PROSPERITY
China CSI Tackles Structural Challenges in South Africa’s Economy
By Kirtan Bhana

11 December 2024
South Africa remains one of the most unequal societies in the world, as evidenced by its Gini coefficient. This persistent disparity reflects the country's historically top-heavy economic structure dominated by commercial, manufacturing, industrial, retail, and wholesale sectors. However, signs of change are emerging as 30 years of transformation since the end of apartheid in 1994 have slowly paved the way for political freedom, inclusive economic growth, and shared prosperity.

The People’s Republic of China (PRC) has become a significant partner in this transformation, with over 200 Chinese companies operating in South Africa across multiple sectors. On December 11, the 2024 Corporate Social Responsibility (CSR) Report of Chinese-Funded Enterprises in South Africa was launched at the China Construction Bank in Sandton. The comprehensive report compiled by the South Africa-China Economic and Trade Association (SACETA), founded in 2011, the report highlights the immense efforts of Chinese enterprises to support South Africa’s economic and social development since the report's first release in 2018.

Ambassador Wu Peng, China’s Ambassador to South Africa, noted that Chinese investment in the country has surpassed $10 billion, significantly contributing to economic diversification and industrialization. This investment has facilitated substantial job creation, tax revenues, and the transfer of skills, knowledge, and technology.

At the 2024 Job Fair in Johannesburg, 75 Chinese enterprises offered over 1,000 job opportunities, drawing 3,000 job seekers. Many applicants were considered and some even signed employment contracts during the event, demonstrating the tangible benefits of this bilateral partnership.

Strategic Initiatives: CAD, BRI, and Energy Projects

The China-Africa Development Fund (CAD) is a flagship initiative encouraging Chinese enterprises to invest in Africa, enhancing local capacity for self-development. South Africa has already earmarked more than ten projects spanning various sectors, including the arts and cultural industries and other priority areas.

Additionally, South Africa was the first country to endorse the Belt and Road Initiative (BRI), which has launched multiple infrastructure and logistics projects in the country. The energy sector, in particular, has seen significant focus, with new and alternative energy models addressing environmental impacts and sustainability challenges.

CSI as a Cornerstone of Transformation

Chinese-funded enterprises in South Africa have embraced corporate social initiatives (CSI) that are sensitive to the country’s divisive and discriminatory past. By prioritizing local communities, cultures, and traditions, these enterprises have ensured that their investments benefit South Africans equitably. Rural development programs, arts, culture, education, and tertiary institutions have all benefited from the generosity of the Chinese business community.

“In the development of bilateral relations, Chinese-funded enterprises are not just witnesses or participants but also contributors,” said Ambassador Wu Peng.

Zhang Chaoyang, SACETA Chairman and CEO of the Bank of China Limited Johannesburg Branch, highlighted the strategic elevation of bilateral ties to an "all-round strategic cooperative partnership in the new era" as announced by Presidents Xi Jinping and Cyril Ramaphosa. SACETA plays a crucial role in fostering mutually beneficial cooperation, enhancing communication with the South African government, and promoting self-regulation among Chinese-funded enterprises.

Zhang emphasized that these enterprises are not merely beneficiaries of the China-South Africa relationship but are also active builders and contributors. He stressed that corporate social responsibility remains a cornerstone of SACETA’s work, with a commitment to compliance, integrity, and positive contributions to South Africa’s economic and social development.

Deepening Cooperation and Mutual Growth

According to Counselor Liu Yu, Minister Counselor at the Economic and Commercial Office of the Chinese Embassy, economic and trade cooperation serves as both the “ballast” and the “propeller” of China-South Africa relations. China has been South Africa’s largest trading partner for 15 consecutive years, while South Africa has been China’s largest trading partner in Africa for 14 years.

The alignment of the BRI with South Africa’s Economic Reconstruction and Recovery Plan (ERRP) has supported President Ramaphosa’s call for a “new investment drive,” providing critical momentum to bilateral investment cooperation.

A Shared Vision for Inclusive Growth

China’s success in lifting millions out of poverty has become an inspirational model for South Africa as it grapples with entrenched inequality. Chinese-funded enterprises exemplify people-centred development and prioritize human capability and capacity as a pathway to shared prosperity.

By addressing South Africa’s outdated economic structures and fostering inclusive growth, these enterprises are not only creating a sustainable impact but are also strengthening the bonds between China and South Africa for mutual benefit in the long term. - TDS