Minister on China-South Africa Relations & China’s Role in Africa

FOREIGN AFFAIRS PORTFOLIO COMMITTEE
5 September 2007
MINISTER ON CHINA-SOUTH AFRICA RELATIONS & CHINA’S ROLE IN AFRICA

Co-Chairperson: Ms F Hajaig (ANC)

Documents handed out:
Role of China in Africa in the Context of the Forum on China Africa Cooperation (FOCAC)

Audio recording of meeting

SUMMARY

The Department of Foreign Affairs illustrated how vital relations were between South Africa and China. It was shown that China was willing to assist with skills and development, conflict resolution in Africa and to correct the trade imbalances with South Africa. The immediate cancellation of the debt of poor African countries was also stressed.

The Minister emphasised the fact that South Africa aimed to maintain a long-term relationship with China and that the focus should not be on the short term. She also reminded the Committee of the One-China policy, that excluded Taiwan, and that mishandling that policy could jeopardise the relations South Africa had with China.

MINUTES
Role of China in Africa in context of Forum on China Africa Cooperation (FOCAC)
Ambassador Jerry Matjila (Deputy Director-General: Department of Foreign Affairs) briefed the Committee on the Beijing Action Plan that emerged from the Forum on China-Africa Co-operation (FOCAC) Summit in 2006 where over 40 African Heads gathered in Beijing. He began by mentioning the outcomes of the Beijing Action Plan which were that China would double the assistance given to Africa by 2009, provide preferential credit to Africa, establish a fund to encourage Chinese companies to invest in Africa and cancel all interest-free government debt by the least developed countries in Africa.

They also agreed to include a mechanism of regular political dialogue between the foreign ministers within the FOCAC framework. A conference on this framework would be held every alternate year. The purpose of the political consultation was to exchange views on issues of common interest and review the Beijing Action Plan.

The Ambassador provided a progress report on the implementation of the Beijing Action Plan listing the agreements, exchange of visits, building of institutions, loans and credit as well as training and skills development that had occurred. He listed the proposed issues for political consultation.

The Ambassador then moved on to the marketing of South Africa in China.

A July 2007 Cabinet meeting resulted in the approval of the framework for a Co-ordinated Marketing Approach of South Africa with China as a first test case.

The reasons for choosing China included the fact that currently China had the fourth-largest economy in the world and it was South Africa’s fifth largest export destination. The framework for a coordinated approach to market South Africa in China was illustrated. The envisaged activities for the tenth year anniversary of South Africa and China bilateral relations were shown as was the growth and development landmarks and timeframes. The Shanghai World Expo in 2010 was the final point of discussion.

Discussion

Adv Z Madasa (ANC) wanted to know the role that the African Union (AU) and other African institutions would play in the relationship between Africa and China. He was concerned with the approach of working with the institutions one at time.

Ambassador Matijla replied that China was working very closely with the representatives of the AU Commission. They were facing a challenge with African presidents about the New Partnership for Africa’s Development (NEPAD). Presidents wanted deliverance specifically to help their countries. The challenge was to reconcile the individual needs of each country and the broader needs of the continent. He believed that they would find a formula to try and balance the two.

Adv Madasa asked about the role of China regarding conflict resolution in Africa and whether anything had been agreed upon at a continental level.

Ambassador Matijla replied that it was part of the spirit of cooperation to assist Africa in its recovery and this included assisting with conflict resolution. They admire South Africa’s work on the continent. China wanted to be seen as a responsible global player, partly because they had been accused of dealing in small arms. China had assisted in convincing the President of Sudan to assemble a comprehensive robust force with the United Nations (UN). South Africa’s role was to cooperate with China completely in conflict resolution.

Mr M Sibande (ANC) spoke about the negative impression that existed regarding China and that goods from China were of poor quality. He was concerned by the consequent expansion of anti-social activities in South Africa, especially the global impression of South Africa’s high crime rate when the fact was that many foreigners were part of that criminal activity.

Further, Mr Sibande agreed that South Africa should have a secure market access, but he was not certain that they had attained a similar level as China. China was more advanced technologically than South Africa, and he did not want South Africa to be taken advantage of.

Ambassador Matijla replied that most of the advancement by China was with regard to technology. However there was a small element that was involved in criminal activities. It should be noted that those involved in these activities came not only from Mainland China but other countries such as Taiwan. South Africa was cooperating with China to gain capacity to deal with this element.

Mr Sibanda wanted to know how long would it take to cancel the debts.

Ambassador Matijla replied that China had cancelled the debt immediately.

Mr M Shah (DA) did not see any input related to defence cooperation in defence-related industries. He wanted to know if they envisaged such cooperation.

Ambassador Matijla replied that there was very good cooperation in defence between China and South Africa. In fact they had a very successful relationship.

Dr S Pheko (PAC) thought that the approach by China and Africa was an unprecedented move. He said China had mainly state-owned business and that South Africa more private businesses, he wanted to know how it would work.

Ambassador Matijla replied that it was a new area. They had to build on the partnership and develop it further.

Dr Pheko sought clarity regarding scholarships for Africa and wanted to know if they were receiving scholarships for required fields in the country and if they were all from China.

Ambassador Matijla replied that most scholarships were provided by China. Relatively speaking they were better off than most African countries. China was providing assistance by training people from South Africa to speak their language. South Africa had to identify and define what was required, as China was willing to cooperate.

Dr Pheko referred to development, and added that in order for South Africa to develop there had to be an improvement in its infrastructure first. He asked what the development would involve.

Ambassador Matijla replied that it was a challenge to learn how to grow their economy. NEPAD had outlined various programmes to China and China were currently in contact with NEPAD to see which programmes to fund.

Ms S Camerer (DA) mentioned the trade imbalance between South Africa and China and the fact that it had increased. She realised that both states wanted to create a win-win situation, however China seemed to be benefiting more. She wanted to know what was the bulk of the imports to China and how could this situation be improved.

Ms Hajaig was concerned about South Africa’s manufacturing sector. Their exports to China were mainly raw materials and manufactured goods were imported from China. She wondered if they were doing the right thing.

Ambassador Matijla replied that it was a challenge for both states to develop this win-win situation. The Chinese were prepared to meet them halfway, to cooperate and to address this huge trade imbalance. There was a technical team that was going to study what exactly was being supplied to China and in what format was it being supplied to China. China was ready to invest in South Africa therefore they had to develop infrastructure.

Ms Camerer wanted an indication of what was South Africa’s share of China’s investments in Africa.

Ms D Mothubase-Hounkpatin (ANC) remarked that although it was noble of South Africa to take responsibility for assisting most African countries, she would like to know what was the percentage or how much was South Africa benefiting from the aid that was being offered to Africa.

Dr A Luthuli (ANC) wanted to hear comment on the view that they were getting poor quality goods from China and that Chinese businesses underpaid South Africans.

Dr Luthuli also raised the issue of the attitude of the Chinese towards the African communities that they are in contact with.

Ambassador Matijla replied that the Taiwanese did mostly manufacturing. If there were such concerns about the attitudes of the Chinese, he hoped that they would find a formula to deal with these issues. The focus was mostly on Mainland China. He felt that they worked well with the present arrangement in China and that they had good intentions.

Minister of Foreign Affairs on China South Africa relations

Minister Nkosazana Dlamini Zuma emphasised that the Chinese obviously have their own interests specifically in the economic sphere, as they want to quadruple their Gross Domestic Product (GDP) by 2020. This had implications in that it meant that they were going to import more and more raw materials from Africa. The challenge was how did they ensure that it did not under develop Africa, but that advantage could also be taken by Africa of the situation. One of things was not to deal only with the trade imbalance between South Africa and China, but also change what was given to China and increase what South Africa sold and manufactured. They needed to treat this as a long-term relationship. They needed to see what China required now as well as the potential of their future requirements. South Africa’s industry needed to be geared up to the Chinese market, who had told their procurement companies that South Africa was one of the priority countries. This meant that they needed to do a proper study now so that they could supply what needed to be supplied now and develop further potential. When they were discussing textiles quotas, China was ready to assist South Africa in making SA’s manufacturing sector more competitive.

They had also agreed to work together on the African relationship. The Minister reminded the Committee about the One-China policy, because the Taiwanese were always actively trying to sabotage the policy. They had been discussing this matter with China. China felt that even though they had this policy, not everyone adhered to the policy. They had to remember when dealing with Taiwan that they had to do so without undermining the One-China policy. The only real cooperation that South Africa had with Taiwan was an economic trade agreement. In fact South Africa had already experienced Taiwan trying to undermine the relationship between South Africa and China. They needed to be alert to the fact that South Africa did not have any foreign relations with Taiwan. There should be no conflict in where their interests lie.

Discussion

Mr Seremane commented on the trade agreement with China and added that South Africa was not creating a platform for poor quality goods. He gave the example that the United States of America was using China purely for the exploitation of cheap labour, which would be in conflict with the South African labour laws. He wanted to know if they had come to any resolutions regarding the issue of poor quality goods and labour issues.

Minister Zuma replied that the Chinese were not the only ones to blame for poor quality goods, as there were businesses that specifically buy poor quality goods from China and sell it to South Africans. It was important for everybody to work together to ensure that the goods that come into the country met the required standards. China had 1.3 billion people and as such China had a very strict work ethic that South Africans may not agree with but that helped to achieve their bigger goal. There were other issues that needed to be considered. For instance if or when the Chinese reached their goal of quadrupling their GDP, then the consumer needs would differ, and the issue would then be what kind of products does South Africa want to sell to China, the rough diamond or jewellery.

Mr Seremane also had thoughts about the crime situation and the Chinese mafia in South Africa. He wanted to know if there were any concrete programmes designed to deal with this matter.

Dr Pheko had a question for the Minister regarding the offered assistance by China. He wanted know if it had been effective or if it was still in the pipeline.

Ms Haijaig mentioned that the Minister had stated that China was willing to help South Africa’s manufacturing sector. She asked whether the private sector was willing to accept the assistance of China.

Minister Zuma replied that an agreement had been negotiated. Whether it could be implemented already was doubtful as the Department of Trade and Industry could only do so much. The private sector had to be more involved as they controlled the economy.

Dr Pheko mentioned the scholarships in Africa and noted that what was being offered was more to do with social studies. South Africa needed more science and technology scholarships, especially for developmental purposes when such skills would be of assistance.

Mr Shah noted that that it was encouraging to see China’s attitude however he was concerned, and wanted to know if there was a mechanism to monitor the aid coming into some of the African countries, as some countries had a history of abusing aid.

Minister Zuma replied that they had not worked out a mechanism as yet. The Minister continued by saying that it was up to South Africa and Africa to take full advantage of this opportunity presented to them by China.

Adoption of Committee Reports
The Committee adopted the 2006 Annual Foreign Affairs Portfolio Committee Report, the Report on the Committee Workshop (Oceanview Hotel, Strand 2-4 May 2007) and Committee Report on African Parliamentarians meeting on the situation in Darfur: 27-28 May 2007.

Meeting adjourned.