China's intention to befriend South Africa comes with economic booby traps

China's President Xi Jinping during the opening of the Brics Summit in Sandton, Johannesburg. The writer argues South Africa ought to exercise caution when accepting aid from China.
China's President Xi Jinping during the opening of the Brics Summit in Sandton, Johannesburg. The writer argues South Africa ought to exercise caution when accepting aid from China.
Image: Alaister Russell

Last week Sandton was abuzz with high-level political and business leaders attending the 10th Brics Summit.

In our media, experts were preening themselves to explain to us laymen what Brics is about and what is its significance.

China is now the second largest economy in the world, with more-than $11-trillion GDP. With a GDP of under $400-billion (R5.28-trillion), South Africa is an ant.

The GDPs of Russia and Brazil are under $2-trillion, respectively.

Even disorderly India, with a GDP of under $2.5-trillion, is no match to China.

The real game is Brics. That is why we heard about China making an investment pledge of $14.7-billion to South Africa, and extending a $2.5-billion loan to Eskom.

Just as South Africa is not trusted by its neighbours in the SADC region, many people are asking questions about China's motives in Africa and the rest of the world.

Americans are trembling that China is about to overtake them as the largest economy on earth.

Statistics tell us that within a year, China will be the largest single importing country in the universe.

As a little country of 57 million people, we must have a running stomach when confronted with a country that scares Americans.

What does China want from us?

What must we do to profit from relations with such an economic giant?

China wants two things from South Africa: mineral resources and moral capital. For ages, our mineral resources have been flowing to Europe and the US.

China wants to divert the stream of our resources towards itself.

By giving us loans, China is weaving strings with which to pull our country when we misbehave. As a recipient of more Chinese foreign direct investment, South Africa will play a bigger role in expanding China's Gross National Product (GNP).

In the end, the wealth generated by Chinese companies here will be repatriated to China.

We must not join howling Europeans who recruit us to treat China like a monster when the Chinese do in SA what Europeans have been doing for centuries - exploit our natural resources.

The second thing China wants from us is moral capital.

In the context of the centuries-long global dominance by the West, China's normative calculus coincides with Africa's efforts to extricate itself from the yoke of its former colonisers.

We stand to lose more by receiving China's loans and investments if we do not export value-added products to that country.

It is foolish for President Cyril Ramaphosa to celebrate China's investment without knowing which sectors of our economy will export which finished products to China. US President Donald Trump is waging a trade war simply because China has value-added products to export to the US.

SA's challenge is not to find friends in Brics from those countries, not through loans, but by selling finished products. If we don't do this, countries like China will give us loans that will multiply and go back home, living our country far poorer.

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