Authors: Muzi Shoba, Victor H. Mlambo
Affiliation: Nelson Mandela University, University of Johannesburg
Organization/Publisher: Cogent Social Sciences
Date/Place: February 29, 2024/ UK
Type of Literature: Journal Article
Number of Pages: 15
Link: https://www.tandfonline.com/doi/full/10.1080/23311886.2024.2321699
Keywords: China, Direct Foreign Investment, Asymmetrical Relations
Brief:
In the 20th century, the prospect of establishing official diplomatic relations between South Africa and China, alongside other developing nations, seemed highly unlikely due to South Africa’s apartheid system. Initially, there were limited diplomatic ties between South Africa and China from 1949, mainly between the National Party of South Africa and China’s Nationalists. Despite having common interests in combating international isolation, relations remained limited to the consular level for almost three decades. However, a significant shift occurred in 1971 when the United Nations recognized the People’s Republic of China (PRC) as the legitimate representative of China, prompting South Africa to intensify its engagement with the Republic of China (ROC) based in Taiwan. This upgrade led to enhanced political and economic bonds, characterized by increased trade and investment. Furthermore, official visits and cultural exchanges further strengthened relations between South Africa and the ROC. Despite external pressures to align with the PRC, South Africa maintained its relationship with the ROC until the political transformations of the 1990s. Concurrently, the Communist Party of China (CPC) began forming connections with South African political groups, particularly the African National Congress (ANC) and the South African Communist Party (SACP), offering support in their anti-apartheid struggle.
However, tensions arose due to suspicions of clandestine trade with the apartheid regime and the Sino-Vietnam conflict. Relations between the PRC and the ANC-SACP alliance were later revived through diplomatic initiatives. Nonetheless, the ROC’s ties with South Africa endured, as evidenced by significant contributions during South Africa’s transition to democracy. Despite political changes, the ROC remained hopeful of preserving relations under the new ANC-led government. Upon assuming power in 1994 following victory in the general elections, the African National Congress (ANC) under Nelson Mandela’s leadership faced a twofold challenge regarding China. The ANC had to decide whether to (1) maintain relations with the Republic of China (ROC), a legacy from the apartheid era, while establishing ties with the People’s Republic of China (PRC), or (2) sever ties with the ROC and adhere to the One China policy advocated by the PRC. This deliberation was crucial given the ANC’s historical ties with China, especially with Nelson Mandela as a highly esteemed figure in global politics. While the global community, which supported South Africa during apartheid, welcomed the new government, the ROC in Taiwan encountered mounting pressure as only a few states recognized it compared to the widespread recognition of the PRC. Despite years of engagement since the 1950s, relations between the ANC and the PRC faced challenges over time.
The PRC did not anticipate delays in formalizing relations with South Africa post-1994, given their shared history in the anti-apartheid struggle. Nevertheless, President Mandela’s orientation towards a “dual recognition” policy of maintaining ties with both the ROC and the PRC took the latter by surprise. This shift was attributed to economic factors, including Taiwan’s economic performance and contributions. Despite objections from the PRC, Mandela persisted in pursuing dual recognition. Over time, the ROC encountered increasing international isolation as more countries moved to recognition of the PRC. President Mandela’s inaugural visit to China in 1998 marked the beginning of official South Africa-China relations. Subsequently, bilateral ties deepened, evolving into a comprehensive strategic partnership characterized by heightened trade, investments, and various exchanges. South Africa became a gateway for China into Africa, offering export opportunities and access to raw materials. In turn, South Africa viewed China as a critical partner in global politics, particularly amid the transition towards multi-polarity favoring developing countries.
Under President Jacob Zuma’s leadership, South Africa-China relations gained further momentum, marked by frequent high-level visits and enhanced cooperation across sectors. The Inter-Ministerial Joint Working Group on Cooperation, established during President Xi Jinping’s visit to South Africa in 2013, facilitated regular interactions between the two nations. Economic collaboration flourished, with China emerging as Africa’s largest exporter and South Africa’s top trading partner on the continent. However, critics argue that the relationship is highly lopsided, with South Africa heavily dependent on China. Concerns about subordination to Chinese influence arise due to South Africa’s perceived lack of a clear strategy. The vast disparities in population, military expenditure, and overall capabilities between the two nations underscore the existing imbalance in their relationship. China’s substantial investment in Africa is underscored by the exponential growth in China-Africa trade, surging from US$155 billion in 2017 to US$185 billion in 2018, according to the China-Africa Research Initiative. South Africa, being the primary African trading partner with China, contributes between a quarter to a third of China’s total trade with the continent, as highlighted by Songtian in 2018. Torrens pointed out that Chinese foreign direct investment (FDI) in South Africa reached USD$15.2 billion, establishing China as a prominent investor in the country.
By 2020, China’s cumulative investment in South Africa exceeded US$25 billion, creating over 400,000 direct and indirect employment opportunities according to Grobler. Augmenting economic ties with South Africa remains a focal point in the broader China-Africa relationship, as noted by Anikola and Tella. South Africa has been a significant recipient of Chinese state-funded loans, further solidifying economic cooperation between the two nations. Apart from state-funded initiatives, numerous Chinese private enterprises operate in South Africa. The establishment of a Fortune 500 company, the First Automobile Works (FAW) China Group Corporation, in South Africa in 2014 marked a significant milestone in Sino-South African economic relations. Former President Zuma lauded this investment as evidence of the strong partnership between the two countries, emphasizing South Africa’s appeal as an investment destination. Vice President of China FAW Group Corporation, Mr. Qin Huanming, expressed confidence in South Africa’s political, economic, and infrastructural stability, citing these as catalysts for FAW’s investment. The successful establishment of FAW’s South African plant, financed by a US$60 million investment from Chinese entities, further showcases the depth of bilateral cooperation.
South Africa reciprocates its investment in China, with companies like Naspers and South African Brewers Miller (SAB Miller) playing pivotal roles in the Chinese market. Discovery, Exxaro, Standard Bank, Sasol, and other South African firms actively engage in China’s domestic markets. South Africa’s FDI in China exceeded US$700 million in 2016, positioning the country as the largest African investor in terms of both quantity and quality. While South Africa’s trade with China is significant, other African countries like Angola, Egypt, and Nigeria also play crucial roles in China-Africa relations. Despite being Africa’s largest trading partner with China, South Africa’s exports primarily consist of raw materials, leading to trade imbalances. Critics have raised concerns about the asymmetrical nature of the Sino-South African relationship, particularly in economic terms. Some equate China’s engagement in Africa to neo-colonialism and imperialism, fearing potential exploitation and domination. However, officials from both sides dismiss these concerns, emphasizing the mutually beneficial nature of their partnership. President Ramaphosa, for instance, views the relationship as a win-win scenario, where South Africa exports raw materials to China in exchange for manufactured goods. While debates about asymmetry linger, both countries remain committed to nurturing their relationship amidst evolving global dynamics.
By: Omar Fili, CIGA Research Assistant
