Background:

On 17 Jan 2017, the president of People’s Republic of China (PRC), Mr. Xi Jinping delivered a speech to state leaders and business community representatives from all over the world. In his speech, Mr. Xi has presented the Chinese national initiative of the Belt and Road, which we may track the root when more than two millennia ago the diligent and courageous people of Eurasia explored and opened up several routes of trade and cultural exchanges that linked the major civilizations of Asia, Europe and Africa, collectively called the Silk Road by later generations

- The initiative to jointly build the Belt and Road, embracing the trend towards a multipolar world, economic globalization, cultural diversity and greater IT application, is designed to uphold the global free trade regime and the open world economy in the spirit of open regional cooperation. It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets; encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all. Jointly building the Belt and Road is in the interests of the world community. Reflecting the common ideals and pursuit of human societies, it is a positive endeavor to seek new models of international cooperation and global governance, and will inject new positive energy into world peace and development.

- The Belt and Road Initiative aims to promote the connectivity of Asian, European and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road, set up all-dimensional, multi-tiered and composite connectivity networks, and realize diversified, independent, balanced and sustainable development in these countries. The connectivity projects of the Initiative will help align and coordinate the development strategies of the countries along the Belt and Road, tap market potential in this region, promote investment and consumption, create demands and job opportunities, enhance people-to-people and cultural exchanges, and mutual learning among the peoples of the relevant countries, and enable them to understand, trust and respect each other and live in harmony, peace and prosperity.

- China's economy is closely connected with the world economy. China will stay committed to the basic policy of opening-up, build a new pattern of all-round opening-up, and integrate itself deeper into the world economic system. The Initiative will enable China to further expand and deepen its opening-up, and to strengthen its mutually beneficial cooperation with countries in Asia, Europe and Africa and the rest of the world. China is committed to shouldering more responsibilities and obligations within its capabilities, and making greater contributions to the peace and development of mankind.

To be mentioned, despite a sluggish global economy, China’s economy grew by 6.7% in 2016, still one of the highest in the world. China’s economy is far bigger in size than in the past, and it now generates more output than it did with double-digit growth in the past. Household consumption and the services sector have become the main drivers of growth. In the first three quarters of 2016, added value of the tertiary industry took up 52.8% of the GDP and domestic consumption contributed to 71% of economic growth. Household income and employment have steadily risen, while per unit GDP energy consumption continues to drop. The country’s efforts to pursue green development are also paying off.

How South African businesses benefit from the “Belt and Road”

South Africa is the largest trading partner for the PRC in African continent. Through years of efforts since 1998, the two governments have built up strong political tie and bilateral trading & investment relation.

At the meantime, South Africa government and ruling party, African National Congress are pursuing radical economic transformation to address poverty, create job opportunities and involve the majority participation in the economy.

Historically, South Africa and China share the same past of walking out of colonialism and building national independent and economical prosperity. Therefore, by learning from the successful experience of our eastern partner and attracting investment in various fields, South Africa can truly benefit from the “Belt and Road” initiative.

In trade and industry:

Recently, Department of Trade and Industry (DTI) just rolled out the Industrial Policy Plan (IPAP 2017/18 – 19/20). The new plan is focusing on labour intensive sectors that link the productive sectors of economy, across integrated value chains.

Obviously, the new DTI plan encouraged business community to expend efforts in building up manufacturing capacity and create more employment opportunities. In this regard, Chinese investors who are supported by the “Belt and Road” initiative can play an important role by forming partnership with SA businesses, injecting capital, introducing innovative technology and skills.

- The resource can be consumed effectively and efficiently.

- The value added products can be produced locally and exported worldwide.

- Large number of decent job opportunities will be created and skilled labour force will be developed.

- African entrepreneurship will grow substantially through the partnership.

- Build up sustainable manufacturing sector and eventually achieve the goal of national industrialization.

Agriculture:

South Africa government and ruling party African National Congress are working tirelessly on transformation in the agriculture sector. The land reform program will ultimately benefit the previously disadvantaged group and involves the majority of rural communities in the agriculture operation. It will also increase production due to inverse farm size productivity and create employment in farming sector.

In this regard, Chinese investors can play a key role based on its well developed small and medium agriculture model through centuries. To be emphasized, China has a well established food processing industry to satisfy the diversified domestic market. The most demanded agro-processing technology and skill will be introduced to South Africa and benefit the majority of rural community through partnership.

Other sectors:

The radical economic transformation will open up sectors to the majority through empowerment of previously disadvantaged society. It will also break the monopoly of minorities and create space for investors from overseas.

There is already substantial Chinese investment from in South Africa, such as infrastructure, finance, construction, motor manufacturing, telecommunication and wholesale & retail etc. There is no doubt that investment and cooperation between South Africa and China will further expend under the guideline of the “Belt and Road”.

Chinese president, Mr. Xi Jinping has expressed the partnership between China and Belgium as “Tea and Wine”, which symbolize the coherent of different culture and manner from Eastern and Western. Therefore, the “Belt and Road” initiative becomes the tie of the differences.

I believe that “Tea and Wine” shall match the characters better referring to SA – China relationship. As the most diversified economy in the world, South Africa will provide great potential for Chinese investors to establish their business and receive their rewards in various sectors. I may also call upon SA entrepreneurs to grab this opportunity provided by both South Africa and Chinese Government and put all efforts in building a sustainable and prosperous SA economy. 

(Anderson ANC Progressive Business Forum)