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(Column Watching and Solving) — Exclusive interview with Justin Yifu Lin: Why did the China-Africa Economic and Trade Expo choose Hunan as a long-term settlement?

Released on:2019-12-02 Views:

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Rednet.cn

Updated: June 27, 2019 23:19 Hunan Rednet News Network Communication Co., Ltd.


Editor's note

On the evening of June 26, the night sky of Changsha City was lit up by the fireworks of the Orange Isle, in which the heat of the first China-Africa Economic and Trade Expo was pushed to a climax. In the next three days, there will be more than 1,500 foreign guests, over 5,000 domestic guests, and more than 3,500 global exhibitors, buyers and professional visitors participating in the exhibition. There are 132 Chinese and foreign media and 582 journalists registered to participate in the Expo by 3 pm on June 26, 53 African countries have crossed the sea to come all the way here for the Expo in Hunan Province

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On June 27, the first China-Africa Economic and Trade Expo opened in Changsha, Hunan Province.  President Xi Jinping delivered a congratulatory letter to the Expo.

It is amazing that the Fourth Investing in Africa Forum was held in Changsha right after the closing of Beijing Summit of the Forum on China-Africa Cooperation on September 6, 2018. At the Forum, the good news that the "China-Africa Economic and Trade Expo will be settled in Hunan in a long term" has spread throughout Hunan. 

For Hunan, China-Africa Economic and Trade Expo is the first international, national, and normalized economic and trade platform undertaken.  In China, its specifications are equivalent to that of China-ASEAN Expo. Nanning, Guangxi, with its unique ASEAN bridgehead status, has become a permanent venue for China-ASEAN Expo.  Then why can Hunan stand out and grab this opportunity?

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Before the opening of the first China-Africa Economic and Trade Expo, we had the honor to visit Professor Justin Yifu Lin, the former Senior Vice President and Chief Economist of the World Bank, the Dean of the Institute of New Structural Economics and the Institute of South-South Cooperation and Development, the  Honorary Dean, National School of  Development at Peking University.  Professor Lin has put forward his own observations and thoughts on questions like the reasons and realistic logic for the China-Africa economic and trade expo to settle in Hunan, the prospects for the exchanges between African countries and Hunan and the meanings for Hunan.

The logic of choice

African people have special feelings in Hunan, for this province cultivates two renowned representatives:

Mao Zedong and Yuan Longping! These two celebrities have impressed African people more than ever.

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Mao Zedong had met with President Kaunda of the Republic of Zambia.

Not long ago, we interviewed some African ambassadors to China in Beijing. In the Zambian Embassy, we saw plenty of photos with Chairman Mao and Zambian national leaders. Zambian Ambassador to China, Winnie Chibesakunda said in an exclusive interview that she was looking forward to seeing Chairman Mao’s hometown. At the opening ceremony of the 2019 Ministerial Workshop on Food Security for Developing Countries and High-Level Forum on Food Security in Developing Countries, 38 ministerial officials from 15 African countries collectively stood up to show their respect when Academician Yuan Longping entered the stadium. 

From the perspective of history, the fact that Hunan and Africa can understand each other is a natural advantage. This is the rightful reasoning under historical logic.

However, in Lin's view, the choice of Hunan to be the holder of  China-Africa Economic and Trade Expo is based more on the realistic logic.

Hunan is a well-known agricultural province, a major grain producing area for the country, an important supply area of pork and vegetables, and also an important province of agricultural product processing.

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Yuan Longping, an academician of the Chinese Academy of Engineering, attended the press conference of the 2019 (Changsha) International Rice Development Conference and Seminar on China-Africa Rice Development and delivered a speech.

But most countries in Africa still use agriculture as the pillar industry of the national economy. Hunan's advantages in agriculture guarantee a relatively large space and possibility for cooperation between the two sides.  In addition, Hunan and Africa have carried out many fruitful cooperation in hybrid rice and agricultural foreign aid trainings in the past period of time. Therefore, a relatively good foundation has already established.

The settlement of the China-Africa Economic and Trade Expo in Hunan has profound historical factors and realistic foundations, but in the view of Professor Lin, there may be deeper reasons.

Successful demonstration

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At the site of the first China-Africa Economic and Trade Expo

In recent years, Hunan's economy has developed rapidly. With the strategic positioning of “One Belt and One Department”, the strategy of “leading by innovation, rising by opening up” and key steps like allowing western and southern Hunan to undertake industrial transfer, the total GDP in Hunan has jumped to 3.64 trillion RMB in 2018, ranking eighth in the country.  Hunan continues its expansion in the fields of biotechnology, engineering equipment manufacturing, new materials, and the Internet, which is becoming a new growth driver for Hunan's economy to achieve high-quality growth.

For a long time, the outside world still held a strong stereotype that Hunan was a major agriculture province. However, Hunan is now undergoing a splendid transformation from a major agricultural province to an innovative province that features smart manufacturing and construction machinery. It is also completing a high-quality leap in economic volume and economic quality.  At this point, Hunan, a major agricultural province, can be described as a microcosm of China, a great agricultural country. What's more, it is also a microcosm that reflects the transformation from China's manufacturing to China's intelligent manufacturing.

Africa is a continent that possesses most developing countries in the world whereas China is the biggest developing country in the world. Many countries in Africa are dominated by agriculture, while Hunan is a province that has transformed from a major agricultural province to a major innovative province. Therefore, the two sides have similarities genetically and plenty integrating points in the development path.

Professor Lin even pointed out that "our starting point is even lower than that of some African countries" and the resource endowment is even worse. But Hunan has achieved remarkable results. This proves to be the success of the "China Plans, China Roads and China Wisdom."

The fact that Hunan and some African countries have similar agricultural genes has become the rational basis for “China plans, China roads and China wisdom” to be “borrowed, reproduced and promoted” in Africa.

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The new version of currency in Madagascar is printed with Chinese hybrid rice.

Justin Yifu Lin said, "Hunan's rapid development in the 40 years of reform and opening up as a major agricultural province will provide African countries with confidence.  Africa will build more confidence for the fact that even an inland agricultural province like Hunan is able to develop so rapidly in the past 40 years."

From this perspective, Hunan is undoubtedly a realistic sample of African countries to learn China plans, to understand China roads, and to draw on China wisdom. It is an offline window for African people to understand the real China.

The greatest value

Over the years, Hunan has vigorously developed agricultural technologies in agriculture. A number of well-known agricultural experts, such as Yuan Longping and Zou Xuexiao, have emerged and gained their reputation at home and abroad.

“Agriculture is fundamental, but the development of society needs industrialization that finally leads to modernization.”

In 2018, the proportion of three industrial structures in Hunan were adjusted to 8.5:39.7:51.8. The proportion of agriculture in the social economy is decreasing. And the economic quality of Hunan is rising by leaps and bounds.

The "new structural economic theory" put forward by Professor Lin believes that in every stage of economic development, the market is the basic mechanism for achieving the effective allocation of resources. However, as a dynamic process, economic development needs to adjust economic structures. To achieve the adjustment, new mechanisms need to be introduced to some degree of intervention.

"On the one hand, it should rely on the market; on the other hand, it depends on the government. Both of the hands should be used at the same time, because economic development requires the market to provide incentives for enterprises and then to promote everyone to fight for higher value-added, higher technology levels, better industries  through competitions and continuous selections of good projects.  In this process, if there is no government to overcome some market failures, the cost of the enterprise alone will be very high which may lead to a failure." Unlike some western countries who advocate resource allocated more by the market, Professor Lin believes that “effective markets and promising governments” are both indispensable. System designs and policy formulations need to be combined with actual conditions and “current industries with comparative advantages " need to be developed. We should "pay attention to our own particularities on the basis of obeying universality" instead of copying other countries.

"I believe that China has a saying: the way of thinking determines the way out.  Maybe the development ideas of some African countries are influenced by the original colonial countries, or their desire for the developed countries. However, they have ignored the premise that they are developing countries like China. The theory and experience of developed countries may not be suitable for developing countries. To apply developing countries' pattern mechanically will drag African countries into the dilemma of "right tea in a wrong cup."

In this regard, China adheres to its own characteristics and embarks on a successful path in line with China's national conditions. This may be the most valuable point for African countries to learn.

Immediate benefits

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In terms of macro and long-term perspective, the establishment of friendship between Hunan and Africa is of great significance for sure.  But for the moment, it still has very abundant realistic benefits.

After the Second World War, African countries got rid of colonial rule.  They are also pursuing industrialization and modernization of their own countries.  But until now, Africa is still the most challenging place for development. The income level is the lowest place among the five continents. It is also a continent where poverty is the most concentrated.  After the cooperation with China, African countries will have at least three major opportunities: historical opportunities for industrial transfer; the favorable conditions provided by the Belt and Road Initiative; and the new choices of their development paths.

Professor Lin pointed out that China-Africa cooperation is a win-win cooperation and mutual benefits. The development of Africa is of great benefit to China because African economy and Chinese economy are highly complementary.   "On the one hand, they have a lot of raw materials, which is the advantage of Africa. On the other hand, Africa now has a large population and a huge demographic dividend. It can take over the transfer of some labor-intensive processing industries, and enables our industries with loss of comparative advantages to have a second development in Africa.  Besides, Africa will be a big market if it develops well. Our high-tech products with higher added value will also create greater market value for us as Africa develops. More importantly, the import of China's development philosophy, ideas, and plans not only helps Africa realize their industrialization and modernization dreams, but also enhances our road, theoretical, institutional and cultural self-confidence."

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Longping Hi-Tech company sows the seeds of hybrid rice in the vast and enthusiasm land of Africa.

Hunan has rich experience and advanced technologies in agricultural production and industrial development, which will provide considerable assistance for Africa to solve food security, improve the transformation and upgrading of African countries' agriculture and promote regional industrialization and modernization.  In addition, Hunan has a number of well-known manufacturing companies in the world, such as Sany Heavy Industry and Zoomlion. Africa need to learn a lot of experience from Hunan's transition from agriculture to manufacturing.

The fact that the China-Africa Economic and Trade Expo is long settled in Hunan will bring preferential advantage to Hunan enterprises. More African friends will come to Hunan, which will bring more communication between governments, businesses and people. It will also inevitably lead to more cooperation results.

Professor Lin pointed out, an important experience that China has gained in the past 40 years is to comprehensively develop domestic and international markets and to utilize the resources. And now Hunan has such a platform that will gain more advantages of international markets and resources.

In the past few years, Hunan's exchanges and cooperation with Africa have achieved fairly good results. However, in Lin's view, it is still just the beginning. He believes that the space for cooperation between Hunan and Africa is very wide and the prospect is huge.  "Although it has just begun, it has already begun to bear fruit. A single spark can start a prairie fire."

The China-Africa Economic and Trade Expo is not only a platform for business exchanges, and it also shoulders a higher realistic mission and paves the way for long-term development.

Therefore, Hunan, the home to the China-Africa Economic and Trade Expo, is not only a province of China, but also a partner of Africa and, what's more, is a city of the world.

Contributing writer for Rednet Moment:    The Crab Watching Tide