Chinese President Xi Jinping makes rare trip abroad to touch many bases in South Africa

21 Aug 2023

For Xi, this rare venture outside China is an opportunity to cement relations with Pretoria, which is China’s key partner in Africa, and to meet the more than 30 African heads of state and government invited to participate in the Africa Outreach component of the BRICS Summit.

Chinese President Xi Jinping has arrived in South Africa on his fourth state visit to this country — which is also only his second visit abroad this year. The visit underscores the importance which Xi attaches to South Africa, Africa and to BRICS and the Global South.

After Tuesday’s abbreviated state visit in Pretoria, Xi and President Cyril Ramaphosa will head to Sandton for the opening of the 15th summit of BRICS, the bloc of emerging nations comprising Brazil, Russia, India, China and South Africa.

For Xi, this rare venture outside China is an opportunity to kill several birds with one stone: to cement relations with Pretoria, which is China’s key partner in Africa, and to meet the more than 30 African heads of state and government whom Ramaphosa has invited to participate in the Africa Outreach component of the BRICS Summit.

Xi will receive special treatment not only in being granted a state visit, but also in co-hosting with Ramaphosa a roundtable at the summit of African leaders. This is billed as a “mini-Focac”, a reference to the Forum on China-Africa Cooperation where the Chinese president meets almost all African leaders every three years for a full, dedicated summit.

Xi will also get the opportunity to meet the many other leaders from the Global South whom Ramaphosa has invited to the BRICS Summit for a separate outreach.

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Xi is strongly pushing for an expansion of the membership of BRICS, which will be the main item on the agenda of the summit. Xi clearly regards an expanding BRICS bloc as a growing counterweight to what he sees as the dominance of the West in the global political and economic order.

“The visit is notable because Xi has been travelling so rarely lately,” says Cobus van Staden, managing editor of the China Global South Project. Xi’s visit reflects the importance of China’s partnership with South Africa, its most important partnership in Africa. And the visit reflects Pretoria’s effort to give this BRICS Summit an Africa focus, which chimes with Xi’s efforts to grow relations with the continent.

Xi will be able to meet leaders of the Global South like Indonesia’s Joko Widodo, who is expected to attend the summit and with whom Xi is eager to strengthen relations.

“So he will be touching a lot of bases while he is here and squeezing a lot into one trip,” Van Staden said.

SA’s trade deficit with China

But the relationship with China is not entirely satisfactory to South Africa, mainly because of its huge and growing trade deficit with the country, which Ramaphosa said is its largest trade partner by volume (though trade with the European Union is larger).

SA’s trade deficit grew from $5.5-billion in 2020 to $7.6-billion in 2021 and to $12.51-billion in 2022, according to UN Comtrade figures.

Ramaphosa said that among the “expected outcomes” of his meeting with Xi on Tuesday was “to underscore the urgent need to address the trade balance and diversify South African exports to China by identifying broad market access for value-added products” and “to highlight the importance of sustainable foreign direct investment through supporting manufacturing, infrastructure and beneficiation and encourage close private sector engagement from both countries”.

In essence, South Africa’s huge trade deficit derives from the fact that it mainly exports raw materials to China and mainly imports manufactured, value-added goods.

SA’s trade deficit with China makes the largest contribution to its overall deficit with the BRICS countries. The chairperson of the BRICS Business Council, Busisiwe Mabuza, was quoted in Business Day this week as saying that the council, which is meeting parallel to the summit, would ask its BRICS partners to outsource some of their production to SA where they could take advantage of the African Continental Free Trade Agreement (AfCFTA) to export into the African market.

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Van Staden told Daily Maverick that while China had been offshoring production for some time, this tendency had recently spiked and included the establishment of electric vehicle companies in Africa, mainly South Africa and north Africa.

South African business is also concerned about losing out to Chinese companies in the massive roll-out of renewable energy infrastructure. Sources say the Manufacturing Circle, representing most SA manufacturers, is lobbying strongly against the possibility of Eskom awarding to offshore contractors the contract to build some 14,000km of transmission lines to connect mainly renewable power plants to the national grid.

Mike Benfield, the CEO of Macsteel and a member of the Manufacturing Circle executive committee, said he had heard rumours, but did not know what Eskom’s plans were for awarding the transmission grid contracts.

He was adamant that South African steel companies could complete the project and said the industry had made this clear in a recent request for information report to Eskom. The power utility originally gave the industry just five days to submit the report, but later extended this to three weeks.

Benfield noted that the massive project, which would take about 10 years to complete, would go out on formal tender.

“This shouldn’t go to Chinese industry. This should go to local industry,” he said, adding that the larger steel firms would subcontract to SMEs.

More cooperation agreements

Ramaphosa said that SA and China would sign more cooperation agreements.

“China is an important investor in South Africa and provides support on infrastructure development projects, including the Small Harbour Development Project, the TVET Refurbishment Project and the Mzimvubu Water Project, all of which are instrumental in job creation.”

He said SA and China would also seek to “enhance multilateral cooperation, specifically within the context of BRICS, the G77 plus China, and the G20 and to seek Chinese support for South Africa and Africa’s call for the reform of global governance institutions, notably the United Nations Security Council”.

One of the great ironies of BRICS is that while it ostensibly aims to give countries of the Global South a greater voice in global government, Russia and China, the two BRICS members which have permanent seats on the UN Security Council, have never publicly supported the campaigns by the other three BRICS members — SA, India and Brazil — to get permanent seats on an expanded council.

The three Western permanent members of the Security Council, on the other hand, have publicly stated they supported permanent seats for African and other emerging and developing countries. DM

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SA’s trade deficit with China

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