South Africa signs 93 economic and trade deals with China
Worth over $1.7 billion dollars
China is South Africa’s biggest trading partner and biggest investor
But South Africa’s deepening ties with China have other consequences
Welcome back to China Uncensored.
I’m Chris Chappell.
China has been cozying up to South Africa for a long time.
But like just about everything in life,
that chummy economic and trade relationship
has unforeseen consequences.
And to take viewers on a deeper dive into
China's growing presence in South Africa is Shelley Zhang,
who traveled to Johannesburg.
Thanks Chris.
As soon as I landed in South Africa,
signs of China-Africa cooperation were everywhere.
Since 2010, China has been South Africa's biggest trade partner.
Now, China is also South Africa’s single biggest investor.
China clearly sees South Africa,
with its development, infrastructure, and location,
as a gateway to the rest of the continent.
And the two countries are in the middle
of a pretty intense honeymoon period.
But there are already signs that the relationship could easily go sour.
In June 2019, China and South Africa signed
93 economic and trade cooperation deals
worth 1.7 billion dollars.
That was also when Chinese leader Xi Jinping
and South African president Cyril Ramaphosa met during
the G20 summit in Japan.
And the South African president...
grabbed Xi Jinping's chest while Putin looked on?
What is going on here?
Please don’t tell me.
But it’s clear that Xi and Ramaphosa have a connection.
I mean, Xi Jinping looks...almost happy.
Maybe that’s because he knows that President Ramaphosa,
and his political party, the ANC,
are strong supporters of the Chinese Communist Party.
In fact, back in 2015,
the ANC called the Chinese Communist Party
a “guiding lodestar” for the ANC
because of their economic reforms in China.
And the support goes both ways.
China’s ambassador to South Africa said that
“President Cyril Ramaphosa is the last hope of this country.”
That’s in reference to Ramaphosa’s drive
to bring in 100 billion dollars of new investment
to lift South Africa’s economy out of a slump.
And most of what they’ve raised so far is from—
you guessed it—China!
Like the $2.5 billion loan to the heavily indebted
state-owned power company Eskom.
But a big focus for the two countries is trade.
Like those 93 trade agreements I mentioned earlier.
One thing these deals are supposed to do is to fix
a trade imbalance between the two countries.
Currently, 85% of what China buys from South Africa
are minerals and metals.
T
hey’re sucking up South Africa’s natural resources.
And what does China sell to South Africa?
Manufactured goods.
Like here at Johannesburg's China Mall.
Or at Oriental Plaza...
...where you can get a bargain on China Green tea,
or communist Che Guevera shirts
or random cookware.
I’m not a big fan.
While this is great for China,
it’s less great for South Africa,
since cheap imports can affect local industries.
That’s a structural imbalance
that South Africa's trade minister wants to reset.
Most of the imported goods at places like China Mall
are from small mom-and-pop businesses.
There are around half a million Chinese people in South Africa.
At first, most immigrants were actually Taiwanese.
They came from Taiwan in the 1970s and 80s,
when South Africa had an official relationship with Taiwan.
Then starting 20 years ago,
they were replaced by economic migrants from mainland China.
Now, these small-mom-and-pop importers are leaving.
I talked to several who told me business isn’t what it used to be.
But as these small Chinese entrepreneurs leave,
they’re being replaced by...the Chinese state.
That is, huge Chinese state-owned enterprises,
and big businesses supported by the state.
Which is why South Africa is getting its 5G infrastructure from—
you guessed it—Huawei.
The...other Huawei.
Another example is state-owned Beijing Automotive Industrial Corporation’s
new auto assembly plant in Port Elizabeth.
The company, known by its acronym BAIC,
is supposed to source around 30% of auto components from local companies.
Does the auto manufacturing benefit South Africa?
Sure.
"And it's beginning already now to make a difference
to the employment situation of young people."
But the auto plant, which can source the remaining
70% of car components from outside of South Africa,
could provide outsized benefits for China.
"Where a Chinese company partners with a South African company
and manufactures here in South Africa,
a great opportunity is presented to export duty free
into the rest of the African continent,
into the European Union, and into the United States,
through our favorable trade agreements.”
So basically, Chinese companies can exploit South Africa's
free or near-free market access to flood the rest of the continent,
as well as Europe and the US,
with cheap cars that could be assembled mostly from parts made in China.
But it’s not just about trade and investment.
China and South Africa are also cooperating, along with Russia,
on military exercises.
Part of the PLA’s goal to develop a blue-water navy.
And South African police are also being trained in China.
But perhaps the biggest potential problem
with South Africa’s growing ties to China
is political influence by the Chinese Communist Party.
Like when South Africa’s president recently came out in defense of Huawei.
And he blasted the US as backwards-thinking and jealous
in its fight against the company.
“The United States is unable to imagine a better future
that goes beyond 4 plus one G.
They are unable to imagine what 5G can offer...
They are jealous that a Chinese company called Huawei
has outstripped them.”
So clearly, South Africa doesn’t share America’s security concerns.
Meanwhile, back in 2017,
the South African Minister of Public Service and Administration
lavished praise on Xi Jinping's book on socialism for a new era
and called him "the most powerful leader on earth”
and also very “humble”.
"President Xi Jinping’s words surpass in value
even the most the precious of metals.”
I guess that’s why South Africa is giving its precious metals to China,
in exchange for Xi Jinping’s very valuable words.
Now it’s interesting that if you look for information
on China and South Africa’s relationship,
you don’t find that many critical opinions.
Maybe that’s because they’re still on their honeymoon,
so everything’s still going well.
Or maybe it’s because China is buying African media’s silence.
A columnist at a South African paper was fired
after writing an opinion piece about the Uyghurs,
the Turkic Muslim minority being put in concentration camps in China.
Turns out the media company was partly owned
by Chinese state-linked investors.
Or this.
“A scholar at a South African university
was told that he would not receive a visa to enter China
until his classroom lectures contain more praise for Beijing.”
And here’s my own experience.
As I was planning my trip to South Africa,
I tried to set up an interview with a local expert
on China South Africa relations.
Like I did in Greece, and Italy.
Strangely, I couldn’t find anyone who wanted to talk to me.
In fact, I was even ghosted a few times.
And then I found out that right after my trip,
one of the biggest universities in Johannesburg
was hosting a conference on China.
Sponsored by the university’s Confucius Institute.
Suddenly, many things became clear.
Like I said earlier,
China and South Africa are still in their honeymoon stage.
We’ll have to keep watching to see what happens next.
Thanks, Shelley.
So what do you think about China’s growing ties with South Africa?
Leave your comments below.
Once again, I’m Chris Chappell.
Thanks for watching China Uncensored.