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Lessons from China for Africa

ADULT POPULATION AGRICULTURAL DEVELOPMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AIR AIR POLLUTION AIR QUALITY AUTO INDUSTRY BASIC NEEDS BUS CAPACITY BUILDING CAPITAL GRANTS CAR CAR USE CARS CASH CROPS CENTRAL GOVERNMENTS CITIZENS CLOSED ECONOMIES COAL COMMODITIES COMPARATIVE ADVANTAGE CULTURAL CHANGE DEBT DEBTS DECISION MAKING DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT STRATEGIES DIESEL DIRECT FOREIGN INVESTMENT DIRECT INVESTMENT DOLLAR PRICE DOMESTIC INVESTORS DRIVING ECONOMIC DEVELOPMENT ECONOMIC PERFORMANCE ECONOMIC REFORM ENERGY EFFICIENCY ENVIRONMENTAL ENVIRONMENTAL DAMAGE ENVIRONMENTAL ISSUES ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ENVIRONMENTAL REGULATIONS EQUITY INVESTMENT EXCESS MORTALITY EXPRESSWAYS EXTERNALITIES FAMILY MEMBERS FARMS FLEETS FOREIGN INVESTMENT FOREIGN INVESTORS FOREIGN TRADE FOREST COVER FUEL GASOLINE GASOLINE PRICES GLOBAL ECONOMY GLOBAL MARKET GLOBALIZATION GOOD TRANSPORT GRAIN PRODUCTION GROWTH RATE GROWTH RATES HIGHWAY HIGHWAY TOLLS HOUSEHOLD WORK HUMAN CAPITAL IMPORTS INCOME INCOMES INDUSTRIAL PRODUCTION INFRASTRUCTURE FINANCE INFRASTRUCTURE INVESTMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL MARKET INTERNATIONAL TRADE INVESTMENT CLIMATE JOINT VENTURES JURISDICTION LABOR COSTS LABOR FORCE LABOR PRODUCTIVITY LABOR SUPPLY LAND TENURE LEGAL MIGRANTS LIFE EXPECTANCY LIVING STANDARDS LOCAL AUTHORITIES LOCAL ECONOMY LOCAL GOVERNMENT LOCAL GOVERNMENTS MARKET PRICE MARKET PRICES MEAT MIDDLE-INCOME COUNTRIES MIGRANT MIGRANTS MOBILITY MORTGAGE MOTOR VEHICLE MOTOR VEHICLE USE NATIONAL POLICIES NATURAL ENVIRONMENT NATURAL GAS NATURAL RESOURCE NATURAL RESOURCES NEGATIVE EXTERNALITIES NUMBER OF MIGRANTS NUMBER OF WORKERS OPEN DOOR OPEN DOOR POLICY OPEN MARKETS PACIFIC REGION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLLUTION POLLUTION LEVELS POPULATION DECLINE POPULATION GROWTH POPULATION GROWTH RATE POPULATION GROWTH RATES POPULATION PRESSURE PORTFOLIO PORTFOLIO FLOWS PORTFOLIO INVESTMENT POVERTY LINE POVERTY REDUCTION POWER OUTAGES POWER PLANTS PRICE OF GASOLINE PRIVATE INVESTMENT PRIVATIZATION PRODUCERS PRODUCTIVITY PROGRESS PROPERTY RIGHTS PUBLIC SERVICES PUBLIC TRANSPORT RAIL RAIL NETWORK RAILROADS RAILWAY RAILWAYS RAPID DEVELOPMENT RAPID EXPANSION RAPID GROWTH RATE OF GROWTH RATE OF RETURN RATE OF RETURN ON CAPITAL REFORM PROGRAM REGISTRATION SYSTEM REGULATORY FRAMEWORKS REMITTANCES RENEWABLE ENERGY REPAYMENT RESOURCE USE ROADS RURAL DEVELOPMENT RURAL POPULATION SAVINGS SAVINGS RATES SOCIAL ISSUES SPILLOVER STATE ENTERPRISE STATE ENTERPRISES STOCK MARKET SUB-SAHARAN AFRICA TAX TAX RATE TELEPHONE LINE TOLL TOLL ROAD TOLL ROADS TOLLS TRADE REGIME TRADING TRANSPORT INFRASTRUCTURE TRANSPORT MANAGEMENT TRIP TRUE URBAN MIGRATION URBAN TRANSPORT URBANIZATION VEHICLES WATER POLLUTION WILLINGNESS TO PAY WORLD ECONOMY
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World Bank, Washington, DC
Africa | East Asia and Pacific
2012-05-29T18:31:04Z | 2012-05-29T18:31:04Z | 2008-02

China has been the most successful developing country in this modern era of globalization. Since initiating economic reform after 1978, its economy has expanded at a steady rate over 8 percent per capita, fueling historically unprecedented poverty reduction (the poverty rate declined from over 60 percent to 7 percent in 2007). Other developing countries struggling to grow and reduce poverty are naturally interested in what has been the source of this impressive growth and what, if any, lessons they can take from China. This paper focuses on four features of modern China that have changed significantly between the pre-reform period and today. The Chinese themselves call their reform program Gai Ge Kai Feng, "change the system, open the door." "Change the system" means altering incentives and ownership, that is, shifting the economy from near total state ownership to one in which private enterprise is dominant. "Open the door" means exactly what it says, liberalizing trade and direct investment. A third lesson is the development of high-quality infrastructure: China's good roads, reliable power, world-class ports, and excellent cell phone coverage throughout the country are apparent to any visitor. What is less well known is that most of this infrastructure has been developed through a policy of "cost recovery" that prices infrastructure services at levels sufficient to finance the capital cost as well as operations and maintenance. A fourth important lesson is China's careful attention to agriculture and rural development, complemented by rural-urban migration.

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