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China Plans Economic Reforms as its Economy Slows


A truck transporting a container leaves the port of Qingdao, in northeast China's Liaoning province, Jan. 20, 2014.

A truck transporting a container leaves the port of Qingdao, in northeast China's Liaoning province, Jan. 20, 2014.


Hello there! Welcome to As It Is. I’m Steve Ember in Washington.

Twenty years have passed since South Africa ended its system of racial separation, known as apartheid. Under apartheid, a white minority ruled the country, while the rights of non-whites were limited. Many people wondered what would happen to the South African economy after the minority government left office. Today we look at how the economy is doing now.

But first, we turn to economic conditions in China. Mario Ritter tells us how China’s economic growth is slowing.

China Plans Economic Reforms as its Economy Slows

For the past 30 years, economic growth in China has lifted millions of people out of poverty. The country is now a world power, second only to the United States. But its growth has slowed, and social problems are increasing. Many people now agree that China must change the economic model it has used since the 1980s.

Experts say China has been too dependent on cheap or low-cost labor, cheap exports and cheap resources like coal to fuel its economic growth. Now, as wages rise, the world economy continues to struggle, and Chinese citizens are increasingly worried about the environment and pollution.

Yang Jisheng is a Chinese journalist.

He says the country cannot continue to operate as it has. A new model is needed, he says. He adds there has been talk of a new model for more than 10 years but change has not been possible under the current system. So what China needs now, he says, is even more reform.

Chinese President Xi Jinping and other top officials met recently to discuss plans for dealing with the country’s problems over the next five to 10 years. The official Xinhua news agency reported on the four-day-long-meeting. It said the Communist Party suggested a greater role for the free market in China’s state-controlled economy.

David Kelly works in Beijing for the group China Policy. He says one problem facing China is its state-owned businesses. They are politically powerful and have controlled large parts of the country’s economy for many years. Experts say these companies have demonstrated more power than some government ministries. They are also a source of corruption, a problem the new leadership has promised to deal with. China’s leadership has called its campaign against corruption, a life or death struggle for the Communist Party.

“The other thing is the world financial crisis, which leaves China with a slowing growth rate, which it has to now really believe, even though it has mouthed this before, that it is real. So, these things mean that, I would say that you cannot use the textbook, for what we know about the function of the third plenum, it is likely to have some extraordinary items.”

Chinese economist Mao Yushi agrees that political reforms are needed, but he is not sure they will be carried out. Mao Yushi says the new leadership’s efforts against corruption are welcome. But he says the campaign has yet to gain strength.

In his words, “The real root of this problem is the public’s ability to exercise oversight of the Communist Party. And recently the government has been tightening its controls of speech and oversight.”

I’m Mario Ritter.

And I’m Steve Ember. You are listening to As It Is from VOA Learning English.

Report Praises South Africa’s Economic Progress

FILE - South African Finance Minister Pravin Gordhan delivers his 2013 Budget speech at Parliament in Cape Town, Feb. 27, 2013.

FILE - South African Finance Minister Pravin Gordhan delivers his 2013 Budget speech at Parliament in Cape Town, Feb. 27, 2013.

​The banking company Goldman Sachs recently praised South Africa for its growing economy over the past 20 years. We have more on the story from our economics reporter, Mario Ritter

Colin Coleman works for the company.

“South Africa in the last year has tended to have a motional, somewhat negative reaction both domestically and internationally. And my view is that we needed to kind of get some perspective on the past 20 years as to what’s been achieved in order to get a better balance in the debate.”

The report notes changes to the South African economy over the past 20 years. For example, the value of all goods and services produced in the country jumped from $136 billion to $400 billion. And, the percentage of homes with electricity increased from 60 to 85.

“When you look back at what Nelson Mandela inherited in May when he became president, it was (a) really bitter pill. Because you had an indebted nation that had no money, there was growing below population growth with huge unemployment, huge racial disparities, a very volatile political social environment. Effectively that gave way to a golden period of growth, low inflation, bringing the debt down and an extraordinary performance until the global financial crisis.”

The report says the amount of money collected in taxes increased from $114 billion in 1994 to $814 billion. And the total value of companies traded on the Johannesburg stock market rose from $3 billion to $50 billion.

South Africans are not always happy about the direction of the economy. But business leaders and economists were pleased to see a long-term look at some of the improvements.

Joanne Yawitch heads the National Business Initiative. The organization works on efforts to help strengthen the economy.

“There’s often a lot of doom and gloom talk about South Africa, but what the report did point out is some fairly significant achievements over the last 20 years. In particular, there has been an increase in productivity, an increase in employment, there has been a huge increase in the number of people in the middle class -- quite a substantial improvement in the quality of life of a great number of people, as well as some significant problems.”

But the country still has problems. The report notes South Africa’s education system continues to struggle, and the unemployment rate remains at about 24 percent. It says 70 percent of those jobless are under age 34. There are also great racial inequalities, especially in terms of earnings. The report says 85 percent of blacks are poor, while 87 percent of whites are middle to upper class.

There have been criticisms of the report. Some people say it depends heavily on general information, not cultural evidence.

Tracy Ledger is a research fellow with the Public Affairs Research Institute at Wits University in Johannesburg.

“I don’t think that there is an adequate enough analysis or understanding of the real drivers of poverty in South Africa.”

She notes that rising wages are a result of the high cost of living.

Joanne Yawitch agrees with some of the criticisms. But she says the report shows the country has come a long way.

“I think the reality certainly for me -- I mean I grew up under apartheid and have spent 20 years in this democracy -- is that life in South Africa is a lot better for most people than it ever was. But there are very, very big things that still have to happen. And I think that’s what the report draws our attention to, is that it’s a long journey and that we’ve made progress and must carry on.”

And that’s As It Is for today. VOA world news is coming up at the top of the hour, Universal time.

I’m Steve Ember. Thanks for joining us and we’ll see you next week.

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