South Africa-China Comprehensive Strategic Partnership: dining in the dragon’s lair?

Taku Fundira, a Tralac Researcher, asks and discusses the question: South Africa-China Comprehensive Strategic Partnership: dining in the dragon’s lair?

The Sino-South Africa (RSA) relationship has reached new heights since the establishment in 1998 of diplomatic relations between the two countries. To date, we have witnessed considerable achievements in Sino-RSA economic, trade cooperation and increases in bilateral trade. In 2009, China became South Africa’s largest export destination overtaking the US and trade statistics from the World Trade Atlas reveal that total trade between the two countries reached US$ 15 billion in 2009, accounting for 17% of China-Africa trade. This share places South Africa as China’s second top African trading partner after Angola. The most recent engagement between the two countries is the Comprehensive Strategic Partnership (CSP), signed by President Jacob Zuma and his counterpart Premier Hu Jintao on 24 August 2010. This marked the last of a series of state visits by President Zuma to the BRIC nations that began in October of 2009 in Brazil.

38 bilateral cooperation agreements are contained in the declaration, ranging from political dialogues, trade, investment, mineral exploration and agriculture to joint efforts in the global arena, such as in the United Nations and the Forum on China-Africa Cooperation (FOCAC). The signing of the CSP can be viewed as a commitment to further strengthen the bilateral relations between the countries and establish a viable long term relationship which takes into account not only the political, but also the commercial interests of both parties.

For the South African government, this relationship is viewed as a vital strategic foreign policy goal to align itself with the new economic giant. According to Alves and Sidiropoulos (2010), the link between the government’s domestic socio-economic priorities and South Africa’s international relations, is at the forefront. This implies that domestic priorities of enhancing access to quality education, health, job creation and poverty eradication have to be factored in. The complementarities in this case offer South Africa an opportunity to learn from China. For China, South Africa offers among other opportunities a gateway to consolidate and expand its African footprint.

Despite the importance of this south-south configuration from a political and economic view, this relationship is not without its challenges, especially with labour movements which accuse Chinese competition as a key reason for job losses. Furthermore, trade between the two countries mirrors that of South Africa and its traditional north partners, where RSA exports are mainly primary resource based-products and imports are mainly manufactured value added products. The prevalence of non-tariff barriers that exist especially for agriculture further exacerbates the concerns as these are hampering RSA’s penetration of the China market. Despite these concerns and given the current forecasts of China’s future economic size and political weight, the logic of improving relations seems irrefutable.

In tralac’s recent publication on South Africa’s Way Ahead – Looking East, we note that expected losses (employment, wages, and production) in certain sectors will be offset by the opportunities created in other sectors with a competitive potential thus in the long run allowing South Africa to develop and expand trade in its competitive sectors. Affected sectors such as clothing and textiles need to be realigned and adopt new technologies while opportunities exist in the chemicals, plastics and non-ferrous metals sectors.

While South Africa dines in the dragon’s lair, there should be a common understanding amongst South African stakeholders, of China role’s in the global economy. The South African government needs to inform its stakeholders that China’s rise is inevitable, and we should not avoid engaging China effectively on the trade front. Concentrating only on defensive positions, on how to limit China’s impact is counter-productive and will ensure that the Sino-RSA relationship remains skewed in ways that suit the Chinese economy far more than those of South Africa.

http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=93462&cat_id=1030

References

Alves and Sidiropoulos (2010), South Africa-China Relations: Getting Beyond the Cross-roads? The Sunday Independent, 29 August 2010, [online] full article

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/