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China doesn't pit the government against the private sector
John Gong
VCG

VCG

Editor's note: Dr. John Gong is a professor at the University of International Business and Economics and a research fellow at the Academy of China Open Economy Studies at the University of International Business and Economics (UIBE). The article reflects the author's views, and not necessarily those of CGTN.

Chinese President Xi Jinping has been busy visiting places in Guangxi Zhuang Autonomous Region for the last two days in his scheduled tour of southern China. The places he visited include but are not limited to a rural village, a local university, a large state-owned enterprise, two municipal governments and a memorial museum for the Red Army of the 1930s. 

As expected, he has made some important remarks and speeches along the way. But one of the things he said that is really worth highlighting, in my view, is about the development of private enterprises in China. 

On April 26, President Xi visited an industrial park in the city of Liuzhou that is exclusively dedicated to the production of a food product called river snail rice noodle, which is one delicacy that Liuzhou is really famous for. The industrial park consists of some 30 companies involved in various stages of the value chain for manufacturing packaged river snail rice noodles. 

This product contains quite a few agricultural ingredients, and all of them are produced in the industrial park or in the surrounding villages. The local government has done an excellent leadership job of organizing various aspects of the noodle-making process, and turned it into an industrial production process.

Xi Jinping, general secretary of the Communist Party of China Central Committee, visits south China's Guangxi Zhuang Autonomous Region, April 25, 2021. /Xinhua

Xi Jinping, general secretary of the Communist Party of China Central Committee, visits south China's Guangxi Zhuang Autonomous Region, April 25, 2021. /Xinhua

Along the way, all the health, hygiene and food safety issues have been addressed in an orderly manner. Basically, this is a great success story of a private-public partnership to turn a homemade dish into an industrial packaged product industry that generated 11 billion yuan in revenue and 300,000 jobs in Liu Zhou in 2020.  

While touring this industrial park, President Xi expressed his hope that private enterprises can develop boldly with confidence. This is a resounding slap on the face on those who prophesize the demise of the private sector under the leadership of President Xi. He basically said that private companies are very welcome in China, and they would grow fast as they should. 

More importantly, the noodles story in Liu Zhou also resonates with what President Xi said about the government's leadership role in the development of the private sector on some occasions. Unabashedly, we reject Ronald Reagan's famous statement, "Government is not the solution to our problem; government is the problem." In this case, in China, the government is the solution. 

I am pretty sure that the local government officials must have gone out of their way in the past to mobilize and organize local resources to make this industry happen, in terms of, quite imaginably, attracting local or outside investments, providing infrastructures on preferential terms, facilitating loan accesses, enabling rightful food safety regulations, and all of those what are accused of as "state aid" policies by the West. 

The Liuzhou river snail rice noodle story is everything what the "free-market fundamentalists" say no to, but it is manifesting as the epitome of the successful China development model. 

China's development model doesn't pit the government against the private sector. The China development model accommodates, encourages and helps the development of the private sector. Some Western politicians proclaim this unique model, a model they labeled as the state-steered capitalism, is a threat to the liberal global trade order and needs to be resisted and pushed back. 

But apparently, the 300,000 people employed in this industry in Liuzhou would categorically say no to that notion. Without the leadership of the local government, there would be no jobs and a better life for them. As for me, there would be no tastier, healthier and safer noodles with river snail flavor. 

This stuff hasn't been exported a lot, and my prediction is that it will sell like hotcakes once marketed internationally. I would strongly suggest to those opposed to the China development model to try this noodle first before venting their criticism. 

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)

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