| Through infrastructure-for-resources loans, China has enabled its national enterprises to operate across Africa and in the process it has also made a substantial contribution toward the provision of roads, railways, ports and other infrastructure needed across the continent. These infrastructure programs have improved the transport system of many African countries, and this has created a conducive environment for business, thus indirectly contributing toward poverty reduction. Questions about quality might persist, but quickly fall square back onto those bodies responsible for oversight in African countries. Tobela Tapula, research analyst at the Center for Chinese Studies,Stellenbosch University, looks at Chinaís involvement in resource extraction in Africa, specifically in South Africa. Excerpts of his views follow:
At the foot of the continent, the China-South Africa relationship has grown significantly since the early 1990s. It is imperative to examine how South Africa has benefited from this relationship. South Africa is the leading producer of platinum and manganese, and signed a Comprehensive Strategic Partnership Agreement in 2010 that prioritized working toward a more balanced trade profile between the two countries, in particular by encouraging trade in manufactured value-added products. South Africa also possesses a number of minerals and precious metals, such as iron ore, diamonds, gold and it is the only country in Africa to invest in China.
In 2008, South Africa’s exports stood at approximately $3.5 billion. According to the Department of Trade and Industry (DTI), South Africa’s exports to China reached an all-time high of $8.5 billion in 2011, an increase of 45 percent over 2010, and dipped slightly to $8.1 billion in 2012.
It is important to note that China’s mining investments in South Africa are noticeably different from investments in other African countries. Chinese companies have been establishing joint ventures with South African mining companies that are profitable and stable, so as to ensure a long-term supply of raw materials to the Chinese market.
The South African Government, through legislation such as the Mining Charter, Broad Based Black Economic Empowerment and Minerals and Petroleum Resources Development Act, has been calling for mineral beneficiation and for more transformation in the mining industry. Transformation is meant to ensure that historically disadvantaged South Africans benefit more from South Africa’s mineral wealth. These policies, coupled with complex environmental and labor laws, have required a very distinct way of engagement for Chinese corporations operating in South Africa, which has to consider development of communities alongside economic benefits. Considering development is an important angle in the debate, analysis still needs to be done on where this policy framework is attracting Chinese investments and where it is not.
The South African mining industry – still the economic backbone of the country – can certainly make a positive contribution toward job creation, thereby reducing poverty and contributing to the development of communities. One of the crucial conditions for South Africa to benefit more from these economic partnerships, is a need to improve the capacity of implementing agencies (such as Department of Mineral Resources), prudent management of mineral rent (quick win vs. long-term vision), building human and institutional capacity, promoting research and development, and a leadership that has a long-term view about these matters. China needs to go beyond the elites and engage with all the stakeholders (including mining communities) in a more constructive way. CA
(Source: CCS) |
