China initiative offers major trade opportunities for SA
The Second Belt and Road Initiative Summit concluded in Beijing last week and will go down as a defining moment of the 21st century.
China built a formidable coalition of willing nations to endorse the Belt and Road plan that will significantly reshape global trade and relations. It will also be remembered as the first global summit that exposed major cracks within developed Western countries since 1945.
For instance, Italy, Greece and Switzerland broke ranks with tradition and joined the Belt and Road Initiative (BRI). In their calculations, the BRI presents more important economic opportunities for their people and countries than rhetorical noise from Washington, Bonn and Paris.
The UN, World Bank and the International Monetary Fund have acknowledged that, if effectively implemented, the BRI stands as a major global economic stimulus that could revive the faltering global growth that is projected at 3% in 2019 and 2020.
President Xi Jinping’s opening speech to 40 global leaders from Asia, Europe, Africa, and Latin America struck a conciliatory tone. He candidly addressed the concerns of those opposed to the BRI. There are myriad concerns emanating from Western capitals, ranging from the perception that Beijing violates the well-established global rules set by Western powers and the BRI might be used to strengthen China’s hegemonic designs.
However, the march of the BRI seems inexorable. Through the Forum on China-Africa Co-operation (Focac) and deep bilateral relations, Africa has somewhat retained a special place in China’s foreign policy. However, China would be negligent not to invest more energy in courting countries that are more developed, industrialised and offer more economic promise.
Thus, while Africa could still hold on to its role as a supplier of mineral and energy resources to China, it might not benefit efficiently from the BRI initiative. The onus to participate in the BRI in a way that boosts Africa’s hard and soft infrastructure is primarily the responsibility of the continent.
Africa featured prominently in the summit with AU chairperson President Abdel Fattah el-Sisi of Egypt relaying the continent’s voice on the BRI to the delegation.
However, South Africa, Nigeria, Angola and many other countries on the continent were conspicuous in their absence. As a Brics member and major contributor to Africa’s peace and security, South Africa ought to be an active participant in the BRI.
More than most African countries, South Africa’s economic growth remains sluggish. Last year, it registered an attenuated growth rate of just 0.8%.
In his budget speech in February, Minister of Finance Tito Mboweni estimated South Africa’s real gross domestic product growth would be about 1.5%, 1.7% for 2019 and 2.1% for 2021. While these forecasts manifest improvement, they still fall short of South Africa’s potential of a 3.7% growth rate as estimated by Mark Appleton of Ashburton Investments.
Coupled with good governance that automatically wins people’s trust in leaders and public institutions, taking advantage of initiatives such as the BRI could be of immense help to South Africa.
South Africa’s notable inactivity in the BRI is due to the country heading for an election that does not guarantee a vast majority for the government. After the disastrous Jacob Zuma presidency, it is expected that the ruling party will try to convince the electorate that Zuma’s departure indicates a shift towards honest leadership.
It would be advisable, however, that after elections, South Africa rethinks its stance on the BRI with the possibility of being an active participant.
By the size of their respective economies, Nigeria and South Africa have assumed a natural leadership role in Africa. Initiatives such as the BRI and the African Continental Free Trade Area could only benefit Africa if the two economies feature prominently.
* Monyae is the director for Africa-China Studies at the University of Johannesburg. He attended the BRI Summit held in Beijing last week.
** The views expressed here are not necessarily those of Independent Media.