Finding the Right Model

　　At the foot of the continent, the China-South Africa relationship has grown significantlysince the early 1990s. It is imperativeto examine how South Africa has benefitedfrom this relationship. South Africa is theleading producer of platinum and manganese,and signed a Comprehensive StrategicPartnership Agreement in 2010 that prioritizedworking toward a more balancedtrade profile between the two countries, inparticular by encouraging trade in manufacturedvalue-added products. South Africaalso possesses a number of minerals andprecious metals, such as iron ore, diamonds,gold and it is the only country in Africa toinvest in China.

　　In 2008, South Africa’s exports stoodat approximately $3.5 billion. According tothe Department of Trade and Industry (DTI),South Africa’s exports to China reached anall-time high of $8.5 billion in 2011, an increaseof 45 percent over 2010, and dippedslightly to $8.1 billion in 2012.

　　It is important to note that China’s mininginvestments in South Africa are noticeablydifferent from investments in otherAfrican countries. Chinese companies havebeen establishing joint ventures with SouthAfrican mining companies that are profitableand stable, so as to ensure a long-term supplyof raw materials to the Chinese market.

　　The South African Government, throughlegislation such as the Mining Charter, BroadBased Black Economic Empowerment andMinerals and Petroleum Resources DevelopmentAct, has been calling for mineral beneficiationand for more transformation in themining industry. Transformation is meant toensure that historically disadvantaged SouthAfricans benefit more from South Africa’smineral wealth. These policies, coupled withcomplex environmental and labor laws, haverequired a very distinct way of engagementfor Chinese corporations operating in SouthAfrica, which has to consider developmentof communities alongside economic benefits.

　　Considering development is an importantangle in the debate, analysis still needsto be done on where this policy frameworkis attracting Chinese investments and whereit is not.

　　The South African mining industry– stillthe economic backbone of the country –can certainly make a positive contributiontoward job creation, thereby reducing povertyand contributing to the development ofcommunities. One of the crucial conditionsfor South Africa to benefit more from theseeconomic partnerships, is a need to improvethe capacity of implementing agencies(such as Department of Mineral Resources),prudent management of mineral rent(quick win vs. long-term vision), buildinghuman and institutional capacity, promotingresearch and development, and a leadershipthat has a long-term view about thesematters. China needs to go beyond theelites and engage with all the stakeholders(including mining communities) in a moreconstructive way.

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