By Michael Mayalo
“In time of difficulties, we must not lose sight of our achievements” - Mao Zedong
A very famous quote by President Mao that speaks on achievements in the most difficult times, further I begin to articulate China and South African youth entrepreneurs, particularly on International Trade.
As of right now South Africa’s population is still growing and Africa is set to be the next big market in the world in contrast with Europe whose population is rapidly declining and getting older by the day.
The market is changing so rapidly in Europe that in 2022 even new rules had to be imposed to keep South African citrus out of Europe to protect their market.
From South Africa alone goods to the value of R1.247 trillion or 25.5% of normal GDP was exported of which a large part went to China. What happens in China, soon to be the world’s biggest economy as a producer of goods and services, impacts directly on South Africa as well as Africa as a whole.
China shipped R198.9 billion of goods to South Africa during the first ten months of 2019 according to Stats SA and exports from SA were R116.6 billion, China accounted for 18.5% of all SA imports and 10.8% of all exports for the same period.
Right now most of Africa’s exports to China are in the form of mineral products such as steel and iron.
In the past Africa exported a lot of coal and steel to China as these are used in manufacturing, palladium and platinum are both used in catalysing converters to reduce carbon emissions in fossil fuel driven vehicles. With the cross over to electric vehicles Africa need to adapt to provide in this new market.
As Chinese citizens become more consumer driven due to a large increase in the middle class will South Africa be able to make use of this situation and be able to supply the market?
Africa can play a leading role in providing food to the rising middle class in China. Agricultural growth is something African countries are gearing themselves towards in order to benefit from the Chinese economy. Both Africa and China are collaborating on massive projects in food security, there are many irrigation projects China can implement to assist Africa to increase agricultural output in pursuance of food security.
African countries are also concentrating on their economies being resilient in terms of what is happening in the world, when the Ukraine war broke out Africa was stumped by wheat exports which could not transpire as well as crops from Africa which could not reach Russia due to the ports being closed in Ukraine. Africa is actively trying to figure out how to react and adapt to these situation faster if and when they do occur in future and here South African institutions such as universities are collaborating with varsities elsewhere in Africa to put structures in place to offset this in future.
For capitalism to succeed some countries must remain poor in order for the few to become immensely rich; this is a false narrative that China is intent on stamping out and make the world a more level place so that Africa and China can play unheeded.
In order to adapt to the changing Chinese economy with its focus on services and goods Africa needs to find its competitive edge in the world and increase its ability to compete with the rest of the world who wants their slice of the Chinese cake.
Africa’s ability currently to provide for the Chinese economy in terms of non-mineral exports depends on how they are able to increase their abilities to increase their capacities in all sectors of the Chinese economy in particular and the world in general.
The west sees that South Africa is benefitting more and more from its relationship with China; for too long has Africa been exploited and kept poor by capitalist policies and it is time we embrace China fully and cut ties with capitalism.
South Africa deserves the best; Africa deserves China.
* Michael Mayalo is the Executive Chairperson of the Youth Business Chamber.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.