70th Anniversary of the People’s Republic of China – a symbiosis of two models

This year the People’s Republic of China celebrates its 70th Anniversary. For the last 70 years, China managed to transform a poor and backward state into the country with a permanently developing economics. The GDP of PRC compared with indicators of 1952 has been risen 450 times and today it amounts to 13,6 trillion US dollars. The PRC was declared as a country on the 1st of October 1949, the time of election of socialism as the underlying state system. In the course of time, China has weakened the role of the state sector in economics, opened the door to foreign investments, allocated funds in development of contemporary infrastructure. According to the Professor of the Ivane Javakhishvili Tbilisi University, Joseph Archvadze, the former leader of the PRI Dan Syaopin should be named an architect of the contemporary China. “This country preserves a communistic system and the way of harmonizing the communistic ideals with the terms of market competition is a very interesting phenomenon,” – says Archvadze. “After the collapse of the Soviet Union, many theoreticians have been writing that communism is not a capable system. China proves the opposite — mainly that it is possible to provide a rapid rise of welfare of the whole nation against the background of a leading role of the state and active social policy, as well as trying to decrease the number of vulnerable and socially unprotected people. Other countries should duly observe economic reforms of China and learn, as happened once in Russia after the October Revolution 1917. Many capitalistic countries had a fear that the working class will take power into its hands, and as a result, they held large-scaled social reforms. Workers in the countries such as Holland, France, and especially USA, became owners of definite favors. Generally, it was made to prevent spreading of revolutionary trends in these countries. The XXI century poses new requirements and challenges in the fields of production, science and technologies. China acquired and introduced licenses with leading countries on manufacturing in the fields of machinery, motor industry, engineering tools and demonstrated good results. I believe that today, we should consider these examples, use the impressive results reached by China in economics. Today the country occupies the second place in the world according to the economic development. In the long-term prospect China will become the first world economics”, — states Joseph Archvadze. Many researchers from different countries name the state, political and party official Dan Syaopin a great contributor in implementation of the so called “Chinese miracle” in the economics. He became the author of the new miracle, initiator of economic reforms in China; he developed a principle of “a socialism with the Chinese specifics” and turned the country into a part of the world market. Social-economic renovation of the country was launched in December 1978. The major motivation in conducting economic reforms was a demand in higher efficiency, higher level of lifestyle in population. A system of family contracting responsibility (privatization of farms) has been inculcated in agricultural regions. China has taken the first place in the world in agricultural production, where more than 30 mln. farmers are employed. As for the cities, special economic zones have been created, an access to the Chinese market has been opened for foreign investments, and the export-oriented economic strategy has been developed. For 40 years, more than 700 million citizens of China have got rid of poverty. The government of the country promises that in 2020 it will eradicate poverty completely. Probably, it is noteworthy that China is well-known of four great inventions – paper, gunpowder, compass and book printing. According to the official Chinese data, in 1820 China was covering 30% of the world GDP. However, after the “Opium wars” of 1839-1860, the country began to degrade gradually and was transformed into a semi-colonial and semi-feudal state. After the period of anarchy, militarization, foreign oppression, civil war and Japanese occupation, China’s share in the world production was less than 5% in 1949 and incomes of the population amounted to 27 dollars – the lowest indicator in Asia. During the celebration of the 70th Anniversary, a chairman of China Si Tszinpin cited: “There is no force which is able to weaken the foundation of this great country. No power can refrain the Chinese nation from development”. According to him, the Chinese people, throughout these 70 years, managed to reach success which has “surprised the world”. The Chairman of the PRC underlined that China will follow the peaceful way of development and proceed its policy of openness. China is committed to its own development and also creates opportunities for development of all countries of the South-Eastern Asia, Central Asia and other regions. China was the first who suggested the united project “One belt – one road”. This initiative has to do with the formation and advancing of a new model of international collaboration and development of all fields among different world civilizations. According to the official data, “One belt – one road” embraces the largest part of Europe, combining developing countries, including “new economics”, and developed countries. The territory of this megaproject is populated by approximately of 63% of the whole world population, and an estimated economic scale is 21 trillion US dollars. Currently, 136 countries and 30 international organizations signed a document of collaboration with Beijing in frames of the initiative “One belt — one road”. “One belt – one road” is the abbreviated name of two initiatives: “Economic belt of the Silk Road” (EBSR) and “Marine Silk Road of the XXI century” which were suggested by the Chairman of the PRC Si Tzinpin in September-October of 2013 during his visits in the countries of the Central and South-Eastern Asia. The key content of the initiative consists of five points: political coordination, infrastructural intercommunication, uninterrupted trade, free movement of the capital and strengthening relations between countries. The National Consultant of the Department of Economics and Social Affairs of UN in Georgia Professor Giorgi Abashishvili states: “The new initiative of the Chinese President Si Tzinpin “One belt – one road” is very important for Georgia since the strategic location of our country provides us with an opportunity to get more benefits out of this initiative, that is, cargo shipment from China to European countries via Georgia, as this route is the most competitive, safest and the shortest. For this purpose, we need more investments in the infrastructure. Georgia should be focused on trade between China and EU to receive more favor from transit of cargoes. Georgia is the only one country in this region which, on the first hand has concluded the Deep and Comprehensive Free Trade Area Agreement (DCFTA) with EU and the Agreement on Free Trade with China. We should intensify trading-economic relations with China, continue cooperation with Chinese companies to enable Georgia to attract Chinese investments to create more products in the country and sell on the European market without any tariffs or various restrictions. Experience of China is very interesting as this country managed to reach an impressive economic development. In some cases, for example when we talk about stimulation of private investors, we should share China’s experience. In China more and more companies become successful, attract a great capital from the USA, as well as EU. China creates an interesting symbiosis of two models which must be studied by economists. I work on the project which studies an impact of the initiative “One belt — one road” on the sustainable development goals of the UN. We discuss how the countries, in frames of the initiative “One belt – one road”, can create products, ensure employment, and how the implementation of this project may be reflected in development of the countries. The project is being carried out in Georgia for 9 months now, and I can say that Georgia has one of the best results. Road infrastructure, both automobile and railway, develops gradually. Year after year, Georgia may import more goods. Ultimately, we have to activate attraction of more private investments into infrastructural projects. We need investments at more rapid rate for fast development. We also need investments which are not only from the government. It is essential to strengthen not only the transit potential, but Georgia’s position as the logistical center. In this case, we will get more favor in frames of this initiative. The project will continue for one year at least. This UN project includes the following countries: Georgia, Azerbaijan, Kazakhstan, Kirgizstan, Uzbekistan, Romania, and Serbia”. It is noteworthy, that this year, we celebrate the 27th anniversary of establishment of diplomatic relations between China and Georgia. Our countries cooperate in many fields, support bilateral relations and have reached good results. In May of this year, the State Advisor and Van I, the Minister of Foreign Affairs of China carried out an official visit to Georgia. The Prime Minister and Vice-Premier of Georgia visited China and took a part in the second Chinese International Trading Forum “One belt — one road”, the first international exhibition devoted to cooperation in Shanghai. Only last year, after enacting of the Agreement on Free Trade between Tbilisi and Beijing, a volume of bilateral trade exceeded 1 billion US dollars. Today, more than 20 Chinese companies invest in Georgia, actively cooperate with the Georgian party in the field of construction, agriculture, finance, communication and economic zone and support the development of Chinese-Georgian relations. Good prospects are in the cultural collaboration as well. Thus, earlier, the Government of Georgia included teaching Chinese language into the national system of education. Lika Jorjoliani,