South Africa and China in awkward embrace

South Africa’s President Jacob Zuma and China’s President Hu Jintao at the Forum on China-Africa Co-operation. (Andy Wong, AFP)

South Africa’s President Jacob Zuma and China’s President Hu Jintao at the Forum on China-Africa Co-operation. (Andy Wong, AFP)

South Africa President Jacob Zuma this week hinted at Africa's awkward friendship with China, saying that allowing an unequal trade relationship – the supply of raw materials – was unsustainable.

"Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other economies," he told the China-Africa Co-operation Forum. "We are particularly pleased that, in our relationship with China, we are equals and that agreements entered into are for mutual gain."

A delegation to the Forum on China-Africa Co-operation in Beijing on July 19 and 20, led by Zuma, was the latest in a series of high-level exchanges between South African and Chinese dignitaries over the past two years. On Thursday, China pledged $20-billion in loans to the continent, double that of its 2009 commitment.

Thabo Masebe, Deputy President Kgalema Motlanthe's spokesperson, said the Beijing Declaration, signed in 2010, aimed to increase trade volumes and encourage investment by both countries.

Minister of Trade and Industry Rob Davies said Africa-China trade in 2011 was worth $166-billion.

Investing in infrastructure
But official engagement was not one strictly governed by trade.
"China is not only looking to Africa to extract raw materials, but to invest in infrastructure and skills," said Masebe.

For Dr Chris Alden of the South African Institute of International Affairs, relations between South Africa and China might be "very strong", but commercial competition was an area where "interests do not align". China's competitively priced manufactured goods had adversely affected local manufacturers, particularly in the textile industry.

Africa's long-standing affliction of being mined for raw materials by foreign powers is also a source of concern. "At this point, China is desperate for raw materials," said Professor Garth Shelton of the department of international relations at the University of the Witwatersrand.

According to Masebe, another component of South Africa's official Chinese mandate was to ensure that China opened its markets to South African exports.

Sidwell Medupe, spokesperson for the department of trade and industry, said South Africa had 10 "set-aside" products the Chinese government had agreed to promote. These included agricultural produce, plastics, steel and paper, and automotive equipment. He said more equitable trade relations would ensue in time.

On one level, China's cheap labour era is coming to an end. "Ten years ago, China had the cheapest labour in the world but that is not the case any more," he said.

Bearing fruit
On the other hand, the Chinese operations of South African companies are bearing fruit. Business Day reported in July 2010 that 45% of SABMiller's growth by 2014 would come from its China operations. In a similar vein, the anomalous growth of media company Naspers in 2009 was largely owed to its stake in the Chinese online platform company Tencent.

"If South Africa manages the relationship with China well," said Shelton, "there are plenty of benefits to be gained from the relationship, particularly in job creation, skills transfer and technological development."

On a governance level, China is also admired.

"China's recognised development successes in lifting its population out of poverty has proven to be an inspiration for the South African government and contributed to an effort to emulate that success," said Alden.

South Africa has expressed interest in the Chinese mode of governance, particularly in its handling of state-owned enterprises.

Public enterprise department spokesperson Mayihlome Tshwete said the consolidation of state-owned enterprises under the department was one option being considered by the presidential review commission. "There is no cut and paste of the Chinese model in South Africa," he said. "We are a democracy and they have different dynamics."

But Tshwete said Minister of Public Enterprises Malusi Gigaba was particularly impressed by the high level of efficiency and co-ordination he encountered in China's state-owned enterprises.  

Read more: Sino-African relations are unfolding against the backdrop of China's increasing dominance in the global economy, writes Paula Akugizibwe.

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