BY MS. NONDUMISO ALICE SITHOLE 06-08-2024
Director General, Dr Wang Liyong, fellow delegates from the African Continent present, Scholars, Ladies and gentlemen, distinguished guests, sponsors and esteemed colleagues,
I am deeply honored to stand before you as one of the delegates that have been invited to come and be part of the conversation that has taken center stage, not only in my country, South Africa, nor just on the African continent but one which now forms part of a continuous and critical global dialogue.
Platforms such as this one, firstly, provide conducive spaces where views and dialogue can be exchanged in order to progressively and consistently work towards the strengthening of the bilateral relations with regards to the Africa-China relationship.
Secondly, they provide an opportunity to engage in a meaningful and in-depth exploration of a topic and/or relationship that is under continuous scrutiny by the entire globe. And lastly, to provide a platform for African voices to contribute to the assessment of China’s engagement in the continent.
I stand here before you, after my country held its national elections on the 29th of May 2024, elections which I deem as a profound change in the dynamics of the political landscape in South Africa. This is owing to the fact that the majority party, the democratic African National Congress (ANC) which has led for 30 (thirty) years, for the first time lost its parliamentary majority, thrusting it into a new way of working.
This “new dawn” in the governance of the country has varying implications for the leadership but also for the people of South Africa. The country is embarking on a new trajectory which has seen leaders and society both anxious and excited for the new developments to come.
The newly formed Government of National Unity or “GNU was founded, albeit out of necessity, on the principles of building a “partnership” and “collaboration”, this is the general view of what the parties are expressing in respect of this system of governance, where the leadership from the various political parties are to work together for the good of the country and to deliver a government that will be united in “action” and “purpose”. This strengthens inclusive decision-making, and therefore, if sustained, is a positive for the country.
I am providing this background because I regard myself as someone who is an active citizen when it comes to issues of importance. The state of affairs in one’s country has an impact that is directly felt by every single citizen no matter what your socio-economic standing in the community is.
Of the 54 (Fifty-Four) countries that currently and proudly form the African continent, all but 2 (two) were never colonized. It is hardly hyperbolic to characterize the net effect of colonialism as negative, it came at great cost to Africa from a depletion of resources to human rights restrictions, the exploitation of labor, lack of widespread industrialization, irregular allocation of resources to local populations, dependence on a cash crop economy, prohibition of trade, sanctions, the breaking up of traditional African society and values, violence, lack of political development to name but a few.
The effects of colonialism continue to plague the African continent to this very day, whether directly through continued conflicts and at times proxy wars, to more nuanced side effects such as the ever-present threat of neo-colonialism and political interference.
With Chinas increasing bilateral relations with multiple African countries, may have attempted to draw parallels between this relationship and Africa’s colonial past. This is commonly phrased as “concern” at the perceived imbalance of bargaining power between the parties, with it viewed as a major influence on the terms of trade and the outcome presumed to always be in China’s favor.
This is admittedly a fair point, China is a huge bargaining power, the largest producer globally and second largest economy in the world. All this considered, such a view still fails to recognize African countries as the serious players on the world stage themselves as they are in 2024.
Further to this, academics such as Peter Stein and Emil Uddhammar have posited that for some African countries, trade with China is the cornerstone of those economies. For example, exports to China amount to over 60 percent of total exports for Angola, the Republic of Congo, and Zambia. South Africa is China’s biggest African trading partner, South Africa is the top destination for Chinese investments, followed by the DRC, Angola, and Zambia.
The bilateral relations between China and South Africa have raised concerns such as trade imbalance, labour practices and job displacement, environmental consequences, financial stability, debt burden and political tension at times to name but a few.
The influx of Chinese goods into the South African market, often at reduced rates, I have personally sometimes engaged with local south African citizens who voice their views that the influx of Chinese goods has been connected to probable job losses in particular industries.
It goes without saying that both parties are aware of this. Therefore, both parties must engage in actively finding methods to address areas of concerns and mitigate risks associated with these concerns, furthermore, address them in a diplomatic manner.
Legislation governs how business is conducted, the Constitution and Public Finance Management Act in so far as where projects are concerned, ought to be used as guiding tools and the principles regulating trade and investments enforced and upheld in order to deepen fair processes with regards to issues of concern raised above.
China as Africa’s current largest trading partner, China contributes substantially to African regional and intracontinental goals such as infrastructural development, increased competition for African export markets as well as the general national economic growth of its respective partners not only through foreign direct investment, but also through the on-going benefits of tangible physical and fiscal investment in those countries, to the local population.
In my humble view, through an approach that prioritizes mutual benefit over excessive interest, China has adopted a funding model that that ostensibly attempts to see its partners ultimately reach sustainable growth objectives by ensuring that funding is generally channeled towards tangible assets. It has provided assistance and aid to Senegal, Algeria, Burkina Faso, Lesotho just to name but a few.
By contrast, China’s aid to Africa it seems offers African states increased policy space since Chinese aid, appears not to be driven by ideological but pragmatic factors. Western aid tended to be more focused on pro-market economic reforms, political reforms in favour of democratization, ‘good governance’, public sector reforms, privatisation, poverty reduction etc.
30 percent of Chinese Foreign Direct Investment in Africa is directed to infrastructure and construction, while 25 percent goes to mining and extraction of raw materials. In contrast to this, detractors particularly of western backgrounds, criticize the strength of China-Africa relations often viewing Chinese policy in Africa as a ‘debt trap’, or a strategy to loan unmanageable sums to African countries.
It is a well-known reality that China has in reality released large scale investments throughout parts of the global south including in South Africa. It is worth noting, however, that while China’s investments in Africa often make the largest foreign direct investment of each country with which they are concluded, because China’s investments in Asia and Europe exceed those in Africa, one must therefore wonder if the concern by detractors is perhaps indicative of a mistrust of African leadership?
We can unfortunately only speculate. What we do know, however, is that the terms of Western loans are hardly more favorable, and quite often, are much more onerous not only financially but politically.
My analysis is that China’s partnerships and relations with countries on the African continent has proven to be one that is substantially more beneficial than detrimental to these countries, largely due to the nature of the loan being one where the investment is in the growth of the country, this further capacitates the country to better be able to repay these loans through the resultant improved economy.
China has been instrumental in projects such as the 2018 Maputo-Katembe Bridge in Mozambique, the Maseru Hospital upgrade in Lesotho, major energy investments throughout Africa (Nigeria, Ghana amongst many others)This is done with a combination of loans, grants and other schemes, often with fairly more forgiving terms compare to western loans which have historically required drastic legislative and economic commitments from recipients, including privatization of national resources.
This deviates from predecessors whether from the colonial era or more recent allied arrangements. Africa is not being left depleted of its resources and the negotiations with African countries take the form of more of a partnership in nature.
President Cyril Ramaphosa, at a convergence for the 15th BRICS Summit, on August 22, 2023, highlighted that the relationship between South Africa and China extended over 25 (twenty-five) years, with China having provided valuable support to South Africa during our struggle for freedom and democracy.
China and South Africa have fostered a relationship which has steadily evolved into one that is currently at the midway point of its 10 (ten) Years Strategic Programme on Cooperation between the People’s Republic of China and the Republic of South Africa (2020-2029) in bilateral cooperation.
China and South Africafurther, have similarities that extend beyond politics; Africans are a community-focused people, we believe strongly in “ubuntu” – a deep-rooted belief in the strength and power of humanity.
It is this approach of succeeding together as a people that aligns Sino-African values and objectives, possibly even more so than our mutually held aspiration for self-reliance and alternatives to western leadership.
Initiatives such as the Belt and Road Initiative, now in its 10th year, which I would predict will result in improved inter and intra continental travel, trade and development and they imply that the objective is indeed a long-term relationship between the two countries, wherein the bilateral trade grew from less than R1billion in 1998 to over R544 billion in 2021.
It is important to take cognizance of the strengths and dynamic core competency of China. It is their focus on investing in their own people and local skills for the nation to gain complete autonomy. I think this a strength that perhaps other countries can learn from and can also be a central objective of most, of countries on the African continent and in general.
It must be an ideal and objective that must be shared in the bilateral relations, with China advocating for such by showing its support for African countries which are progressively spearheading programs that aim to eventually lead to the autonomy of their economies and that of their critical sectors such as technology and energy.
As recently as 2023, China provided support to South Africa in addressing its energy challenges through a donation of emergency power equipment worth R167 million and availed a grant of approximately R500 million as development assistance.
Currently, China provides South Africa with support on infrastructure development projects including the Small Harbour Development Project, the TVET refurbishment project and the Mzimvubu Water Project, all of which are instrumental in the creation jobs for the people of South Africa and provide long term solutions to basic service provision needs. These are all Forum on Africa-China Cooperation (FOCAC) related infrastructural development projects.
South Africa and Senegal as examples are countries which continue to actively mirror shared values as with China through adopting and trying to aggressively drive the promotion of “local content” as a strategy to enhance and invest in their own economies. In South Africa, we have what is termed “Proudly South African” (PSA) services and goods.
The vision and mission of “Proudly South African” is to encourage the people of South Africa to make personal and organizational contributions towards economic growth thereby increasing employment opportunities, economic value and local value, while reinforcing national pride and patriotism.
It is through the missions of PSA where South African producers and service providers who are serious about quality and committed to creating and sustaining meaningful gains for local content industries, join in on efforts to boost the local economy and drive the economy. PSA seeks to influence the public and private sectors and even consumers to procure locally produced and manufactured goods and services to stimulate economic growth. The strategy aligns with the Industrial Policy Action Plan (IPAP) as well as the National Development Plan (NDP).
Senegal has a similar strategy of driving local content with supervised scrutiny by the Public Order Regularity Authority a body that tries to ensure compliance with tender standards for the execution of projects. In the execution of projects financed by development partners, 33% of the contract amount is granted to the private sector.
In a similar fashion, the government has a similar strategy whereby 30% of development opportunities are given to small- medium sized enterprises, the 30% is limited to government funded projects. I am of the view that South Africa needs to work vigorously on oversight and scrutiny of ensuring that compliance is met when applying industry standards and where projects are funded for development purposes.
This in order to circumvent corruption and to ensure that government does not end up falling short of achieving the objectives set out at the inception of those projects through funds being squandered by public officials working with unscrupulous and incompetent service providers.
This ultimately leads to the intended beneficiaries, the communities not benefiting and essentially service delivery being obstructed and has other negative implications.
It would be disingenuous to pretend that the Sino-African relationship is not driven at least in part by political objectives i.e. the goal of the Chinese government to further expand China globally, both economically and politically.
But then, those in the West are driven by the same objectives. Access to raw materials at competitive prices, considering the abundance of resources in Africa such oil in Angola, Zambian copper, or the DRC’s cobalt, as well as expanding markets for its exports and realizing profitable investments is also an understandable objective given the critical nature of bilateral trade, making the strengthening of Sino-Africa relations, ultimately mutually beneficial.
In return, China has undoubtedly committed to financing the needs of countries in difficulty and addressing their urgent infrastructure needs such as highways, buildings, airports, and others. It is therefore not a partisan or biased relationship.
Sino-African relations are a vibrant, two-way dynamic in which both sides adjust to policy initiatives and popular perceptions emanating from the other. Therefore, it is my view that this cooperation has become a strategic opportunity for African countries to address their infrastructure deficit and boost their exchanges. The work of FOCAC needs to be aligned with the Global Development Initiative and Global Security Initiative.
There must be coordinated efforts that will aim at balancing the inputs of China and Africa in respect of both parties’ interests, with this being my largest piece of advice to leadership in the Sino-Africa partnership.
It goes without saying that China is undoubtedly the biggest direct foreign investment partner on the African continent. The efforts of China to empower and give support to the global south must be commended and not condemned.
Many of these countries’ economies would have regressed into further pits of economic crises especially with occurrences such as the Covid pandemic, if China had not come to their aid. Partnerships are always hard work, and it takes two parties to make a partnership work.
In conclusion, it goes without say that there are numerous of benefits of increased trade with China for Africa. The bilateral relations and China being a trade partner has a key factor behind the high economic growth rates in Africa from the late 1990s to 2014.
The increased Chinese demand for African exports has improved terms of trade in the continent, but most importantly it has generated additional financial revenues for African countries. This has strengthened people-to-people relations and formed a formidable bridge that enables leaders on the African continent to enhance their diplomatic and inter-governmental efforts.
What is most apparent in the China-Africa relations is the improvements in job creation, and overall economic growth which has led to improved connectivity, trade, and transportation in a continent where infrastructure integration has always been challenging.
IThank you.