Chinese investment is boosting SA economy
Newcastle has become the heart of the local textile industry
MY CAREER as a diplomatic correspondent began 10 years ago, at the time when the world witnessed a change in the worldwide financial situation, and international financial reform.
I have been flying back and forth between China and South Africa frequently since 2011, observing how these two emerging economies work in a joint effort to improve people’s livelihoods and build a bright future since the latter formally joined BRICS in 2010.
When I first became one of the members of the Africa-China reporting programme at the University of the Witwatersrand, a scholar from South Africa told me that South Africa’s greatest benefit from joining BRICS was enabling the country to be placed at the centre of the world, and become the spokesperson for emergent economies and developing countries.
But I can only agree with this in part. The leaders of the BRICS countries co-ordinate within the co-operative mechanism with great political aspirations and faith. It is a perfect practice of multilateralism in terms of politics and international relations, and it is also a way to maintain the current world economic and trade order, to safeguard free trade against the capricious policy of the US in terms of economics.
I would like to use three stories to illustrate what South Africa has gained from BRICS. The first story comes from Newcastle in KwaZuluNatal. There are some courageous Chinese businessmen who changed this town, which emerged out of the iron industry and became a famous “Clothing City” in southern Africa over the last 20 years. I went into their life and work, noting the details of exploiting the market in countries involved in the “Belt and Road” initiative, with the use of new technologies, management and marketing methods.
China encourages companies to go abroad, especially those that wish to start businesses in emerging-market economies. Newcastle, which was centred on the heavy industry of iron, benefited from this change, and became the heart of the textile industry. Chinese businessmen invested in over 100 clothing factories in Newcastle, providing job opportunities for one third of the 400 000 people of the town.
More importantly, some of these businessmen in Newcastle and Durban are now aiming at investing in an industrial park so as to attract more manufacturing industries. It is obvious that this is going to expand the industrial sector in South Africa and boost the economy.
The second story comes from Port Elizabeth. The construction of the production lines of Beijing Auto was initially started at Coega industrial zone when I went there last summer. Within one year the company finished the construction of production lines and produced the first car branded “Beijing”. Zhang Liang, a senior counsellor from BAIC (Chinese state-owned enterprise and holding company of several automobile plants located in Beijing), also joined the construction of Beijing Auto in South Africa. He told me that he wished that Beijing vehicles produced in South Africa would be sold across Africa.
In 2016, Beijing Auto and the South African Industrial Development Corporation co-invested in BAIC (South Africa). Xu Heyi, president of BAIC, said that when construction was completed, the factory in South Africa would represent a step towards international production.
Although the international production and trade of automobiles is under the threat of trade barriers, China is still investing in auto factories in South Africa. This not only shows the confidence and internationalisation of Chinese goods on the one hand, but also reveals the unlimited potential of South Africa’s market. Besides Beijing Auto in Port Elizabeth, Hisense in Cape Town and ZPMC in Durban both provide the most economical choices for consumers and businesses in South Africa. This is the real benefit of facilitating free trade and investment.
The third story is about entrepreneurs and company leaders I have met and communicated with in Beijing over the past few years. They said they felt inferior and were limited by many old rules, or traditional Western interventionism, when entering the traditional developed countries – while the BRICS nations speak highly of co-operation, have a long-term vision, respect each other and champion common negotiation and sharing. More and more young Chinese people are breaking the barriers of conventional thinking and are investing in, or starting businesses in, South Africa.
South Africa isn’t the only country that benefits from the BRICS mechanism; China has gained a lot from it as well. South Africa has a worldfamous banking management system and experience in the fields of ecological protection and inclusive growth, which China can learn from.
Since the 2017 BRICS Summit in Xiamen, China, governance of China by President Xi Jinping has become a topic for mutual learning and exchanges among BRICS nations. Each time I see the passengers during flights from Beijing or Hong Kong to Johannesburg, I think that all these passengers live in the new era under the leadership of President Xi, and act as the best ambassadors in the fields of climate change, trade, conventional and unconventional security affairs, cultural exchanges and so on.
One of the plainest truths is that South Africa is a large, rising market.
What is my opinion on the Johannesburg BRICS Summit? The answer is: please look at those diplomats and involved stakeholders from both countries; they are so hard-working. If China and South Africa co-operate with each other, the world will definitely become more beautiful.