was basically stable. We had a good grain harvest for the fifth consecutive year, with a total output of 528.5 million tons. Eleven million and one hundred and thirty thousand new jobs were created in cities and towns last year. Household income in both urban and rural areas continued to rise. And thanks to the reform and opening up of banking sector in the previous years, our financial system functioned well and the banking system kept its liquidity and credit asset quality at a healthy level. It is also believed that China’s equal emphasis on an efficient market and a responsible government regulation has help to shield it partly from the crisis.

In addition, we have also taken a package of upgraded version of reform and opening up policies to fight the ongoing crisis. We have acted decisively with a systematic and comprehensive package aimed at promoting steady and relatively fast economic growth.

First, we substantially increase government spending to boost domestic demand. The Chinese Government has announced a two-year investment program that will generate, through fiscal spending, a total investment of RMB 4 trillion nationwide, equivalent to about 600 billion USD.

Second, implement a large-scale industrial restructuring and rejuvenation program. We are pushing forward industrial restructuring and upgrading across the board and formulating plans for the restructuring and revitalization of ten key industries.

Third, make energetic efforts for progress and innovation in science and technology. We noticed that a major crisis is usually followed by a revolution in science and technology, and no economic recovery is possible without technological innovation. We are stepping up the implementation of the National Program for Medium- and Long-Term Scientific and Technological Development to foster new social demand and bring about a new round of economic boom.

Fourth, significantly raise the level of social security. We will continue to increase basic pension for the retirees, upgrade the unemployment insurance, reform the health and education system, create more jobs and lessen the impact of the financial crisis on employment.

Fifth, heavily invest in environment protection and sustainable development. We will change the main driving forces of our growth as the world’s factory from higher consumption of material resources to scientific and technological progress, improvement of workforce quality and innovation of management. We will encourage "green" production and way of living, increase resource efficiency, control the total discharge of pollutants and ensure that the natural eco-system and the social and economic system are mutually reinforcing.

Sixth, we tide together with friends over this crisis. We help to deepen international economic cooperation and promote a sound multilateral trading regime. We push for the reform of the international financial system and the establishment of a new international financial order.

We also effectively advocate for the interests of developing countries, Africa in particular. China supports Africa’s desire to increase its representation and say in reforming the international financial system. China supports AU’s participation in the G20 financial summit. We will earnestly follow through on the various measures announced at the Beijing Summit. We will continue to increase assistance to Africa and cut debts owed by African countries as our ability permits. We will expand trade and investment and strengthen practical cooperation with Africa. We are also willing to increase exchanges and cooperation with African countries to jointly fend off financial risks.

Ladies and Gentlemen:

China has traveled a long distance after the adoption the reform and opening up policy. We are ready to carry on this policy and work together with the international community to tide over this crisis and usher in a new chapter of global development and growth. Thank You!