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The China syndrome

25th September 2015

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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South Africa’s ruling African National Congress (ANC) certainly seems to have a fixation on China. It is already well known that the foreign affairs chapter of the party’s NGC 2015 Discussion Documents (NGC standing for National General Council, to be held from October 9 to 12), contains sections on China that could, in fairness, be considered rather sycophantic and, in some cases (for South Africans), rather alarming. Thus, paragraph 32 of the chapter reads: “China [sic] economic development trajectory remains a leading example of the triumph of humanity over adversity. The exemplary role of the collective leadership of the Communist Party of China in this regard should be a guiding lodestar of our own struggle.”

Now, the first sentence of this paragraph is perfectly true, although it omits the fact that a very considerable degree of that adversity (the disastrous Great Leap Forward and the dreadful Cultural Revolution) was caused by the Chinese Communist Party when it was led by Mao Zedong. The second sentence is, at best, bizarre (for reasons to be discussed below) and, at worst, extremely concerning. The ANC is meant to be a democratic party governing a democratic country – so how can an undemocratic party like the Chinese Communists serve as a “lodestar”? The way this sentence is phrased, the focus is not on China’s successful economic policies but on the role of the Communist Party, which remains totally opposed to democracy, still denies full religious freedom and still seeks to control news flows within the country.

And, equally well known, the document expresses hostility to other countries. So, paragraph 38, for example, “The US is exploiting China’s dispute with some of its Asian neighbours over the North and South China Sea islands to rally these neighbours against China, including trying to build an anti-China alliance of Asian satellite States that will take its orders from Washington.” Commentary in South Africa has focused on the anti-Americanism and anti-Westernism in the document. That is not very important: the US and Western countries in general are usually very forgiving of such drivel. What is important is the hostility shown towards Asian countries.

This passage is anti-Japanese, anti-South Korean, anti-Filipino, anti-Indonesian, anti-Malaysian and anti-Vietnamese. Note that all these countries, except for Vietnam, are democracies. So it is, in fact, an attack on democratic East and South-East Asia. Using this phraseology, the ANC is seeking to delegitimise these countries’ inherent rights to seek support and allies, within and without their regions, when confronted by a stronger power. It is implicitly endorsing Beijing’s position, that such disputes should be settled bilaterally, which, of course, benefits China as the much stronger (except against Japan) party.

Yet most of these States are also major or rapidly rising economies. There is no guarantee that they will be as forgiving as the Western powers and this is not the way to encourage them to trade with and invest in South Africa. Nor is this all. China’s claims in the China Seas are only part of its territorial claims. Others lie along its borders. The Chinese see them all as equally valid. And one other country against which China has major territorial claims is India. It seems safe to assume that New Delhi would not be happy if the ANC adopted this very pro-Chinese foreign policy line at the NGC.

Earlier, I described the second sentence of paragraph 32 as, at best, bizarre. Why? Because the one area of Chinese life in which there is today a great deal of freedom is the economy. And the “exemplary role” of the communist leadership has been in freeing up the economy. China has boomed because it became capitalist. It is notorious that the ANC and the South African government focus their attention on China’s State-owned companies and ignore the huge privatisations that made the Chinese economy what it is today. While State-owned companies remain very important in China, they account for only about 25% of the country’s economy.

But that focus on China’s State-owned businesses is also very limited. There is no apparent recognition that thousands of State-owned companies were closed down by Beijing during the 1990s. That many of those remaining are not owned by the central government, but by provincial and even city governments. Nor does there seem to be any recognition of successful experiments, such as with SAIC Motor Corporation, which is structured as a listed company with all its shares listed on the Shanghai Stock Exchange, with the State (by means of a holding company) just happening to be the majority shareholder.

In fact, Beijing is seeking to reform its State-owned companies, precisely because the sluggish performance of many them is seen as a drag on the country’s economy. The proposed reforms include reducing government intervention in the companies, increasing the freedom of their managements, listing companies on the stock exchange and selling minority shares to the private sector. Ironically, South Africa once had a policy of selling minority stakes in State-owned companies, but this process was stopped years ago. Now China is headed down the road abandoned by South Africa and, indeed, plans to go further with the idea of listing its companies on stock exchanges. Let us hope that the ANC notices this!

One final point: it is striking that, while China gets several paragraphs devoted to it in the chapter, democratic India – whose economy is currently doing much better than China’s – does not get (as far as I can see) a single one to itself. Why is the ANC ignoring this democratic Asian economic success story?

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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