Africa -China Review Africa -China Cooperation and Transformation
The Peoples’ Republic of China (PRC) and The Republic of South Africa (RSA) established official relations in January 1998. During the 2010 Beijing Declaration, South Africa was upgraded to the diplomatic status of Strategic Partner by the Chinese government”. In the same year, trade volume between China and South Africa stood at SD $25.6bn with imports from South Africa reaching US $14.8bn, while the cross country investment had grown to US $7bn. By 2014 , the two-way trade between China and South Africa reached US $60.3bn
In 2010, China invited South Africa to join the BRIC group (Brazil, Russia, India and China), a move that was largely supported by other BRIC members. When South Africa was admitted, the acronym changed to BRICS with the added “S” to represent South Africa. This in a way accelerated the improvements in trade and relationships between China and South Africa. South Africa is considered the most commercially developed country in Africa, a position it highly contests with Nigeria. It is considered by many as a gateway to the rest of Africa. Given that position, Chinese business in South Africa may also serve to have some trickling effect to the rest of Africa.
According to the 2006 to 2015 Poverty Trends Report, 30.4 million people (55.5%) of South Africans are living in poverty. These are people earning below one dollar per day and these are the ones that are referred to as the “poor” in this article.
Chinese companies have greatly increased their presence in South Africa for example China’s Powerway Renewables and Suntech Power holdings are known to be actively involved in renewable energy projects in South Africa. South Africa has many projects to distribute energy to areas that were previously ignored by the apartheid government which governed South Africa before 1994. These areas are mainly those occupied by the “poor” therefore involvement of Chinese companies in these projects will greatly benefit the poor communities.
China development Bank is quite active in South African financial services as one of the lenders of capital. The jobs created by businesses that borrow the finances is another way poor communities benefit from Chinese business in South Africa.
Other Chinese big businesses like Hisense which is an appliance manufacturing business is said to produce in excess of 400, 000 refrigerators and televisions in one year. Hisense is said to have created in excess of 700 direct and 2000 indirect jobs for the local population which is mainly made up of the “poor”. Other companies like FAW, China Longyuan Power Group are operating in South Africa and employ hundreds from mainly previously disadvantaged sections of the South African society which eventually uplifts the well-being of the “poor”. A Chinese company purchased the Palabora Mining Company (PMC) in Limpopo in 2013, which was previously owned by Rio Tinto. This allowed the extension of mining operations estimated to last up to 2033, and helped keep 5000 jobs for the local community. The list of Chinese businesses that have been established since the advent of democracy in South Africa is endless.
Additionally, Chinese businesses have developed a number of Malls best known as China Malls and these have more that outshined the original Chinatowns that existed before. These Malls are mainly in South African big towns like Johannesburg and Durban where they have developed vast square meters of land with modern commercial buildings and shopping spaces for rent. This has developed into shopping centres that have high traffic of shoppers because of the vast variety on merchandise sold on these premises and the competitive prices that are mainly affordable and favourable to the “poor”. Middle class and relatively poor communities have been given an alternative where they do not have to shop from previous monopolies which were wilfully charging excessive prices. Some of these malls like the one in Johannesburg boast of a monthly clientele volume of over 2 million people. South Africans have benefited jobs created by the businesses that have been set up in these Chinese Malls.
“South Africa doesn’t see its relationship with China as just based on trade, but a partnership rather, that is aligned to our development goals. China, on the other hand, regards South Africa as a key partner in advancing its relations with the African.” This was said by the Minister in the Presidency Jeff Radebe in December 2014 as narrated by the SA government news agency. The benefits to South Africa are therefore not only in trade but in tourism as well where South Africa receives over 100,000 Chinese tourists annually as of 2019 records. Based on information provided by the acting chief executive of Tourism in Kwazulu Natal in Nov 2018, each of the tourist spent an average of R15 800 each, which equated to roughly R1.5billion that is annually spent in South Africa.
Cultural relationships have led to teaching of Mandarin being one of the subjects of choice in grades 4 to 9 as a non-official language. There are cultural exchanges, South African students studying in China has increased tremendously over the years. There is a Centre for Chinese Studies (CCS) at Stellenbosch University which is the leading African research institution for innovative and policy relevant analysis of the relations between China and Africa adding to proof that relations between South Africa and China are not only trade related.
Conclusion
Co-operation between South Africa and China has mainly been cemented under the framework of platforms like, the Forum on China-Africa Co-operation (FOCAC), BRICS, and the Belt and Road Initiative (BRI). South Africa has become China’s largest trading partner in Africa (since 2009) and is said to be accounting for a quarter to a third of China-Africa overall trade.
Based on written history, Chinese communities arrived in South Africa as far back as the 1870s. This just like other movements of peoples around the world results in communities forming a “new home away from home”. The Chinese became part of South African community way back during apartheid times and similar to Africans, Indians and coloureds, were segregated by the apartheid system. The Chinese community is known to have settled in the inner-city of Johannesburg until after 1994, when most Chinese nationals started shifting to suburbs of Bruma and Cyrildene on the Eastern side of Johannesburg roughly 15km from the current OR Tambo airport towards Johannesburg central business district. This area was the first to be known as “China town” within Johannesburg.
The bilateral relationship between China and South Africa has grown over the years, enabling China to immensely invest in South Africa, and the cooperation framework facilitated a number of infrastructure developments all of which have created employment in South Africa and assisted in reducing poverty and unemployment.
Mr. George Nsamba- is a Risk management practitioner based in Johannesburg