South Africa and China: behind the smoke and mirrors

The Chinese and South African governments, led by presidents Xi Jingping and Jacob Zuma, cement ties during a meeting at the Great Hall of the People in Beijing.
Reuters/Wang Zhao/Pool

The People’s Republic of China’s relationship with South Africa has deepened significantly in recent years, as shown by a raft of economic and political proclamations.

The year 2014 was dubbed “the year of South Africa in China”. It was followed last year by the “Year of China in South Africa”. Now South Africa has been upgraded to China’s lofty “Strategic Comprehensive Partner”.

And the governing African National Congress (ANC) has made no bones about how it feels. Its 2015 National General Council discussion document identifies a new “Cold War” in which

the exemplary role of the collective leadership of the Communist Party of China in this regard should be a guiding lodestar of our own struggle.

Such statements have left observers wondering whether the ANC-led government is making a geopolitical turn toward China. Such sentiments have been emboldened by bureaucratic obfuscation that’s prevented the Dalai Lama from visiting South Africa on three different occasions and the Chinese government funding an ANC training school.

China’s economic relationship with South Africa has added further fuel to the fire. China has been South Africa’s largest trading partner since 2010, with a total trade volume of R270 billion in 2013. The announcement during the China-Africa summit that China will be committing a further R90 billion to South Africa, will only confirm sceptics’ fears of growing subjugation.

Knowing which side your bread is buttered

Reactions to China’s engagement tend to overlook one important fact. While, at least ideologically, the South African government may be thumbing its nose at traditional western partners, economically, multiple international engagement is the order of the day.

Europe and the US continue to be significant trading partners. Foreign direct investment from these regions far surpasses what comes in from China. In fact, India is the only BRICS country - Brazil, Russia, India and China - in the top five sources of foreign direct investment in South Africa.

Additionally, the US, UK and Germany are still the top overseas visitors to the country.

Those of an economically pragmatic bent may be scratching their heads as to why the South African government needs to engage with China at the expense of engagements with western partners.

This is, in fact, by no means the case. South Africa may be taking sides at an ideological level. But at the level of international economic engagement, it is business as usual. In an instance of what Patrick Bond refers to as the “talk left, walk right” approach, the South African government uses the language of anti-Western imperial hegemony while simultaneously being deeply engaged in the logic of global markets.

In fact, when it comes to international political economy, no one “talks left and walks right” more than the Chinese themselves. The country’s integration into the global market system, the rise of a consumer-orientated middle class, and its outward-bound commodity forays to support both domestic and international consumption make China a dominant player in global capitalism. Significantly its currency, the renminbi, has just been accepted by the IMF as a world currency.

China’s engagement in Africa is an extension of this process, a fact which many in the Euro-American world, and even Africa, seem unable to digest.

Nothing highlights this more clearly than the recent announcement of the Chinese-driven Asian Infrastructure Investment Bank. The new bank includes most major global players, including South Africa. Notable absentees are Japan and the US. It has eclipsed the BRICS New Development Bank, presenting itself as a champion of the global South.

South African and Chinese aspirations have much in common if we look at China from the perspective of a formidable global market player, rather than simply as an authoritarian single-party state. Both are deeply integrated within global markets while at the same time being engaged in domestic ideologies which are inherently antagonistic to these markets. In this respect, they are part of a broader post- Cold War economic pragamatism in which domestic and even foreign policies - be they left, right or centre - are subordinate to the market imperative.

Ross Anthony, Director of the Centre for Chinese Studies, Stellenbosch University

This article was originally published on The Conversation.

Look to China for the main beneficiary of America's likely retreat from Africa

Presidents of Kenya, Guinea, US and Nigeria’s Vice President at the G7 Summit.
Angelo Carconi/EPA

Anti-terrorism and transactional relationships are likely be the main features of US President Donald Trump’s Africa policy. But if Trump’s proposed cuts to the state department hold, the US will be less and less of a presence on the continent, according to Prof Gregory F Treverton, who directed the US National Intelligence Council in the Obama Administration.

Treverton, who is currently Professor of Practice at the University of Southern California, is a world authority on security and intelligence. I put a number of questions to Treverton who visited South Africa recently to deliver the keynote address at a South African Council on International Relations conference on South Africa’s relations with Africa.

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Why is Donald Trump’s foreign policy so incomprehensible?

I wish I knew! It’s a continual struggle between, on the one hand, the true believers, the American firsters who are anti-trade and anti-engagement in what they see as an unfriendly world, and on the other more traditional conservative Republicans.

The pattern has been that the more traditional conservative Republicans, like the Secretaries of State and Defence, tug policy in a more familiar direction, only to have the president blow the process up with a tweet condemning the Paris climate agreement or labelling Germany an unfair trader. The intensity of the struggle is reflected in the continuing haemorrhage of leaks, all from the very top of the administration.

Didn’t the post-Second World War liberal international order need a shake up?

Yes, and perhaps in that sense we’ll end up thanking Trump, if, and this is a big if, we get through the next years without a major crisis or too much broken crockery. Some of Trump’s complaints, like (America’s Western) allies bearing too little of the burden, have been true for a long time. And the reaction by Americans to the sense that they pay too much for the “public goods” of international economics and security has been going on for a long time.

Polls routinely show that Americans think the country spends on foreign aid 20 or 30 times what it actually does. So, too, the questioning of what we all too easily call the “liberal international order” has been growing over time.

You suggested that Russia under Vladimir Putin, is a declining power. Doesn’t the evidence point in the other direction?

It surely is a declining power, though Putin has played a weak hand extraordinarily well. It is in demographic decline, and far from modernising the Russian economy, Putin has only deepened its dependence on hydrocarbons. My fear is that as the country declines, it will be all the more tempted to turn to what tools it retains – cyber attacks and nuclear sabre-rattling.

How do you think Trump’s Africa policy will turn out?

In testifying before Congress, Secretary of State Rex Tillerson probably was as clear as the administration could be given its disarray. Africa was in the “turning to other countries” category, and he began with the fight against terrorism. He did, though, mention the economic opportunities in Africa, mostly in the sense of business that might be done. I suspect those will continue to be the emphasis.

So does this mean that anti-terrorism and transactional relationships will be the main features of Trump’s Africa policy?

I think they will continue to be the main drivers, for better or worse, though not the only drivers. The country will have to respond to major humanitarian crises whether the administration wants to or not. And some of the legacy programmes of the last two administrations, like the African Growth and Opportunity Act, or the President’s Emergency Plan for AIDS Relief have had bipartisan support, so we’ll see how they fare in the congressional budget process.

And, if this is so, what are the long-term implications of this for US relations with the continent?

If Trump’s proposed cuts to the State Department and USAID hold, the US will be less and less of a presence on the continent. The main beneficiary, diplomatically, will be China, followed by the Europeans and perhaps even Russia, though it doesn’t have much to contribute except arms sales.

If there is any silver lining, perhaps it will be that Africans, and particularly South Africans, will realise they have to take more initiative on their own.

When it comes to the US itself, you raised the possibility that it might break up? Where you speaking in abstract terms, or is this a real possibility?

I meant it mostly as a metaphor and as a touchstone for thinking about the future. I don’t think it’s likely, but it does have to be considered.

What is certain is that the next few years will be a kind of a guerrilla war, one mostly fought in the courts, between the US federal government and the “blue” (read Democratic Party-controlled) states, led by California, over climate change, immigration and other issues.

What does the Trump presidency mean for these ideas?

So far it seems bound to increase the divide in America. Trump has talked and acted entirely to please his base. He has played on fear, fanning it by portraying the country in dire straits surrounded by a hostile world. So far that base – especially older and often poorer white Americans – seems to have been satisfied by word, words they see as validating them.

But we’ve known from the beginning that Trump can’t deliver on his promises: those “good” low-skilled jobs in manufacturing or mining (as he has portrayed them) aren’t coming back. So we’ll see, but I expect that realisation to only deepen the anger and disaffection.

The co-hosts of the conference Treverton addressed were the Johannesburg Institute for Advanced Study (JIAS) and the Wits School of Public Management.

Peter Vale, Professor of Humanities and the Director of the Johannesburg Institute for Advanced Study (JIAS), University of Johannesburg

This article was originally published on The Conversation.

What the Djibouti military base tells us about China's growing role in Africa

China hasn’t been known for establishing military bases in Africa – or even beyond its immediate sphere of influence. This is changing following its decision to build a military base in Djibouti on the Horn of Africa. The base will be next door to the United States Africa Command.

China will be able to use the base to improve the way it manages its peacekeeping operations and humanitarian efforts in Africa, as well as its regional maritime operations.

How should this be understood in terms of China’s global positioning? And what are the implications of its expanding military footprint in Africa?

The brief answer is that there has not been a sudden change in China’s role and foreign policy profile on the continent. Instead, the change has been gradual and incremental. This is particularly evident from an international peacekeeping perspective.

Beijing’s views and approach towards United Nations peacekeeping have changed significantly since China joined the UN in 1971. A major shift took place after the end of the Cold War and, over the years, it’s gradually taken a more positive stance and indicated a greater willingness to contribute.

Today China contributes peacekeepers in substantial numbers to operations in South Sudan, Mali and the Democratic Republic of Congo. In doing so, it’s deliberately sending a message that its rising profile is not a strategic threat to other major powers. Instead, it wants to be regarded as a friend to developing nations and be more responsive to global expectations. This includes the need to reduce tensions and conflicts.

China’s role in Africa can be understood from three broad perspectives: to assert its position as a global power, craft a positive image of itself, and to promote its national interests.

A global player

China increasingly intends to show that it is a global power. The new base in Djibouti should be viewed in this context. It’s in line with China’s views on international peacekeeping. This is that peacekeeping is way of exerting greater influence on international affairs through the UN.

Unlike the US, which has numerous military bases around the world, China has exercised its global presence through peacekeeping operations. As a result, Beijing has emerged as a significant actor in international peacekeeping operations – in Africa and elsewhere.

Its commitment to this can be seen from the fact that it’s the only country that significantly contributes both troops and money to UN peacekeeping operations.

Secondly, China’s expanding role in UN peacekeeping over the last two decades has helped it craft a more positive and constructive global image and reputation. It has used peacekeeping deliberately, and systematically, as a diplomatic instrument aimed at projecting China as a responsible global power. Its approach to peacekeeping has also allowed it to respond more quickly to African requests or challenges. And it’s worked as a confidence building measure with both African governments and the African Union.

Thirdly, China’s emerging role in Africa is part of an evolving and pragmatic reorientation in Chinese policymaking circles, specifically where Beijing’s political interests and related investments are at stake. China is Africa’s largest trading partner, and its strategic and material interests have become more integrated and entangled with African concerns.

Chinese soldiers deployed for UN peacekeeping missions at their military base in Qinyang, Henan province, China.
EPA/Michael Reynolds

But its growing involvement in peacekeeping has become more difficult to reconcile with its historical commitment to non-interventionism. This is particularly clear in the case of South Sudan.

Strategic interests

Africa’s youngest nation has presented both challenges and opportunities for China. It has had to soften its historical arm’s length approach to facilitate a political solution to the ongoing conflict in South Sudan. But it has also needed to secure its strategic interests, especially the production of oil.

In this volatile and turbulent environment, Beijing felt compelled to make a substantial peacekeeping contribution to the United Nations Mission in South Sudan. This included deploying combat troops.

But it also had to assume a number of new political roles, such as mediating between warring parties and engaging in multilateral peace talks. This put Chinese foreign policy principles under pressure and steered its involvement in international peacekeeping operations in a new direction.

China’s peacekeeping experience in South Sudan suggests that it tacitly recognises that some kind of intervention is sometimes needed to protect its strategic interests.

Although China’s involvement in peacekeeping in South Sudan should not be overstated in terms of its scope and extent, it does seem to signal the beginning of a far more assertive role in Africa’s peace and security issues.

At the same time, as much as China is being forced to adopt high risk strategies in cases of overseas investment, as in South Sudan, its approach can still be defined as being carefully impartial. It remains true that China’s increased involvement in political dynamics in South Sudan doesn’t sit easily with its long held policy of non-intervention.

A new colonialism?

Will China’s presence in Africa – including its military footprint in Djibouti – turn into a new form of colonialism in Africa?

I believe this is highly unlikely. China remains acutely aware of the pitfalls associated with the politics of interventionism, especially in developing nations. It wants developing countries to regard it as a friend in global politics.

But it wouldn’t be surprising if China started to apply at least a measure of military (hard) power alongside diplomatic (soft) power if it believes its economic interests are under threat.

African leaders must be realistic about developments such as the Djibouti military base. They can’t welcome China’s presence – and investments – as an acceptable alternative to America, while opposing Beijing’s use of diplomatic – and even military – means to protect its interests.

Theo Neethling, Professor and Head: Political Studies and Governance in the Humanities Faculty, University of the Free State

This article was originally published on The Conversation.

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What's in a name? Towards genuine economic transformation in South Africa

‘Radical economic transformation’ in South Africa needs to move beyond rhetoric.
Flickr/Ryan McFarland

While much froth and babble has accompanied the debate over “Radical Economic Transformation” in South Africa, the bottom line remains: the country urgently needs real economic transformation. Calling it “radical” is to invite politicking and point-scoring and take our eyes off the ball – the need for real economic transformation.

How far South Africa has moved in altering the economic landscape is open to debate. It certainly has moved, but how far, and at what point will monopolistic tendencies be challenged?

While much has been achieved in many areas – meeting basic needs for example – there’s still an enormous distance to travel, and impatience is growing.

For the democratic period, economic growth has been singularly anaemic. Unemployment has been rising consistently, and income inequality has worsened. This despite a plethora of policy documents, the most recent being the National Development Plan.

However, the real causes of the economic crisis are obscured by the current political crisis. It has allowed mainstream economists to reinforce the call for “fiscal discipline” as if that were the only factor stifling growth and development.

In business and government, economic policy is reduced to the maintenance of macroeconomic stability. Fiscal discipline is an important precondition for economic growth, but not a sufficient condition.

We must ask: who is in charge of economic policy?

Driving economic policy

Radical economic transformation suggests, at the bare minimum, that government must take charge of economic policy, including macroeconomic policy, so that the country’s real development needs can be addressed.

It’s correctly noted in the National Development Plan that the country’s economy needs to grow at a much faster rate, 6% at least, to begin to address its socioeconomic challenges, high unemployment, inequality and poverty. The current growth trajectory, measuring 2-3% over the past 20 years is just not enough. It will not deliver inclusive growth to address the challenges. Rather, it will merely accentuate inequalities in the country.

And, if sustained, the prevailing recession spells disaster. Serious transformation is required.

If radical economic transformation is to serve the needs of the bottom 60% of the population, it needs to move beyond the catchy political slogans of nationalising land, banks and mines, and “kicking out” whites. It requires a rigorous analysis of why economic and social policy have not delivered growth and development.

There seems to be consensus that the country needs industrial development. It is largely considered the solution to overcoming commodity dependence. However, there is no consensus on who must drive it - the private sector or a strong “developmental state”?

South Africa has to find the right balance between the power of market forces and private initiative on the one hand, and the obligation of governments to provide an enabling framework and to intervene in favour of the public interest on the other.

In spite of being a late starter on industrial policy, considerable progress has been made; but much more can be done with increased funding for growth in and greater diversification of manufacturing.

Combating monopolies

Almost everyone agrees that small business has to be a critical component of any development strategy. But the sector has been characterised by a singular lack of success. The country needs to ask why.

One reason is the domination of markets and exploitation of the small business sector by big business. The history of large supermarkets and their ruthless exploitation of small suppliers tell the story of the highly unequal and exploitative relationship that exists in virtually all sectors of the economy. What is government doing to ensure that small business can survive in the monopolistic environment which characterises contemporary South African capitalism?

Predatory tendencies of conglomerates stifle township businesses.
Flickr/Anne-Sophie Leens

“Black economic empowerment” needs to progress beyond an elite few who are closely linked to the ruling party. Sectors such as tourism - overwhelmingly white-owned - offer opportunities for creative thinking about new, broadly beneficial forms of ownership.

And real black economic empowerment is clearly linked to the question of land reform. The country needs to break up monopolistic ownership, but also to ensure that land is used productively.

Developmental state

Given the current political climate, there’s a great deal of scepticism about the potential of the developmental state. This comes on the back of the pervasive governance crises afflicting parastatals such as, among others, the power utility Eskom and South African Airways.

However, there is no alternative to the developmental state. The country cannot leave economic development to the private sector, whose immense wealth has been built on its version of the free market and exploitation of cheap labour.

But for the developmental state to be effective, it has to be competent. There are numerous global examples of success in this area that can be followed. But is South Africa learning from them?

Building the developmental state does not imply a return to “yesterday’s socialism” of state control of the means of production. Rather, the country should focus on an appropriate mix of roles, with the state as the driver of development coupled with truly competitive markets producing goods and services.

Driving fundamental economic change

Clearly, fundamental economic change is required, and soon. But saying so, and achieving it, are very different. South Africans must separate the current political noise around radical economic transformation from the basic fact that business as usual is not an option. A lot has to change, and fast.

Going back to the tenets of quasi-socialism of the 1950s – nationalisation of mines and banks, land seizures and so on – are not “radical” in the 21st century economy.

It follows to then ask if and how the country can jump from the current state of recession to radical economic transformation – ensuring that the “radical” equates with positive outcomes for the poor, not for existing or new elites? Which “radical” elements can help make that leap?

The global economy is going through its own radical transformation, as blue collar and white collar jobs are giving way to “new collar” jobs.

The world is looking at single digit economic growth, and the workplace is undergoing dramatic transformation. Those propagating radical economic transformation must explain how it fits into the broader global change.

It has been a hallmark of the ANC government – from the time of the Reconstruction and Development Programme - to see economic growth as the driving force for change across society. That programme suggested that by meeting basic needs – such as clean water, housing and sanitation – much of the damage of apartheid would be dealt with and dignity restored. Economic growth would harness the energies of the “healed” black population and a positive future would flow seamlessly.

This was wishful thinking. The damage done to all people by racist violence and apartheid will take far more than economic growth to repair. Radical social transformation is needed.

There are other key elements which must be dealt with to realise inclusive growth. Fixing the spatial landscape is one of them. Apartheid deliberately separated “races” into different spaces, divided by natural or man-made barriers. The economy - even a radically transformed one – won’t change this.

A truly “radical” vision would have to encompass all these aspects of change, and specify them in detail.

Article adapted from a position paper delivered at the OR Tambo Debate on radical economic transformation recently held at Wits School of Governance.

Pundy Pillay, Professor of Economics and Public Finance, School of Governance, University of the Witwatersrand and David Everatt, Head of Wits School of Governance, University of the Witwatersrand

This article was originally published on The Conversation.