South Africa is in the fortunate position of having front-row seats at the greatest show on earth – the rise of a new world power that not long ago had a small‚ insular economy.
“Because of the speed at which China’s economy grew and hit the world stage‚ people forget that it used to have a small economic base – much like Africa today‚ in fact‚” says Gregory Nott‚ director at Werksmans Attorneys‚ which in 2000 was among the first law firms in South Africa to establish a China desk.
“As one of three African countries attracting the most Chinese investment‚ South Africa is extremely privileged‚” he says. “Apart from the trading and investment potential of our relationship with China‚ we have the opportunity to learn first-hand from its success story.”
There are distinct parallels between Africa today and China before its rapid rise into the ranks of the world’s top two largest economies‚ Nott says.
“The similarities include large populations and widespread poverty. Africa is poor but like China‚ we have the people and resources to take ourselves out of poverty – provided we are willing to learn from the lessons China has to offer us.”
In Nott’s view‚ the three main characteristics that have fuelled China’s spectacular rise to world-power status are visionary leadership‚ disciplined economic management and radical economic transformation agenda.
“The Chinese take long-term views of what they see for their nation‚” he says. “They set goals and objectives that may take many decades and sacrifices to achieve‚ and they carry them out and keep to them. They do not chop and change every few years.”
Nott says the discipline and focus that China applies are evident in its approach to making new investments‚ including in Africa.
“The Chinese do a lot of background work before they make any decisions. Typically‚ research managers visit the specific region where an investment is being considered and prepare detailed reports for the decision-makers‚” he says.
“The approval process in China can be very long and involve many different levels of management‚ so it takes a while to get started. Once started‚ however‚ they move at speed – far faster than the norm in Africa‚ where we are used to projects that take a long time to complete.”
As for its radical transformation agenda‚ China did not shy away from taking and executing pragmatic but ideologically difficult decisions for a communist state‚ such as introducing profit incentives for rural collectives‚ family farms and small businesses.
Nott adds that as a foreign investor in Africa‚ China has become increasingly attuned to Africa’s needs and priorities. To date‚ China has signed bilateral investment treaties with 33 African countries and double taxation agreements with another four.
“We have also discovered how more and more Chinese companies are becoming increasingly sensitive to corporate social responsibility and are starting to focus on the ‘triple bottom line’ – profit‚ social requirements and the environment. They realise they can’t do business without it.”
“What’s more‚ China holds a positive view of Africa and it is that which we should capitalise on”‚ says Nott. - I-Net Bridge