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VOL.2 October 2010
South African President's China Safari
Twelve years after switching diplomatic recognition from Taipei to Beijing, South Africa has upgraded this engagement by signing the Comprehensive Strategic Partnership, and concluding 12 economic agreements that ranged from memoranda of understanding to actual trade and investment deals
By SANUSHA NAIDU

Following what could be described as a breathless three-day diplomatic visit to China at the end of August, South African President Jacob Zuma has finally come full circle with his BRIC tour. Described by foreign policy specialists and the mainstream media as Zuma's symbolic BRIC foreign policy strategy, the visit signaled more than just an attempt to strengthen the trade and markets dynamic, which has become a familiar feature of the BRIC phenomena. It was a veritable sign that the Zuma Presidency was serious in going for the coveted prize of becoming the fifth member of the BRIC alliance.

With visits to Brazil in April and India in June, hosting the 2010 World Cup football in June-July and then jetting off to Russia in early August and rounding off the month with the China safari, it is becoming abundantly clear that South Africa's foreign policy is intensifying under the "Look South" focus. And this is no surprise. Undoubtedly calibrating our international relations with the BRIC countries is the way to go.

Not to do so is tantamount to diplomatic suicide in the current global setting, especially considering that these four emerging markets are projected to be the anchor of the global economy by 2050 and commanding an undeniable position with their combined wealth and growth that is projected to be larger than the G7 over the next 25 years. Therefore having an African voice in what is potentially becoming a countervailing Bloc to the G7 in the G20 pushes all the right buttons. But, Zuma's trip was also about solidifying its engagement with Beijing and demonstrating to Chinese friends how serious Pretoria views its relations with the Middle Kingdom.

Twelve years after switching diplomatic recognition from Taipei to Beijing, South Africa has upgraded this engagement by signing the Comprehensive Strategic Partnership, and concluding 12 economic agreements that ranged from memoranda of understanding to actual trade and investment deals. In this regard the Zuma government signaled its intention that it wanted to elevate its relations with its second largest trading partner to one that produced tangible benefits for both sides while permeating the win-win partnership, which has become the hallmark of China's Africa Policy.

By eclipsing the United States with the total trade volume amounting to $16.3 billion in 2009, just behind the EU, this trip also meant that China could further embed itself in the South African market with opportunities to expand across the Limpopo River into the economies of Southern Africa and the beyond.

As much as the deals signed signal a business as usual approach for the Chinese and SA Inc., Zuma's trip was also about effecting a more balanced engagement. During his various interviews and speeches there was an implicit message about forging a strategic relationship that encompassed beneficiation, production of value-added products at source and equal trade partnerships. Perhaps the latter had to do with South Africa's current trade deficit with China, which is approximately $2.7 billion.

But I am inclined to think otherwise.

With a major public sector strike taking center stage back home, Zuma was probably mindful of the how a burgeoning trade deficit could render more problems for his presidency. And he needed to strike the right cords.

Moreover, Zuma had to find the right mix to convince his Chinese counterparts that investment in the continent's most powerful economy would yield a gateway to mineral, energy, infrastructure and transport opportunities.

But the key was to ensure that the striking public servants were not forgotten in all of this and modeling his visit on the premise that China could act as a catalyst for our manufacturing sectors could be seen as a shot in the arm for job creation and improving the country's current account.

From the Chinese side, like any other investor, there will be quiet concern about how the strikes will affect future investment projects. Already there is a land dispute around the cement manufacturing plant, a joint venture between Women's Black Economic Empowerment group, WIPRO, Chinese cement group Jidong Development Group and the China-Africa Development Fund (CADF) in Limpopo. The community living close to the plant is claiming that the land rightfully belongs to them and is now calling for the reversal of the $2.34 billion deal because they have argued that they were not rightfully consulted over the project.

With these tensions emerging, it is clear that the Zuma presidency has much to do not only to resolve the public sector strike, but also to convince workers of the fruits from the deals and agreements signed during his trip to China. And that these trade and investment opportunities should not be interpreted as merely intentions but rather should be viewed as leading to tangible investments that would result in job creation and a viable manufacturing base for the country. And in doing so this means that Zuma has to also ensure that investor fears are allayed while reassuring an important domestic constituency that joining BRIC is in the national interest.

 

In September issue Africa Postcard stated that: "Most donors did reach the target of 0.7 of GNI while the promise of doubling of aid..." It should in fact read: Most donors did not reach... The writer regrets the error.

 

Views here may not necessarily represent those of ChinAfrica. She can be contacted at: Sanusha.naidu@gmail.com

Sanusha Naidu is the Research Director of the Emerging Powers in Africa program based with Fahamu in South Africa

 

 

 

 

 

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