Economics professor at Xiamen University in China Yan Chen says poorly performing economies should not overtax their citizens in the name of collecting money to fund government budgets, saying this leads to further weakening of the economy.
He said this in a lecture to 10 Africans from Malawi, Tanzania, Ghana and Nigeria currently attending a three-week seminar on economic development and planning analysis of cities and towns for African countries.
Said Yan: “Big governments require large sums of money to run. The solution is to reduce the size of governments to also lessen taxes on the already poor people. Such large taxations are not good for business and are painful to ordinary citizens.
“Big governments become an excuse to heavily tax citizens and most of the collections are not even directed at their purported use. Many times, these funds are embezzled through corruption.”
He said some of the reasons countries fail to sustain themselves include the lack of enough savings, poor exporting culture, inability to import because of foreign currency shortages and failure to collect enough taxes due to poor economy.
Yan advised Africa and other developing countries to strive to development through investment in infrastructure, such as roads because foreign aid was not sustainable.
“Roads are ideal for economic prosperity for the convenience of people and goods movement. While it makes sense for rich countries to help the less privileged, training on how to attain wealth is another form of aid which China strongly believes in-to teach how to fish rather than providing the fish,” he said.
Yan observed that China has embraced the contempt of foreign direct investment (FDI) with many foreign investors attracted to the Asian nation because of its peace and security.
He noted that while China needed to reform further by fully moving from a government controlled economy to a market economy, the country has political stability that goes beyond just being a democratic State.
“China has its own definition of democracy and indeed while democracy is good, the process neither happens overnight nor guarantees economic growth,” said Yan.
Commenting on the calibre of some investors and foreign products, deputy director of foreign affairs in the office of Fujian Provincial People’s Government, Li Hong admitted that most of China’s products are sub-standard.
“We want to improve the quality of our products because they are not good enough. Even some Chinese opt for Japanese or Korean products because our own are also expensive and highly taxed. Our leaders are ashamed of this development and want to change,” he said.