51. South Africa, China: The Limits of Cooperation

South Africa, China: The Limits of Cooperation
Stratfor
August 24, 2010
2128 GMT

Summary

South Africa and China signed a “comprehensive strategic partnership” during President Jacob Zuma’s visit to Beijing, part of a wider effort to increase economic cooperation with other emerging economic powers and increase Pretoria’s standing as a global geopolitical actor. While such partnerships can help bring much needed investment and technical expertise into the country, South Africa’s domestic challenges, such as unemployment, public sector strikes and widespread poverty, will need to be addressed before it can credibly rise as a regional power with global influence, and some of the potential partnerships with China could even exacerbate existing problems.


Analysis

South African President Jacob Zuma announced a “comprehensive strategic partnership” with China on Aug. 24 during his three-day state visit to the country. Pretoria is courting China and the other BRIC countries — Brazil, Russia and India, all of which Zuma has recently visited — as a way to position itself not merely as a leading emerging economy but as a global geopolitical actor representing a developing region.



Since the end of apartheid in 1994, South Africa has been focused on internal reconciliation, including efforts to avoid capital flight, mass emigration of the white elite, and the possibility of a protracted civil war. It is only since Zuma’s 2009 election that South Africa has emerged from this inward focus. The BRIC countries, foremost among them China, have a great deal of technical expertise and investment capital they can offer Pretoria and that Pretoria intends to seek. However, a number of domestic challenges, including labor disputes, unemployment and poverty, must be addressed before South Africa is able to lay claim to its regional and global ambitions, and some of the potential avenues for cooperation with China may even exacerbate these problems if pursued.



The BRIC countries are a loose confederation often viewed in terms of their rapidly growing economies, but more significant, recognized for their regional and global political influence. Likewise, South Africa has long seen itself as not only the natural leader of Africa, but also as a country that should spread its influence globally. During the Cold War, South Africa positioned itself essentially as a Western European ally that happened to be in Africa, acting as a bulwark against Communist expansion on the continent (especially in the southern African region) and as a crucial source of natural resources, as well as informally monitoring military activity in the South Atlantic for NATO.



Reaching out to the BRIC countries is one way for the South Africans to acquire the investment and other skill sets they seek, such as Brazilian energy technology, Russian mining technology, Indian information technology and Chinese capital. The Chinese are already South Africa’s largest trading partner both in terms of exports and imports. Recent Chinese deals in South Africa have included major mining and banking sector investments, and during Zuma’s ongoing visit, a railway infrastructure deal was discussed and a telecommunications deal was signed.



These will be necessary inputs to help South Africa boost its global footprint but by themselves will not overcome domestic and regional constraints facing Pretoria. While a strategic partnership with China may facilitate heavy investment, and Beijing may speak up for South Africa on global interests held in common, Beijing’s primary interests are obtaining natural resources and providing major infrastructure projects for its state-owned companies. It is not interested in helping South Africa in intra-regional spats with other African countries in which China also holds economic interests. For example, Angola, which is attempting to emerge as a rival to Pretoria for African leadership, is now China’s largest crude supplier, and Zimbabwe is home to a number of Chinese mines; China would not want to risk alienating these trade partners. Brazil is also unlikely to jeopardize its growing relationship with Angola, with which it hopes to jointly explore for ultra-deep crude oil in the Atlantic Basin stretching between the two countries.



At home, Pretoria will be careful to manage its burgeoning BRIC dealings so as to not upset its relations, particularly with its labor allies, the Congress of South African Trade Unions. Currently embroiled in a public sector strike over a pay and working condition dispute involving at least 1 million workers, the Zuma government cannot afford a deepening of unemployment (the official unemployment rate is 25 percent, while unofficially the rate is believed to be closer to 40 percent). In addition, China often sends Chinese workers abroad with its investment capital to work on joint infrastructure projects. This potential influx of Chinese laborers displacing their South African counterparts, as has been the case elsewhere in Africa, would compound Pretoria’s existing employment problems. South Africa has recently dealt with violent threats against Zimbabwean and Somali immigrants perceived to be stealing South African jobs and absorbing what limited supply of social services there are in South Africa, and anti-Chinese violence could also take hold.



Globally, Pretoria has positioned itself for a stronger international role, and it is taking incremental steps to achieve this — aligning with BRIC countries, representing Africa at G-8 and G-20 summits, and aiming for a non-permanent seat starting in 2011 on the U.N. Security Council (and perhaps using that seat to eventually petition for permanent council membership).



These efforts are not without significance, and the prospect of increased economic cooperation, investment and strategic partnership with China, however it manifests itself, hold promise for Pretoria. However, until South Africa makes headway on some of its fundamental economic challenges, its ability to join the BRIC countries as a player on the global stage will be constrained.