China in South Africa’s Brics kraal

2013-02-26 00:00

OVER the weekend, Derek Hanekom, the minister of science and technology, had to contend with tough questions about our relationship with China. In a lively and difficult exchange, he discussed China’s relationship with both Africa and South Africa, and the fact that it might deepen our dependence on them and weaken our commitment to human rights, labour rights, good governance and democracy.

Hanekom was addressing a public engagement on the upcoming Brics summit in Durban in March 2013, as part of an effort by the inter-ministerial committee of government charged with preparations for this first Brics summit on African soil. The idea was to explain the value that Brics brings to South Africa, and how we contribute to improving the role and impact of the group on the global economy and African development. The committee released a sort of group statement that went something like this: the Brics countries represent some three billion people or more, and have a combined GDP of about R120 trillion with about R32 trillion in reserves. So, it is good for South Africa to be part of this vital source of investment, trade, other forms of capital, and technology and skills transfer.

Ministers say SA is in Brics to take advantage of huge investments needed to meet our five priorities: jobs, education, health, building a capable state, and fighting crime and corruption. They raise expectations that Brics’ African summit will benefit the whole of Africa, while positioning the country strategically to be the underwriter of Africa’s continued economic surge. Brics-Africa trade volume is projected to increase three-fold from R1,2 trillion in 2010 to R3,9 trillion by 2015.

The story goes further to indicate that there is now a sound set of priorities, finally agreed on at the New Delhi summit in 2012, namely: job creation, clean energy, food and water security, sustainable growth, income inequality, and urbanisation. Many of these challenges manifest in their worst form in Africa, including in South Africa. Therefore, we are told, the Brics may enable the country and the continent to overcome these largely structural challenges, in which these rising giants have made significant progress themselves over the past three decades. They also underline the fact that there are significant sectoral agreements recently signed on monetary policy, financial co-operation, development co-operation and so forth, which promise direct benefits for the South African economy.

It was very interesting that the small group of civil society, labour and political party representatives at the meeting was more concerned about China in the Brics and its increasing presence in Africa through South Africa, than about the Brics message per se. Issues were raised about the attitude of Chinese companies to the conditions of service for African workers; the tendency of cheap Chinese imports to crowd our local and indigenous businesses; the unfair advantage that Chinese multinationals enjoy in Africa because of huge state support for the mainly state-owned enterprises, through which it penetrates African markets; and the fact that the Chinese are involved in a debilitating scramble for Africa’s natural resources. These participants, especially the Cosatu delegates, came across as well-informed about growing concerns about labour practices by Chinese companies in South Africa, especially in the manufacturing industry. They suggested that the Chinese competition was not good for our economy, as it was unequal and therefore fundamentally unfair.

These citizens cautioned the government not to just look at the benefits of economic relations with the Chinese and other Brics countries, but to beware of the potentially negative ramifications, especially in regard to both the quantity and quality of jobs being created. Many other observers have been asking South Africa for a clear strategy and plan to be discussed with the public on how the country ought to respond to the shift in global economic power, and the growing interest of emerging powers in Africa and South Africa’s precious resources, infrastructure and so forth.

It is obvious that some of the fears and concerns are exaggerated, because in a capitalist system all companies seek to maximise profit by reducing costs, including labour costs, while pushing productivity up. This results in abuses and profiteering. This is the story of western companies too. The Chinese are being capitalists like the rest. What is needed is stronger regulatory mechanisms within and across countries, especially in Africa, to contain corporate abuses and strengthen corporate citizenship. This should be the focus, both of bilateral diplomatic relations with Brics countries and the Brics platform itself.

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