The price of China’s economic support
South Africa-Chinese relations have no doubt been mutually beneficial. However, certain concerns regarding Chinese influence on the local political economy remain.
theForum on China-Africa Cooperation summit, which will take place in Johannesburg next month, will once again cast a spotlight on the relations between South Africa and China. Since the establishment in 1998 of diplomatic links between the two countries, the bilateral relationship has grown rapidly to become one of the closest between an African country and the emerging global superpower.
The importance both countries attach to the burgeoning relationship is underscored by the frequency of high-level visits undertaken by political leaders in recent years. Underpinning the strong political and diplomatic ties has been growing economic cooperation.
Viewed through China’s lens, SA’s bountiful mineral wealth has elevated Pretoria-Beijing relations to strategic importance. Also, China views SA’s regional power status as justification for elevating cooperation to a strategic level. This explains why China pushed hard to extend an invitation to SA to join the Brics grouping. The creation of the Brics Development Bank represents an opportunity for SA to tap into an alternative source of finance to address the economy’s development needs. Thanks to China, SA is also a member of the Asian Infrastructure Investment Bank.
In SA’s strategic calculations, China’s import resides primarily with it being a growing source of foreign investment that SA needs desperately to ameliorate pressing domestic social challenges, notably high unemployment, poverty and inequality. SA regards China’s support as crucial to promoting Africa’s interests in the United Nations and other multilateral institutions. SA also views the deepening of economic links with China (and with the other Brics countries) as central to its economic strategy of diversifying its external trade away from Europe. There is no doubt that the SA-China relationship is in many ways complementary and is poised to become stronger and grow further in the future. Yet the question this raises is whether SA can sufficiently accommodate China’s needs and, if so, at what cost. Satisfying China’s needs will depend on the extent to which domestic constituencies in SA – mainly labour unions, the business sector and civil society formations – feel that their concerns about China’s influence on SA’s political economy are being addressed. Labour unions have voiced concerns about the impact of Chinese textile imports on local jobs and wages: they have blamed the ‘neo-colonial’ nature of the trade relationship for the de-industrialisation of the SA economy. The local business community has questioned SA’s decision to grant China marketeconomy status, making it very difficult for local firms to prove that the Chinese government gives its companies an unfair advantage. Also, China’s economic expansion into Africa has been seen as a threat by South African companies who have lost market share in SA’s ‘near abroad’.
Civil society organisations have voiced uneasiness over the baleful influence of the expanding SA-China economic relations on SA’s foreign policy. The Dalai Lama visa debacle attests to the reality that economic pragmatism has trumped the foreign policy idealism of the Mandela years.
China has shown that it is attuned to the sensitivities of South African domestic politics. That is why, for example, it previously acceded to SA’s request to impose quotas on its textile exports (albeit for only two years) and undertook to work with SA to correct the unbalanced trade profile between the two countries – by urging Chinese firms to expand investment in the country’s manufacturing sector and promote local beneficiation of raw materials.
It is clear, however, that China’s responsiveness and flexibility in this regard will remain conditional upon SA maintaining unfettered access to its mineral resources for Chinese firms, upon not questioning China’s policy positions in multilateral forums and upon not interfering in China’s domestic affairs – as evidenced by the Dalai Lama affair. China’s economic support for SA, therefore, comes at a price. The question is whether South Africans are prepared to pay it.
There is no doubt that the South Africa-China relationship is in many ways complementary and is poised to become stronger and grow further
in the future.
Chinese President Xi Jinping shakes hands
with South African President Jacob Zuma at The Great Hall Of The People in September in